By Zarathustra, who is the founder of Hong Kong blog Also sprach Analyst. He was educated at the London School of Economics and the Chinese University of Hong Kong and was once a Hong Kong-based equity research analyst focusing on Hong Kong real estate (which he did not really like), with a secondary coverage on China real estate sector (which he actually hated). Cross posted from MacroBusiness
Zero interest rate policy and quantitative easing is not working to stimulate the real economy. No country has succeeded. The pioneer of quantitative easing, the Bank of Japan, failed (and Japanese yen is uber-strong). The Federal Reserve has failed, and the Bank of England has failed.
Before going to quantitative easing, let’s consider whether zero interest rate policy (ZIRP) works. Michael Pettis offered some interesting observations recently in his newsletter. He says that even though theory reckons that lowering interest rates should make people less likely to save, and to consume more, empirical data suggest the otherwise. In fact, people save more when rates are low, not less:
In China, for example, deposit rates are seriously negative and have been negative for many years, and yet the household savings rate is nonetheless very high. In fact it seems that, as a rule, countries with repressed interest rates have higher, not lower savings rates.
What’s more, I have seen US historical data that suggests that when interest-rate declines have coincided with falling, not rising, stock and real estate markets (as they have recently), the savings rate usually rises rather than declines. In other words households care mainly about their wealth, not about the reward for postponing consumption.
So in an environment where the asset side of household’s balance sheet is falling in value (as in recent years in the US), it makes sense for households to save more, regardless of the interest rates. That’s debt deleveraging or balance sheet recession as we know it.
Now let’s consider Japan. It underwent debt deleveraging or a balance sheet recession for two decades. As corporate balance sheets were underwater because the asset side was falling in value, corporates increased their saving level. Thus there plenty of demand for holding Japanese yen (and for that matter, Japanese Government bonds as a vehicles for savings). That’s why JGBs yields are so low, because the saving level in the corporate sector has increased.
Of course, when everyone is saving and not spending and borrowing, asset prices will be under even more pressure, and that encourages even more debt deleveraging as that pushes everyone’s balance sheet even deeper under water. So we have a vicious circle of falling asset prices, increasing saving level, and deflation.
If central banks can’t break this deflationary vicious circle even as they are getting bigger and bigger, Prof. Nick Rowe considers the following somewhat bizarre endgame in his terrific post:
What happens as we push this process to the limit, and keep on reducing the long run inflation rate, down to zero, and then into deflation? The central bank keeps on getting bigger and bigger, and owns a larger and larger share of the total assets in the economy. It buys all the short-term government bonds, then all the long-term government bonds, then all the commercial bonds, then all the shares, then all the land, then all the houses….Because as the rate of inflation falls, falls to zero, and keeps on falling into negative territory, people will want to hold more and more of their wealth in the form of central bank money. And unless the central bank satisfies that demand, by selling them money and buying their other assets, the result will be an excess demand for money and recession.
Where does it end? Do we ever hit some absolute liquidity trap where people want to hold money rather than any other asset? Well, not really. Because the central bank has to keep on buying assets that people do not want to hold because they want to hold money instead.
It doesn’t end in a liquidity trap. It ends when the central bank runs out of things to buy, because it already owns everything, right down to your house, furniture, and toothbrush, which it rents back to you. It ends in communism.
Karl Marx certainly did not say that quantitative easing can achieve his goal, although he did want to see the following according to the Communist Manifesto:
Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
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Brilliant!
Communism means workers control the means of production and determine the distribution of the surplus. I’m no Marxist, but I get sick and tired of people who clearly have never read Marx using that term as a synonym for every conceivable form of state control.
It seems to me that if the state, via its central bank, owns all physical assets, then that is the same as the people owning those assets. How is that different from communism? Of course, as we know, in practice its not the same thing since state control winds up as control by those who run the state. Since it is not practically possible to have direct democratic control over all state assets, whoever controls the state has total control. That is the key weakness in Marx’s theory — the system becomes a totalitarian one controlled by those who run/manage (whatever you want to call it) the state.
Absent that tiny flaw, I’d be a communist. Instead I am a social democrat — I want direct democratic political control of the state, with a balancing regulatory scheme (to eliminate monopolies and provide an “even playing field”) and the freedom of private enterprise. This disperses economic control among various segments of society, thereby reducing the likelihood of totalitarian control.
The US, and indeed, all of our western political systems have the one major flaw that they provide for political power dispersal, without the necessary economic dispersal. Since capitalism’s fatal flaw is its tendency towards monopoly structures, the political system becomes enslaved to the economic powers. The most important role of the state, as FDR and Teddy Roosevelt seemed to understand much better than our current “technocrats”, was to break up monopolistic powers and distribute economic power in a more equal manner, thereby dispersing political power (assuming a republican or direct democratic political system), thus leaving no one group in control.
I liked your commentary Yankee. The solution is now available on the Internet. Make buying the State impossible by increasing representation levels to hundreds per State/population as the Articles of Confederation suggest. In the end, Fascism will still come back but slowing down the centralization process by addressing these flaws are now more than possible.
The only decent alternatives I’ve seen suggested to social democracy are anarchist communism (which suffers from the policing-of-bad-people problem) and enlightened despotism (which suffers from the succession problem). Other alternatives like state communism (USSR) and kleptocratic capitalism (US post-Reagan) are plain disasters. Of course, undemocratic state capitalism (fascism) is even worse, but we seem to be on the road to that now.
Social democracy is a fine thing to fight for, then.
Communism, social democracy, etc, what does it matter. Right now the world has so much debt the creditors are largely dictating policy. Unfortunately for the creditors, the currencies of all the debt needs to be inflated if they are ever to get paid back.
Just buy physical gold and silver. Leave some cash if we get a complete financial meltdown though. The aftermath would be money printing on an epic scale.
http://gainesvillecoins.com
Best prices by far
The workers are NOT the proletariat.
And it is the proletariat who are to control the means of production, not the workers, according to Marx.
Or have I gotten that wrong? I haven’t thought about what Marx wrote for many decades. I mean, who really cares?
Yep. Who cares what the old shaman of the dialectic thought or wrote. On the other hand the point of the article that lower interest rates is counter productive is fascinating. Who would have imagined that that people would see in low interest that the costs of providing for future needs have increased and that therefore they need to save more money?
“Who would have imagined that that people would see in low interest that the costs of providing for future needs have increased and that therefore they need to save more money?”
Who wouldn’t??
…and as to Marx’s “shamanism”, wasn’t it really only warmed-over Hegel he was dishing out? Pretty thin gruel there, if ya asks me!
Hey! There’s a lump in my proletariat! And my water beaker’s full of grease!
I believe that Marx’s definition of proletariat is “those people who live paycheck to paychek”, and this encompasses most of the middle class in developed economy; the poor are actually the “lumpen-proletariat” IMHO.
IIRC, China hasn’t got a pension system. As such, saving at any rate is to be expected, while it seems to make extrapolation from the Chinese case to those in other countries problematic.
Translation:
“QE means that the FED is throwing away free money, but unfortunately that free money is not used to hire people, stimulate the economy etc, but only ends up in the coffers of the banks.
This however means that people with some financial capital cannot exact high interests from their capital, because money becomes very cheap. Thus rentiers cannot have their rents! Communism!”
Actually Marx understood very well that “thight money” is just a way to increase rents for financial capitalists, and hence hoped for “central banks” that could manage financial systems to the advantage of the population; we have central banks that unfortunately still manage the economy to the advantage of some restricted class (like in fighting inexistent inflation instead of unemployment).
Thus we are just halfway, and a more “communist” approach to central banking should be welcome.
I’m with Foppe. Increasing the Fed’s ownership share of everything may be an outcome of QE, but that doesn’t make it Communism. For one thing, the Fed is a private entity — ok, a pseudo-private entity with a board appointed by the Government, but the member banks are guaranteed their six percent return — but it is sure as hell not publicly accountable, even if the Treasury does get a cut of the proceeds, too.
Fed ownership /= federal ownership.
I would argue that it is pretty close to every practical experiment in communism we’ve seen on planet earth so far. Sure its not the way Marx imagined it would be, but do we really want to make the same kind of mistake the neoclassical economists make (confusing imagination with reality)?
Congress could kill the Fed with a mere stroke of a pen.
Are you sure that it’s really the Fed, and not rather the Congress, who have failed to be “accountable” to the US Public?
Perhaps it is all about the substance of the policies adopted, and not about the formal skeleton of the Institutions themselves.
We would be crawling around in the mud looking for worms right now if it had not been for the Fed. Congress is totally useless. And the Fed can only do so much. I was surprised to learn that it can buy up munibonds. That is a direct way to help our cities.
Yeah right. The problems we face wouldn’t have arisen, at least in this way, if it weren’t for the Fed providing all that easy money for the past decade, and also providing all that “intellectual” firepower justifying everything from globalized outsourcing to why the “welfare” state is destined to fail. And the too big too exist banks would’ve collapsed, showing the lie to the notion that we need them in the first place. The state would’ve jumped in, nationalized them, broken them up, and helped create a sound recovery. They would’ve had no choice as the public barely put up with the $700 billion, let alone the trillions the Fed dumped into the markets.
This argument is sound up to a point. Like those who fret that healthcare costs will become 100% of GDP if they continue to rise at the current rates, QE would/could never practically continue until the Fed or central bank owns everything.
However, the other part of this analysis is very interesting. Amazing what a little empirical analysis tells you once you leave the “pure” environment of the economists’ fevered imaginings. Who knew that when people feel poorer they try to save more money!? Astounding! I mean, I thought the purpose of life was to maximize my interest income while monitoring inflation, and at the first sign my “real” rate of return became negative, I would run out and by every piece of crap for sale at the mall to avoid “losing” money! The problem with these economic fabulists is — they are profoundly stupid! And yet they hold themselves in the highest regard! Who else gets to have a job where they concoct theories without feeling the need to ever test them in the real world? Ah yes, they have “models” and “math” for that. How silly of me. Neoclassical economists, as a group should, after realizing their “real” rates of return are negative, take their “diminishing” money to the gun store, buy the fanciest gun they can, and blow their damned heads off. With a negative rate of return, and every day bringing them closer to death, what is the point of going on? Add to that the fact that the only effect they have on the world is to increase the misery, hunger and death of those unfortunate enough to not be neoclassical economists, and the choice is simple, clear, and rationally expectable. As fertilizer they will do more for the earth than they ever did in life. Go ahead, kill yourselves! All of you neoclassical douchebags! Now! Do it! YOU CAN DO IT!!!!!!!
I think the author knows quite well he is overstating his case, but he could have made it clearer to readers.
I figured he was. I was responding to some commenters who were taking it too far.
The author’s piece presented here is out of a larger context and from that larger context one might see that his tone is hardly that of sarcasm.
QE may not be communism but it most assuredly smacks of hubris that beleives that you can create more credit money to solve that which is an excess credit money problem.
The solution is to deleverage and in the context of our current reliance on credit money that means a very serious recession if not outright depression. That is the reality that no one is writing about.
Sarcasm can be very hard to discern in print formats, with consistent typeface. Especially when you don’t use ALL CAPS and redundant exclamation points!!!
How much of US “health care spending” is actually comprised of the costs of health insurance corporate administrative costs ? 30%, 40%, 50%, or more?
Oughtn’t that be stripped out to determine the medical care itself costs?
How much do insurance co costs and profits count for in that “US health care spending” total? A third, a half, or more?
Medicare keeps their costs down to 3%.
Obama care attempted to limit administrative costs for private insurers to 15%. The insurers objected strenuously and that requirement was dropped. Administrative costs vary depending upon the market but mostly private insurers keep their administrative costs to 15-20%.
Those numbers don’t include doctor-side or hospital-side administrative costs for dealing with health insurers. Double the health insurer administrative number to get the true administrative overhead — it’s 30%-40%.
I wasn’t being sarcastic.
Every time someone begins to build a logical economic argument that runs out of steam due to inherent logical flaws or the inability to cite conclusive data supporting the hypothesis so that it might have some efficacy as a quantifiable predictive model, they indulge in chasmic leaps of fancy to reach what seems, more often than not, to be their intended conclusion anyway – the red hoards are coming; even if said red hoards don’t exist. The anti-red meme is losing its vodoo power.
The authors conclusion about interest rates and communism has more to do with the Marx Brothers than Karl Marx.
The only red flag being run up the pole here is a marker about the author’s inability to draw a logical or insightful conclusion from his hypothesis.
the red hoards are coming; even if said red hoards don’t exist.
Ol’ Zarathustra was warning us about red hordes, one would think.
But after the damned commies take over, hoarding could certainly be a problem too, as the peasantry squirrel away banknotes and potatoes.
Dear raintonite;
I know I’m being unnecessarily picky, (the technical term is ‘Anal’,) but “red hoards?” That is, intended or not, one of the funniest puns I’ve ever encountered! Good for you! It also perfectly encapsulates the posters contention! Double plus funny!
Glad it gave a chucke. Didn’t realise the mistake until I re-read the comment to correct my numerous spelling mistakes, but decided to leave it.
What horde got the hoard? It weren’t the commies and it weren’t me.
This is a big jump, even for my little brain.
Permanent revolution is a principal feature of Marxism. What we have, or going to have as in Japan, is a form of corporate statism with highly entrenched incumbents.
As there was no balanced inflation, there will be no balanced deflation. So the prices of assets will fall more rapidly that the price of consumer goods and services, opening in the end the ways for arbitraging between them. For example, the price of houses falls more than rents. When the price of a house is only five or six years of rent, people will change from renting to owning (probably much sooner). The same with shares /dividends, commercial property etc..this will overcome the deflationary expectations. And this is the natural process of clensing that the Fed, BoE etc are determined to resist.
“Cleansing”?
Odd choice of metaphor.
As in Augean Stables? Even Hercules would be daunted by this task.
theory reckons that lowering interest rates should make people less likely to save
This doesn’t make sense to me at all, in practical terms, at least not in this country (US). When the pension program available doesn’t provide for a substainable existence at an average of $1000/mo. (assuming SS will even be available), citizens must look towards accumulating wealth towards supplementing their pensions. With ZIRP and falling asset prices, or even absent falling asset prices as one comes into retirement and is less able to afford risk, of course people must save at higher rates in order to accumulate sufficient wealth to afford eventual retirement. If Treasuries are paying 2%, $500K of wealth is required to afford a meager $10,000/yr. of investment income, no trivial amount for the average American household making $47,000/yr. Americans aren’t asking what makes most sense per economic theory but whether they really want a new television if it means still working when they are 72?
Not “television” (what are they good for anymore?) , but “computer”.
Dear aet;
Get with the program bud! (I’m channeling Fat Cat and his ilk here.) The concept of ‘average’ folks getting to retire at any age prior to terminal burn out is so New Deal Old School! Just walk around any big box store and check out the oldsters working their senescence away. They haven’t figured out yet that the medical advances of the last century that have signifigantly extended lifespans weren’t meant for the ‘lower classes’ at all. The proper redress for this misapplication of resources is to get rid of all those pesky ‘social safety net’ programs like Social Security and Medicare. Then the ‘hidden hands’ of right thinking rentiers can get back to their traditional places; the top of the pyramid. Like I said; get with the Program bud!
Where I’m from, people went to Court to overturn mandatory retirement ages.
People want to keep working, there’s nothing else to really do with the time….
Here’s some good old advice from a lady I know, who is now in her healthy mid-nineties:
“Work is never done!”
“This doesn’t make sense to me at all”
It doesn’t make sense to me either, but that doesn’t matter. The fact that you and I guessed right is of little consequence. Empirical observation trumps all. If most economists were interested in science, they’d understand that.
It worked for me!
-John E. Cash, Esquire, PhD, MBA, CFA, LLC, LLD, Ltd., AAA, BBB, CCC-. AA, BYOB
I agree with LucyLulu. I don’t think that it would make people spend more, i.e. save less. People have to save, to secure their future. In this economic climate things are very unstable, and it would be silly for families to be over spending. While families still spend money, it’s more important for them to save.
Plus the last statement of the article, in my opinion, is too harsh. Even though you should never say never, I don’t think that we need to worry about communism here. (At least for a while)
Best to ignore the nominal legal situation as to the ownership of capital (lots of billionaires came out of Russia in the 1990s).
I’ll know the US has gone “commie”, once the Government starts throwing people into work-prisons and work-camps for the statutorily undefined crime of “parasitism”.
The US isn’t there quite yet.
But considering how the poor and those needing assistance are treated socially…
Tito was right. Call it State Socialism.
Fascism is the wealth transfer/theft model. Communism is the enforcement model afterward to keep the majority of elite in power.
I doubt we’ll reach the Communism phase. War won’t be so containable this time around. And bottom line is if you fight for East or West your just Bantha Fodder for the elephants. When elephants fight ants get trampled. What a world…
The incorrect assumption here is that central banks are owned by the state. They are not. They are owned by the commercial banks, thus when the central banks own everything it does not lead to communism — it simply leads to a new form of bank feudalism.
What’s in a name?
A rose, by any other name, would smell as sweet.
Nominal private ownership with state control is the precise definition of fascism.
What is nominal state governance with private ownership and control?
It’s called “Utopia.” ;-)
No, it isn’t communism. Communists seize control of private property, but generally aren’t in the habit of providing compensation for it. In the scheme described, the Fed may end up holding all the deeds, but the rest of us are holding all the cash. And who will end up holding the most? Of course the people who have the most now. What will those people do with all that cash? Arrange for sweetheart leaseback deals with the Fed for all those deeds, and they will rent everything back to us for a profit. It won’t be communism. It’ll be that other thing, the Mussolini thing.
For the most part, anyone to the right of James Galbraith ought to read Kolakowski’s Main Currents of Marxism before uttering anything about Marx or any of the related ideologies in comment threads or in blog posts. Not only is it the best critical reader on the subject, but also the most comprehensive, in terms of setting aside misperceptions commonly voiced by those who dislike Marx(ism) but know little about it beyond tea party or old Bircher rhetoric. I get sick of the little zingers in these articles that have make no contribution to the subject matter itself, but is merely a rhetorical “fuck you” to anyone who sees state intervention in Ponzi capitalism on behalf of the public good as “evil”.
Well, the intuitive drive in our current rounds of popular dissent seems to be toward DE-centralization of power. Are you saying you think all those people are wrong?
After all, I am VERY hard pressed to see this “state intervention on behalf of the public good” of which you speak. And think it is likely that the public will continue to be suspicious of the US government, and suspicious that what *looks* like an “intervention on behalf of the public good” today, will turn out to be something very different tomorrow.
Beyond the trust issues, I definitely think it’s worth thinking about what kind of centralized control these actual policies might be producing (as opposed to your fantasized policies “in the public good”), even if “communism” isn’t exactly the right term.
More descriptive analysis would probably best precede the attempt to analogize, but analogizing along the way might also play a role in furthering the descriptive analysis if it helps us refine what something is and isn’t.
Frankly, it seems to have more in common with fascist corporatism to me although it’s probably its own new, clever beast and we still need to profile it.
Also, it seems unlikely to me that people using the term “communism” today are solely using it to convey by the book 19th century Marxian ideas. (A lot of water has gone under bridge since then). Consequently, I think when someone uses the term, instead of making assumptions about what they mean, they should be challenged to *say what they REALLY mean.*
While there is so much trolling around the term, it may not be the case that everyone who uses it is being a troll, (even right wingers). Maybe they are really trying to convey something, in which case they should be also be challenged to say specifically what they mean.
So, I would have liked the poster to have filled in his cryptic comment a little more but I don’t think he’s a troll, (and NC isn’t known for featuring trolls in guest posts).
you wrote, “Well, the intuitive drive in our current rounds of popular dissent seems to be toward DE-centralization of power. Are you saying you think all those people are wrong…after all, I am VERY hard pressed to see this “state intervention on behalf of the public good” of which you speak.”
It doesn’t matter what I think of it, and it is a red herring. Nor does it matter if such is even possible, bordering on utopian (government for the people?). The point I make is that writers like the above use these rhetorical devices because they happen to not understand the ideology that they are criticizing, beyond bumper sticker slogans and quips found in the comment threads of econoblogs (ZH esp.). It is insulting to ones intelligence to read this stuff, with a actual understanding of why Marxism/ists are flawed, understanding that the authors expectation is for me to simply say “communizim iz bad, it sucks blah de blah”.
Tell me why without simplistically conflating everyone thatuses the word “class” with Stalin or some other bogeyman, who has much more in common with the managerial class running the corporate system in the US, than with the so called workers.
It’s just shitty writing, and people who aspire to wrote intelligent material to aspire a little higher. Reading/hearing a bullshit meme grates the nerves after a while.
And I’ll aspire to use my spellcheck more often in return.
“I am VERY hard pressed to see this “state intervention on behalf of the public good” of which you speak”
Well, that might only reflect upon the quality of your local government, and might not hold so much weight were you to experience places where such government intervention HAS been effective.
Like pretty well the entire industrialized world, outside of the USA, when it comes to health care policies:
http://www.bbc.co.uk/news/world-us-canada-15288865
…for an example.
“State intervention” can be decentralized: the model of state or quasi-state (as would be in an anarchist system whatever they say) can be all decentralized and participative we wish (and efficiency allows) and still intervene for the public good (after that’s the reason we organize them, right?)
Decentralization is NOT privatization but decentralized collectivization. Private property prefers concentrated powerful states they can co-opt and corrupt, while they cry about how horrible the state is – playing “good cop, bad cop” until you don’t know anymore who’s the good and who’s the bad one.
This is why you need bankruptcy and default to happen up and down the chain to clear out the debts. Why doesn’t anyone want to own corporate debt? Because they are underwater zombie companies yhat might go bust tomorrow. Zombie mortgages. Zombie CRE. Zombie banks. All with government pretending these assets might come back someday.
If the TARPsters all went into receivership with small depositors guaranteed, The dow would have gone under 2000, we would have had an economic heart attack, but be on our way to recovery. Instead we live with daily angina waiting for that same heart-attack.
Junk. The author does not even argue why his “empirical” findings might be true, which could be an interesting economical issue. It’s the typical US far-right discourse of ultra-liberalism (known for some reason and quite confusingly as “libertarianism” in that country, and only there).
Regardless, when Marx and other communists argue for public (state, community, society) control of credit, they are arguing for a fully public bank system at all levels, not this mockery where the state “lends” (gives away) to the private banks which are as a bourgeois aristocracy living from royal subsidies (as happened a lot just before the French Revolution).
What true socialists and communists want from public banking is a banking system that lends directly to the people and serves the people, and not just a bunch of oligarchs. It’s exactly the opposite concept of public bank.
It is however not a concept of public banking that has been absent in the Capitalist world: the Bank of Australia (known once as “the bank of the people”) or the savings banks (cajas) of Spain, owned traditionally by the local authorities (though nowadays being sold off), or sometimes cooperatives, offered affordable and somewhat understanding banking for the common people.
The important thing is that banking, as I think someone said recently, must be considered as public-interest utilities and not mere business, just as electricity, tap water, housing, roads, hospitals…
Maju, private banks can stay private and play all the casion games they want. Just nationalize the currency, go Fair Tax on consumption only model. No tax authority for bankers and complete firewall between productive saving/capitalism and extreme risk takers still using private finance.
“The author does not even argue why his “empirical” findings might be true”
Yes he does, as does Pettis (whom the author cites), as does Nabar (whom Pettis cites). And please explain your use of quotation marks around the word empirical, as Nabar’s study is clearly empirical.
More importantly, why doesn’t matter nearly as much as the truth of the empirical data. That’s what science is about, and not the fevered imaginings of economists who’ve based their entire field on a variety of convenient assumptions that have been empirically demonstrated to be false (see Steve Keen’s criticisms for numerous examples).
I’m glad that you asked me to research it further because the paper finds something more: that the result is only strong for the latest period (2003-09) and not so much for the previous one (1996-2002) and, importantly, that the real factor seems not so much the interest rate but the profit offered by alternative investments. Whith a yearly GDP growth of c. 10%, Chinese investments have been offering very high and growing “interest rates” that banks can’t compete with.
There was something too counterintuitive in the claim and, after reading (rather quick) the paper, I realize that I was right in casting doubt to the “science” behind the claim: alternative causes were not controlled for (but all in the paper seems to indicate that they are the real cause and not interest rates themselves).
Crony capitalism. Their song lyrics are all about laissez-faire, free markets, and global trade, until the rich bondholders and big banks need a bailout. Then they sing “too big to fail”.
And China won’t be the bad guy, until they can’t squeeze another buck off of them, at which point they’ll insist we all get out our flag to wave and show our patriotism, by supporting a war, in the name of “freedom”, no less.
What? Didn’t any of y’all here ever hear of StaMoCap?
State Monopoly Capitalism, where the state, via cronies within the capitalist system, effectively has a monopoly on economic decisions: what to make, where to make it, by whom, for whom, at what price. Fundamentally, the state fuses with big business (Government Motors, anyone?), end of story until the revolution.
http://en.wikipedia.org/wiki/State_monopoly_capitalism
Jeez, didn’t the author get the memo? I mean, even the unions are integrated into this one…
Quite accurate. And if the elites were not *kleptocrats and idiots* they could maintain a functional state monopoly capitalism for a long time.
However, they are kleptocrats and idiots. Unlike the Pharoahs of old, they do not think that they need to keep the people fed or employed. Therefore the revolution will come sooner rather than later.
Our mission, if we can pull it off, is to make the revolution lead to a better, more just society — it is very possible to have a revolution which simply places *smart* fascists in control.
A national bank? Sign me up. Better red than dead.
Jeez… Just mention the name Marx and the comment section blows up with all manner of silliness. If you’re willing to comment authoritatively about old Karl at least do us all the favor of reading something besides the manifesto. It is a useful historical document and is his clearest articulation of globalization, but it isn’t very useful in understanding anything about the fellow or his work.
Clear your mind and read something.
Core of libertarian philosophy is individualism. Democracy is when these individuals exercise their voting rights.
Today we are faced with the disappear of individualism because we are controlled by larger financial institutions and corporations. We are losing our financial freedom.
Ideally we should strive for Communitarianism ( not communism ). This ism preserves your individualism. Remember the core of individualism is when Your-Rights has priority over Greater-Good, and Your-Self has priority over other’s Means-to-End.
“Core of libertarian philosophy is individualism”.
I have always used the term ‘libertarian’ as synonym of ‘anarchist’ and Anarchism is not individualist but collectivist: even if freedom is central in the Libertarian philosophy, individualism is not, communism is instead.
Communism in freedom: that is the only possible liberty: one where people coalesce to rule their common matters, while retaining full personal freedom (within the bounds of mutual respect and mutual support).
We humans are not ants (all for the group) nor cicadas (all for ourselves), we are something totally different, much more complex and we need to live with freedom but also with mutual support.
Pure individualism is self-defeating nonsense.
“Pure individualism is self-defeating nonsense.”
Skippy…Koch brothers as exhibit A, rentiers promote individualism…nuff said.