By Chris Becker. Originally published at MacroBusiness
It’s always interesting to hear mega-capitalists complain about the very system that provides them opportunity to turn their talents into Scrooge McDuck size piles of cash. Furthermore, it’s usually the most successful that have the most liberal of views and Ray Dalio, head of hedge fund Bridgewater, has weighed in again.
From CNBC:
“Capitalism basically is not working for the majority of people. That’s just the reality,” Dalio said at the 2018 Summit conference in Los Angelesin November. Monday, Dalio tweeted a video of his Summit talk.
“Today, the top one-tenth of 1 percent of the population’s net worth is equal to the bottom 90 percent combined. In other words, a big giant wealth gap. That was the same — last time that happened was the late ’30s,” Dalio said. (Indeed, research from Emmanuel Saez and Gabriel Zucman of the National Bureau of Economic Research of wealth inequality throughout the 20th century, covered by The Guardian, bears this out.)Further, Dalio points to a survey by the Federal Reserve showing that 40 percent of adults can’t come up with $400 in the case of an emergency. “It gives you an idea of what the polarity is,” Dalio said. “That’s a real world. That’s an issue.”
“We’re in a situation when the economy is at a peak, we still have this very big tension. That’s where we are today,” he said in November. “We’re in a situation where, if you have a downturn, and we will have a downturn, I believe that — I worry that that polarity will become greater.”
Here’s the full talk:
There is no actual problem with capitalism in and of itself. As a system, compared to other systems in the past, it has provided the greatest gains to the greatest number of people in the last two centuries of human development. To borrow a catchphrase, it’s settled science, and in fact maybe one of the only theories of economics that actually holds water, given that communism, socialism and other market structures have failed time and time again.
The problem with capitalism is when it is wedded to an ideology that has limited or perverted checks and balances. Inequality being the most dire and neglected outcome of perverting a system that does not punish the risk takers who fail. Witness the banking industry in the aftermath of the GFC. A properly tuned capitalistic system would have seen the majority of bankers incarcerated, there wealth confiscated by legal and just reparations and an overhaul of the financial sector.
Captured regulatory authorities and legislative assemblies overturned the fundamental cornerstone of capitalism – if you fail, you take a loss – and turned it into an even more perverse form of socialism where the losers become winners and society bears the entire burden of their mistakes.
Dalio, like Buffet and Gates before him are pointing out the problems of extreme wealth, but this is not a new phenomenon. History shows that when income and wealth inequality become widely disparate, the forces of populism rise to shake the foundations. And inequality in the US and in the Western world is again reaching those heady heights where “unbridled” (read:captured) capitalism resulted in the Great Depression:
The concentration of wealth by capturing the full yield of capitalism without distributing any seeds is worse than ever as The Economist explains:
The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealth—back to the 1916 share, which is the highest on record. Those down the distribution have not done quite so well: the top 0.1% (consisting of 160,000 families worth $73m on average) hold 22% of America’s wealth, just shy of the 1929 peak—and exactly the same share as the bottom 90% of the population.
Dalio is right to point out that an unworkable capitalist system, where the majority of the gains are kept by the few, creating an oligarchy that is inflexible to change, or risk, has not benefited the majority.
Lost in the amazing advances in the developing world which has embraced versions of capitalism over the last thirty years is that the average Westerner has gone nowhere in terms of wage growth and real wealth:
Similar forces have been in play in Australia:
Creating these instabilities, where it’s extremely hard for someone to rise above the average wage, let alone no wage, is going to cost the whole system eventually if it is not reformed and brought back to the center where it belongs.
68 comments
Comments are closed.
Here’s a good example of today’s capitalism:
https://wolfstreet.com/2019/01/17/another-retail-chain-owned-stripped-bare-by-sun-capital-goes-bankrupt/#comment-169787
Capitalism “works” because it is a flawed system that steals from society.
Limited liability corporations protect profits and socialize losses.
Companies get society provided benefits for well well below cost, but spend zillions avoiding contributing to their improvement (think infrastructure, public education, legal system).
Consumers over consume because they are not charged the full cost of their consumption. So we get pollution, resource depletion and worker exploitation.
Capitalism is a wild stallion that can take you to places you would never get to on your own, but unharnessd it will likely also take you into a ditch. Capitalism needs to be harnessed by society. It needs to serve society. Society should not be serving capitalism.
The actions of the actors in a system can be predictable. Make a system where the actors benefit by cheating and they will cheat – good people included. Make a system that encourages good behaviour and people will be better.
The planet can not handle much more of capitalism’s “success”.
capitalism works because those who benefit from it get to decide whether it works or not
YES!
“To borrow a catchphrase, it’s settled science, and in fact maybe one of the only theories of economics that actually holds water, given that communism, socialism and other market structures have failed time and time again.”
Remember when capitalism started in earnest in the early Renaissance and the already established, competing ideology tried to strangle it in its crib and destabilize any state, no matter how small, that didn’t hew to the orthodox economic and political hegemony? Oh right, me neither.
“Socialism didn’t work” without acknowledging the entire resources of the European and American “first world” attempted to put down the USSR from 1917-1921, and undeclared covert war on any state with a constitution to the left of Harry Truman ever since is kind of a mitigating circumstance of “capitalism > socialism”
Not true. See the uk revolution, the dutch revolution, and the French. Each one was an attempt by capitalism to revolutionize a region and the feudal lords tried to strangle it.
But it slowly built basic accounting methods and legal social frameworks that ended up dominating the world.
Just like socialism has created legal structures that have changed basic sense with 2 steps forwards and 1 back. Who knows where it may go after a few more centuries of revolutions?
Make a system where the actors benefit by cheating and they will cheat – good people included.
That’s the basic question in a nutshell. Can Capitalism ever be configured in such a way in which that doesn’t happen? The historical record says no, not for long, “cheating” being a relative term anyway. Good capitalists will tell you they don’t cheat, they simply redefine the legal meaning of the word to benefit their own interests, the law and its makers being simply another commodity to be bought and sold like any other.
This debate on “capitalism” feels like the black mirror discussion of MMT.
MMT = Good because it is a theory that runs contrary to norms that have produced bad results.
Capitalism = Bad because it is the widely accepted theory that has led to bad results.
Reality is they are both amoral concepts that need to be applied appropriately to produce the desired results. Coming to consensus on what those results need to be is the issue.
Dalio is an interesting character. If he went public with this in November, you can bet he’s been modeling it for years, made piles of money on it and he sees it at the end of its cycle. What he’s not saying is how they’ve modeled it out for the next 5-10 years and what those outcomes entail, which is unfortunate.
I disagree with the characterization of both MMT and capitalism. MMT is mostly not theoretical, but descriptive. The system is operated as economists like Stephanie Kelton describe. What is not the “norm” is the open acknowledgement of the way in which the monetary system operates. That particular self-delusion is about 300 years old.
Capitalism is driven by the need to always expand. But what seems possible on the micro level is not possible on the macro level, at least not forever.
Capitalism is based on two kinds of theft. Private ownership of the gifts of nature is theft from the community. Appropriation of the surplus is theft from the workers.
I would not call that amoral.
This is the kind of lectures you will get when you bail out scoundrels. Scoundrels will blame capitalism when in reality these scoundrels define capitalism as “privatize profits and socialize losses”. The temerity of these scoundrels is galling. These arsonists talk of capitalism. If capitalism had been allowed to do its job, many of these scoundrels would have been languishing in jails and the companies they run would have been dead and buried.
Capitalism doesn’t prescribe right or wrong in moral terms, only profits. The idea that markets could ever be self-policing is laughably misguided. We’re living with that truth as we speak. Profits buy power and influence, which are then used to change the rules of the game to enable even more profits in a classic vicious cycle. Rinse and repeat until a clear winner emerges or the entire system collapses in a mass of warring factions. Looks like we’ve got the latter to me.
It is the bailouts (in the guise of saving the common man from something unimaginably worse, mind you) and the lack of accountability (no one going to jail, arsonists being asked to put out the fire etc.) that is simply covering capitalism with the moral hazard muck to an extent that capitalism is now unrecognizable. The rottenness of the system has been in the works since 1987 (Greenspan put) and has taken this long to germinate into a monster. Let us see how it ends!
Gotta be real specific in our terminology here. When you say Capitalism it is like saying Religion. Just as with Religion you have different flavours of it such as Christians, Muslims, Buddhists, etc. you have also different types of Capitalism as well. I suppose that you can best describe the type of Capitalism that we have in place now as ‘Crony Capitalism’ though others may disagree. Another aspect of the type of capitalism that has evolved is that it is built on the premise of expansion as it came of age during the past two centuries when expansion was just the way it was.
Not only has this caused problems in a world of finite resources which we are pushing the envelope off but I have no idea what would happen when the Age of Expansion ends and we instead go into the Age of Contraction which will maybe last just as long. Another problem with our brand of Capitalism is that it never captures all the costs associated with a venture. An example? All those toxic sites that fracking will leave behind? The companies will never pay to clean that mess up but it will be done – maybe – by the taxpayer so of course those companies never add those costs into their accounts. A more sustainable form of Capitalism would be forced to calculate those costs into their accounts. Just because Capitalism is the way that it is does not mean that that is the way that it has to be.
A little bit of every -ism.
Looking back, it appears that when humans came out of Africa, they intermixed with Neaderthals, acquiring some of the local immunity DNA, among others, and that gave them survival advantages.
And the hybridization has enabled them to overpopulate the planet, with commentators of all kinds, including those wiser ones who are aware of the over-popluation problem and climate change.
So, in the same way, we should look to combining ideas and -isms.
Not just socialism all good, capitalism all bad, etc.
Wrong question. Capitalism isn’t designed to “work”, it’s designed to exploit & destroy- individuals, communities, societies, and ecosystems.
The results are overwhelmingly obvious except to elites.
oh it’s obvious to them too, but as Upton Sinclair said, it’s impossible to get someone to understand something when their paycheck depends on them not understanding it.
Correct. Without “restraint”, unbridled capitalism cannot be sustained; it will eventually devour the planet and render it uninhabitable. Unbridled capitalism is an animal uncaged. That uncaged animal today, globally is devouring the commons. “Capitalism” is now, “off the rails”.
“There is no actual problem with capitalism in and of itself. As a system, compared to other systems in the past, it has provided the greatest gains to the greatest number of people in the last two centuries of human development. To borrow a catchphrase, it’s settled science, and in fact maybe one of the only theories of economics that actually holds water, given that communism, socialism and other market structures have failed time and time again.”
Precisely wrong. Capitalism is a donut machine, doing its job, and spitting out donuts, it’s working exactly as it’s supposed to. The externalities and corruption are part and parcel of the system. Saying that “pure” capitalism wouldn’t have the impurities we see in the system is the exact same arguement socialists and communists could argue for their own systems. “Communism (or capitalism) (or socialism) failed because it wasn’t pure enough”, essentially. Capitalism takes the worst aspects of human nature, promotes them as virtues, then acts surprised when everyone starts acting like pirates and vampire squid.
I know. That paragraph left me laughing.
What is funny is that the post author didn’t get his or her own irony.
He probably gets it, he just put it in there as a disclaimer to keep himself from being shunned by his peers in the professional class.
capitalism assumes rational actors will balance out its flaws. He claims socialism fails but the new deal had some elements of socialism which assuaged the winner take all nature of capitalism. Deregulation basically is unmaking the rules and the result is global casino capitalism, and that’s a disease just as it would be in vegas or atlantic city. I am unsurprisingly not optimistic, we had a great chance to rein it all in, twice with obama (i say twice because I was cajoled into voting for him a second time because he was supposedly going to do something good in his second term when the poor man became unshackled from the need to be re elected [irony alert: if obama had made any effort to help regular “folks” he wouldn’t have had any problem getting re elected and the dnc wouldn’t have needed to cheat the voters and shove her republican leaning highness down our collective throats]) …and a third time with b sanders, so that’s 12 years of active enrichment of the worst fackers in the world, and now this article makes it seem like maybe they are worried but they won’t do anything to rein in bezos, or fix student loans, or any of the other crises facing the population. Self driving tech is going to increase traffic and consumption, who here thinks waymo and uber will give up on the fantasy because they’re worried about global warming? They’re worried about patents. They’re worried someone else will get the mountainous payoff. It’s all about the self and there is no sign that hand wringing of the nature Mr Dalio is engaging in, as sensible and reasoned as it may be, is going to lead to any changes that result in concrete material benefits going to people who the upper class, for lack of a better word, hates. The only good mope is one with a catalog of unpayable debts, who works to survive all the while paying into their social security account so the worst fackers in the world can garnish it and put a bottom tranche on their greedy securitization schemes.
My first thought was: climate change. If your system of producing goods and services leads to environmental destruction that interferes with the ability of the planet to harbor human life, well….I’d say that’s a major problem with your system.
To follow on Prodigalson’s analogy, Its a machine that destroys the environment to creates donuts until there is no-one left alive to eat the donuts.
+1
What you said, plus capitalism requires constant growth with finite resources which is frankly an insane expectation.
The one difference with the purity argument is that the communist apologists are pointing to the impurity of the system. The tried systems were either too capitalist or too despotic or not despotic enough or too reformist or etc.They posit that the solution is just that the system needs to have the purity of the way their political theory describes a communist system.
The capitalist apologists, apropos, point to the impurity of the individual instead. The system cannot fail, as they don’t even see it as a system, it is simply “human nature.” The morality of the individuals at the top of the hierarchy determines all. If capitalism is failing, it is because of the bad choices of those individuals.
“The morality of the individuals at the top of the hierarchy determines all. If capitalism is failing, it is because of the bad choices of those individuals.”
That’s incorrect, though. The system favors those willing to exploit others and the system as structured puts those people at the top of the pyramid. Anyone with morality cannot have outstanding success in rising to the top of the economic hierarchy in this system due to their morality being a major limitation, with the possible exception of being born into wealth.
From my background as an engineer, I have come to the conclusion that economics is not a science and should be renamed as political economics as that is a much more descriptive.
All of the “isms” are constructs of the governing rules established by governing bodies (mostly national governments) and agreements between governing bodies. All of the “isms” depend on a means to enforce the rules. I know this is all obvious to anybody who has studied this stuff. It was not to me until I started paying attention in the late 90’s, and ignored all the BS we get bombarded with on a daily basis.
The current set of rules (including the unwritten class rules where the rich and poor have different rules) guarantees the end of a human inhabitable world. It seems to me that we need to re-write the rules very quickly before we are overtaken by events.
Perhaps we should just go back to what Economics used to be called: Political Economy.
That name got nixed because its not fancy sounding enough.
>As a system, compared to other systems in the past, it has provided the greatest gains to the greatest number of people in the last two centuries of human development.
How do we actually know that? What was, during the peak years, an “average” Aztec’s quality of life, for example? Let alone knowing what work/remuneration system he/she existed under. And in truth, the measurement itself is capitalism’s measurement. It’s like ranking everybody in the country by how hard they can throw a baseball. It’s useful for winning at baseball, doesn’t say anything about the country’s metallurgical capabilities. Capitalism is best at Capitalism! Yea!
I actually think the biggest contributor to what they claim as “the greatest gains to the greatest number of people” is sewage treatment. Which I believe has been a government initiative, yes?
Now, I’m actually not comfortable kicking over the table. Universal Health Care and really high marginal tax rates would, in my model of the world (which may be completely wrong) work well enough. We would have to study not-so-Great Britain’s problems when they tried the same thing, to be sure.
The embedded youtube video doesn’t seem to match the theme of the article. Is this the one you meant to link to?
https://www.youtube.com/watch?v=5C43i3yclec
(Not that the embedded video wasn’t worth taking the time to watch)
For me, the question is:
once capitalism is established, is it possible to rein it in? Will it not allways turn out to get out of control, to become the „real existing“ capitalism. Is a capitalism „with a human face“ a stable possibilty. Communism „with a human face“ doesn’t seem to be possible. Sytems have their own dynamics and tend to find a stable equlibrium, and for each there are only a finite number of stable states, probably defined by human nature. Power tends to concentrate.
In short: Is a capitalist system, in which the TBTF are allowed to fail, a realistic possibility?
“To borrow a catchphrase, it’s settled science, and in fact maybe one of the only theories of economics that actually holds water, given that communism, socialism and other market structures have failed time and time again.” Seems like the author is ignoring those successful socialistic countries like Denmark, Sweden, etc.
They’re social democracies, which aren’t exactly socialist. They’re democratic capitalist societies with some basic socialist elements.
Sorry, but the USA’s biggest trading partner is a self declared Communist state. Anytime someone brings up the Communist boogeyman this needs to be given right back to them. Vietnam isn’t doing so bad either. Of course what the Corporatists love is not the Communism but the Totalitarianism. You can still be Communist and be involved in a market economy, and China has plenty of state involvement in it’s industry
The FIRE sector makes money from money. Their interest and profits compound and concentrate wealth. That is the only possible outcome of capitalism.
Ex Nihilo Nihil Fit! That is the only possible outcome for the rest of the human race as a result of capitalist extractions.
Seemingly a significant portion of the folk desire more stuff, regardless of the consequences. Capitalism provides more stuff for many of them, or can pretend to. Therefore they will continue to support it until it collapses. Sal si puedes.
I’m pretty certain this is a case of the dopamine hit in lieu of economic security on the lower side of the income scale.
Where did it all go wrong?
Economics, the time line:
Classical economics – observations and deductions from the world of small state, unregulated capitalism around them
Neoclassical economics – Where did that come from?
Keynesian economics – observations, deductions and fixes for the problems of neoclassical economics
Neoclassical economics – Why is that back?
We thought small state, unregulated capitalism was something that it wasn’t as our ideas came from neoclassical economics, which has little connection with classical economics.
On bringing it back again, we had lost everything that had been learned in the 1930s, by which time it had already demonstrated its flaws.
Let’s find out what capitalism really is again by going back to the classical economists.
We really need to get the cost of living back into economics.
Disposable income = wages – (taxes + the cost of living)
Cutting taxes but letting the cost of living soar has been a pointless neoliberal exercise.
Let’s find out what real wealth creation is again as they worked out in the 1930s.
It’s measured by GDP that excludes the transfer of existing assets like stocks and real estate as inflating asset prices isn’t creating real wealth. That fictitious financial wealth has a habit of disappearing as they realised after 1929.
We need to remember the problem with the markets they discovered in the 1930s.
https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png
1929 – Inflating the US stock market with debt (margin lending)
2008 – Inflating the US real estate market with debt (mortgage lending)
Bankers inflating asset prices with the money they create from loans.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
Michael Hudson has enlightened me as to the history of economics and I have added the other parts that were lost from the 1930s.
What was that terrible existence like before capitalism?
https://libcom.org/files/timeworkandindustrialcapitalism.pdf
“This general irregularity must be placed within the irregular cycle of the working week (and indeed of the working year) which provoked so much lament from moralists and mercantilists in the seventeenth and eighteenth centuries.
A rhyme printed in 1639 gives us a satirical version:
You know that Munday is Sundayes brother;
Tuesday is such another;
Wednesday you must go to Church and pray;
Thursday is half-holiday;
On Friday it is too late to begin to spin;
The Saturday is half-holiday agen.
John Houghton, in 1681, gives us the indignant version:
“When the framework knitters or makers of silk stockings had a great price for their work, they have been observed seldom to work on Mondays and Tuesdays but to spend most of their time at the ale-house or nine-pins . . .
The weavers, ’tis common with them to be drunk on Monday, have their head-ache on Tuesday, and their tools out of order on Wednesday. As for the shoemakers, they’ll rather be hanged than not remember St. Crispin on Monday . . . and it commonly holds as long as they have a penny of money or pennyworth of credit.”
Merrie England gave way to the dark satanic mills.
Capitalism is progress?
Maybe because they had plenty of time to think while they were weaving but historically, if you had an active politically minded group, it was guaranteed that the weavers would be part of them. Until they got industrialized that is. Certainly that was true in Scotland in the 19th century.
The article is interesting, but do we truly have to be lectured by Becker?:
In other words, capitalism is dogma that has defeated the Arians. Try going to Wikipedia, put in “Panic of,” and you will get fifteen major crashes in the U.S. economy from 1792 to 1930. That’s fifteen crashes in 150 years. And this is a system that hasn’t failed time and time again?
Mixed economies with strong government intervention and subsidies to the citizenry (the welfare state) have done quite well. The Venetian republic used that economic model for some 1100 years. There are alternatives to U.S. buccaneer capitalism and its endless slogans about its bestness.
Only in America:
https://www.youtube.com/watch?v=0AFDhxk97Xg
https://youtu.be/gAyWvNXLn0g
Nearly dropped my phone as I desperately texted Denmark to let them know their country had failed.
Haha
some might agree and then probably blame immigrants … *eye roll*
But there are degrees of perceived “failure” and in the U.S. these are getting pretty extreme.
They are never honest about socialism, “its been tried and it failed”
Never mention that any country that dares go socialist will immediately be economically attacked by capitalist countries. Has it ever been given a chance where it wasn’t?
I always thought it funny that capitalists always say socialism doesn’t work but then why are they so desperately afraid of it.
And why try to spread capitalism to your main enemies, China and Russia, instead of letting them languish with their inferior systems?
it’s not clear that China’s present system isn’t also capitalism. Russia neither only it’s also particularly corrupt. It’s a raw power contest with them and the U.S. government, not an ideological one,
Russia has been capitalist since the wall fell, China since Deng Xiaopings reforms. Russia is just a regular capitalist country at this point, whereas China is State Capitalism (in fact, the only major extant example of such).
What I find so frustrating about this kind of analysis is that it takes as given that “capitalism” is a thing, something actually existing in the real world. In reality, it’s a sound we make with our mouths, and nothing more. At most it’s a rather vague concept whose definition there does not seem to be any real agreement on. It’s a shibboleth with no actual referent in the physical world.
I think words like “capitalism” and “socialism” get used as mental shorthand because most of us can’t be bothered with the nuance of reality. The policies, norms, and systems we have in place now are there because they serve (or served) the interests of some person or group of people who had enough influence/power to get them put in place. Sheldon Adelson demanding the Feds regulate on-line gambling is a perfect example. Adelson doesn’t give a rip whether having the gov’t remove his competitors is “capitalism” or not. It’s in his interests, and if he can flex enough muscle to get the Feds to go along, he’ll get his way. What label you put on the outcome is irrelevant.
The strong take what they can and the weak suffer what they must. Seems like that’s been true in every large-scale society I’m familiar with, regardless of how they labled themselves.
A clear definition of capitalism is not to the advantage of capitalists, so we never hear one, except “private ownership of the means of production” which is not it.
People have been taught to think of capitalism simply as “the source of all good things” so by definition any alternative must be worse. No need to think about the details.
Capitalism is stock markets. The separation of labor and management from ownership by turning ownership into a financial commodity.
The difference between piracy and the dutch east india company? Capitalism.
for leftists it seems it’s often shorthand for the status quo, and the status quo economics and power relationships. So sure that’s a catch all for the water us fishes hardly know we swim in.
They aren’t wrong on the fact that any system that uses more resources than the earth produces WILL NOT and CAN NOT end well and that the only hope, if hope there is, is in reigning this in. And that probably, or at least probably if it is to be humane in any sense and not just be mass extermination, requires an economy geared toward human needs, not consumerism, not excess for anyone beyond what the world can produce.
Sometimes this system we live in produces more or less inequality, how much depends on how much the powerful are able to take, how much power they have to direct all wealth to themselves. Always it produces wage slavery, deprived as wage slaves are of their own subsistence other than by selling their labor. They might have more of less of a voice in the workplace, in the U.S. they have pretty much none. So the U.S. status quo is a powerless vast mass of people that must work for a living whose lives are dictated by economic powers beyond their control. And then there are the rentiers taking their cut from everyone working for a living as well. The returns just from owning property etc. – almost all real property being owned by a few large players.
So capitalism is bad only because it has been wedded to perverse ideologies, but all other economic systems are bad inherently. Seems legit.
What a blabbering rambling pointless airhead.
No, no, no NO!
https://americanaffairsjournal.org/2018/11/principles-for-dummies/
The biggest failure of capitalism is environmental. In a system which everything is privatized except the externalities which are dumped on public plate with no way to pursue public interest and which will bring us down sooner than later. Inequality is at the core of the system, but it isn’t the worst outcome. A system that produces much more than needed and pollutes the environment, we find ourselves sitting on piles of garbage and killing ourselves in the name of production efficiency. In a socialist system the public has potentially control over resources and could potentially divert resources to less destructive production, or make a conscious decision to stop altogether. Even if we, in this stage, distribute wealth equaly we won’t be able to avert the environmental catastrophe that awaits us.
Capitalism has been historically a system of exploitation of the Masses, and remains so today, even after decades of attempts to reform it. Talk regarding the system has largely been of a circular and utopian nature since the collapse of the U.S.S.R.. The Center-Left coalition has been searching for a way to make Capitalism “work,” i.e. make it palpable enough for the majority of people so as to keep the Owner Classes feeling secure. You can’t fix what something is by its very nature, though. Capitalism is a socio-economic model for a Class based organizing of society; it’s chief claim to progress was that it operated as a universal (neither religiously or ethnically demarcated) organizational structure outside of the hereditary based systems of feudalism that preceded it–though given projected trends for Wealth concentration one might find the later claim to be somewhat specious.
The Keynesian economists tried to make Capitalism work and they were axed back in the 70’s, along with the older generations of the CED, the moment the owner classes felt secure again after the Great Crash. Unions, Regulatory Bodies, and the promises of a Great Society where undermined and attacked, dismantled, and largely turned into empty talking points. The triumph of Right Wing politics, aka the last four to five decades, should be observed as nothing short of absolute failure on the part of the Center-Left, Triangulationists (Neo-Liberals), and the Soft-Politics of Identity in providing substantive answers to systemic questions of exploitation of the Many by the Few. The Liberal Theory of Reform has ultimately proved to be very divergent from Reality, which has largely demonstrated that it takes both large scale emergent catastrophes (Great Depression), a militant population (Socialists, Fascists, Organized Labor, and/or Disgruntled Peasantry), and the acceptance or acquiescence of the Power Elites in order for Change to place. The gradualism of reformist policy has largely been debunked thanks to over a century of sloppy and mostly reactive implementation and subsequent repeal.
In the Western context, however, Capitalism is the softest form of Power enforcement, in that it is largely an idea that most in the society at least tentatively accept as the deterministic apparatus for “success” and “failure.” Even intellectual debate is referred to as, “the Marketplace of Ideas.” Once it is gone as viable option, the Elites have one of two options: submit to egalitarianism or resort to older forms of control.
To be more frank, we also need to start talking about actual material breaking points, rather than pretending that abstract “polarization” will continue on.
For me the question is if the “system”, broken as it is, is or isn’t already repairable, and whether guys like this are really ready for the necessary steps.
Capitalism cannot survive without slave labor.
Capitalism works! The problem are all those brainwashed by neoliberal propaganda nonsense, that capitalism is a system that will deliver to all and sundry, sort of market socialism.
Only a child could believe that?
That the minority of the elite that owns and control the means of production and not least the financial institutions would have identical interests with common people?
Some people still not get that neoliberalism is and was a counter revolution, by the capitalist class, on the postwar mixed economy that did spread economic growth to all and sundry. That it should generate welfare to everybody was just a propaganda ploy. Everyone who didn’t engage in self-deception did see that from the beginning.
It have worked beyond any expectations, a total success for the few that owns this world. Some counter counter revolution on this aren’t even remotely visible on the horizon. And if it would come the few will defend their progress with whatever it takes, if a bloodbath are required they won’t hesitate.
A Benevolent Dictator will be needed to displace capitalism as the means for supplying the goods and services needed for a survivable and sustainable society. A new enlightened elite conscious of rational needs instead of marketers and self-promoters.
Millions of individuals are beginning to extricate themselves, the best way they can, from this corrupt system. The die hard capitalists will be the last to notice that the world has changed around them. Climate change will make this a necessity. People not working together to ensure their common survival will be dead.
Capitalism depends on various forms of exploitation to persist. When the world has been ground down to such an extent that growth and exploitation cannot continue, those practiced in radical conservation have the best chance for survival. I just don’t see slave societies meeting that requirement. Slaves can always sabotage the system if they don’t fear for their lives. An elite spending their time and energies focused on preventing slave revolts won’t have the luxury of abundance to pursue their follies- they will be too busy trying to survive themselves.
Maybe this has a silver lining. The future elite will be members of the community, not some sequestered and pampered minority granted the privilege to live in this seclusion- it just won’t be possible any more.
Until then, learn practical skills and be kind.
“….is going to cost the system eventually. ” This is the reality .. Systems DO NOT reform themselves; they can’t because they don’t know how to. Something new has to emerge to fill the vacumm they create when they collapse.No one knows what that will be. So just be prepared . Hold to what you know to be true.
“Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of us all.” –J. M. Keynes
“If you’re not willing to kill everybody who has a different idea than yourself, you cannot have Frederick Hayek’s free market. You cannot have Alan Greenspan or the Chicago School, you cannot have the economic freedom that is freedom for the rentiers and the FIRE (finance, insurance, real estate) sector to reduce the rest of the economy to serfdom.” ~ Michael Hudson
Neoliberalism is extreme capitalism, the libertarian purists’ dream that, if left unabated, would eliminate human rights, safety regulations and environmental protections. That’s why they’ve taken Civics out of the educational curriculum. Why should people learn about rights in a future world of no citizenship?
And forget about freedom to roam. There would be restricted zones, less car ownership, more mass transit, less private property ownership. Why do you think the housing prices are so out of reach today?
“In a libertarian society, there is no commons or public space. There are property lines, not borders. When it comes to real property and physical movement across such real property, there are owners, guests, licensees, business invitees and trespassers – not legal and illegal immigrants.” ~ Jeff Deist, president of the Mises Institute
They’ve already tried their experiment of replacing nations with privately owned “charter cities” in Honduras, but it didn’t work, unsurprisingly. Co-ops must be restored in that region, which were very successful.
Private bankers can’t control BOTH forms of money creation – government issuance of new currency and credit creation, but they do and have been in the US for the past 40 years now.
Gov’t finance is being intentionally mismanaged because banks make money on loans (and deficits cut into their profits), so they suppressed wages and shut off fiscal policy gov’t investment in order to force the nation to borrow credit. This has caused a massive private debt over the past 40 years, all dishonorably accrued because it never had to have happened in the first place. It should all be cancelled.
“This is an outrageous betrayal of public trust — but only what can be expected when private bankers are given a governing role in American monetary policy. In a sane world, private bankers would have no more voice than any other citizen in making that decision. It’s time to throw these turkeys out of American monetary policy.”
We need to reclaim the State from the money lenders.
“The “nation-state” as a fundamental unit of man’s organized life has ceased to be the principal creative force: International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state.”
~ Zbigniew Brzezinski, Between Two Ages, 1970
“The Trilateralist Commission is international…(and)…is intended to be the vehicle for multinational consolidation of the commercial and banking interests BY SEIZING CONTROL OF THE POLITICAL GOVERNMENT OF THE UNITED STATES. The Trilateralist Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power – political, monetary, intellectual, and ecclesiastical.”
~ Barry Goldwater, With No Apologies, 1979