Is capitalism destroying itself?

[kentuck]

http://www.alternet.org/newsandviews/article/649635/mainstream_economist%3A_marx_was_right._capitalism_may_be_destroying_itself

<snip>
WSJ: So you painted a bleak picture of sub-par economic growth going forward, with an increased risk of another recession in the near future. That sounds awful. What can government and what can businesses do to get the economy going again or is it just sit and wait and gut it out?

Roubini: Businesses are not doing anything. They're not actually helping. All this risk made them more nervous. There's a value in waiting. They claim they're doing cutbacks because there's excess capacity and not adding workers because there's not enough final demand, but there's a paradox, a Catch-22. If you're not hiring workers, there's not enough labor income, enough consumer confidence, enough consumption, not enough final demand. In the last two or three years, we've actually had a worsening because we've had a massive redistribution of income from labor to capital, from wages to profits, and the inequality of income has increased and the marginal propensity to spend of a household is greater than the marginal propensity of a firm because they have a greater propensity to save, that is firms compared to households. So the redistribution of income and wealth makes the problem of inadequate aggregate demand even worse.

Karl Marx had it right. At some point, Capitalism can destroy itself. You cannot keep on shifting income from labor to Capital without having an excess capacity and a lack of aggregate demand. That's what has happened. We thought that markets worked. They're not working. The individual can be rational. The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else's income and consumption. That's why it's a self-destructive process.

[Syrinx]

1. shorter version

Once the oligarchs have all the money, any true capitalism dies.

[blindpig]

9. "true capitalism"

What we got is true capitalism. You cannot freeze time, say the 1830's, and say this is what capitalism 'is'. Capitalism develops over the course of history by the mechanisms inherent in it's operation. The dominance of finance capital was predicted by Marx, a result of falling profitability due to overproduction.

[ladjf]

24. Simple as that. nt

[galileoreloaded]

2. Analysis...correct. Outcome...a capitalism that would make the 14th c. Italians blush. n/t

[Selatius]

3. I favor two changes to American labor law.

I believe the government should embark on a jobs program with the goal of financing the start-up, funding, and advising of labor co-ops or employee-owned enterprises. The program should also have the power to buy out failed or bankrupt enterprises for the purpose of reorganizing them into labor co-ops. In a labor co-op, there is no "labor cost" to reduce because the owners are the workers themselves.

The second proposition is the passage of a law similar to Germany's co-determination law. For enterprises over, say, 1,000 employees, the board of directors would have to be reorganized so that half the seats on the board are elected directly by the workers at the company. The chairmen of the board would act as a tie-breaker in the event of a deadlock and is elected by the board of directors at large. Half the management positions would also be open to workers' elections.

The aim of these two propositions is to provide a real choice to American workers to either work collectively to enjoy the fruits of their labor or sell their labor to a traditional enterprise in return for whatever wages they can obtain. They would have two sectors to choose: The co-op sector or the private sector. With the co-determination law in place, it would help to ensure workers who are in the private sector have some defense against the destructive impulse to exploit employees as much as possible and to pay as low as possible.

In time, I believe the co-op sector would grow to rival and, hopefully, surpass the private sector in size and influence. While the goal isn't the total elimination of capitalism, the purpose of this reform is to ensure that the activity of production benefits all instead of just a few at the expense of many.

[Owlet]

4. Itself, and 'democracy' to boot

Franklin D. Roosevelt in an April 29, 1938 message to Congress warned that the growth of private power could lead to fascism:

"The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power."

(The above is in a Wiki article on capitalism. I copied it into a text file some time ago and didn't copy the link.)

[slay]

5. We can only hope

it destroys itself - before it destroys the planet.

[leveymg]

6. Harvard economics professor Joseph Schumpeter described capitalism as "creative destruction."

Today, Wall Street and the Big Banks have become ever more destructive, risky and predatory as they become expanded their product lines into exotic derivatives such as Sovereign Credit Default Swaps and creative bookkeeping used to measure their claimed value.

[socialist_n_TN]

12. True and at the same time they've become MUCH less

"creative" RE: actual products. Of course that's an historical imperative. How many kinds of deodorants can the public use? Their creativity has gone INTO distruction.

[Puzzledtraveller]

7. people destroy themselves

or eachother, human nature will rear it's ugly head in any social and economic system, any.

[socialist_n_TN]

13. Then we probably need a system that doesn't ENCOURAGE

the WORST part of human nature to assert itself. At least then it wouldn't be socially acceptable to be a sociopath.

[Puzzledtraveller]

14. Civilization has been humping along a long time

what hasn't been tried yet that hasn't failed in some fashion or another? Serious question.

[socialist_n_TN]

17. Leninist/Trotskyist version of Marxism

nm

[blindpig]

18. "human nature"

What people call 'human nature' is a result of the social environment. In a society in which acquisitiveness is valued and rewarded that behavior will come to the fore. In a society which does not value this behavior it will be relegated to an unpleasant behavior which will be dealt with in society like any other obnoxious behavior. This is not to say that 'greed' will be abolished in socialist society but rather that with the ability to command society removed the 'greedy' will be toothless and just unpleasant.

[randome]

19. Where did this society come from?

It didn't spring into existence at the behest of our leaders.

[blindpig]

21. It developed historically..

from the feudal society which preceded it.

[socialist_n_TN]

22. No it sprang into existance from a system that

ENCOURAGED greed as a virtue and an amoral profit at any cost attitude (capitalism). THAT'S THE POINT.

If human beings are so flawed that they'll fuck up a wet dream, then why in the world ENCOURAGE those flaws in your economic system? At least a socialist system, AT WORST, would pay lip service to ideals of economic democracy. Would there still be flaws? Of course, but the WORST in human nature wouldn't be encouraged.

[occupyeverywhere]

8. Capitalism is a parasitic

and once the parasite sucks up all the resources, energy of the host, the host dies.

[TBF]

10. Marx is definitely right. A good read on this also is Lenin's Imperialism -

a friend suggested I read it to understand what it is happening with Capitalism in this country. It is a fairly easy read - http://www.marxists.org/archive/lenin/works/1916/imp-hsc/

Next we transition to socialism. Morons like Bloomberg (and other capitalists who are still benefiting from the system) will push back, but if we want to save our planet it's imperative that we install an economic system that puts people and environment before profits.

[Yavin4]

11. If You Take The Refs Off The Football Field, The Game Would Descend Into A Brawl

It would no longer be a game of football. It would quickly descend into dirty cheap shots and violent retribution. Ultimately it would become an all out brawl.

Regulations are the refs on the field. For the last 30 years+, we've taken the refs off the field, and now we're seeing the ugly side of capitalism as it feeds on itself.

[Odin2005]

15. All those idiots who said "Marxism is dead" in 1990 have egg on their face, now.

[randome]

16. About 5 billion people would disagree with you.

Most of the world is capitalistic or aspires to capitalism. There are good things about capitalism. Essential things. But without proper regulation, it begins to fall apart.

[Odin2005]

20. That's total bullshit.

[Gregorian]

23. Mzrx! Now I see it. It makes sense.

I thought, and still do think, that capitalism can work. But that greed interferes. However, that Marx statement makes logical sense. It may very well be that capitalism fails for the reason he mentions. Very interesting.