Posts Tagged ‘capitalism’
Tags: capitalism, cartoon, Comcast, corporations, inequality, jobs, merger, Obamacare, rich, taxes, Time Warner
Tags: 1 percent, capitalism, crises, Greg Mankiw, inequality, knowledge
But, in his defense of his defense, Mankiw does make a curious admission: capitalism is fatally flawed.
The admission actually occurs in his textbook [pdf], where Mankiw sends us to read his explanation of who bears responsibility for the most recent financial crisis (hint: it’s half the fault of government, and half Wall Street). Then, he admits that financial crises “do occur from time to time.”
Finally, keep in mind that this financial crisis was not the first one in history. Such events, though fortunately rare, do occur from time to time. Rather than looking for a culprit to blame for this singular event, perhaps we should view speculative excess and its ramifications as an inherent feature of market economies. Policymakers can respond to financial crises as they happen, and they can take steps to reduce the likelihood and severity of such crises, but preventing them entirely may be too much to ask given our current knowledge.
Yes, indeed, “speculative excess and its ramifications” are in fact “an inherent feature” of capitalist economies.* But then, Mankiw adds, “preventing them entirely may be too much to ask given our current knowledge.”
What Mankiw sees as a problem of knowledge is what the rest of us see as a problem of economic institutions. It’s precisely because the economic system is arranged so that a tiny minority at the top is able to continue to capture the surplus that financial crises occur on a regular basis.
What the rest of us know is that defending the 1 percent is precisely what will guarantee more financial crises in the future.
*And, for Mankiw, they’re something we simply have to put up with because “for human welfare, growth swamps fluctuations.”
Tags: capitalism, history, Lyndon Baines Johnson, poverty, United States, War on Poverty
Clearly, the War on Poverty hasn’t worked. Not when the official poverty rate has only fallen to 15 percent from 19 percent since Lyndon Baines Johnson’s landmark State of the Union address, and when in 2012 46 million Americans still lived in households that fell below the poverty line.*
But the problem is not that government tax and transfer programs don’t work. It’s that they simply can’t work, not when the U.S. economy continues to force people to try to survive in such miserable conditions.
Recent research (by both Liana Fox et al. and Christopher Wimer et al. [pdf]) on historical trends using the Supplemental Poverty Measure has shown that, in fact, government policies have played an important and growing role in reducing poverty. For example, the national poverty rate fell from about 26 percent in 1967 to 16 percent today.
But their research also indicates how difficult it is to decrease, let alone eliminate, poverty—when nothing has been done to transform an economy that continues to generate such high levels of poverty. That’s the real war on war on poverty.
The U.S. economy continues to force almost a third of Americans to try to survive on low private-sector jobs and incomes—which, in the absence of government programs, would leave them below the poverty line. If anything, things have gotten worse since the war on poverty was first declared: about a quarter of Americans would have been poor in 1967, and that number has climbed to over thirty percent in 2011.
The real reason the War on Poverty hasn’t worked is that U.S. capitalism continues to generate such high levels of poverty in the first place.
*Those numbers are only slightly modified by the Census Bureau’s Supplementary Poverty Measure [pdf], which indicates a poverty rate of 16 percent and a total poor population of 49.7 Americans.
Tags: Adam Smith, capitalism, commodities, happiness, profits, workers
As it turns out, happiness is neither a warm puppy nor a warm gun. It’s decommodification.
That’s the conclusion of research conducted by my colleague and friend Ben Radcliff.
Can you talk a bit more about what you mean by “decommodification”? Do you mean not being reliant on work to live — not being a commodity yourself — or the carving out of certain things (human organs, say) that just aren’t commodities you can buy and sell?
A society is decommodified to the degree to which people are not entirely dependent on labor market participation in order to survive — principally because they are aged, because they are ill, or simply because jobs are scarce, but also, potentially, so that they can take time to care for a new child or an ailing family member, etc. My research suggests people lead better lives in those societies that are the most decommodified. The reasons are easy enough to understand: There’s a famous quotation observing that a capitalist economy, whatever its many positive aspects, creates a situation in which people have to behave as commodities in order to survive. It doesn’t take great insight to realize that people do not enjoy being reduced to commodities, so a society that limits that necessity is likely to be a better one in which to live.
Now, to be sure, the market economy absolutely contributes to human well-being in other ways — no one can deny that — but we have a macro- vs. micro-problem. At the macro level, capitalism works well. I would agree with Brooks that the market society is one of humanity’s greatest achievements. But at the micro level it depends at the very core of its logic, as even Adam Smith was at pains to point out, on the idea of using other people (employees) as a means to making profits for oneself. The people we hire to do work are just mere commodities in the profit-loss calculations, no more worthy of special concern than barrels of oil or bushels of grain. The last chapter of my book discusses these moral tensions that capitalism creates. My conclusion is that the social safety net, labor market regulations and labor unions all limit the degree to which people become mere commodities, and thus are more likely to lead fulfilling lives.
Although, clearly, in light of the Second Great Depression, Radcliff might want to reconsider his argument that capitalism works well at the macro level. . .
Tags: Boeing, capitalism, cartoon, ethics, jobs, Marx, pope, Republicans, Right to Work, right-wing, workers
Tags: capitalism, chart, crisis, growth, secular stagnation
This chart, which was prepared by economist Anthony Laramie [ht: ja], is one way of looking at how much trouble we’re in right now as a result of the recent and ongoing crises of capitalism.
As Laramie explains,
these are data derived using the revised National Income and Product Accounts. The blue line is actual real GDP since 2000, first quarter. The green line is the post-World War II trend in real GDP, from the first quarter of 1947 to the third quarter of 2013 (where the average annual growth rate is about 3.2 percent). The red line is the post-Bretton Woods (i.e., since 1972) trend in real GDP (where the average annual growth rate is about 2.9 percent).
The obvious conclusion from looking at this chart is that the United States has shifted onto a lower trend with a lower growth rate.
Which trend is a better benchmark as to where the economy should be? Well, if we look at the period from 1972 (first quarter) to 2000 (fourth quarter) (i.e., the post-Bretton Woods to the pre-War on Terror period), the average annual growth rate is just over 3.1 percent. Excluding the poor economic growth of the last decade suggests that the better benchmark is given by the trend growing at 3.2 percent (the green line).
Is there any wonder that the notion of “secular stagnation” has reared its ugly ahead again?
Tags: capitalism, cartoon, fast food, films, pope, right-wing, strike, unemployed, workers
Tags: capitalism, David Simon, inequality, Marx, profit, Second Great Depression, The Wire
Marx, it seems, is getting more and more play these days—as class inequalities continue to rise and we remain mired in the Second Great Depression.
Simon offers the usual disclaimers (which we almost always read when someone respectable tries to make the case for turning to Marx to understand what’s going on, along the lines of “I think Marx was a much better diagnostician than he was a clinician” ”Oh by the way I’m not a Marxist you know”) but Marx’s critique of capitalism is in fact central to Simon’s analysis of the current “horror show.”
he was really sharp about what goes wrong when capital wins unequivocally, when it gets everything it asks for.
That may be the ultimate tragedy of capitalism in our time, that it has achieved its dominance without regard to a social compact, without being connected to any other metric for human progress.
We understand profit. In my country we measure things by profit. We listen to the Wall Street analysts. They tell us what we’re supposed to do every quarter. The quarterly report is God. Turn to face God. Turn to face Mecca, you know. Did you make your number? Did you not make your number? Do you want your bonus? Do you not want your bonus?
And that notion that capital is the metric, that profit is the metric by which we’re going to measure the health of our society is one of the fundamental mistakes of the last 30 years. I would date it in my country to about 1980 exactly, and it has triumphed. . .
Mistaking capitalism for a blueprint as to how to build a society strikes me as a really dangerous idea in a bad way. Capitalism is a remarkable engine again for producing wealth. It’s a great tool to have in your toolbox if you’re trying to build a society and have that society advance. You wouldn’t want to go forward at this point without it. But it’s not a blueprint for how to build the just society. There are other metrics besides that quarterly profit report.
The idea that the market will solve such things as environmental concerns, as our racial divides, as our class distinctions, our problems with educating and incorporating one generation of workers into the economy after the other when that economy is changing; the idea that the market is going to heed all of the human concerns and still maximise profit is juvenile. It’s a juvenile notion and it’s still being argued in my country passionately and we’re going down the tubes. And it terrifies me because I’m astonished at how comfortable we are in absolving ourselves of what is basically a moral choice. Are we all in this together or are we all not?
They weren’t in this together in The Wire—and we’re certainly not, in real life, in what passes for society today.
Tags: capitalism, class, Communist Manifesto, exploitation, Marx
It just so happens I’m finishing up the course on Marxian economic theory this week with, among other readings, the Communist Manifesto. The students haven’t read it before (in contrast to previous generations, who had encountered in either in high school or some other college course) but it should be an interesting discussion.
And if students are not acquainted with that text, they won’t fully understand the recent conversation between Paul Jay and Chris Hedges [ht: db], in which Jay refers to Hedges’s 20 October essay, “Let’s Get This Class War Started.”
JAY: Now, you write something here which, you know, if you–you would not be allowed to say on mainstream news anywhere. You write: “Class struggle defines most of human history. Marx got this right. The sooner we realize that we are locked in deadly warfare with our ruling, corporate elite, the sooner we will realize that these elites must be overthrown.” There’s a massive campaign not even to use the words class warfare. In fact, if you talk class, people accuse you of being essentially anti-American.
HEDGES: I don’t think you can understand the nature of capitalism if you don’t understand the nature of class warfare. You know, if I was running a Wall Street firm, I’d only hire Marxian economists, because they understand that capitalism is about exploitation. Marx got that right.
Tags: capitalism, cooperatives, enterprises, globalization, richard wolff, unions, United States, workers
From Edward Lambert, who writes:
Richard Wolff is on fire here. He is explaining the cooperative model and why it will save the US. I have never seen a better video on the subject. This video should be required listening for all economists. The ideas presented should be reflected upon and understood.