Today, as we celebrate the passing of the old and the ushering in of the new, we have to recognize that while we can’t repair the past we can certainly figure out how to create a different future. The key question, as always: what is to be done?
Francis Fukuyama makes a hash of it (arguing, incorrectly, that the working-class and with it Marxism can be consigned to the distant past) but he does identify one key task:
It is not possible to get to that point, however, without providing a serious and sustained critique of much of the edifice of modern neoclassical economics, beginning with fundamental assumptions such as the sovereignty of individual preferences and that aggregate income is an accurate measure of national well-being. This critique would have to note that people’s incomes do not necessarily represent their true contributions to society. It would have to go further, however, and recognize that even if labor markets were efficient, the natural distribution of talents is not necessarily fair and that individuals are not sovereign entities but beings heavily shaped by their surrounding societies.
The Pew Research Center continues to document solid support for socialism (notwithstanding the post-Cold War assault on anything and anyone associated with the idea), especially among some groups (such as young people, African-Americans, those with lower incomes, and Democrats).
Occupations have a long tradition in the United States, Michael Moore reminds us, beginning with the Flint sit-down strike 75 years ago yesterday.
Although there had been prior strikes at other auto plants, Flint represented a new milestone for the union movement. The strike targeted two critical plants, Fisher 1 and 2. Both belonged to General Motors, the biggest of the big three auto manufacturers in the United States. UAW activists realized the strike had the potential to paralyze the auto manufacturer and give them a platform to organize on a national level.
Goldman Sachs is certainly not optimistic about the future:
“Slowing growth (and in places outright contraction), public-sector cuts, and a renegotiation of the social compact between state and society in different parts of the world is an environment ripe for political turmoil,” Goldman said in a note to clients.
Mainstream economists continue not to understand the redistributive effects of government deficits, with Paul Krugman focusing only on the national identity of those who finance deficits and Greg Mankiw arguing (with the help of Laurence Ball) that the question of who wins and who loses is mostly philosophy and not economics.
There is much more, of course, that remains to be done. And it’s clear that the answers are not going to be found within mainstream economics or within the existing forms of capitalism. The only way out of the Second Great Depression is to make a clean break from the past and chart a different future.