Posts Tagged ‘capitalism’


Apparently, there’s a new documentary film [ht: ja]—Boom Bust Boom, directed by Monty Python’s Terry Jones—whose aim is to to popularize the work of Hyman Minsky.

Minsky’s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks and households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable.

This logical and coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; and that any shocks must be external.

This is the latest attempt, in a long sequence since the crisis of 2007-08, to rediscover and examine the implications of Minsky’s work (which I’ve discussed many times on this blog).


While mainstream economists continue to discuss and debate their favorite topics—when to hike interest rates, the appropriate measure of capital, how to apply monetary rules, the outcome of debt negotiations in Europe, and much else—they never mention one obvious fact: capitalism kills. In particular, it kills babies and middle-aged people.

According to Alice Chen, Emily Oster, and Heidi Williams [pdf], capitalism kills babies. The United States, for example, ranks fifty-first in the world in infant mortality—comparable to Croatia, despite an almost three-fold difference in income per capita. But, as it turns out, it’s not differences at birth that explain the low ranking of the United States; it’s the high rate of postneonatal deaths. And that high rate (e.g., in comparison to Finland and Austria in the authors’ study) is “due entirely, or almost entirely, to high mortality among less advantaged groups. Well-off individuals in all three countries have similar infant mortality rates.” In other words, the high level of infant deaths in the United States are almost entirely a consequence of the grotesque levels of economic inequality that capitalism has created within the United States.

We also have to admit that capitalism kills middle-aged people. In a study recently published in the American Journal of Preventive Medicine, Katherine A. Hempstead and Julie A. Phillips found that suicide rates among middle-aged men and women in the United States have been increasing since 1999, with a sharp escalation since 2007. Their conclusion is that

Relative to other age groups, a larger and increasing proportion of middle-aged suicides have circumstances associated with job, financial, or legal distress and are completed using suffocation. The sharpest increase in external circumstances appears to be temporally related to the worst years of the Great Recession, consistent with other work showing a link between deteriorating economic conditions and suicide.

What’s the old adage, an ounce of prevention is worth a pound of cure? Well, in this case, preventing neonatal deaths and middle-aged suicides should start with eliminating capitalism.


I haven’t read Fifty Shades of Grey nor have I seen the film. But at some point I may have to, given what others are writing about this particular phenomenon in popular culture.

According to Heather Havrilesky,

the story of Anastasia Steele and Christian Grey isn’t really about dominance or bondage or even sex or love, despite all the Harlequin Romance–worthy character names. No, what Fifty Shades of Grey offers is an extreme vision of late-capitalist deliverance, the American (wet) dream on performance-enhancing drugs. Just as magazines such asPenthouse, Playboy, Chic, and Oui (speaking of aspirational names) have effectively equated the moment of erotic indulgence with the ultimate consumer release, a totem of the final elevation into amoral privilege, James’s trilogy represents the latest installment in the commodified sex genre. The money shot is just that: the moment when our heroine realizes she’s been ushered into the hallowed realm of the 1 percent, once and for all.

Lynn Stuart Parramore offers a similar interpretation:

Author E.L. James has often insisted that Fifty Shades of Grey is wildly popular not because of its titillating trappings of transgression, but because it tells a simple love story for the ages. But this is a romance for a particular kind of age — a time of growing inequality. The social order is breaking up and leaving massive human wreckage in its wake. Dreams of love turn into fantasies of power – who has it and what they can do to those who don’t have it. . .

The film is the dispiriting denouement of this late stage of capitalism, where cruel conditions are accepted and you learn to suffer the whims of the rich — and pretend to like it.

Havrilesky and Parramore have succeeded in doing something I hadn’t expected: they’ve made me rethink my initial ignoring of Fifty Shades. . .


During last night’s discussion of capitalism verusus Catholicism, I made the point that everyone—rich and poor—is negatively affected by capitalist inequality.

My argument was that poor people are put at a distinct disadvantage within an “economy of exclusion,” because they are denied the basic material conditions necessary to sustain not only their individual lives, but also their participation in the wider society. But, I went on, rich people are also hurt by inequality, in the sense that are forced to act in selfish and unethical ways in order to maintain their positions of privilege.

I then referred to the psychological literature on the behavioral effects of inequality, about which I’ve written before (here and here). The latest contribution to this literature was just published in the Journal of Personality and Social Psychology: “Social Class, Power, and Selfishness: When and Why Upper and Lower Class Individuals Behave Unethically,” by David Dubois, Derek D. Rucker, and Adam D. Galinsky. The authors set out to disentangle the differences between unethical and self-serving behavior in relation to social class. Here’s what they found:

Both higher and lower social class individuals can engage in unethical behavior, but the target of that behavior might often differ: The unethical behavior of upper class individuals is more likely to be self-beneficial, whereas the unethical behavior of lower class individuals is more likely to be other-beneficial. This parsimonious account complements and qualifies recent work on social class and unethical behavior (Piff et al., 2012) by advancing the argument that the link between upper social class and unethical behavior occurs primarily for self-beneficial reasons.

As I’ve argued before, the point is not that rich people per se display behavioral pathologies—or, for that matter, that poor people are noble. It is fascinating that there are systematic differences in the target of their unethical behavior. But I’m more interested in the idea that both groups, within a highly unequal society, are forced to behave in ways many of us would consider unethical, whether self-serving or altruistic.

What I had in mind when I made my remarks was, of course, Marx’s statement “that the capitalist is just as enslaved by the relationships of capitalism as is his opposite pole, the worker, albeit in a quite different manner.”

But after the fact, as I was driving home from the discussion, I had another thought: what if that is the true content of the preferential option for the poor? We often think of the preferential option as a kind of basic moral test, in the sense of judging the adequacy of current economic arrangements in terms of how the most vulnerable members of society are faring. But what if there is a somewhat different interpretation—that changing society to eliminate poverty will benefit not only the formerly poor but also everyone else? In other words, creating institutions that eliminate the kinds of grotesque inequalities that characterize contemporary capitalism will benefit even those who are not poor, since they will no longer be forced to lose or undermine or otherwise forsake their humanity by engaging in unethical self-serving behaviors. Thus, eliminating capitalist inequality can be seeing as restoring humanity to everyone, both poor and rich.

In that sense, the poor and vulnerable represent a universal class—not because of some kind of inherent nobility, but because eliminating the conditions of poverty and vulnerability will benefit not only themselves, but all others in a capitalist society.

That—and not pity or charity or individual instances of social mobility—may be the truly radical content of the preferential option for the poor.

Capitalism VP Poster FINAL

A debate tomorrow at Notre Dame, which will be broadcast on Vantage Point Radio.


Special mention

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GOP_Income_InequalityCOLOR Strike It Rich...the Hillary Clinton Way!

This campaign might just get interesting—Republican and Democratic presidential candidates falling all over themselves trying to appear to talk seriously about poverty and inequality.

The Republicans (such as Rand Paul, Marco Rubio, and Jeb Bush) appear to have decided that the one major criticism of the Obama presidency they can run on is the number of Americans who have been “left behind” during the current recovery. And, as we know, that’s a lot of people, who are either living below the poverty line or trying to get by on stagnant wages—and falling further and further behind the top 1 percent.

Apparently, the Democrats (well, Hillary Clinton) have decided they need to offer (with the assistance of 200 policy experts) their own view of what an “inclusive capitalism” might look like.

In all honesty, I don’t expect much in the way of a serious debate about the issue—much less real policy proposals—from those candidates. Neither group wants to alienate their donors, much less call into question or pose an alternative to the current economic system. But it should be interesting to watch them raise the issue and then do everything possible to make sure nothing serious gets said or done.

I wonder what the electorate will think as they watch that spectacle unfold. . .