Tuesday, August 16, 2011
Free Market Economist Nouriel Roubini: "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"
Communism Sucks ... But the Type of Capitalism We Have Now - Socialist Upward Redistribution for the Rich - Isn't Great, Either
As several people have previously noted, everything the communists said about their system was false; unfortunately, some of what they said about capitalism was true.
(Of course, we don't really have capitalism in America ... but the Russians didn't follow all of the communist ideals, either).
Nouriel Roubini: If You Redistribute All of the Wealth Upwards, the Free Market Capitalist System Self-Destructs
One of America's leading economists, Nouriel Roubini, told the Wall Street Journal:
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.
In other words, runaway inequality causes depressions. See this and this.
And government policies which redistribute money upwards are killing capitalism.
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Roubini is right: Marx was right... and that is Capitalism.
ReplyDeleteAnd Capitalism is what you have in the USA and what we have in Europe. It is so purely distilled Capitalism that now Capitalists do not only earn the surplus value and the very income of workers who buy "their" goods but even the taxes go directly to them for no reason at all.
You, like Michael Moore and so many others, seem confused by the marketing strategy designed to counter the socialist wave of the early and mid 20th century and the ideological influence of the USSR and other so-called communist states (communist in ideology maybe but not in development in any case, which can at best be described as "real socialism" or, as Troskyists would say, "degenerate worker state").
A lot of people have the notion that extreme Keynesianism as it existed in the 1950s and specially 1960s is "real capitalism". But that was only a mirage and not even an accident: it was design, subverting to a great degree the very principles of Capitalism (but without truly supplanting it), in order to win the cold war.
It crashed in the 70s but then came Reagan and the credit bubble... and to this day. I doubt there is any other workable plan or that the ruling Capitalist elites care at all about it. Right now they expect to be able to deepen exploitation to the very limit of human resilience.
Luckily Marx and Roubini (even Ford grasped this, mind you) are right and this ever-growing exploitation destroys, not just the very fabric of society, but also the engine of any Capitalist economy: demand.
And that's why Germany's growth has collapsed: because by imposing such draconian measures on the EU's periphery, they destroyed their own market.
It's as over as it can be.