So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proved wrong). Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality, and reduces final demand.If the best minds in the very center of Wall Street cannot find a better ideology than Marx's Capital, what will be of us?
Recent popular demonstrations, from the Middle East to Israel to the United Kingdom, and rising popular anger in China—and soon enough in other advanced economies and emerging markets—are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world's middle classes are feeling the squeeze of falling incomes and opportunities.
Thursday, August 18, 2011
Marx is Not Dead
Prof. Nouriel Rubini is one of America's most salient economist. For a change, he is not an Ashkenazi but an Oriental (Persian) Jew. He has read Karl Marx's Capital and now we discover that he is a Marxist. Writes:
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8 comments:
A few points in IQ can make a world of difference to a young man's prospects today.
It is not so easy for even averagely intelligent men in the West today to get secure employment, and to have enough money to start a family. Usually the woman has to work, like it or not, which is why they don't have a first child til they are really too old.
The correct role of government is to redistribute just enough to enable demographic equilibrium, but not to the extent that entrepreneurs get screwed.
It is very difficult, and not rendered easier by slogans.
Anon.
The problem of job insecurity is probably worsening in the West due to a combination of outsourcing and automation. As labor-saving technologies progress, I think we can expect fewer and fewer decent jobs to be available. Forget about needing a few IQ points. Not even every 140 IQ person is able to be creative, which will increasingly be required just to maintain employment. So why have children at all if their prospects are going to be so dim?
The problem with Marxism (as even Rubini admits) is that it has been tried and has failed miserably. Capitalism is like democracy - Churchill said that it is the worst possible system, except for all the others. In the current crisis, no one can propose a better alternative (not even the genius Rubini) so we muddle on with what we have. Of course what is needed (in part) is for socialists to stop throwing sand in the gears of the economy - "stimulus" programs that are just boondoggles for cronies, burdensome regulations and high taxes that discourage business , etc. But this does not occur to them at all.
Krugman is praying that we are invaded by space aliens - the only thing that stopped the Depression of the 30s in the US was that the Japanese bombed Pearl Harbor, sod everyone was given a job in the war industries - there was plentiful demand. Plus by the end of the war, the Allies had destroyed most of the factories of Germany and Japan (and the Germans had destroyed much of the industry of the rest of Europe) so that the problem of excess capacity was reduced. Also labor was in high demand because millions of able bodied had been killed.
K
"so that the problem of excess capacity was reduced. Also labor was in high demand because millions of able bodied had been killed."
Sounds like an excellent argument at for low birth rates. Not as painful as wars, and not as many excess people to go around unemployed. If only we didn't have pay-as-you-go Social Security that is dependent on a large number of current workers to pay for retirees.
The best minds on Wall Street have always been socialists as regards expenses. They do want to privatize profits, however.
"The bottom line is that Roosevelt's New Deal policies turned what would have been a three- or four-year sharp downturn into a 16-year affair.
The 1930s depression was caused by and aggravated by acts of government, and so was the current financial mess that we're in. Do we want to repeat history by listening to those who created the calamity? That's like calling on an arsonist to help put out a fire."
For K, a quote from Ominous Parallels by WW.
And you can find the mentioned Great Myths of the Great Depression here.
Marx and Lenin's idea was that capitalism is in permanent search for markets, and imperialism is when this search becomes military. I just dont see European military operations as a way to secure markets, but they may be exactly that.
Marx and Lenin's idea was that capitalism is in permanent search for markets, and imperialism is when this search becomes military. I just dont see European military operations as a way to secure markets, but they may be exactly that.
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