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Guest Post: Is This The Terminal Phase Of Global Capitalism 1.0?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
The road for both global capital and the State is narrowing to a rocky trail that leads to a cliff.
We turn to cycles--business, solar, Kondratieff, etc.--to understand current events. But what if this era is not just a cycle but the terminal phase of Global Capitalism 1.0?
This heretical thought arises from the school of economic history pursued by Fernand Braudel and those he inspired. I have long recommended Braudel's three volume history of early capitalism as essential reading for anyone seeking to understand modern global capitalism: Civilization & Capitalism, 15th to 18th Centuries:
The Structures of Everyday Life (Volume 1)
The Wheels of Commerce (Volume 2)
The Perspective of the World (Volume 3)
The Wheels of Commerce (Volume 2)
The Perspective of the World (Volume 3)
Of those continuing this "long duration" analysis, I find much of interest in the work of Giovanni Arrighi (The Long Twentieth Century: Money, Power and the Origins of Our Times) and Immanuel Wallerstein (recommended to me by correspondent Lew G.) (World-Systems Analysis: An Introduction).
This school sets the current iteration of world capitalism as beginning in the 1450s. Everything that characterizes modern global capitalism was already operational by 1500: stock and bond exchanges, hedging with derivatives and insurance, joint stock ventures, highly profitable global trade, commercial credit/paper, central States funding their wars with privately provided credit, etc.
In Wallerstein's analysis, the current form of global capitalism is running out of road. He identifies three long-term forces that are undermining capitalism's key function, the accumulation of more capital:
1. Urbanization, which has increased the cost of labor.
2. Externalized costs (dumping private waste into the Commons, environmental damage and depletion, etc.) are finally having to be paid.
3. Rising taxes as the Central State responds to unlimited demands by citizens for more services (education, healthcare, etc.) and economic security (pensions, welfare).
Wallerstein is one of the few who clearly understands the State's role as enabler and enforcer of monopolies and cartels. High profit margins are most easily maintained by persuading politicians to create and then regulate quasi-monopolies and cartels.
The State has two core mandates: enable and enforce quasi-monopolies and cartels for private capital, and satisfy enough of the citizenry's unlimited demands for more services and economic security to provide political stability and thus maintain State/cadre/Aristocratic power.
If the State fails to maintain monopolistic cartels, profit margins plummet and capital is unable to maintain its spending on investment and labor. Simply put, the economy tanks as profits, investment and growth all stagnate.
If the State fails to satisfy enough of the citizenry's unlimited demands for more of everything, it risks social instability.
That is the nation-state's quandary everywhere. With growth slowing and parasitic monopolies increasingly difficult to maintain and justify, the State has less tax income to fund its ever-expanding social spending.
In response, the State raises taxes and borrows the difference between its spending and its revenues. This further squeezes spending as the cost of servicing debt rises along with the debt.
In the conventional view, global capital lowers its costs and therefore increases its profits by shifting production to locales with lower labor costs, few environmental restrictions and low taxes (or an affordable bribe structure).
Thus the opening of China was simply the latest opportunity for global capital to shift production to lower-cost areas. Restless capital is now leaving China as its population has moved en masse to urban zones and the cost of labor has risen, and those in the traditional camp are forecasting global capital will decamp to Africa and the remaining low-labor-cost nations in Asia such as Myanmar and Cambodia.
When global capital runs out of low-cost labor opportunities, profit margins decline and the jig is up.
The rapid progress of robotics and automated, networked software is upending this conventional view of capital running into a brick wall as labor costs rise globally. It is increasingly cheaper and less risky to replace human labor with machine and computational capital, for a reason that Wallerstein does not mention: labor does not just demand more services and benefits from the State, it also demands more benefits from employers.
Global capital is thus finding its input costs rising on virtually every front: energy and resources cost more, externalized costs are coming home to roost, urbanized labor demands higher wages and benefits, and the State is raising taxes to fulfill its ever-expanding promises of more services and security.
Investing in robotics and software offers temporary respite by cutting labor costs, but as everything that can be produced by machines or software becomes abundant, margins vanish.
Reducing labor's share of production costs (and of value created) also has the consequence of reducing the total sum of wages available for consumption and taxes. This feeds the stagnation of the consumer-based economy and severely restricts the State's ability to raise wage-based and consumption-based taxes.
As this low-growth, lower-profit margin cycle tightens, there is less capital available to invest in future production, and the "highest return investment" is increasingly political lobbying/bribery to enhance or solidify profits gained from quasi-monopolies and cartels.
But the State is also running out of air: parasitic cartels skim huge sums from the economy, diverting it to the very class (the financial Aristocracy, the Party leadership, etc.) to whom the State is beholden. Since it cannot cut social spending without risking insurrection, the State is forced to borrow increasingly monumental sums to fund its dual mandate.
States that print their own currency are looking longingly at the printing press, tempted to fill the widening gap between their promised social spending and their tax revenues with phantom money. But like funding consumption with debt, this too is an end-game that leads to the same result: the destruction of the State and both its enforcement of profitable cartels and its vast social spending.
The road for both global capital and the State is narrowing to a rocky trail that leads to a cliff. Two sides of the same expansionist coin, neither can continue to expand in a world of diminishing return, shrinking margins, surplus labor, declining wages and tax base, higher input costs and a restive, entitled/high-expectations, urbanized and under-employed workforce.
The standard business cycle has no answer to these structural quandries, and even the credit expansion/renunciation Kondratieff cycle does not provide a model for the next global system, or perhaps non-system. Technology cannot provide the "solution" because technology replaces labor-intensive business models with new low-labor models of production and service.
There will be no labor-intensive technological revolutions, there will only be technological revolutions that radically reduce the need for human labor. Just as profit margins approach zero in a world of over-capacity and over-supply, so too does the the value of most labor decline.
These are not issues that are unique to capitalism; the same dynamics are pressing socialist states that own key industries and control the markets in their nations. The old ideological models of the 19th and 20th centuries are increasingly disconnected from the new realities of capital, State and labor.
We need a new model, and a re-hash of the old broken models will no longer do.
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Well I hope it gets here soon, this insanity is getting to me.
DavidC
What capitalism? Where is it?
+1
Global Fascism is not capitalism.
Thank God someone pointed out that this isn't Capitalism.
It's Corporatism sprinkled with Socialist Democracy.
I didn't see any suggestions for a new model. The narrowing road leads to a cliff? Perhaps chaos will spawn the new model.
The "new model" is merely the model before oligopolies "captured" governments through "partnership", resulting in fraud upon the consumer, fraud upon the electorate, and capital mis-allocation so severe as to necessitate the murder of millions -- in the name of the, "Greater Good".
article was tl;dr
replace the cliff pic with one of a walk downhill
The new model is simply the old model. Return to gold and silver, 100% fractional reserve banking, and the rest will take care of itself.
When the people control money they are in power. When central banks control money they are in power.
Is that simple enough?
You have confused value with production.
We have no working model for production.
Cliff notes: Charles Hugh Smith falls prey to the lump of labour fallacy.
Good catch. I like Smith's writing, but when working through his arguments, I usually come to a dead end. Digging a little further, I find an unstated assumption that fouls up his whole argument. It's frustrating, because his arguments show a lot of promise until...they don't.
Not exactly. If you mean the comments about capital fleeing highly-paid national labor forces for the harbor of lesser-paid national labor forces, this has clearly happened and is a shady emergent property of the goal-seeked road to maximum quarterly returns. Corporations have been in a head-long (and it turns out somewhat self defeating) stampede to extract the last ounce of profit from the failing western economic model by turning workers into blinkered consumers, many of whom were then encented by government programs to use their homes and their childrens' futures as collateral to debt their way into temporary happiness.
But no matter. It is now doomed. Whatever happened is a question that will not endure the devouring jaws of what comes next.
And that's the point of the article: the pseudo-capitalist model is dropping the pretense of working as it did before WWI. To call the banking cartel "capitalism" is to misunderstand what capitalism actually is. And the dolts who claim that capitalism has failed probably could not even define true capitalism, since few of us have ever lived in a true capitalist society.
We did not have capitalism in this country since Lincoln signed down the emancipation act.
Signed: an American.
Blobbing up of Chinese citizenism shark finaticism cannot be contained by polycarbonation of the enclosing means.
Signed: AnAnonymous
"To call the banking cartel "capitalism" is to misunderstand what capitalism actually is. And the dolts who claim that capitalism has failed probably could not even define true capitalism"
+1
Really...the doom on this site is over the top, with no timing to offer.
GS must be funding Tyler.
If .05% of this bullshit came true we'd be around 800 spy.
Tyler get some timers on this site or you will be just another laughable "market" site
Me, I'll check the headlines here but not much else.
Guess what? No one cares. And when reality finally does rear its head, SPY at 800 will seem like the laughably optimistic ravings of a lunatic.
as we all know... SPY 'is' the economy... There's nothing else ~ not even God...
Fascism is the marriage of corporate and state power, and, clearly, the author understands that very well. However, even if the present brand of capitalism, distorted as it is by its fascist aspect, were to be reformed, there are a still a host of other factors, which the author went to some pains to enumerate, that stand in the way of a capitalist revival. We have, indeed, arrived at the End of History, but not as Francis Fukuyama envisioned it. Not by a long shot.
without taking any merit from your sentence, for many europeans that still remember fascism here this kind of talk is still a bit strange
yes, fascists themselves talked a lot of "marriage of corporate and state power", but they understood it more in the way of state power slapping corporate power (and worker's unions, btw) around as necessary for state reasons
a very, very, very oldfashioned marriage
what you are describing is corporate power getting whatever it wants from state power, which for us is a kind of reverse fascism and a reason for the rise of popular support for our dictators - the crisis of the liberal state vs the socialist alternative and the fascist "third way", with strong appeal to the conservative elements and a strong distrust of the "bourgeoisie"
I understand the ivory tower term is inverted totalitarianism
At the risk of sounding sycophantic, your clarity of thought is really impressive - and that doesn't mean I agree with everything you say.
Lack of context, either by circumstance or by intent, is a big problem 'round here.
you are very kind and I have to admit this is the result of much mulling, some homework and many lesser attempts here in ZH to express this bellyache
often it's intent - and the old adage that politics makes strange bedfellows, who then adapt their talk accordingly
I do agree that state power "slapping" around corporate entities for the purpose of achieving the state's own goals, is the purest form of fascism.
However, I purport that we (depends on your collective use of the term...I'll start with the European Union or the USA, for that matter) are simply on a different path headed to that same end-state (no pun intended).
The more important questions are how close are we and at what velocity are we traveling?
* Keep in mind that the final step to getting there will be some "crisis" situation arising, through which the state -in response- declares itself THE sole institution to be served by all others, including the corporate organizations/interests, in the name of "saving the people of the state."
Fascism is the marriage of corporate and state power, and, clearly, the author understands that very well. However, even if the present brand of capitalism, distorted as it is by its fascist aspect, were to be reformed, there are a still a host of other factors, which the author went to some pains to enumerate, that stand in the way of a capitalist revival. We have, indeed, arrived at the End of History, but not as Francis Fukuyama envisioned it. Not by a long shot.
DING DING DING DING !!!!!!
Give edwardo1 a gold star and a cigar.
Welcome to Prison Planet !
More than likely gone for good. Monopoly is a game you can only play over and over... not forever. Or pray for destruction on a mass scale if you're that devout.
Everything you know as capitalism that has existed in history.
Granted, that is different from capitalism theory. But you can't look back at some age in the past where that theory existed as fact.
O/T but does Tyler Durden intend to report the story of the cop going around Los Angeles killing other cops?
http://lostcoastoutpost.com/2013/feb/7/local-law-enforcement-echos-state...
I'd like to see how the ZH community views this, as I think this has the potential to be the next (although far too soon) Sandy Hook like event.
Don't get me wrong, but Sandy Hook's a fucking joke the way the media and government have used it to pursue a political/bankster agenda. There has been no real tenable solution tabled. Blame Asperger's rather than the fact that our culture promotes sociopaths being allowed to defraud the populace with impunity? It's a joke. A real sad joke.
That's basically what I was getting at as well. This situation could be used to promote an agenda just like the Sandyhook shootings. I could feasibly see parts of Los Angeles being locked down over this, and in a way being treated like some psyop where they condition the rest of us to get used to boots on the ground in our own communities. This is the first situation that I can remember where someone has gone out to specifically target police officers, and it will not be good for our freedoms. In fact, two civilians have already been wounded by over zealous police officers shooting at them because their cars matched the description of the shooters car. Get used to this shit Amerika...
Agreed. It's a very good story, but the media/government probably figures that shooting LA police officers isn't as important (i.e. politically galvanizing) as shooting kids. Send some crazy asshole into Goldman Sachs manhattan offices upper deck and off some sociopaths and then the media/government/zerohedge ect. will be all over it like gangbusters.
The reason this story is so buried (IMHO) is that it doesn't sell easily to the "ban assault weapons" crowd.
Here's evidence that the police can have fucked-up individuals on the force carrying the same weapons they want to deny us. Then there's the part about nervous cops shooting innocent unrelated individuals.
Hell, this is the kind of story that makes more folks want to go home and buy an AR or two.
FYI - check out the picture of the car that the police fired on:
http://jalopnik.com/5982580/a-case-of-mistaken-truck-identity-caused-la-cops-to-shoot-two-innocent-women
Two women delivering newspapers in a different make and model pickup. F'n LAPD's finest.
JFC.
there's a cop going around mudering people with asault weapons...somehow, this isn't national news.
But george zimmerman was. sandy hook, aurora...
Do you note the difference in color between the "perpetrators"? The media won't tolerate negative images of black men doing what black men frequently do.
the news isn't covering that kidnap murder of the class president at UNC (eve carson) either, grabbed off the street, pretty white girl, by two black felons (one of whom had killed an indian student previously), taken to ATM, robbed, then shot 5 times and dumped out of her car. this shit happens all the time; it's an epidemic.
Yeah, i'm the racist...
ICE-T CopKiller Bitchez
http://www.youtube.com/watch?v=p5gRIud57jQ
his manifesto is great...you should read it.
and not the redacted one.
He's staunchly pro obama, pro gun control, loves msnbc, hates the NRA, hates the fuck out of white people, claim he choked a fellow cop for saying "nigger" (typical race card concoction), that some guys actually sung nazi prison camp songs to a jew (how much more incredible can a made-up story be than this...fucking nazi prison camp songs??? who the fuck speaks german?), and on and on and on.
He's a typical example of the left these days, especially black.
And you racist-americans want to find common ground, bwahahahahahaha
Touted for ANONYMOUS tho?? Basically equated cop "chalk lines" to overtime pay... LOL, perfect. Too perfect. He had his moments.
Any NEW ideas, bitchez? Cuz that's what all this is REALLY gonna take.
uhh, stop the hand outs- both corporate and welfare?
maybe require work and stop rewarding irresponsible behavior?
there that was easy.
If only it was that easy. Did you even read the article?
Well some people won't make it- that is the hard part. The breeders won't be able to eat and will need to go the the fema camps.
Beats slavery I guess. Let them die there of old age- just no more spawn from these types.
Yea how about a president and congress that actually do their job instead of worry about who's playing at the next Wed. concert at the white house and has their invitation arrived. The political class is killing us and I think it's time for a part time congress again just like most states have. They need to serve the people instead of serving themselves.
Yes, because lack of government action was the problem the whole time, right? They were acting the whole time, in their own self-interest. Why? Because that is what humans do.
See now, that's a hell of a question and the key to moving forward. My wife was shocked when I told her I was no longer a capitalist, having been such a diehard business guy up to this point. But she agreed with my assessment that capitalism is based on eternally increasing expansion, which is impossible given finite resources. I don't know what the new model is, but I'd be very interested in all suggestions.
A near limitless supply of cheap energy for the next +100 years would be a great place to start.
http://energyfromthorium.com/
Oh look everyone we have a techno-utopian today!
Good. Such things shouldn't be taboo in these jonx... cutting edge and all.
No, that is being a Monetarist. Capitalists are savers
Resources are infinite!
With a larger telescope, we can see much further, but never reach the outer limit.
With a larger microscope we can see much further, but never reach the inner limit.
Evidently, resources are fractal and continue on into infinity, so here we are positioned between 2 sets of infinite resources.
It's the same issue with human thinking about the distance around a lake: We think it's limited, but actually it's infinite. (As an exercise, try making your steps smaller and smaller into the atomic level of grains of sand.)
The issue is with our limited thinking about infinite resources and the freedom to pursue ownership and use of such resources.
You still can't go around profitability - if it's negative, you'd better forget about it.
Sunrise, that is incredibly funny!
Thank you for writing it.
A New Model Suggestion,
Remove all forms of money from the equation so that the inherent "I must compete and pay in order to live on an Earth that I was born on" is ommitted from all train of thought. No more competition, but cooperation etc. Get over the "ye ole hippies on the grassy knoll smokin' and laughin' etc," this is like saying oh ya, that's a "conspiracy" and shaking it off and forgetting all about it, or simply just saying ya, that's crazy talk.
Well, isn't that where we are currently....crazy talk?! So to get beyond the crazy talk, maybe evolve a little more in our general vibrational harmonic on Earth and say that we're all here, we're all one, let's figure this stuff out without the same paymasters / debt overlords that require us to pay to live.
Use technology to its upmost potential, unlock all that forbidden technology, you know, the ones that the US Patent office has and or the ones that have been bought and supressed by the oil / gas interests. It's not hard to think, that if you own the economy / demand of a product, the goal of the game is to control all ends and that of competition....so what do you do? I dunno, maybe buy out / erase those technologies that make your product / way of life obsolete?
It takes just a few people to start the river rollin' and I have a feeling it's already on its way.
Remove debt based money / central banks / let the green sprouts run crazy on that there hill, let the natural way do its work, do the dance, do it all, in love.
If you have a problem with any of the above. Right on.
1. Real term limits of not more than two years for all forms of public service.
2. Mandatory service in full-time military for minimum two-years for rights of citizenship.
3. 18-25 year olds must serve one year as government paid "lobbying police" whose job it is to identify and persecute corruption at any and all levels of government. Lobbyists, politicians, and corrupt corporations in collusion to degraud the people to be sent to rebuilt dry tortugas prison to be slowly consumed by mosquitos.
4. Political and white-collar crime to be heavily persecuted. Violators fed to blue collar criminal population for rehabilitation.
Other ideas upon request.
Punish high treason with summary executions. That would leave hundreds of openings in Congress for new, non corrupted people.
You failed when you got to the "mandatory" part but you probably like Hope and Chains.
yes because more government will solve the problems of government, right? What fucking world do you retards live on?
Well, he calls himself Electric Synchronist. What would you expect from a guy who's still into trance & discos?
(waves hand wildly)
Me Me Me ...Pick Me!
I want to be a Commissar.
Can I have a snappy peaked hat too?
"18-25 year olds must serve one year as government paid "lobbying police" whose job it is to identify and persecute corruption at any and all levels of government."
Do they get brown shirts?
You realize I hope that all your proposals -- almost exactly as given -- would have been making the rounds of the political intelligensia in 1930's Berlin.
New ideas? Go back to the old ideas....circa 1776.
New ideas? Go back to the old ideas....circa 1776.
Only if you mean circa 1776 as in the Articles of Confederation.....NOT the Constitution (the second Constitution) as we have now circa 1789.
http://en.wikipedia.org/wiki/Articles_of_Confederation
Why? They started this mess. Anyone who thought rich slave holders would create a government that did not eventually enslave everyone wasn't thinking things through.
Any NEW ideas, bitchez?
_____________
Why should new ideas be needed when you have 'Americanism', the best thing to ever happen to humanity?
We need a Cultural Revolution.
My little red book says so.
What a bunch of shit....they have to keep up the 'social spending' so that there will not be 'insurrection'...and that's the ONLY point to anything at all today....the 'elite' inbred lunatics must survive...somehow...someway.
I think I'll go cash out everything, put all the cash in a box and bury it somewhere so the 'elites' will never ever get their hands back on it, then just go build a 200 sq ft cabin in the remote wilderness and live with the chipmunks.
I hate chipmunks...especially singing chipmunks
But basically ANYTHING has to be beter than this shit day after day....even singing chipmunks!
Alvin
Simon
Theodore
ALVIN, ok!
I hear you about the social spending. I live around a bunch of military folks and I'd hate to see the day they don't get their cut from Uncle Sam. Actually, I'd hate to be around any of their wives as they are some of the most knowledgeable and thorough "milk the system" people I have ever seen. When their payday stops, it's going to get ugly quickly.
The dependopotamus is perhaps the most frightening creature to have ever trampled their way across the American landscape. 300 lbs beached whales that paddle their way from Burger King to the next big sale with several children (generally attention starved and poorly dressed) in toe demanding more benefits and nothing is ever good enough for them.
Their husbands are generally borderline retarded with no prospects outside of the military but somehow a paycheck and free housing isn't enough. Disgusting realy.
'Dependopotamus'...LOL spectacular!
If my job goes the retirement account will get cashed in and converted to physical. Whatever happens, I win!
"put all the cash in a box and bury it somewhere so the 'elites' will never ever get their hands back on it"
They don't have to touch your money to rob you of it. They created inflation for that.
Spend it or lose it. They win either way.
When too many people are bribed not to riot through welfare the whole system collapses...
time and time again
And the people who are being bribed to keep quiet are about 50% of the population right now. Whenever this breaks down, it's going to be utter chaos! Hmmm, gee maybe thats why the govt is buying billions and billions of rounds of ammo for their 'personal defense weapons'.
When we decide to close our businesses, quit our jobs and join the chipmunks is when their tax revenues die off.
Probably the only way we kill big gov. Ayn Rand wrote the story years ago.
Agreed. You don't try to choke a bear; you go poison the fish it eats.
Right, because the bribes have to keep getting bigger and bigger each year. They gotta feed the monkey, man!
'Americans' will riot in other places than 'american' nations. If they riot, by the way...
cant spell Debt without EBT.......keep it flowing
The death throes will be spectacular. Just watch out for the shockwaves.
Indeed. Typically, very large and costly wars are the skockwave of choice. Bleed the pleebs to death seems to be the model for the landed oligarchs sitting comfortable in the estates.
I imagine that a future generation of historians will look back and note that what would later be called the Third World War began late in 2008 when the plutocrats had finally drained away what little blood was left in the global economy.
Yeah, sure Capitalism is failing.... guess what? Because of BIG GOVERNMENT!
Stunning ideological twist!
Big government and capitalism work together, all the time, at everything. Big government is the tool of capitalist survival, not it's enemy. Government diplomacy, wars, treaties, internal security, police state tactics, propaganda. All serve large corporations and cartels by defending their monopolies, supressing unwelcome change and extending profits .
People need to start looking behind the curtain. Otherwise we will not understand what is about to happen to us. And we really need to understand.
charles, kondratieff cycle is on course. we are still in winter. the spring will come after the big reset.
76 year or long wave?
Even a boat rocks in the waves a few times before it turns over and sinks.
It's a cycle only until it isn't. And then, it's something else.
Capitalism has been replaced move aside comrades..
https://www.youtube.com/watch?v=wRXKHTTzayU
There has been no failure of the free market. Simply a failure to abide by a free market.
Free markets always fail. It's called "the tragedy of the commons". Look it up.
But what if this era is not just a cycle but the terminal phase of Global Capitalism 1.0?....
this isnt global capitalism 1.0 chuckie........global capitalism was already wiped out by the tyranny of bankers, centralized governments and multinationals.....this is global collusion....................
You say "tomato."
While you blur definitions and confuse the masses, yeah we got it. You're a Socialist, and you want Socialism.
I realize you're tying to teach me something I just didn't even realize about myself. I should be grateful. Thanks.
hey nid respect your elders....spas has been here long enough to have established himself as an honest, selfless, altruistic, individualistic Socialist....................
Hee, hee!
;)
"this is global collusion"
Believe it possible you may be mistaken.
The old ideological models of the 19th and 20th centuries are increasingly disconnected from the new realities of capital, State and labor...We need a new model, and a re-hash of the old broken models will no longer do.
No we don't. We need an older form of government.
No, we need a new model.
The reason the older form of government didn't last wasn't because it worked too well.
It didnt last because people voted themselves benefits we couldn't afford. The solution for that problem would have been spending constraints but for the Federal Reserve. Now, instead, it will be the loss of individual liberty as America abandons a Constitutional government and adopts a Chinese mercantile system.
Wallerstein thinks labor costs are rising but really state costs embedded into labor costs are rising. The cost of actual labor is going down. Plus, technology is inexpensively raising living standards so the logical extention points to a requirement for less government not more.
We use the US mail less and less (lower demand) yet somehow its price keeps going up as its quality declines (no delivery on Saturday now). That's not a story of more expensive labor it's a story of more expensive government.
We use the US mail less and less (lower demand) yet somehow its price keeps going up as its quality declines (no delivery on Saturday now).
_________________________
Economy of scales from top to bottom, maybe?
No, not maybe for sure.
But hey, 'americanism' is as 'american' does so 'americans' will always deny the most obvious to favour their fantasy.
The older form of government was abandoned, just as its framers warned it would be if it wasn't shepherded properly. The issue to understand is why it is abandoned...which is driven by certain segments of the population being unable to accept that equal opportunity can lead to disparity of outcomes. As a result, they attack liberty and bolster the central authority to "level" the playing field at the outcome level. That is what destroys the ideal of capitalism, liberty, and private property.
I'm not sure but I think if you ever try to fit reality to any -ism ideology/system, even in the face of the most catastrophic results, proponents would always point that, anyways, their -ism was never really implemented, so it cannot be blamed for whatever happened.
A true scientific/historical account would benefit therefore from avoiding characterizing any episodes by such or such ideology or system. However hard it may be, the analysis would benefit from a factual description of the state of affairs even if that description does not fit any -ism.
As much as many here would argue that capitalism was never really tried, many would also argue that socialism or keynesianism,... was not tried or properly implemented, so... let's try some more.
What I'm arguing for, if not obvious, on both a descriptive, analytical and prescriptive bases, are a rules/principals-based model, instead of a comprehensive theory of how everything is or should be.
Unfortunately, you will have to cope with deeply held faith beliefs that are presented as objective, rational, thoroughly tested, incontrovertible facts.
By defintion Capitalism requires capital formations. It's not a capital formation if it's created by debt. So it's really not a faith thing, it's an obvious no brainer to anyone that looks at the Federal Reserve more than two minutes rationally.
TA DA!
The sad thing is that there are always people throwing words around such as yourself that cause the altering of definitions. You negate that anyone can accept these things, because you yourself would lose a portion of reputability if it were ever pointed out that you were part of the problem.
The current situation was caused by people like yourself allowing the debt pushers to convince everyone that they are printing wealth, never mind that the particular "wealth" they are peddling comes with a Principal and Interest Rate.
Wealth is holding's after Principal and Interest are removed, you give them a free pass by decrying that those of mentioning the definitions are basing the argument on faith rather than rational discussion. You get away with it, because 2000+ years of economic theory have been negate by ignoramuses such as yourself.
Now that that has been pointed out using rational logic, are there any other fallacies or demagogues you would like to spout today?
Not all of us are primitives such as yourself.
What word?
The Socialist is always identifiable by his lack of attention. His display of ignorance to obstruct the issues at hand and adept methods of seeming aloof intelligently. In reality he is actually a cruel ignorant barbarian.
It should say, "WHICH word?"
Which word?
You're not a "fanatic." And that's bad.
So being an Economist and actually knowing what the word means rather than just walking around listening to non-Economists tell me what it means because I am going by faith in something I understand very well is just me being a fanatic, gotcha.
When I want to understand something about Trading, I ask a Trader. When I want to understand something about genetics, I ask a Geneticist.How about for once in this decade, some of you actually ask a Capitalist Economist what Capitalism is? Rather than running around listening to Rent-Seekers and other Socialists about what Capitalism is?
Just once in my life time, it would be nice for people to think about what they are saying and doing, before spouting off nonsense.
Should we ask scientists about "global warming?"
Depends, are we asking real scientists, or fancy people with computers?
How would I know if I was asking a real scientist and not a charlatan?
<snicker> Fancy. There's a new one.
economy is not science, which this other "couch roach" does not understand. Sorry for the slang; but dogma of libertarian roaches is smelly even if they be 'couch intellectuals', in an age where the past is written in people's blood with their smelly songs sung in glory of ridding the world of "the road to serfdom"..wow! Was ever a phrase more inappropriate... to define the ugly reality that ensued, now in full bloom...One that maybe only can be matched by that other gem : dicatorship of proletariat, to save the world from capitalism!
How we swing from Charydis to Scylla.
Logic, and historic factual example is closer to truth than economic theory; any day!
To a slight extent, I resemble that remark. However, as you probably know, I would never be accepted as a brother by anyone who seriously called themselves "Libertarian." Except maybe Kito. Which is sad, becasue I am their brother.
Peace, brotherman.
It's not a capital formation if it's created by debt.
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Absolutely. It had to be said. It is not capital formation if it is created by debt.
It is capital formation if it is not created by debt.
Capital creation, like creation of the world or something.
Just imagine if jesus had created the world using debt...
Delusional once again.
Another point is that this guy travests reality.
What he is saying is true though.
.
Yes, you are correct.
It is an example of the blind Chinese citizenism squirrel occasionally finding a water chestnut. That's why I gave him a +1.
But in a finite world it will always be in debt to something. Nothing is created and nothing is lost, only everything is borrowed. Borrowed from nature, from the future, from the commons, from other's labor, from other's freedom, from other's blood.
The idea that value is created from nothing is the realm of the propagandists.
How bout I dust off some old chestnuts...
Thou shall not steal.
Thou shall not lie
Thou shall not covet
Thou shall not kill
The rest can be elastic as needed.
That wasn't hard.
"elastic as needed" has always been the problem. The center does not hold.
An oversimplified viewpoint but it reinforces. for the benefit of everyone, that the growth of small governments into large governments is the root of class inequality.
Wealth inequality can exist without government intervention at all (in fact, that is a sign of a proverbial "free market"). Those who conclude that such disparity is "unfair" and needs to be corrected, coupled with those at the high end who want to foreclose the ability of others to catch up with them, invoke the central authority to intervene. That is statism. And, of course, the state intervention fails to "correct" the "problem" because it relies on direct redistribution, which serves to only make things worse. So I would not say that large government is the root as much as it is an accelerant to moving from more "natural" levels of inequality to all out class warfare.
Greater inequality just demonstrates that a society isn't standing in the way of the natural and just distibution of reward to those who earned it. Think of Imperial France.
Today, China is a little better at this than the US. South Africa is near the top of the justice heap.
+1 both. and Sweden is on the other extreme
Sweden is almost too horrible to consider.
Funny that seeing as we have never had capitalism.
What we have here is straight up fucking facism. Period. Lets see bad behaviour and bad business practice shut fucking down for a change, then we may see some light at the end of the tunnel.
Capitalism or free market enterprise is the natural system by which individual effort and risk taking is best rewarded. So, while yes, capitalism is reaching an endpoint, no it isn't because we need another, better system.
Oh come on - even God has His angels. Surely The Invisible Hand can be allowed Its own agents? Ben Bernanke is Capitalism's St. Michael, I'm sure.
It's not Capitalism. Capitalism requires Capital formations, all that is going here are continuations of the Montaigne Fallacy and debt sufferage.
The issue is with corruption, greed and lust for power and control on the part of those in leadership positions; locally, nationally and globally. It is systemic. Break out the pruning shears.........
The State ... The State ... The State ... I can't hear it anymore.
The State is the problem ! .. in it's current form.
Decentralize power ... to the Sovereign man ... and things will suddenly & automatically get better .
Charles ... next time , start off with the question .... "why are 'States' always corrupt and destructive"
Answer : Centralized Power Corrupts.
... and then start building on how good life would be without a "Central State" .
+1 Decentralize is one of my favorite words.
People will always trade with each other to get what they need to live. That's called capitalism, it's a GOOD thing, and it won't end. What you are talking about is the collapse of the financial system (mass defaults, evaporation of credit), the effects of technological change, and political/social corruption. Keep it real.
According to the postmodern philosophy, this is the age that we have witnessed the end of the self and the end of the man. How important is your money and capitalism?
http://www.youtube.com/watch?v=wiGNR1rBYxo
I think this is so much sophistry. The problem that the world is facing is conceptually simple to understand, which does not mean easy to fix. It has nothing to do with cycles or end of anything. Suppression of childhood mortality collided with entrenched cultural values to produce rapid population growth. If one truly globalized the world economy today, the equilibrium point of the global economy with present commercial technologies would be somewhere between global china and global brazil: 20% living our lives, 80% stuck in poverty. Developed countries are trying to prevent a slide towards this equilibrium point within their own populations by playing games with money, which leads both to distortions we are observing and to emergence of parasitic finance which is the tool used to play money games.
The only way out is technological progress. The danger is that the world can get stuck in an unhappy equilibrium point. There is no shortage of oil or anything else for that matter if you can keep 80%-90% of the population in permanent poverty. The real governance/political question is how to preserve enough social stability to maintain engines of technological progress, rather than get stuck at an equilibrium point resembling dark ages.
There is no such thing as economic equilbrium on the global scale, economies are always changing, and, except in the rarest instances (6th century Europe, 14th century Persia), economically progresses.
The better term is probably "reversion to the mean", and most developed economies are staring at the real possibility that the welfare of their populations will become, in Neal Stephensen's phrase, that of the average Pakistani bricklayer.
The world economy as a whole is in deep disequilibrium now. We have developed countries and developing countries, for historical reasons. If you were to effectively globalize the economy, you would reach temporary equilibrium. In physics you would call it a transient equilibrium. In my view, just by applying simple math to energy resources, this equilibrium would be 20%/80% or perhqps 10%/90% split in the standard of living.
If you look at the problem of world economy as an optimization problem, you would worry about the world economy finding a stable but undesirable "local minimum" in which it can stay for a long time, if not indefinitely.
A good example is medieval Europe. Though historical iffing is always controversial, there is a school of thought that attributes Renaissance to a jolt delivered to the European economy by black death epidemic. Prior to the epidemic, Europe was stagnating in a state of permanent surplus of labor, given then existing range of opportunities to employ this labor productively. Sudden loss of ~50% of the population essentially created a severe shortage of labor, thus taking the economy out of its relatively stable equilibrium and forcing it to seek a new state of equilibrium through labor saving innovation.
Stagnation in a state of permanent surplus of labor should sound really familiar to everyone on this blog.
I highly endorse reading Braudel. Picked up his first volume in an airport in 1990, changed my reading habits towards economics for the next few years, I think I've read publication that he has written (that's been translated) since.
Economics in the medieval years is the same as modern economics, but, to use an analogy with baseball, its the "single A league" version; simpler, fewer players, rawer, slower. But the rules and scores are all there to learn from. Especially the greedy-to-the-point-of-suicidal sovereigns who had no intention of paying their debts.
Henry Ford and the generation after the industrial revolution practiced capitalism, I think it lasted for a couple years before the Wall Street fascists destroyed it once again. They planned the depression to destroy the growing middle industry and consolidate power back to the elites.
How many small industries were put out of business by the depression? Small auto companies, motorcycle, engine manufacturers, bicycle makers, etc. The big players were bailed out and got special preference from the government. When war broke out the innovations of small industry, their IP, were taken from them and spread around to larger factories to produce goods for the war effort. The larger corporations made out well, the little guys, not so much.
After the war industry became massively consolidated with the US government. For the next 40 years small business which built the middle class was attacked and systematically destroyed. By the 1990s what was left of local retail was on its last legs. The big box massive publicly traded retail entities took over. Wall Street cheered, traders never had it better. As long as your company is publicly traded, the executives have never had it better either. The employees, not so much. After Wall Street destroyed the private corporation, they went after the worker. The government destroyed the education of the citizen to create a sub class that would accept being ruled by an iron fist with open arms.
Instead of capitalism we have been brought back to capital fascism. Fake industry and lies of productive business propped up by governments to make a select class of people massively wealthy. All they can do is blow one asset bubble after another because the true productive economy has been completely destroyed.
Go try and start a real productive business, not a fake "social media" crap business with no productive purpose. It is nearly impossible unless you are part of the ruling class. Try to start a real car company like Henry Ford, try to start like Rockefeller and build an oil refinery, hell even try to be like Michael Dell and start a new computer hardware company in your dorm room. You won't get very far. But you might be able to start a photo sharing app with no business plan and no hope of ever producing dollar one in revenue, and become a billionaire.
What that does is make sure the goal of any innovator is to produce unproductive devices so they never challenge the business of the establishment. They will be happy to manufacture 100 Zuckerbergs to make sure one new Henry Ford never exists.
I think Henry Ford was a fascist, more or less. I guess he was one of the good ones?
Henry Ford was an admirer of National Socialism. He paid his employees a decent wage because he understood economics.
Paying a "decent wage" seems like a self-defeating idea today. Different times, I guess.