Calling Time on Capitalism

SOYMB occasionally comes across individuals who not surprisingly reach similar conclusions as ourselves. Such a person appears to be Richard D Wolff, the professor of economics emeritus at the University of Massachusetts, who presents his view of the economy. Apologies for the lengthy abstract from his New Year article in the Guardian. 

  "Like someone convicted of murdering his parents who demands leniency as an orphan, corporate America demands conservative government and austerity on the grounds of excessive budget deficits. Mainstream media and politicians take those corporate demands seriously, reminding us who controls whom... ...Since the early 1970s, workers' wage increases came to an end, their benefits and job security shrank and government supports for average people came under conservative attack. These increasing burdens were justified as absolutely necessary to enable more investment and, therefore, greater economic growth. A bigger economic pie would then provide more for everyone including workers. While workers' conditions deteriorated, capitalist surpluses and profits soared and stock markets boomed. Income and wealth were redistributed from poor and middle to the rich. But the promised results never materialised: neither more investment, nor greater economic growth...growth actually slowed and then the whole system imploded into a catastrophic crisis...

....capitalism was like a train hurtling toward the stone wall of crisis. To return to a pre-crisis capitalism risks resuming our places on a similar train heading for a similar crash. Republican and Democratic politicians alike dare not link this crisis to an economic system that has never stopped producing those "downturns" that regularly cost so many millions of jobs, wasted resources, lost outputs and injured lives. For them, the economic system is beyond questioning. They bow before the unspoken taboo: never criticise the system upon which your careers depend. Thus, this crisis and its burdens will continue until capitalists see sufficiently attractive opportunities for profit to resume investing and hiring people in the US as well as elsewhere. The freedoms of US capitalists to gain immense government supports as needed, and yet to invest only when, where and how they can maximise their private profits are paramount: the first obligations of government....

In good times, as in bad, capitalism is a system that places a small minority of people with one set of goals (profits, disproportionally high incomes, dominant political power, etc) in the positions to receive and distribute enormous wealth. Those people include the boards of directors that gather the net revenues of business into their hands and decide, together with the major shareholders in those businesses, how to distribute that wealth. Not surprisingly, they use it to achieve their goals and to make sure government secures their positions. No Keynesian monetary or fiscal policies address, let alone change, how that system works and who uses its wealth to what ends. No reforms or regulations passed or even proposed under Obama would do that either. To avoid the instability of capitalism and its huge social costs requires changing the system. That remains the basic issue for a new year and a new generation. Will they break today's version of a dangerous old taboo: never question the existing system?" 

 Whether the good economist would accept the whole of the WSM case for socialism remains to be seen , but at least we both agree that it is indeed time to change the system and to call time on capitalism .