Saturday, January 01, 2011

Political Economist Speaks the Truth (Richard Wolff)

http://www.commondreams.org/view/2011/01/01-2

An excerpt:

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 criticize 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 maximize their private profits are paramount: the first obligations of government. The freedoms from want and insecurity for the US people remain a distant second priority – until mass political action changes that.

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?

2 comments:

  1. Like Rick Wolff, I'm a democratic socialist and would prefer to live under a system where economic productivity was directed at human thriving, universally distributed, rather than profit and power. Elements of this proposal seem coherent with utilitarianism (the 'greatest number' part) and deeply conservative (stability), though not of course to the exclusion of well considered innovation.

    Shy of such a system, however, it is worth noting that, in the past century in the U.S., whenever the marginal tax rate has been above 50% for the highest wage-earners, opportunity and decent standards of living have been fairly widely distributed and stability maximized, and when the rate drops below that, inequalities and instabilities skyrocket. Seems like one place to start.

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  2. That's why Obama's latest "compromise" extending the Bush tax cuts is so disheartening to progressives (and sensible economists everywhere).

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