Saturday, June 23, 2012

Capitalism : What is it Good For ?

Capitalism doesn't have much to offer if it can't provide an increasing standard of living. Even at it's best it is highly unstable, prone to crisis, deeply unequal and in general, alienating.

With 30 years + of wage stagnation in the U.S., neo-liberal economists increasingly have had to point to China and other emerging economies as proof that capitalism still works in its fulfilling its main promise. Even if those countries achieved success by ignoring almost all neo-liberal advice.

And I would argue that the rise of some of the developing world has merely exacerbated the structural issues in the global capitalist system. Basically, a world economy reliant on a U.S. consumer to soak up excess capacity, a consumer now broke and underemployed.


The Arthurian said...

A great opening paragraph.

I would say a lot of the success of China is zero sum. Their gain is our loss. But our policymakers criticize China's policies, rather than fixing our own. Short-sighted at best.

Lorraine said...

I get the feeling that the world economy, while still reliant on the US consumer, is developing other pools of demand. If the US consumer wants to throw some weight around to make a point, I'd say do it before that window of opportunity closes.