Economist speculates that Marx was right, capitalism will destroy itself

In an interview with the Wall Street Journal, economist Nouriel Roubini said the following:

Karl Marx had it right. At some point, Capitalism can destroy itself. You cannot keep on shifting income from labor to Capital without having an excess capacity and a lack of aggregate demand. That's what has happened. We thought that markets worked. They're not working. The individual can be rational. The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else's income and consumption. That's why it's a self-destructive process.

The demand for greater capital by driving down wages and benefits while forcing prices to rise has led to fewer and fewer people with the ability to create demand and allow the economy to bounce back. Capitalism is destroying itself.

Video interview

No system is perfect, and that includes Marxism and Capitalism. Human beings a fallible, and they will find a way to exploit any system for their own gain, sacrificing the well-being of others in the process. If everyone adhered to the rules and played fair, problems would be minimized. Since many don't play fair, systems eventually collapse one way or another.

lol, capitalism is destroying itself?

Perhaps Nouriel Roubini would like to tell me where anyone is actually practicing capitalism? Not in the USA, that is for sure.


ETA:
Capitalism = An economic and political system in which a country's trade and industry are controlled by private owners.

So is Nouriel Roubini suggesting that trade and industry is not under government control? lol? and people listen to this guy?

Yea, Marx has been proven right time and time again, huh? Yep, Laos, Cuba, North Korea, Vietnam and China are all shining examples of prosperity.....

Russia sure did a bang up job.... yep Marx gets proven right, I concede, Nouriel Roubini, save us with your immense intellect


Free Market Capitalism = A free market is a market in which there is no economic intervention and regulation by the state, except to uphold private contracts and the ownership of property.

Now this is something that might actually help a bit. Add in a dash of government, to protect 3rd parties and you have the recipe used to create the greatest amount of prosperity in the history of the world.

reply to post by links234


No 'ism' has destroyed systems.

The only thing that's responsible is greed.

Money truly is the root of all evil.

Every system is destined to fail if they don't have the right leadership and governance, and Communism isn't necessarily the answer to Capitalism.
And the die hard sheeple who defend capitalism don't like to face the cold hard truth that Multinational Companies routinely enforce child labour and suppress worker's rights in 3rd world countries. Oh yeah, and then theres Monsanto...

But didn't communism destroy itself well before capitalism? And the current system is not capitalism but corporatism. Do people really not know this or do they just really want to blame things on capitalism?

If the USA was a capitalist system, I could set up a lemonade stand in my front yard without fear of getting it shut down by the lemon police.

Originally posted by galactictuan
reply to post by links234

 

No 'ism' has destroyed systems.

The only thing that's responsible is greed.

Money truly is the root of all evil.

Money isn't the root of all evil. You had it right the first time..... greed is the culprit. Money is just a coin, a piece of paper, a gold nugget, a pearl, a shell,..... anything that can be exchanged for something else of perceived equal value. Value is perceived by an individual human being who decides what is worth how much of what.

In other words it's people who do evil things in exchange for an item of human-perceived value. Objects are harmless until a human being picks them up and decides what he wants to do with them.

Originally posted by CasiusIgnoranze
Every system is destined to fail if they don't have the right leadership and governance, and Communism isn't necessarily the answer to Capitalism.
And the die hard sheeple who defend capitalism don't like to face the cold hard truth that Multinational Companies routinely enforce child labour and suppress worker's rights in 3rd world countries. Oh yeah, and then theres Monsanto...

edit on 15-8-2011 by CasiusIgnoranze because: ..

I agree. Democracy has nothing to do with capitalism. Democracy sucks, it is two wolves and a sheep voting on what is for dinner. I much prefer a constitutional republic.

People forget, the United States fought a revolution to rid themselves of large multi national corporations, have you heard of the Boston Tea Party? That was a revolt against the tyranny of a large multi-national corporation.

Corporations were a dirty word to many founding fathers of the USA. Free Market Economics of Adam Smith were not. Anyone who links corporations to capitalism simply does not know US history very well.

The founding fathers saw corporations as a tool of a tyrant. Corporations did not exist in their current, life killing capacity until Santa Clara County vs Southern Pacific Railroad.

A true capitalist society has controls on corporations. What you are talking about is corporatism, that is what has been practiced in the USA since 1886.

ETA:
Sorry, I read before your edit, then quoted after your edit.
also
I agree, Corporatism exploits 3rd worlds, Monsanto is pure evil. I just don't agree that Free Market Capitalism does such. You are blaming the wrong system. Free Market Capitalism is the way to destroy Monsanto, If you want to keep companies like Monsanto around and thriving, letting the government get involved is exactly why they are open and profiting to this day.

People always assume things would just work out fine, if only the right people were in charge.... How about not letting any person be in charge. That is the free market.

reply to post by sageofmonticello

Misplaced ridicule. Corporatism has superceeded capitalism - corporations control the governments, the markets, the economy. Speculators and hedge managers control commodity prices in the present with their futures spreads. The concept of free market capitalism is as unattainable as any other economic theory - in today's corporate autocracy anything approaching a free market is absurd - almagamation of capital and market dominance are the creeds of the corporatists, there is no interest in a free market when there is an entire global economy to exploit. The trouble with economic theories in the real world, is that people believe they actually describe some sort of reality, when we are shown every day that economics "as we know it" has no basis in fact today. As pointed out by others earlier, the major flaw in all systems is that the effect of the human condition (elitism and greed) is not factored into the conceptual framework - the theory is constructed with a utopian view of the environment that does not conform to what we know as reality.

ganjoa

reply to post by ganjoa


I disagree, Free Markets and Free Enterprise assume that everyone is greedy and looking out for their self interests. (ETA)Anything BUT Free Markets assumes that people controlling the market don't have self interest and aren't greedy. Of course they are. So every type of system but Free Markets assume utopia.(/ETA)

That doesn't mean everyone is evil. Blaming greed assumes that people don't benefit from others greed. Blaming greed assumes that people who are greedy don't have other redeeming qualities.

I have never met a single person who says they couldn't use more money. Free Markets take into account that the world is not utopia and can never be.

Free Markets = The un-hindered self interest of all, combining to make a good society. No society can be perfect, so the question, it seems to me, is how to create a society that gives every person the best chance to act upon their dreams. That is the free market.


PS, the only person I was ridiculing was Nouriel Roubini. It is obvious that his statements, as quoted above, are incorrect and not based on any valid history of economics.

ETA: Greed for self interest is the single driving force behind every great discovery and the entire world benefits from that greed. Where would we be without Einsteins Greed for knowledge? Einsteins also had greed for money to fund his research.

Can greed for money produce evil? yes, can greed for money produce good? yes, and much more so than evil. All systems will have evil, so how do you not let the evil among us gain control? Give the control to everyone participating in the world. That is the free market.

He would be right if we had capitalism.

Tbh though, Nouriel Roubini is probably the most well connected man in finance, since he is a consultant to most of the central banks of the world. This could be a hint about what our future economic system will be like.

Capitalism isn't destroying itself.

Capitalism is being destroyed by forces against it.

Such as the POTUS-Obama and his merry group of Czars.

The policies being put in place, or attempting to be put in place, by the Obama administartion or Democratic party is the biggest battle Capitalist face.

Of course Capitalism is a failure. Capitalism benefits only a small percent of the global population, while forcing the rest into abject poverty and suffering.

The main flaw the American-Capitalists make is looking only at individual countries, refusing to look at the effect of their Capitalism from a global perspective. The billions in poverty who suffer daily, that has nothing to do with Capitalism to the American, because it isn't in their own back yard. So it must be someone elses problem.

Capitalism will be looked back on with absolute disgust by all, somewhere down the line. Such an inhumane and barbaric system. A system where people care more about a 2.3 point movement on the DJIA than the welfare and happiness of their own neighbors.

Free Market Capitalism doesn't work either. The Free Market just leads to a state of inequality, that's the nature of the beast. The Free Market will always create a large underclass and the underclass will always revolt and rise up. That's just a historical truth. There's only way to stop that revolt and that's the creation of a welfare state to pacify the underclass. Ultimately though the Free Market is destined to fail, either through revolution or through a welfare-state co-optation on behalf on government and big business.

You also see Oligopolies formed. A select few big businesses and individuals come to dominate their market and then use their dominance to influence and exert power, while controlling and potentially regulating the market. Arrogating to themselves a monopoloy of force. Which of course kills the Free Market as the regulation goes against Free Market principals.

You could maybe prevent the above happening through Government regulation of business and markets, but that'd be a bit of an oxymoron in a supposed Free Market economy.

Ron Paul supporters can delude themselves all they like into this Free Market myth, but big business and government moved away from Free Market Capitalism for a damn good reason. The people overwhelmingly despised it and were threatening to rise up, not just against Free Market Capitalism but against wage-labor itself

reply to post by anon72


Capitalism assumes that there will be a free market. We don't have a free market in the US with rampant speculation, insider trading, unequal tax benefits and taxpayer funded subsidies for corporations and sanctioned corruption by both parties.

We have a corporate oligarchy and only a fool would believe otherwise; but Obama the neocon didn't help things I agree.

www.abovetopsecret.com...

It's a brave new world, welcome to the monkey house.

reply to post by NadaCambia

I beg your pardon,

The flaw in your logic is that the people who control the economy through government are not acting in their own self interest.

Of course they are. Everybody in the entire world acts in their self interest, whatever good or bad they are doing.

So your proposal is to give the control to a select few, that act in the select fews self interest. I simply do not see how that leads to prosperity?

There is no historical truth to a free market creating a large underclass. A free market has never existed in its true form. Although the closest representatives of a free market have always produced the largest equality of wealth. That is a historic fact. I would check my definition of a true free market and then check my history if you claim the opposite is historical fact.

You yearn for a notion of equality, so do I. So how can equality best be achieved? That is the question. Through the force of law? through the barrel of a gun? or through unrestricted voluntary cooperation?

A free market, which has never truly existed, and only "sorta" existed for a short time in the USA gives the control of the economy to the masses. Every dollar spent is a vote every single day.

I argue that if you care about the welfare and happiness of your fellow citizens, you would want the least amount of restrictions on them to pursue their dreams. This is what a free market is.

Capitalism? Privatisation of gains and socialisation of losses. For those who think that this is not capitalism or free market: Marx was talking about this current system. This is capitalism and if you do not agree find some better term for your dreamy perfect system. K. Marx saw what A. Smith didn't: inevitable rise of corporate power.
Factories should be owned by people who work there, not by some anonymous shareholder somewhere on other side of planet. A. Smith's theories works well in small city for bakeries, not at globalized world. Read Communist manifest, everything is there.

Originally posted by sageofmonticello
reply to post by NadaCambia

 

I beg your pardon,

The flaw in your logic is that the people who control the economy through government are not acting in their own self interest.

Of course they are. Everybody in the entire world acts in their self interest, whatever good or bad they are doing.

So your proposal is to give the control to a select few, that act in the select fews self interest. I simply do not see how that leads to prosperity?

There is no historical truth to a free market creating a large underclass. A free market has never existed in its true form. Although the closest representatives of a free market have always produced the largest equality of wealth. That is a historic fact. I would check my definition of a true free market and then check my history if you claim the opposite is historical fact.

You yearn for a notion of equality, so do I. So how can equality best be achieved? That is the question. Through the force of law? through the barrel of a gun? or through unrestricted voluntary cooperation?

A free market, which has never truly existed, and only "sorta" existed for a short time in the USA gives the control of the economy to the masses. Every dollar spent is a vote every single day.

I argue that if you care about the welfare and happiness of your fellow citizens, you would want the least amount of restrictions on them to pursue their dreams. This is what a free market is.

The flaw in your post is that you cannot read. I didn't say government don't act in their self interest, I didn't say we should give the power to a select few. I didn't say either of those things.

There was a massive underclass under the American "sorta" Free Market. In fact, conditions were that bad that a good percent of the population were begging for Socialism or Communism. Do you know anything about your own history? Did the labor movements not occur in your parallel universe? Was there not a massive uprising against wage-labor?

The Free Market is a fallacy, it doesn't work and it never will. The majority will always reject it. I argue these 'dreams' that people pursue only make sense if you're sleeping - I'm wide awake.

The Free Market will bring Economic freedom and prosperity. But never anything more than that. It will never bring happiness, freedom and prosperity to the people. Because for you to be successful and prosper, others must fail. For you to be a winner, I must be a loser. For you to live in a big house, I've got to live in a run-down dump. For you to eat well, I must eat poorly. For you to have good health care, I will have none etc etc

This idea of competition and the line of thinking that says if you put the effort in you'll live well and prosper, it's foolish and borders on a lie, or at least outright stupidity. Everyone could be equally intelligent and equally hard working, and be equally the same in every way... Yet still under Capitalism, few will 'win', but most will 'lose', and be forced into a life of poverty and misery. Not because they're less intelligent or less hard working or different in anyway. But simply because that's the nature of the Capitalist beast - For few to be paid handsomely, most must be wage-slaves for pennies.

I'm an Anarchist btw - Throwing that out there so you can aim your pot-shots with more accuracy, as opposed to making incorrect assumptions about my position and where I stand.

reply to post by zeddissad2


I am sorry, but nobody is under the illusion that a Free Market is a dreamy perfect system.

The illusion is that a centrally controlled economy is a dreamy perfect system.

Free Market = An economic system in which prices are determined by unrestricted competition between privately owned businesses.

Capitalism = An economic and political system in which a country's trade and industry are controlled by private owners for profit.

Your use of these two words interchangeably is proof to your lack of understanding of either.

Factories should be owned by the people who work there

A fine notion. A few things would have to occur.

First capital must be raised to build the factory, machines, etc.. to start the business.

The people who will run the factory and own must agree on how to split the profits and share any potential losses.

These people must also be found in the local area and be willing to supply money and take the risk with that money of failure, these people will be betting there lives and the lives of there family.

If this sounds good to you, it is entirely possible to achieve in a free market.

You assert that it is better to give control to a minority of government officials than to corporate interest.

I agree. Except in one principal, I argue that government control is just as bad as corporate control. In a free market, people are in control.

reply to post by NadaCambia


I am sorry, but I stand by my original reply to you. Despite your insistence that you did not say this or say that, it is exactly what you said. There are two choices. A free market that is controlled by everyone or a controlled market that is controlled by a few. Saying no to a free market is saying yes to a controlled market. Despite you saying otherwise, if you don't support a free market, you support government intervention, Anarchist, though you may claim to be.

Please explain to me that which isn't a free market and doesn't require the control by the self interest of a few?


You assume that when one person succeeds another person has to fail for that to occur. You deny that another person can benefit from any else's success? How does that make any sense, I can succeed and bring hundreds with me.

You admit that "The Free Market will bring Economic freedom and prosperity." yet deny that will bring happiness.

So what will bring happiness? If a person has freedom and prosperity, happiness will come soon enough or not at all. what is your solution that is better than free markets?

Asking for an economic system to provide happiness is going a bit too far.

You say "In fact, conditions were that bad that a good percent of the population were begging for Socialism or Communism."

What is a good percent to you? What is the percent? Where is your proof that a free market was the cause of there problems and anything else was a solution. Your history is faulty, but I will play along.


You say "This idea of competition and the line of thinking that says if you put the effort in you'll live well and prosper, it's foolish and borders on a lie, or at least outright stupidity."


So what is you alternative, a bad life for all? Your solutions? A free market is the best chance we have.


You say "I'm an Anarchist btw - Throwing that out there so you can aim your pot-shots with more accuracy, as opposed to making incorrect assumptions about my position and where I stand."

I did not aim any "pot shots" at you nor did I assume your political stance, I simply replied to what you wrote. BTW, as an anarchist, you should support a free market. This leads me to believe that you do not understand what a free market is.

A Free market is the absolute anarchy of economics.

I am not here to take "pot shots" at anybody. Though I did notice your assumption that I can't read or comprehend...

I am here trying to intelligently discuss the benefits of a free market system. You, it would seem are here to emotionally argue against it. But what is your better alternative?

Capitalism does not always produce a free market, in fact a true free market has never really existed. You can attack me all you want but it does not change your lack of free market understanding on the facts of history.

I am not saying either that capitalism is perfect or doesn't have problems of its own.

I am saying that if you want everyone to have the best chance at happiness and wealth equality, give them a free market.


ETA:
You accuse me of making assumptions on who you are... I have done no such thing, though it is absolutely clear by your reply that you have made many assumptions on who I am.

If you would drop your assumptions you would probably find, as a self proclaimed anarchist that we probably agree on about 98% of topics. I am much closer to being an anarchist than anything else, in my opinion, though I feel there is a very narrow and thin role for government.

Response to sageofmonticello
------------------------

But you're wrong, it isn't that black and white. There are more options than the 2 you present. And I don't even believe in the existence of Government, how then could I support Government intervention!?

You show once again you're unable to comprehend English. Either that or you're purposely construing what I said. I did not say that the Free Market brings freedom and prosperity - I said a Free Market brings ECONOMIC freedom and prosperity. The freedom and prosperity of market does not run parallel to the freedom and prosperity of society or individuals, however.

Regarding the labor movement in the United States and the growing support for Socialism and Communism, you can start here

- en.wikipedia.org...
- en.wikipedia.org...
- en.wikipedia.org...
- en.wikipedia.org...
- en.wikipedia.org...
- en.wikipedia.org...
- www.u-s-history.com...
- en.wikipedia.org...
- en.wikipedia.org...
- en.wikipedia.org...

There's hundreds of citations at the bottom of each page if you want to dig deeper. Although it shouldn't be my role to educate you on the basic history of America.

And here is a link on the various economic theories of Anarchism

- en.wikipedia.org...

I shouldn't support a Free Market just because I'm an Anarchist - although I could do, I suppose. But Market Anarchism isn't really my idea of fun. In fact I'd rather live under State Capitalism than Market Anarchism, to be completely honest with you.

The Free Market is a sham-concept. I've said my piece, you've rejected to address most of my arguments or viewpoints.