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Title: The Ideological Crisis of Western Capitalism
Source:
Truthout
URL Source: http://www.truth-out.org/ideologica ... -western-capitalism/1310127895
Published: Jul 11, 2011
Author: Joseph E. Stiglitz
Post Date: 2011-07-11 13:59:56 by Brian S
Keywords: None
Views: 11979
Comments: 28
Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin. Even in its hey-day, from the early 1980’s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest in the richest country of the world. Indeed, over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year. Moreover, output growth in the United States was not economically sustainable. With so much of US national income going to so few, growth could continue only through consumption financed by a mounting pile of debt. I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government. Alas, that has not been the case. On the contrary, a resurgence of right-wing economics, driven, as always, by ideology and special interests, once again threatens the global economy – or at least the economies of Europe and America, where these ideas continue to flourish. In the US, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of math and economics, is threatening to force a default on the national debt. If Congress mandates expenditures that exceed revenues, there will be a deficit, and that deficit has to be financed. Rather than carefully balancing the benefits of each government expenditure program with the costs of raising taxes to finance those benefits, the right seeks to use a sledgehammer – not allowing the national debt to increase forces expenditures to be limited to taxes. This leaves open the question of which expenditures get priority – and if expenditures to pay interest on the national debt do not, a default is inevitable. Moreover, to cut back expenditures now, in the midst of an ongoing crisis brought on by free-market ideology, would inevitably simply prolong the downturn. A decade ago, in the midst of an economic boom, the US faced a surplus so large that it threatened to eliminate the national debt. Unaffordable tax cuts and wars, a major recession, and soaring health-care costs – fueled in part by the commitment of George W. Bush’s administration to giving drug companies free rein in setting prices, even with government money at stake – quickly transformed a huge surplus into record peacetime deficits. The remedies to the US deficit follow immediately from this diagnosis: put America back to work by stimulating the economy; end the mindless wars; rein in military and drug costs; and raise taxes, at least on the very rich. But the right will have none of this, and instead is pushing for even more tax cuts for corporations and the wealthy, together with expenditure cuts in investments and social protection that put the future of the US economy in peril and that shred what remains of the social contract. Meanwhile, the US financial sector has been lobbying hard to free itself of regulations, so that it can return to its previous, disastrously carefree, ways. Help fight ignorance. Click here for daily Truthout email updates. But matters are little better in Europe. As Greece and others face crises, the medicine du jour is simply timeworn austerity packages and privatization, which will merely leave the countries that embrace them poorer and more vulnerable. This medicine failed in East Asia, Latin America, and elsewhere, and it will fail in Europe this time around, too. Indeed, it has already failed in Ireland, Latvia, and Greece. There is an alternative: an economic-growth strategy supported by the European Union and the International Monetary Fund. Growth would restore confidence that Greece could repay its debts, causing interest rates to fall and leaving more fiscal room for further growth-enhancing investments. Growth itself increases tax revenues and reduces the need for social expenditures, such as unemployment benefits. And the confidence that this engenders leads to still further growth. Regrettably, the financial markets and right-wing economists have gotten the problem exactly backwards: they believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government’s fiscal position, or at least yielding less improvement than austerity’s advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion. Do we really need another costly experiment with ideas that have failed repeatedly? We shouldn’t, but increasingly it appears that we will have to endure another one nonetheless. A failure of either Europe or the US to return to robust growth would be bad for the global economy. A failure in both would be disastrous – even if the major emerging-market countries have attained self-sustaining growth. Unfortunately, unless wiser heads prevail, that is the way the world is heading.
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#1. To: Brian S (#0)
Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin. Wow... couldn't even make it through the first sentence, without being a bald- faced lie. We haven't had real capitalism in this country for about 90 years. LMAO. Thanks for playing, Baghdad Brian.
That's because it failed then. When they tried to bring the monster back to it's original form, it failed again.
gobsheit: That's because it failed then. When they tried to bring the monster back to it's original form, it failed again.
It's too bad you were treated that way before your diagnosis.
MING: It's too bad you were treated that way before your diagnosis. TRANSLATION: "NO." ming/loonymom, you conclusively prove that you're not interested in any honest discussion. Like most leftist SOCIALISTS, you believe your fantasies, and won't dare to think beyond the propaganda that fills your head. ANYTHING which might upset the precarious delusion that you consider reality, you run away from. Oh, sure... you'll call others names, you'll attempt to use the Rules of Disinformation, but the truth is that you're a coward. You want to live your life inside a prison of your own making, and you can't understand how we would want so badly, to be FREE of that prison...
Ping.
#15. To: Capitalist Eric, mininggold, Godwinson, mcgowanjm, lucysmom (#14)
The progressive globalist moonbats have watched too many MSLSD programs, and read too many commie comics.
Top • Page Up • Full Thread • Page Down • Bottom/LatestThe Ideological Crisis of Western Capitalism
#8. To: Capitalist Eric, lucysmom (#1)
We haven't had real capitalism in this country for about 90 years.
#11. To: Godwinson (#8)
Capitalist Eric: We haven't had real capitalism in this country for about 90 years.
#12. To: Capitalist Eric (#11)
#13. To: mininggold (#12)
(Edited)
Capitalist Eric: You posted a link to a fairly comprehensive (but utterly unoriginal) website, which discusses a lot of the same propagandist crap that you can see on TV. Nowhere in entire website is there an accurate description of what's REALLY going on right now.
If you look at the observations by Hayak, you'll start to get hints... http://www.economictheories.org/2008/08/friedrich-hayek-socialism- versus- market.html
So where are we REALLY at?
We're living under a de facto "Corporatocracy." Our economic model is going down the path of corporativism.
In other words, where we're really at, is NOT something your talking- heads on CNBC will be discussing... and you'll know why, as soon as you do some homework on this economic system...
Interestingly, while you demand PROOF of my position, you whine that I cut-and- paste. Fine, I'll let you do the work of finding out about this model yourself.
I've given you the key; will you have the courage to use it? A man who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself.
-- John Stuart Mill --
#14. To: jwpegler, hondo68, rudgear, Happy Quanzaa, Badeye, Mad Dog (#13)
Replies to Comment # 14. Superman Renounces US Citizenship
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