Why Capitalism Needs Saving - by - Robert Reich

[kentuck]

http://www.rollingstone.com/politics/news/robert-reich-on-why-capitalism-needs-saving-20151007?page=3

<snip>
It seems like there's some convergence with this kind of analysis. Joe Stiglitz at the Roosevelt Institute (where I work) is really big on the rules of the economy. So is Elizabeth Warren. Tony Atkinson in England just wrote a book called Inequality that focuses on market structures too. Why do you think there's so much focus on this right now?
First of all, inequality is a bigger issue because it's more extreme. We are in a second Gilded Age. And even people on the right are beginning to agree that it is a central feature of the modern economy.

Now the next question is, what do you do about it? I think for many years Democrats and liberals have sought to correct the market with taxes and public investments and raising the minimum wage and a lot of other government regulations. Taxes and regulations and public investments are fine, and I have argued for them in the past, and will continue to argue for them. What has been left out of the debate is the actual structure of the market itself.

We don't recognize the relationship between political power and market structure. This has stacked the deck in favor of the people at the top and against average working people. The only response is that you've got to have countervailing power such as we had in the first three decades after the Second World War.

What do you think of the way the 2016 primaries are shaping up so far?
The big divide politically in the future is not going to be so much left and right, Democratic versus Republican, as it is anti-establishment versus establishment. The Republican anti-establishment candidates, the people who are perceived as being outside the ruling class are doing much better. Donald Trump, although he is a billionaire, he is a guy who is a right-wing populist. Bernie Sanders exemplifies what might be seen as a reformed populist.

....more at link

[rug]

1. It can't.

"The real issue is whether capitalism is organized for the benefit of the society as a whole or for the benefit of a small group," says Reich.

The nature of capital is the concentration of resources and the political power that goes with it.

It can never be organized for the benefit of society as a whole.

[Nye Bevan]

2. Don't you think capitalism works OK in countries such as Denmark? (nt)

[rug]

4. Not really. It's a very small country with a relatively small economy.

Capitalism is a global force.

While Denmark's laws work much better for its people than most, it still benefits from the capitalist exploitation of the rest of the world. It is better despite capitalism, not because of it.

It's like finding one Wal-Mart store that treats its workers well. Wal-Mart nevertheless remains Wal0Mart.

[pampango]

3. "Obama will be remembered as the last gasp of liberalism, as opposed to populism."

Those are the two questions I've been getting on the book tour. One group of people says, "Why do you suppose it needs saving? It's perfect." And another group says, "Why do you want to save it? It's so rotten." This reveals a fundamental misunderstanding of the global economy and also the American economy. Even democratic socialist countries like Denmark and Sweden are fundamentally capitalist in terms of how they're organized. ... The real issue is whether capitalism is organized for the benefit of the society as a whole or for the benefit of a small group at the top. That's really what we ought to be debating.

... there are overlaps between right-wing and left-wing populists. Number one is busting up the big banks of Wall Street. Many right-wing populists want to end "too big to fail." In fact that is what the Tea Party grew out of: the bailout of Wall Street. Many right-wing populists hate the Transpacific Trade Agreement, they despise corporate welfare, they're against handouts to corporations, they talk incessantly about "crony capitalism."

Listen to what the rhetoric of what the right-wing populists is, and some of it sounds remarkably like the rhetoric of the left-wing populists. The difference, of course, is that the right-wing populism comes with the scapegoating of immigrants and Muslims and the poor. It comes with, sometimes, a lot of homophobia and xenophobia, and it has no real respect for democracy.

I think the truth is that Obama accomplished some important things. ... I think Obama is an incrementalist. ... His incrementalist instincts, his unwillingness to fight and be a populist, was completely understandable, because he might have got nothing done if he had taken that stand. But I think he'll be remembered historically as the last gasp of liberalism, as opposed to populism.

[Hortensis]

5. Obama is "incrementalist" BECAUSE OF

CONSERVATIVE OPPOSITION. Without that, Obama would not be "incrementalist," he'd just fix things.

All arguments that pretend every problem is caused or perpetuated by the Democrats require pretending that half this nation literally doesn't exist. Bizarre. They do, and they're not going away.

As for the notion that in future left and right will dissolve, I only wish it were so because that giant divide widened so deliberately in order to divide and defeat the electorate would dissolve with it.

But guess what? There is no longer any significant "pro-establishment" -- i.e., pro Big Money infiltration into and control of government functions -- support now that is not conservative, and only a minority of them.

A significant majority of conservatives are also now anti- along with everyone else. We are all part of a huge correction. IF we don't screw it up.

[ronnie624]

6. Capitalist ideology implies

that if everyone 'works hard enough', we can all be wealthy, which is obviously nonsense. If we all decided to 'pull ourselves up by our bootstraps', there could never be enough available resources and energy to allow everyone to be rich. If the system can't provide the same opportunities for everyone, then it is inherently unjust.

The concept of creating 'wealth', is also at odds with the Laws of Thermodynamics. The Law of Conservation of Matter and Energy, expressly forbids creating anything. Wealth HAS to have a foundation in the physical universe. If it does not, then the theories that underpin it, are nothing more than magical incantations. Anytime energy and matter is converted and dispersed, the system will always sustain a net loss, especially when you're talking about usable energy as a part of an economic system.

Also, everyone (who isn't an idiot) already knows, that the wasteful and unwise use of the earth's resources, and the fevered pursuit of material 'wealth', is what is destroying our biosphere. Anyone who understands this, yet continues to embrace the nonsense of capitalist/consumerist ideology, is essentially a global climate change denialist.

The ENTIRE concept of capitalism is flawed from top to bottom, both morally and intellectually, and amounts to little more than shitting our own nest.

[ronnie624]

7. There are only two sources of energy for the 'creation' of 'wealth':

the stored energy of the earth's resources and the available energy of human labor. The sum total of all our economic activity is derived from these two sources, which makes them subject to the strictures of the laws of physics. You can NEVER end up with more than your initial investment of energy and resources.

What the proponents of capitalist ideology are saying, essentially, is that $20 worth of resources and $20 worth of labor can be converted into $50 worth of value.

My question is, what is the physical source of that surplus of value?