Capitalism in Crisis?

Old Man Marx is (partially) being resurrected in Nouriel Roubini's, "Is Capitalism Doomed?" (at Memeorandum):

So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong). Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality and reduces final demand.



Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China – and soon enough in other advanced economies and emerging markets – are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities.



To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.



The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts.



Over time, advanced economies will need to invest in human capital, skills and social safety nets to increase productivity and enable workers to compete, be flexible and thrive in a globalized economy. The alternative is – like in the 1930s - unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.

RTWT for the context. Roubini can't go all the way for the socialist revolutionary program (completely smashing capital), so he goes for a hyper-Keynesian quasi-socialist model instead. The end result is really the same: The complete obliteration of the individual into the maw of the state bureaucracy (and today's progressive thought police are the spiffed up version of communist totalitarianism's secret police, i.e., a new NKVD). And while Roubini merely cites Marx on the crisis, Stefan Stern (tweeted by Roubini), goes all the way for the proletarian revolution, "Marx was right about change":

Those who regard the recent actions of rioters in English cities as "criminality pure and simple" will not see any connection between Roubini's declaration that "Marx was right" and the decision to steal a 42-inch TV from a burning electricals store. But, for some, looting may have seemed a sensible (if illegal) response to the apparently continuous turmoil of the economy. If everything about your financial future seems at best uncertain and at worst desperate, why not carpe diem, or carpe television at any rate? Rational economic man (and woman) has finally been sighted, legging it down Tottenham High Street in a new pair of trainers.



Marx said that while interpreting the world was all very well, the point was to change it. If capitalists want to keep their world safe for capitalism, they need to face up to what is wrong with it, and change it, fast.

I agree. We need to change the ever expanding social welfare state, rationalize the economy with lower taxes and less regulation, and put people to work. The rioters in Britain's aren't remotely near the starving urchins of the British 19th century industrial revolution. They're mobs of yobbers outfitted with Blackberries. The state keeps them well fed and what do they do but burn down their cities? Socialism sucks. It creates ungrateful losers who kill the innocent and destroy productive capital. The left owns this crisis, all of it, and the politically correct spinelessness has only exacerbated the dislocation. ASFLs.