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article imageOp-Ed: Does capitalism have a future? Not like this, it doesn’t

By Paul Wallis     Dec 1, 2019 in World
Sydney - Capitalism is a sort of dogma. It’s also seen as a mechanism of social failure, inequity, and oppression. The days when capitalism could simply say it was anti-communist and rest on its dubious laurels are long gone. The future looks very different.
OK, so what IS the future of capitalism? A writer called Antony Funnell, writing for the very aptly named website Future Tense has a few bones to pick with the current version of capitalism. One of those bones is monetary policy, which he accurately describes as a major problem, Citing the ancient dogmas of “small government, privatization, tax cuts and deregulation”, he goes on to outline in commendable brevity the problems these things have caused. There is such a thing as the obvious, and Mr Funnell keeps it simple.
The problem with capitalism
The problem with this model is that governments are also social administrators. That’s their real role, and that role has been so contaminated with ideology that it’s now barely functional. Most politicians, saturated with these half-witted theories seem to see “government”, aka the necessary social assets management role, as the enemy. They apparently have no idea what governments are supposed to do, or why.
Since so many politicians come from privileged backgrounds, they’re also happy to go along with whatever is called free market capitalism whether they understand it or not. Capitalism is the theory of personal wealth, at whatever level, applied to the macro society whether it makes sense or not. That’s why it rarely works at all levels or does anything but deprive people of things they need at the lower income levels.
The result is that people now pay taxes for almost no services. What used to be public assets and services now cost a lot more. The safety nets are called “bureaucracy” with or without a few snide comments about “freeloaders” who usually have almost nothing. This is the current image of capitalism. A lot of noisy, downright weird rich people dictating to people who aren’t rich and have real material needs.
Capitalism, in short, has made itself an enemy of so many people its future is looking very bleak indeed. This form of capitalism is based largely on fiction and self-interest, at the expense of quite literally everyone else. It’s genuinely hated, and sooner or later, the crunch will come. The likely result will be a massive overreaction, not good management.
The future, maybe.
A backlash of epic scale is predictable. Equally predictable is that any backlash will deliver the “British” effect, where public assets were dissolved en masse to produce a social system which simply moves the problems around.
At the heart of the Future Tense commentary is a thing called “Modern Monetary Policy” (MMT). The theory of MMT could be anything from actual sanity to a vague idea that 50 year old economic ideas don’t work too well. Monetary policy is the practical mechanics of money supply. The most recent form of monetary policy for capitalism is “monetarism”, invented during the Reagan/Thatcher era and now long since hopelessly obsolete and ineffectual.
Monetarism was based on government money supply, which has now failed miserably in the era of cheap money. The rich get cheap money at say 1% which they then lend out at 12%, for instance. Obviously, not much thinking on the subject has been done since. Everyone’s making too much money out of this self-service public asset robbery.
Modern Monetary Policy
MMT is based on a simple expression of the fact that policy based on reducing government spending doesn’t work. That policy, which is universal, is a significant non-sequitur in capitalism. For example, government spending is a huge factor in the US economy. Government contracts keep the ball rolling. The same people who demand cuts in spending don’t demand cuts in government handouts for corporations. Defence contracts and open-door spending don’t get smaller, but a few cents for people who need them is a major ideological issue?
Although it does address so many issues, MMT seems a bit tentative in some ways. To me, it’s evolving an old model rather than bringing in a new model, but it makes sense. The writer argues that deficits may be necessary, and surpluses basically just technical balances.
That’s hardly addressing the basically wrong and bizarre mindsets of a political class which seem totally ignorant of their responsibilities. An ideologically based society can’t be effective. Humanity isn’t an ideology. It’s a miserable, mismanaged fact.
The misery and mismanagement has now become standard practice, and it’s intolerable. “Austerity”, the famous free market policy, has never achieved a damn thing. Privatization is simply giving money to people at public expense, and the market efficiency is ludicrous. Governments have been giving away cash cows, and they wonder why there’s a need to raise more revenue? None of these models ever had a chance of working, and they’re now taught to people as gospel facts.
The current version of capitalism definitely cannot work in future. Even basic income will be totally different. More to the point - 11 billion people won’t be able to live their lives, at this rate. Nor can they afford (pun intended) to allow the model to continue. The writing is on the wall, and so far it’s been pretty right.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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