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Tag Archives: capitalism

Karl_MarxMore and more the headlines make me think of Marx, but none so much as this–Two Giants Emerge From Wall Street Ruins.

Forget revolution of the proletariat and all that. Let’s look at the foundation of Marx’s argument that capitalism is a destabilizing economic system. Economic growth leads to surplus, decreases in spending bring about recession, capital prices move lower, and the stronger companies are able to buy-out the weak companies at a bargain, reestablishing growth.

The one overriding trend? Greater and greater concentration of productive capacity and market share. As the owners of larger and wealthier firms, the capitalists gain power and influence over government and policy, increasing the divide between rich and poor. That, according to Marx’s dialectical materialism, is what drives the major conflicts and changes of history.

Of course Marx’s followers used the argument to justify armed revolution, but it is not completely clear that is what Marx intended. That point, in fact, may explain Marx’s statement  from his deathbed, “I am not a Marxist.”

As J.P. Morgan and Goldman Sachs begin to dominate financial markets, we also see demands that government take more control and establish guidelines for how the market will run. Does not seem like a revolution, but it sure sounds socialist.

As an educator, the real point for me is that Marx needs to find his way into our economics curriculum.

(Don’t forget to visit condron.us and alphainventions.com)

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Karl_MarxInteresting editorial here that echoes some of my sentiments from weeks (months?) ago, that Marxism is showing itself valid and relevant again. I still have doubts about the real possibility of a revolution in the relatively near future, but it is likely that revolution–in the strict sense–is not needed.

Interviewer: “Nowadays we call these ‘crises’ recessions. You predicted that over time, capitalism would become dominated by larger and larger firms.”

Marx: “[T]he concentration of capital and land in a few hands.”

Interviewer: “And how does this concentration bring on socialism?”

Marx: “By paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.”

Interviewer: “So the bigger firms become, the harder they fall. In the US economy, some firms have become ‘too big too fail,’ and the government has moved in. As this plays out, what will happen to capitalism?”

Marx: “Its fall and the victory of the proletariat are equally inevitable.”

It is true that much of the policy designed to help the US finance and auto companies seems particularly socialist in that government is taking over the control of many larger firms. Not sure that counts as a victory of the proletariat, but I also read today that governement is limiting executive pay. That levels the playing field a bit.

(Don’t forget to visit condron.us and alphainventions.com)

toasted_peanut_in_shellPeanut products tainted with salmonella have meant closing a plant in Blakely, Georgia, the “peanut capital of the world.” And here is an article that argues capitalism requires regulation. The event’s timing makes it a perfect boost to the idealistic turn away from the deregulation of supply-side theory. In the words of the author–

(People) are re-learning long-lost lessons about the perils of unfettered capitalism. Along with former Wall Street secretaries and unemployed bank clerks, they have become collateral damage in an age of deregulation and an ideology that defined government as always the problem, never the solution…

Now, however, Georgia legislators, including Republicans, are suddenly clamoring for stiffer laws and more oversight. Indeed, the entire country is in the midst of a cultural shift as Americans rediscover the many reasons that smart government oversight of commerce and industry makes good sense.

No one seems to remember the very similar problems with tainted milk a few months ago.  The response in China was similar, that regulation needed to be more thorough and better policed.

These food problems, and the problems in the financial sector, make me think of Sinclair Lewis. How many times do we need to learn the same lessons?

Maybe The Jungle and Main Street should be required reading for business students.