Guardian: Capitalism simply isn't working and here are the reasons why

[Iwillnevergiveup]

http://www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty

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"Suddenly, there is a new economist making waves – and he is not on the right. At the conference of the Institute of New Economic Thinking in Toronto last week, Thomas Piketty's book Capital in the Twenty-First Century got at least one mention at every session I attended. You have to go back to the 1970s and Milton Friedman for a single economist to have had such an impact.

Like Friedman, Piketty is a man for the times. For 1970s anxieties about inflation substitute today's concerns about the emergence of the plutocratic rich and their impact on economy and society. Piketty is in no doubt, as he indicates in an interview in today's Observer New Review, that the current level of rising wealth inequality, set to grow still further, now imperils the very future of capitalism. He has proved it."

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[qazplm]

1. it isn't the fault of capitalism

but unfettered, pro-corporation/rich capitalism.

Get back to managed capitalism where government and law evens the playing field and provides a safety net, and things are much better.

There is no perfect, feasible economic system where no one is poor. Communism would technically do it but until you fundamentally alter human nature that's never going to work. Some combination of socialism/capitalism is the best we can do IMO until we reach Star Trek levels of technology where energy is so cheap and limitless that need is basically eliminated.

[Warpy]

2. Capitalism only works when it's heavily regulated and supplemented by a strong

social safety net. Part of that regulation is progressive taxation that reaches a confiscatory level at the very top and prevents huge fortunes that can buy government from being built quickly.

Let's hope the next time we try something that has been proven to work, we index the whole business to inflation so that middle class people aren't stuck paying plutocrat taxes, the fatal flaw in the last system that allowed Reagan the support to junk it.

[qazplm]

3. yes, which is what I said

although I don't have a problem with large fortunes. If you simply get in reasonable judges then you pass campaign finance and corruption laws that make it impossible to buy government. This shows that the problem isn't purely economic.

There is no panacea economic system that will replace capitalism. Just like democracy, capitalism (properly managed) is the best of a slew of imperfect choices.

[RainDog]

4. The entire argument of the economist

is that people with large fortunes are not taxed heavily enough to redistribute wealth - most esp. in the U.S., compared to other western democracies.

this is creating a reversion to a sort of feudalism - powerful families, not nations, who create laws that favor them and this goes on and on - until we have lost democracy because some are allowed to continue to concentrate wealth among the few at the expense of the many.

Taxation is such a bugaboo because of a TINY percentage of the population this actually impacts negatively, while all the middle class (mostly white) people who hate taxes are being screwed over by the 1%.

[shaayecanaan]

5. it is the fault of capitalism

Last edited Mon Apr 14, 2014, 02:14 PM - Edit history (1)

Capitalism requires, on average, a return on capital. If investors have a no better than even chance of making a dollar then they are better off taking their chances at the casino.

A return on investment can come from only one of three places: credit, increases in productivity and taking money from someone else. Increases in productivity cannot keep happening forever (in the west they have been steadily slowing) and credit of course can't keep flowing forever either.

The third option is redistribution of wealth from poor to rich. This is what has happened for much of the past two decades. In both 1929 and the present day the poor are looking increasingly tapped out.

Social democracy can slow the cycle by taxing the rich and ensuring that the wealth transfer from poor to rich takes place at a slower rate. But it cannot overcome the fatal flaw of capitalism. It is like a game of monopoly. The object is to make money and to force out the other players. When one player has all the money, the game is finished.

[cprise]

6. You may be right. France just shifted Right to reduce taxes. n/t