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Forum Post: What Capitalism Delivers By Richard D. Wolff

Posted 6 years ago on April 17, 2012, 9:20 a.m. EST by flip (7101)
This content is user submitted and not an official statement

Most Presidents preside over one or more capitalist downturns (recessions, depressions, crises, etc.). Every President since at least FDR generated a "program" to respond to the downturn -- as demanded by citizens and businesses. FDR and every later President promised that his program would "not only extricate the US from the present economic troubles but will also make sure neither we nor our children need face such downturns in the future." Obama is only the latest to do so.

No President has been able to keep that promise. The current capitalist crisis, now halfway through its fifth year with no end in sight, proves that preventing future capitalist downturns has eluded every past President and all his prestigious, high-priced economic advisers. Since President Obama's program is not basically different from earlier presidential programs, there is no reason to expect him to succeed either.

Failure to prevent capitalist crises has condemned millions of our fellow citizens to the repeated ravages of lost jobs, job benefits, and job security plus foreclosed homes and bleak job prospects for our children. The personal, family, and economic costs of the failure to deal with capitalist crises are staggering. Tens of millions of Americans today either have no work or must accept part-time jobs when they need and want full-time work. According to the US government, roughly 30 percent of the economy's tools, equipment, factory, office, and store space, and raw materials stand idle. This capitalist system deprives us all of the output and wealth that could be produced if the people denied jobs were combined with the idled means of production.

That output could rebuild our industries and cities, could convert them to environmentally respectful institutions, and could alleviate poverty in the US and beyond. If employed, those now without jobs could lead better lives, keep their homes, and be productive. We could all benefit enormously but for capitalism's abject failure to combine the people who want to work with unused means to produce the output we need.

Nor does the basic problem lie with government policies and programs. After all, the chief political parties, politicians, lobbyists, and their allies in the media and academia have all performed in unison to celebrate capitalism. They have insisted over the last fifty years that criticism of capitalism, no matter how poor its performance, was silly, unfounded, absurd, disloyal, or worse. Their mantra has been "capitalism delivers the goods."

Behind the protective cover of a near total ban on criticism, the US capitalist system deteriorated (the usual result when public criticism of a social institution is disallowed). Since this crisis began in 2007, capitalism has been "delivering the bads" to most of us. It increasingly threatens to deliver still worse in the years ahead. Capitalism's uncritical boosters are now pressing the government to cut back public services just as the mass of Americans need them more than ever. Their basic slogan and program remain: economic "recovery" for the few and austerity for the many.

In the 1950s and 1960s, the top individual income tax bracket on the richest Americans was 91%, while today it is 35%. In 1977, the tax those people paid on "capital gains" (when they sold assets like stocks and bonds at prices higher than they paid for them) was 40%. Today that rate is 15%. The mass of people never enjoyed such massive tax cuts. Those cuts made the wealthy still richer while forcing the government to borrow money to replace what it no longer got from taxes on the rich. How grotesque that the rich now use government debts as the excuse to cut public services for the mass of Americans!

The solution for capitalist crises like the one plaguing us today is not another President's program of reforms, regulations, economic stimuli, and deficit budgets. We have been there and done that. It has never worked to prevent this economic system from condemning people to endlessly repeated "hard times." It is long overdue to subject capitalism to the kind of serious, open, and free public criticism and debate that should never have been repressed in the first place. We need to examine whether and how the US might do better than capitalism.

Economic systems are born, evolve over time, and pass away -- like all human institutions. Out of the deaths of slavery and feudalism, capitalism was born. It promised, in the words of the French revolutionaries, "liberty, equality, and fraternity." It made some genuine progress toward those goals. However, it also erected some serious obstacles to ever actually achieving them. Chief among these was the organization of production inside capitalist enterprises.

In the capitalist corporate enterprises that dominate economies today, their major shareholders and the boards of directors they select are in the undemocratic, exclusive position of making all the key decisions. Major shareholders and boards of directors constitute a small minority of those directly connected to capitalist enterprises. The majority are the enterprise's workers and the populations of communities dependent on those enterprises. Yet that minority's decisions (about what, how, and where to produce and what to do with profits) impact the majority -- including bringing crises -- without permitting that majority any direct role in making those decisions. It is hardly surprising then that the minority seeks and is in the position to take the lion's share of income and wealth for itself. It likewise buys control of politics to block the majority from using government to rectify its economic disadvantages and deprivations. That's why we now have government bailouts for the rich and austerity for the rest of us.

Unless society moves beyond the capitalist organization of production, economic crises will keep happening and generating politicians' false promises to prevent them. It is naïve to expect the minority in charge of a system that still works well for them to democratize the economy and politics. That is a central task of the 99%.



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[-] 1 points by zoom6000 (430) from St Petersburg, FL 6 years ago

Nationalize banks(too big to fail)nationalize oil companies,electric companies .,eduction,and health care., get those fat monkeys out

[-] 2 points by flip (7101) 6 years ago

i like that idea

[-] 1 points by darrenlobo (204) 6 years ago

You don't seem to know the difference between free markets & corporatism. We now have a mixed economy that's why it has problems. With the progressives' ideas implemented like central banking, the income tax, an imperial foreign policy, subsidies, regulation, & welfare (including Social Security & Medicaid/Medicare) things are going badly. It's past time to face what's really going wrong & allow a free market to come into existence (no, we don't have one now) & get us out of this mess.

[-] 2 points by flip (7101) 6 years ago

you would be surprised at what i know - and why did they implement those reforms - weren't they trying to save capitalism? do you now the history of your beloved free market in the 18 and early 1900"s - check it out - give me a breakdown of all the financial panics then tell me how well free markets work - wondering if you read chomsky on markets - here is a bit in case you haven't - For those who are interested in the real world, a look at the actual history suggests some adjustment -- a modification of free market theory, to what we might call "really existing free market theory." That is, the one that's actually applied, not talked about.

And the principle of really existing free market theory is: free markets are fine for you, but not for me. That's, again, near a universal. So you -- whoever you may be -- you have to learn responsibility, and be subjected to market discipline, it's good for your character, it's tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I'll be able to rant and rave about the marvels of the free market, while I'm getting properly subsidized and defended by everyone else, through the nanny State. And also, this has to be risk-free. So I'm perfectly willing to make profits, but I don't want to take risks. If anything goes wrong, you bail me out.

So, if Third World debt gets out of control, you socialize it. It's not the problem of the banks that made the money. When the S&Ls collapse, you know, same thing. The public bails them out. When American investment firms get into trouble because the Mexican bubble bursts, you bail out Goldman Sachs. And -- the latest Mexico bail out, and on and on. I mean, there's case after case of this.

In fact of the leading -- top -- hundred leading transnationals in the Fortune list of transnationals -- there was a recent study of how they -- how they related to the States in which they- they're all somewhere, you know, so they're all mostly here -- in some National State, it turns out that all hundred of them had benefited from industrial policies, meaning, State intervention in their behalf. All hundred had benefited from the State in which they're based. And twenty of the hundred had been saved from total disaster, that is, collapse, by just State bail-out. When people talk about globalization of the economy, remember that the nanny State has to be very powerful in order to bail out the rich. And nothing is changing in that regard. Twenty out of a hundred, again, were saved from collapse by this, including a number here.

Well, that's really existing free market theory. There are many examples of it quite close to home. So, we could start with our own Governor, Governor Weld, who is described by the Boston Globe as a libertarian with a religious belief in free markets. And then a couple of days later, they reported that through various scams he had- his administration was able to sharply increase Federal subsidies to Massachusetts, so that- way beyond what they were before, so that he could parade as a fiscal conservative. And that's pretty common.

Just the year before, you may recall, if you have long memories, they had to close Georges Bank -- the richest fishing area in the world -- because it was being overfished, thanks to a combination of deregulation and subsidies to the fishing industry, which have that odd consequence that you tend to get overfishing. So it looked as if the ground fish were wiped out, and they had to close it off. It didn't take long for the religious libertarian fanatic, William Weld, to take the next jet plane down to Washington, hat in hand, asking for a Federal bail-out. They wanted the Federal government to declare it a natural disaster. And the reason was, as he explained, with, presumably, some scientists in tow, that there was some strange kind of predatory fish which no one had yet found, but they would find it, don't worry. So some kind of predatory fish had come and, sort of, wiped out all the, you know, the Cod and the Haddock, and all those things. So it was a natural disaster, and therefore the general public had to, sort of, pay off the results of deregulation and subsidizing the fishing industry. Well, that's the way to be a libertarian with religious fervor.

Another one is the leader of the conservative revolution, Newt Gingrich. Nobody is more passionate about the market than he is, in particular about what he -- his own district, which he calls a Norman Rockwell world of jet planes and fiber optics, as indeed it is. Except, if you ask where jet planes and fiber-optics came from, you discover that the public paid for them, and still pays for them. And in fact he manages to get more Federal subsidies for his district than any suburban county in the country outside the Federal system. So, you can have conservatism flowering among the malls, and so on.

Or you can go back to the Reaganites, who were also very passionate about free markets for everyone else. Meanwhile, they boasted to the American business community, correctly, that they had done more- that they had instituted more protection than any post-war American administration, in fact, more than all of them combined. They had doubled import restrictions, blocking- and helped -- and poured public funds into major industries to enable them to recapitalize, to protect the -- in fact reconstruct, the steel industry, and the automotive industry, and semiconductors, and so on, which would have disappeared if they had opened the markets.

The Thatcherites in England were about the same. Government expenditures relative to GNP stayed pretty constant, although, anything that went to the general population collapsed. Meanwhile, military industry shot up, arms sales were booming -- that's all publicly subsidized stuff -- arms sales to nice guys like Saddam Hussein, and General Suharto, and others.

Well, that's really existing free market theory.

[-] 1 points by darrenlobo (204) 6 years ago

Actually, everything you describe is about govt intervention & politicians deceiving people about what they're doing. Gingrich a free marketer? LMAO Thatcher & Reagan? double LMAO They're as big govt as the rest. Bail outs, no free market there. No you'll have to look to other sources for "existing free market theory".

[-] 2 points by flip (7101) 6 years ago

i understand you agree with chomsky - i thought i said that. how about the financial panics - let me know

[-] 1 points by darrenlobo (204) 6 years ago

Financial panics are caused by central banks. The artificial boom created by inflating the money supply leads to the bust when they hit the brakes to avoid price inflation:

Austrian Business Cycle Theory: A Brief Explanation


[-] 0 points by flip (7101) 6 years ago

you're up early - you won't get anywhere with me using the austrian school and that fool hayek - i have read max neef. but you need to explain this in terms of central banks - Panic of 1785, 1792, 1819, 1837, 1857, 1873, 1893, 1907 and you might as well try 1929

The panic of 1785, which lasted until 1788, ended the business boom that followed the American Revolution. The causes of the crisis lay in the overexpansion and debts incurred after the victory at Yorktown, a postwar deflation, competition in the manufacturing sector from Britain, and lack of adequate credit and a sound currency. The downturn was exacerbated by the absence of any significant interstate trade. Other factors were the British refusal to conclude a commercial treaty, and actual and pending defaults among debtor groups. The panic among business and propertied groups led to the demand for a stronger federal government.

Panic of 1792

The panic of 1792 arose from speculative activity following the adoption of the Federal Constitution, the founding of the First Bank of the United States (BUS), and the emergence of securities markets for bank shares and other government securities in New York City. Almost immediately after its establishment in 1791, the BUS overextended notes and discounts, and then sharply reversed its course. Speculators in the bank's shares quickly sold their holdings, which had risen markedly over previous months, and the nation's first true securities market panic took hold.

Panic of 1819

The Second Bank of the United States, seeking to curb speculation in commodities and western lands following the War of 1812, sharply contracted its extension of credit, provoking the panic of 1819. The downturn hit the southern and western states hardest, and many banks suspended specie (coin money) payments or closed their doors. The BUS went through a period of recrimination, congressional investigation, and financial rehabilitation. Commodity prices declined, manufacturers clamored for more protection, and debtors demanded relief legislation, which was enacted in several western states. The economic picture had improved by 1823.

Panic of 1837

A series of events led to the panic of 1837: On 11 July 1836, President Andrew Jackson issued an executive order (the Specie Circular) that attempted to end speculation in western lands by requiring specie for their purchase; the Deposit Act, passed on 23 June 1836, ordered that the more than $34 million in surplus that had accumulated in the Treasury be redistributed to the states, in proportion to their relative populations; the Second Bank of the United States dissolved following Jackson's veto of an act to recharter in 1832; and England introduced a tightened monetary policy designed to "recover" specie presumed lost to the United States. By early 1837, these factors had dislocated the nation's specie reserves out of New York City and into the interior and the hands of the public. With its specie base depleted by more than 80 percent over a six-month period, the public lost confidence in the New York banks and withdrew their deposits. Within two weeks, all of the nation's banks had suspended specie payments. This first general suspension in the nation's history started a six-year economic downturn that was the most severe of the nineteenth century.

Panic of 1857

The failure of the Ohio Life Insurance Company in August 1857 was the catalyst that initiated the panic of 1857, which spread quickly from the Ohio Valley to the eastern money centers. Unemployment grew, breadlines formed, and ominous signs of social unrest appeared. The depression was most serious in the industrial northeast and in the western wheat belt, where the new Republican Party saw increasing support. The cotton belt was less affected by the panic: cotton crops were good, prices were high, and banks were sound. These factors brought over-confidence in the South, an impulse to protection in the East, and a drive for free land in the West. Economic conditions became as potent an issue as slavery in the subsequent election of 1860.

Panic of 1873

The failure of several important eastern firms in September 1873—including the New York Warehouse and Securities Company; Kenyon, Cox and Company; and the famous banking house, Jay Cooke and Company—precipitated this panic. The stock exchange closed for ten days, and bankruptcy overtook a host of other companies and individuals. Some causes of the panic and ensuing depression were international, including a series of wars and excessive railroad construction in central Europe, Russia, South America, and the United States. Domestic factors included currency and credit inflation, losses from fires in Boston and Chicago, an adverse trade balance, and overinvestment in railroads, factories, and buildings. In the following depression, 18,000 firms failed during 1876 and 1877, a majority of the American railroads declined into bankruptcy, and more than two-thirds of the nation's iron mills and furnaces fell idle. Wage reductions led to strikes among Pennsylvania coal miners and New England textile workers, and to a railroad walkout in 1877. In 1878 the depression began to lift.

Panic of 1893

The panic of 1893 originated in the usual factors of the business cycle, including overinvestment and falling prices in the 1880s. The uneasy state of British securities markets in 1890—culminating in the liquidation of the banking house of Baring Brothers and Company—stopped the flow of foreign capital into American enterprise, and the sale of European-held securities caused a stock market collapse in New York, accompanied by substantial gold exports. The financial crisis was postponed, however, by strong exports of agricultural staples over the next two years that reestablished gold imports. Uncertainty returned in the winter of 1892–1893 as renewed gold exports raised the possibility that the nation would be forced off the gold standard by a decline in the U.S. Treasury's holdings. The nation also suffered with decreased federal revenues and heavy expenditures, including the purchases of silver under the Sherman Silver Purchase Act of 1890.

The gold reserve had fallen below the accepted minimum of $100 million by April 1893, and the failure of the National Cordage Company in May touched off a stock market panic. By the end of 1893, about 4,000 banks and 14,000 businesses had failed. President Grover Cleveland sought a repeal of the Silver Purchase Act as the one absolute cure for the depression. By 30 October the repeal had passed both houses of Congress. In the meantime, imports of gold had stabilized the monetary situation in New York somewhat. The depression did not lift substantially, however, until the poor European crops of 1897 stimulated American exports and the importation of gold.

Panic of 1907

Sometimes called the "rich man's panic," the panic of 1907 was preceded by speculative excesses in life insurance, railroad and coastal shipping combines, mining stocks, and inadequately regulated trust companies. Several profit-dampening reforms were enacted in 1906, such as the Hepburn Act (giving the Interstate Commerce Commission power to set maximum railroad rates) and the Pure Food and Drug Act, yet the economy seemed healthy in January 1907. In fact, most financiers believed that improved banking controls made it impossible for panics like those of 1873 and 1893 to recur.

In early 1907, when Henry H. Rogers of Standard Oil had to pay 8 percent interest to float a $20 million bond issue, the stock market dropped sharply—the so-called silent panic. The economy seemed to recover, but failure of the United Copper Company in the summer of 1907 precipitated runs on the Heinze and Morse chain of banks. When the Knickerbocker Trust Company closed in October, runs on the Trust Company of America and several others followed, and there was panic on the stock market. To halt the panic, Secretary of the Treasury George B. Cortelyou authorized large deposits in several banks. Investment banker J. P. Morgan headed a banking group that used a borrowed emergency fund of nearly $40 million to rescue banks and firms they deemed savable, and whose survival was crucial. To rescue the brokerage house of Moore and Schley, Morgan arranged to have the United States Steel Corporation buy the brokers' holdings of the stock of a major rival, the Tennessee Coal, Iron, and Railroad Company. This arrangement strengthened the steel trust. By the end of the year, the financial situation was normal again.

Although the panic did not lead to heavy unemployment or a wave of bankruptcies, it seriously damaged the image of the big financiers. It also had repercussions over-seas, as the United States temporarily imported a large amount of gold, and interest rates abroad rose. On 30 March 1908, Congress passed the Aldrich-Vreeland Currency Act, which provided for contingency bank currency in the event of another stringency. The act also created the National Monetary Commission, which produced the Aldrich Report of 1911. This was a major step in setting up the Federal Reserve System in 1913–1914.

[-] 1 points by darrenlobo (204) 6 years ago

During all these panics the govt regulated banks & manipulated the currency. The fact that there sometimes wasn't a central bank in existence is irrelevant.

[-] 1 points by flip (7101) 6 years ago

there are none so blind as those who will not see! here is an economist who lives in the real world - not a hayekian one - AMY GOODMAN: What do you think we need to change?

MANFRED MAX-NEEF: Oh, almost everything. We are simply, dramatically stupid. We act systematically against the evidences we have. We know everything that should not be done. There’s nobody that doesn’t know that. Particularly the big politicians know exactly what should not be done. Yet they do it. After what happened since October 2008, I mean, elementally, you would think what? That now they’re going to change. I mean, they see that the model is not working. The model is even poisonous, you know? Dramatically poisonous. And what is the result, and what happened in the last meeting of the European Union? They are more fundamentalist now than before. So, the only thing you know that you can be sure of, that the next crisis is coming, and it will be twice as much as this one. And for that one, there won’t be enough money anymore. So that will be it. And that is the consequence of systematical human stupidity.

AMY GOODMAN: So, to avoid another catastrophe, collision, if you were in charge, what would you say has to happen?

MANFRED MAX-NEEF: First of all, we need cultured economists again, who know the history, where they come from, how the ideas originated, who did what, and so on and so on; second, an economics now that understands itself very clearly as a subsystem of a larger system that is finite, the biosphere, hence economic growth as an impossibility; and third, a system that understands that it cannot function without the seriousness of ecosystems. And economists know nothing about ecosystems. They don’t know nothing about thermodynamics, you know, nothing about biodiversity or anything. I mean, they are totally ignorant in that respect. And I don’t see what harm it would do, you know, to an economist to know that if the beasts would disappear, he would disappear as well, because there wouldn’t be food anymore. But he doesn’t know that, you know, that we depend absolutely from nature. But for these economists we have, nature is a subsystem of the economy. I mean, it’s absolutely crazy.

And then, in addition, you know, bring consumption closer to production. I live in the south of Chile, in the deep south. And that area is a fantastic area, you know, in milk products and what have you. Top. Technologically, like the maximum, you know? I was, a few months ago, in a hotel, and there in the south, for breakfast, and there are these little butter things, you know? I get one, and it’s butter from New Zealand. I mean, if that isn’t crazy, you know? And why? Because economists don’t know how to calculate really costs, you know? To bring butter from 20,000 kilometers to a place where you make the best butter, under the argument that it was cheaper, is a colossal stupidity, because they don’t take into consideration what is the impact of 20,000 kilometers of transport? What is the impact on the environment of that transportation, you know, and all those things? And in addition, I mean, it’s cheaper because it’s subsidized. So it’s clearly a case in which the prices never tell the truth. It’s all tricks, you know? And those tricks do colossal harms. And if you bring consumption closer to production, you will eat better, you will have better food, you know, and everything. You will know where it comes from. You may even know the person who produces it. You humanize this thing, you know? But the way the economists practice today is totally dehumanized.

[-] 1 points by darrenlobo (204) 6 years ago

The Austrians are against subsidies just like your Max-Neef. We don't want the govt building roads, railroads, or ports. It was this subsidizing of transportation that lead to the consolidation of industry & "too big to fail". In the real world this is actually an argument in favor of free markets.

[-] 1 points by flip (7101) 6 years ago

well "we" want gov't building roads ports and railroads - i guess you want private enterprise to build them - no thanks - cut cost, cut corners, cut safety - make more profit! i have see how they work. i don't think you understood max neef but that is ok. as i said before your austrian school is complete nonsense as far as i am concerned. andrew mellon was an austrian right? Hoover received advice from Andrew Mellon: ''Liquidate labor, liquidate stocks,. liquidate the farmers, liquidate real estate . . . purge the rottenness. out of the system.'' ... great - that would have worked wonders in 2008 - free market - you are out of your mind. just my opinion!

[-] 1 points by darrenlobo (204) 6 years ago

No Mellon wasn't of the Austrian school nor was Hoover:

Is Budget Austerity Modern-Day Hooverism?

"Herbert Hoover did more to intervene in the peacetime economy than any prior president. Indeed, he set in motion all of the things that FDR later did in the New Deal. I argue in my book on the subject that Herbert Hoover bears responsibility for the Great Depression because he was such an interventionist. When FDR came into office, he merely upped the ante on everything Hoover had started, and that's why the nation stayed mired in depression for another decade." http://mises.org/daily/5215

“The ideas embodied in the New Deal Legislation were a compilation of those which had come to maturity under Herbert Hoover’s aegis. We all of us owed much to Hoover” (Rexford Tugwell, 1946).

In case anyone is wondering who Tugwell was: http://en.wikipedia.org/wiki/Rexford_Tugwell

[-] 0 points by flip (7101) 6 years ago

no surprise but you missed the point - mellon was a free markert fundamentalist like hayek - the liquidate school of economics. creative destruction no? ok, so now to the point - ww2 and the depression. chart unemployment and fdr and tell me why the double dip. you got your work cut out here. don't need to look up tugwell, von mises or hayek - all insanity. free market fundamentalism - it does not work - not even for the capitalists. they need the nanny state. i would like to hear the nonsense theory showing that ww2 and huge deficit spending did not get us out of the depression.

[-] 1 points by darrenlobo (204) 6 years ago

I know the argument you're getting at:

"In a study published by the European Commission’s Directorate General for Economic and Financial Affairs in February 2010, Paul van den Noord concludes that “while the 1937/38 recession is generally attributed to a tight stance of macroeconomic policy” that produced negative fiscal and monetary shocks, the likely effects of these shocks cannot account for the actual magnitude and contour of this contraction, and “this view is thus questionable.”

"To strengthen his explanation of the depression within the Depression, van den Noord appeals, as have other economists (notably Richard Vedder, Lowell Gallaway, Harold Cole, and Lee Ohanian), to factors that also impressed many analysts at the time: rapidly rising real wage rates caused in large part by the Wagner Act’s stimulus of labor unionization, governments’ tolerance of sit-down strikes, and the Roosevelt administration’s vocal hostility—expressed in word and deed—to businesspeople and investors, which caused entrepreneurs and capitalists to fear an impending dictatorship that would greatly weaken or destroy the free-enterprise system. The President’s shrill denunciations of businessmen in 1936 and 1937, his attempt to pack the Supreme Court and reorganize the government, his administration’s stream of tax proposals aimed at fleecing investors, and the New Deal’s many economic regulatory ventures—particularly the Securities and Exchange Commission and the National Labor Relations Board, among many other menacing developments—generated what I call “regime uncertainty,” which helps to explain the extraordinary collapse of investment, especially long-term investment, in 1937 and 1938." http://www.thefreemanonline.org/columns/our-economic-past/america%E2%80%99s-depression-within-a-depression-1937%E2%80%9339/

History debunks your assertion. In 1921 there was a panic. The govt cut spending & taxes, the economy recovered nicely. After WW II the govt cut spending & taxes as it discharged millions from the military, the economy grew marking the true end of the Depression.

[-] 1 points by flip (7101) 6 years ago

ok, we have said the same silly things to each other a few times now so that should be enough. i have no use for fundamentalists and their circular theories - doesn't matter if they are christian or free market fanatics - cannot see the obvious truth. you have explained nothing - so keep at it - looks to me like only one thing will convince you that there will be no 70 virgins for you in heaven - death! there are none so blind as those who will not see.

[-] 1 points by flip (7101) 6 years ago

you seem to be avoiding the main question - i will answer yours when you answer mine - maybe that is why i question motives - did ww2 end the depression and explain 37 and 48 - if you are sharp you can find the debate in the business press about pump priming after ww2 - i will give you a hint - it centered around schools hospitals and housing or weapons! cutting taxes and spending when the economy is up and running is no trouble - but how about now??? want to cut spending like europe - working well there don't you think. come on - it is so obvious that a 12 yr old would figure it out - keynes was right! ww2 come - give it to me - did it end the depression?? you can see an interesting debate here - http://louisproyect.wordpress.com/2011/09/24/did-world-war-two-end-the-great-depression/ - read through the comments and you will see that his argument is destroyed

[-] 1 points by darrenlobo (204) 6 years ago

No, WW II didn't end the Depression & '37 I've already explained, scroll up. The mild recession in '48 happened because of Truman's Fair Deal & the Fed tightening the money supply. You may now attempt to explain how cutting taxes & spending worked in '21 & '45 but mysteriously not in '37.

In Europe their cutting spending out of desperation while running massive deficits. That's not what us free marketers advocate. Deficits work like a tax diverting resources from their best use.

BTW, if taxing & spending is so good fro an economy then why is US unemployment still so high?

[-] 0 points by flip (7101) 6 years ago

sorry but you can post up all the diversions you like - you do not know the history - can you look it up or do i have to spell it out for you - look at the crash of 29 then see what fdr's 1st admin did. then check out 1937 and see why the economy tanked again after the recovery under fdr's policies. now look to ww2 and then 1947-8 - again slipping into recession and what did the capitalist government do about it - pump priming - thus was born the cold war and the military industrial complex. that should do it - go ahead - read all about it - run the numbers and charts of the years 1928 to 1952. let me know what you find out - i already know so don't try to fool me!

[-] 1 points by darrenlobo (204) 6 years ago

You're not explaining how it is that in '21 & then after WW II the govt cut spending & taxes & the economy grew:

"In 1945 and 1946 Congress repealed the excess-profits tax, cut the corporate tax to a maximum 38 percent, and cut the top income tax rate to 86 percent. In 1948 Congress sliced the top marginal rate further, to 82 percent.

"Those rates were still high, but they were the first cuts since the 1920s and sent the message that businesses could keep much of what they earned. The year 1946 was not without ups and downs in employment, occasional strikes, and rising prices. But the “regime certainty” of the 1920s had largely returned, and entrepreneurs believed they could invest again and be allowed to make money.

"As Sears, Roebuck and Company Chairman Robert E. Wood observed, after the war “we were warned by private sources that a serious recession was impending. . . . I have never believed that any depression was in store for us.”

"With freer markets, balanced budgets, and lower taxes, Wood was right. Unemployment was only 3.9 percent in 1946, and it remained at roughly that level during most of the next decade. The Great Depression was over." http://www.thefreemanonline.org/columns/what-ended-the-great-depression/

For your theory to make any sense you need to explain how cutting taxes & spending worked before & after the Depression but for some odd reason were the cause of the downturn in '37.

BTW, you shouldn't ascribe evil motives like trying to fool you to people of other POVs. I obviously don't think you know what you're talking about but I don't question your sincerity.

[-] 0 points by zoom6000 (430) from St Petersburg, FL 6 years ago

We had fee market that why we have this mess

[-] 1 points by geo (2638) from Concord, NC 6 years ago

We went about 60 years with no severe economic problems when the banks were contained back in the 1930's. Once unleashed they grew to such strength that 45% of our GDP was provided by Financial Services. It all happened in a mere 25 years.

Laissez-faire attitudes in the financial markets, the passing of the 'Commodities and Futures Modernization Act of 2000', Free Trade Agreements that are not Fair Trade in nature, the shift to a debt based society (once the banks were freed), the push to consumerism and globalism, have all benefited the wealthiest at the expense of the poorest.

Not all capitalism is bad. It needs to be tempered and regulated. Corporate charters need to have social responsibility built into them, instead of corporations having a fiduciary accountability to the shareholders.

[-] 2 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

"We went about 60 years with no severe economic problems"

This is not true at all.

We still had rampant poverty, lack of income, underemployment, unfair inequality and regular recessions that exacerbated them.

Capitalism is bad. It is the problem, not banks.

Nearly the entire world is capitalist and most are in poverty.

America has had capitalism for hundreds of years and half its population are still on the verge of poverty.

Capitalism is a system for the 1% and always will be.


[-] 2 points by flip (7101) 6 years ago

you are right that the post depression period was better for many but capitalism still has a fundamental problem. small grassroots capitalism might be ok but there are better ways to organize a society - the means of production - land, water, industry should be held in common in my opinion

[-] 1 points by geo (2638) from Concord, NC 6 years ago

No doubt, capitalism has its flaws and needs to be harnessed to work, corporate charters need to have social conscience and community responsibility written into them. But I have yet to see a major truly Socialistic country work.

[-] 1 points by flip (7101) 6 years ago

is that the only other possibility - usa or the soviet union or china - think outside the box - you are on occupy wall street after all

[-] 2 points by geo (2638) from Concord, NC 6 years ago

What you offer as the only ways are Socialist Dictatorships vs. Corporatism. Thats not thinking outside the box IMO.

[-] 1 points by flip (7101) 6 years ago

ok, which socialist countries were you thinking of??

[-] 2 points by geo (2638) from Concord, NC 6 years ago

As I stated earlier:

'But I have yet to see a major truly Socialistic country work.'

[-] 1 points by flip (7101) 6 years ago

sorry instead of saying this - ok, which socialist countries were you thinking of?? i should have said - ok, which major truly socialist countries are you thinking of?

[-] 1 points by geo (2638) from Concord, NC 6 years ago

I'm not thinking of any as models. I believe that a legal mandate to force corporations to have social responsibility, built into their charters would go a long ways to changing how capitalism does business. Along with universal healthcare and free education. The means of production doesn't have to be owned by the state.

[-] 2 points by flip (7101) 6 years ago

the state is a highly problematic entity as are corporations - private authoritarian structures. i agree that all of this can be modified but that is so far off that i do not really care about the theories. we cannot even get a candidate who can say the simple truth - like we do not need 800 bases around the world unless we want to maintain the empire or the society is highly unequal and that is not right. you might be more careful with your language - such as when you say major socialist countries do not work but do not want to name any - it is not a big deal but it does waste time and throw the discussion into unproductive areas

[-] 1 points by geo (2638) from Concord, NC 6 years ago

I think I misunderstood you, I thought you were asking for major socialist countries that do work. I can't think of any... maybe you can. I see changing to a real socialist government to be near impossible and just theory.

I see legally changing corporate charters as not theory but doable. The British East India Co, was the worlds most powerful corporation in history, charters are no longer given in the same manner because the need was clearly seen to change them.

[-] 1 points by flip (7101) 6 years ago

boy is this confusing. you said this - 'But I have yet to see a major truly Socialistic country work.' - now i would like to know which country you might be thinking of - can you do that?

[-] 1 points by geo (2638) from Concord, NC 6 years ago

I could mention any of the Eastern Bloc countries during the existence of the USSR, or even the USSR itself, which we know had to reorganize and change. Is Russia truly socialistic today?

Sorry for the confusion. I've never been on a board with this many responses so far, and it does get confusing remembering each thread.

[-] 1 points by flip (7101) 6 years ago

you need to work on this - here is what you said - What you offer as the only ways are Socialist Dictatorships vs. Corporatism. Thats not thinking outside the box IMO. - and now this is what you are saying - I could mention any of the Eastern Bloc countries during the existence of the USSR, or even the USSR itself, which we know had to reorganize and change. Is Russia truly socialistic today? - hard to have a conversation with you - go back and read or just stop

[-] 1 points by geo (2638) from Concord, NC 6 years ago

At this point I'll stop as there it seems that there are limited reiterations of the 'reply' function with this forum. I'll concede that I screwed up the conversation early on and did not recognize where it had gone bad.

[-] 1 points by NOAMISRICH (28) 6 years ago

Again, the rich NEVER paid anywhere near 90% in taxes! Its one of the biggest myths out there. A portion of society will always be in poverty no matter what the government does. Working class people have it worse in europe.

[-] 0 points by flip (7101) 6 years ago

that is your response to richard - figures. we have always had slavery also - things change sometimes! sounds like you have not been to europe - ask around - maybe your friends have gone. not very insightful

[-] 0 points by jph (2652) 6 years ago

Well stated. I have long thought that what we needed was to get a more balanced system a capitalist/socialist hybrid. However, after many years of pondering and studying the effects of our capitalism, and the steady deterioration of out planet under this system, I have come to the conclusion that capitalism simple can not be reformed in any meaningful way. The very idea that a minority should control the resources needed by all, for the benefit of themselves and the enslavement of the majority, is simply untenable.

Many will not like the 'word' since the capitalist propaganda forms the basis of our education system and culture, but what we need is socialism. The difference is that under capitalism the few own the bulk of the world, and decide non-democratically how, where, and when we utilize our resources. (and they do so for the profit of themselves) This is the system we live in now.

Under socialism all the worlds resources are held in common by all the people of the world, and we all decide democratically how, where, and when we utilize our commonly held resources. Under both systems the individual is free to own personal property, for personal use. Socialism however does not allow the few to accumulate wealth for their personal profit, and power. We have tried capitalism for many years and we have lived the results. We need to end this system of entrenched enslavement of the many for the benefit of the few.

[-] 0 points by flip (7101) 6 years ago

agreed! real democratic socialism is something to move towards - we re a long way from any really just social structure so how we move to it is a big question. have you looked at anarchist thought?

[-] 0 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

Nearly the entire world is capitalist and most are in poverty.

America has had capitalism for hundreds of years and half its population are still on the verge of poverty.

Capitalism is a system for the 1% and always will be.

[-] 1 points by flip (7101) 6 years ago

right on! seems to me that by definition when land, water and everything we need to survive can be owned by one person - this is not a good system for the majority