Asymptosis — Dean Baker on Piketty’s Capital: Or, How FDR Proved Marx Wrong

My comment there:

Picketty is correct. Capitalism is ultimately unworkable, and the name says it all. Capital formation, with land folded into capital, is placed in front of labor as a priority. This means that money and machines, and the people that own and control them, are placed ahead of ordinary people socially, politically, and economically, that is, culturally and institutionally. This creates the kind of “contradictions” that Marx pointed out in his day and which are now dated, but similar conditions always accompany capitalism regardless of its form in that it is in the interest of the elite to favor capital share over labor share. While this can be overcome temporarily, as it was for a time owing to the Great Depression and the aftermath of WWII, including the Cold War. But that was a special case due to the context of the times, and virtually immediately upon passage the wheels were set in motion by the elite to reverse the New Deal. That push is now in full swing.

The only way to overcome these internal contradictions that arise from class and power structure is to change that structure, which Marx, of course, realized. Marx is anathema for a good reason. He saw behind the veil and revealed the naked wizards holding the levers of power. Read sociologist C. Wright Mills, for instance. His work is still prescient.

The argument for the neoliberal variety of capitalism was summed up by Margaret Thatcher, TINA — “there is no other way.” This is the argument that the elite employ the press, academics, and other minions to make in order to dupe the rubes into voting against their own interests. It works.
The saving grace is the innovation in transportation and communications technology that is ushering in a digital age that is shrinking the world and favoring flatocracy over hierarchical organization. The problem is fundamentally a cultural and institutional issue rather than chiefly an economic one. Once the cultural context shifts, the institutional change will follow and with that social, political and economic organization.

It’s happening already. This kind of change takes time to diffuse and be incorporated into the cultural mindset. This involves a die-off of the present class and power elite. This transition will take place in the period in which the silent generation (mine) and the boomers (many of yours) retire and die-off, leaving a world in which everyone has grown up in at least the onset of the digital age and “thinks differently” that is flat rather than hierarchically.
What the new culture and institutions will look like is as yet unclear, but it will reflect the diffusion of knowledge gained after the 18th and 19th centuries, which is still setting the dominant paradigms of thought for those of the silent generation and the boomers that occupy most of the seats of status and power presently.

The debate is already becoming clear, however, as between libertarianism and authoritarianism on one hand, and, on the the other, right and left libertarianism. Capitalism and republicanism are authoritarian and hierarchical owing to the class and power structure. Marx and other socialists were libertarians of the left. Classical liberals were libertarians of the right, who sought to limit autocratic government at the time of the transition from late feudalism to early capitalism.
That dialectic is still in progress in a much changed context.

Looking at it in 18th and 19th century terms is anachronistic and even looking at it in 20th century terms is long in the tooth. We are in the transition to a new age, the digital and knowledge age from the industrial and machine age. The transition will be as profound and far-reaching as the transition from the agricultural to the industrial age. Just as feudalism did not survive other than as a remnant, such will be the fate of capitalism, especially as the West ceases to dominate global affairs as the global age becomes increasingly a reality.

Of course, this doesn’t mean that advances of the past like money, markets, and the like are going to disappear. It means that people are going to be recognized as the most important factor socially, politically and economically. Lincoln’s ideal of “government of the people, for the people, and by the people” may finally be fulfilled as the obstacles to it fall away, but not without strong resistance by vested interests. We are now in that transition.

Asymptosis
Dean Baker on Piketty’s Capital: Or, How FDR Proved Marx Wrong
Steve Roth