Monday, July 27, 2015

What's capitalism and what is neoliberal capitalism?


Dan Kervick said...

It's the same thing. "Neoliberalism" is just the name of the late 20th century political movement that rolled back a lot of the partial socialization that occurred in the mid-20th century and re-established the capitalist way of doing things.

Bob said...

When you stir up a wealthy hornets nest, there is bound to be a reaction. Neoliberalism is that reaction. Enjoy :)

Next, Mike explains the difference between social democracy and democratic socialism.

Marian Ruccius said...

I think that a good way to think about the differences is by comparison to neo-Conservatism: I am not an American, but I will at least one US example.

Capitalism/manufacturing capitalism: private ownership of the means of production by an owning class: this involves exploitation of wage-based labour to extract surplus value for the purpose of capital accumulation by the owning class. It is productive, and frequently exploitive, but ultimately, pace Polanyi, requires investment in social infrastructure to maintain the value of labour as an endowment. So you get social programs to maintain a reserve army of the unemployed.

Neo-Conservatism: Same as the above, except that it seeks to eliminate social infrastructure supportive of capitalism, as that is seen to have become an excessive threat to the power of the ownership class. It is a neo-Darwinian view in which the ownership class contents itself with appropriating an ever greater share of the real economy, even at the expanse of a declining financial "pie". It can involve reallocation by "captured" government of private sector resources to a select number of productive sectors tightly controlled by elites. Asset stripping combined with profiteering.

Neo-Liberalism: transcendence of mere neo-Conservatism, as that has already plundered the real economy, it nonetheless also depends on increasing inequality, in order to reap rents from the rising private debt foisted upon the earning classes. Entirely "decadent" (as Parguez puts it) or parasytic, as it is non-productive, purely devoted to extracting rents. As such it can gradually kill the host, leading to economic collapse and potential authoritarian tyranny. Instead of seeking to destroy residual elements of the social infrastructure that once supported manufacturing capitalism, it seeks to monetize them, using financial innovation to sustain them at a level just sufficient to extract, often through state-sanctioned fraud, small but perpetual rents from the self-same social infrastructure, supported by a captive but well rewarded political elite. Think of Third-Way ideas for US social security.

Marian Ruccius said...

Err, I meant "EXPENSE of a declining financial pie"