Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as "outdated and crumbling."
"We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations," said Klaus Schwab, host and founder of the annual World Economic Forum.
"Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole. "We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual," the 73-year-old said, adding that "capitalism in its current form, has no place in the world around us."
Some 1,600 economic and political leaders, including 40 heads of states and governments, will be asked to come up with new ideas as they converge at eastern Switzerland's chic ski station for the 42nd edition of the five-day World Economic Forum which opens WednesdayOh no, now 1,600 morons on a European ski-holiday boondoggle may actually have to do some thinking... poor babies!
I have very low expectations as to what they will come up with (if anything). If they actually come up with anything, it will for sure include some recommended heavy doses of general austerity brought to you by the "taxpayer on the hook" dogma which no doubt all 1,600 attendees subscribe to. This false dogma you can already see being seeded by Herr Schwab stating that "we" are "over-leveraged". Who is "we" moron Herr Schwab?
These deranged and pampered elites will come up with nothing. All they can do is point out problems, this is what they are good at. They have no solutions.
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Shouldn't they have called it a market system, I thought capitalism was becoming a dirty word.
ReplyDeleteGLH, Probably not a dirty word to these people. I tend to not even use the word "capital" unless I put it in quotes.
ReplyDeleteI think "capitalism" means many different things to different people. It seems like an ill-defined term around economics.
Unless these people jettison the concept of what Mike coined years ago "taxpayer on the hook", ie the belief that govts "get their money" from taxes; and get rid of their idea that the fiscal deficits are a policy lever and should be targeted (vice the truth that they are an ex-post accounting record of savings desires); they will get nowhere.
They cannot seem to let go of these false dogmas. It puts them in an intellectual straight jacket they cant get out of.
All you will see at this conference is a bunch of selfish whiners complaining about how things are turning out for themselves. How their system is "broken", how do we fix our system?, blah, blah...
To fast forward thru the same thing as we will get this week at Davos, all you have to do is read Muhamed El-Erian's latest on fixing the "plumbing" (like we just have a few "clogs" LOL):
http://www.project-syndicate.org/commentary/elerian13/English
All within the paradigm of "taxpayer on the hook" and "fiscal deficits matter ex ante".
GLH, China calls its system "market socialism." It's possible to have a market-based system that is not capitalistic, that is, where all capital is private and real investment involve risking private capital.
ReplyDeleteBTW, when the the government declares certain firms TPTF, which means it will not let them fail by using its unlimited capital to do, that is not capitalism either, as many have duly noted.
Actually, there probably never was a purely capitalistic system anyway, since corporations began as government "franchises" that were very similar to the land "franchises" under feudalism. Was Britain going to let the British East India Company fail? I don't think so, although it didn't come to that.
"Capitalism" is only for the "little people." At the top gains are privatized and losses are socialized. So it has ever been, in some guise of another. Now they are just casting about for another guise.
Marx's definition of capitalism is the only one that has teeth.
ReplyDeleteThey have solutions, "Keep the party going like it's 1999". And when the morning after hangover appears, let the workers clean up the mess.
ReplyDelete