The end of capitalism

November 23, 2009

Hard to imagine with financial markets still buoyant and newspapers full of tales of bonus greed, but there is still the possibility that captialism will end.  At least there is according to prestigious investment consultants Watson Wyatt in their latest study called “Extreme Risks“.

The firm listed the demise of the system of private ownership as one of 15 threats to investors and the global economy that probably won’t happen but which it reckons are worth worrying about anyway. The idea behind the report is that such things as climate change, the break up of the euro zone and war are always worth being included in an investment risk management process.

As for the future of capitalism:

In our view, the most likely scenario is moving along from one end of a spectrum where market is king (minimum regulation) towards the other end, where we could see more onerous regulations and government intervention in, and control of, the economy. The extreme risk, however, is the demise of the capitalist system and the end of the market as the primary means of resource allocation.

And the impact:

The economy would be likely to run a higher risk of failure and economic growth would be sluggish in the long run due to lower productivity.  Centrally controlled economies tend to be characterised by shortages, which are inherently inflationary. Private investment activities would collapse or even be terminated. The end of capitalism is simply the ultimate extreme risk. The economy is likely to be associated with extreme uncertainty and a large amount of wealth destruction during the transition period.

Watson Wyatt does try to give its free market clients some hope, suggesting that buying gold may be one way to hedge against the propect of capitalism’s demise. But it admitted that in such a circumstance investors would probably be more concerned about the return of their investments rather that the return on them.

(Illustration called The Communist Party, from Threadless)

Related Blog: Slavoj Zizek on resurrecting the Left


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It really is getting to a point in history where we need to move beyond systems. It’s really a simple lesson. I taught it to my son not too long ago.You do something good because it’s good. Not because you want something for doing it. That’s it. Not hard at all.But profit motive disciples call this idea weak, childish, foolish, etc…And yet they give lip service to the idea of one day achieving an enlightened society based on the very idea they scoff at now.So really we all need to be a bit more childish in our thinking. We need to stop being so self absorbed and self important. That leads to pride and greed and all manner of suffering.Do what is good because it’s good. And for no other reason. How about THAT for a great experiment?

This blog should’ve ended at the first comment, we haven’t had real capitalism in america for over 100 years.Irregardless of political party government has taken in about 40% of people’s income in the 24 years i’ve been alive. Take any basic economics course and you’ll capitalism only works under low taxes, which we’ve never had in any of our lifetimes, and we never will have.

Posted by Michael Ham | Report as abusive

While the hypothetical topic, was thought-provoking, the reality,is that Oligarchy in the USA and Europe has got firmly entrenched,though the recent effort of Obama to discourage Lobbyists, is a step in the right direction,and very much needed.In India also, Oligarchy is being surreptitiously introduced,and this is a cause for alarm for the ordinary people of,not only the USA,Europe and India,but the World,also.

Jeremy, capitalism is already evolving into something new. Not as a result of the financial crisis.Marshall McLuhan, the media philosopher, had an interesting argument. The “medium is the message”, he said. This means that people change with the media they use. In a TV age, they become self-absorbed, narcissistic as they emulate examples on the little screen. There is no feed-back which leads to self-absorbtion.Now we are using the web and social media. This makes us more self-reflective. We do receive feedback. There is a trend towards more authenticity and a search for meaning.A recent survey in Europe showed that young people prefer to lose their car or other material objects over their access to the internet. They are less materialistic.One of the excesses of the capitalist system is the poverty trap. Some poor can´t afford or don´t know how to educate their children. They stay poor. This is similar to the greed trap that many lament here. The rich compare themselves to other rich and feel poor. They are trapped into trying to get more.I believe that the new media are changing attitudes. The “global brain” will condition its users. This will change capitalism….for the better.

Posted by Armand Bogaarts | Report as abusive

Exiting times, these.I do not believe Capitalism “Ends” as such. It may take a different shape, colour or scent.Assuming politicians and economists are learning from the events over the last few years I guess new ideas will emerge from consensus, synergies and new political systems.The problem for some will be the required political change. That may hurt, rather than new economical trends.Have a look at the emerging economies and especially the political systems behind them.Then take a look at the failed economies. USSR communism included.I’m still looking for something new to emerge. Maybe we are actually seeing the shapes of something in the eastern and southern horizons?

Posted by John Anders | Report as abusive

After 1930 so-called markets of capitalist systemget volcanic shake-up. It shows inheritance weakness/defect of the system. Government regulationscan save it otherwise doomsday day is not so far.

Posted by D.S.chatha | Report as abusive

Benny: Greed may be an addiction to the collection of possesions and result in “bondage”, but it seems more organic and less evil than you suggest. In pursuit of money and power is the “game” element, someone just trying to win. The consequences aren’t likely to be a concern in the very long term. I think, too, that any great entrepreneur or capitalist who accumulates great power or wealth will ultimately have the empire eroded away – by subsequent generations or social upheaval. Like a colony of insects, empires grow until they reach some point of excess, then recede a bit until they reach a level of equilibrium. Or they become extinct. We’re all dead in the end. I’m not suggesting that there’s a “moral” foundation for capitalism, although the Ayn Rand groupies try hard to materialize one. I think the golden rule is about as good as it can get, and that’s something my mother taught me, out of thin air.

Posted by Howard Perry | Report as abusive

Capitalism ended when FDR became president. Since then we’ve had a failed combination of capitalism ,socialism and here recently, corporatism. Even before FDR we never had a purely capitalist economic system. The economy had always been tinkered with by outside forces, either the government or special interest groups. It’s just that since FDR the government has meddled in the economy to the extent that the capitalism of today no longer resembles the capitalism of yesterday. True capitalism will eventually go underground, just as it did in Communist Russia. It was true capitalism that destroyed the Soviet Union

Posted by Mufaso | Report as abusive

The first step in defining a new economic paradigm is coming up with the proper terms…new words to define a new economic environment.As words, “capitalism”, “communism”, “socialism” may now be inadequate to describe the emerging economic reality.We need new nomenclature. Any thoughts?

Posted by Anthony Conforti | Report as abusive

What many of you refer to as “capitalism” is a mismomer. The economic system over the past 100 years (and more) has been a state regulated and controlled economy. You can call it whatever you like, but a state controlled and state regulated economy-especially when the government has the sole authority and power to print money and over the banks, etc., is not “capitalism”. So the demise of the system you call “capitalism” is no demise at all … But you need to discover this for yourself to understand. Begin with reading Ayn Rand’s book of essays: Capitalism: The Unknown Ideal.

Posted by Stephen Watson | Report as abusive

@Benny Acosta: the problem with your “let’s all do good for good’s sake,” admonition is that it’s naive and it fails to take account of 10,000 years of human nature (and animal nature long before that.) All animals, humans included will always act in their own self interest. People will never act against self-interest unless they are insane. Your theory of doing good because it’s good is deficient because, first, one must decide what IS good. Secondly, you have to assume that everyone else agrees with you. I for instance, think human-caused global warming is a big scam, so “good” in my view might contradict “good” in Al Gore’s view. Finally, without a market, one has to have someone making decisions on scarce resource allocation. Who shall that be? The Soviet system was built on your theory, “doing good for the people.” Of course, it will never work because some people are always more equal than others. The free market is the best system there can ever be because, unless humans (and animals) suddenly become programmable robots, people will always act in their own self interest. Any fundamental reading of Adam Smith should explain the concept of selfish actors more clearly. ..and we are ALL selfish. Even if you are acting for the “greater good” you are being selfish because you WANT to do that because you feel it will provide you with profit (either fiscal, moral or otherwise.) Nice try though, but Polly Anna is not reality. There is no such thing as pure selflessness. The Soviet experiment ought to put to sleep any illusions of a society’s ability to “do good because it’s good.” Free market capitalism is the most efficient (and equitable) means by which to distribute finite resources.

To Roger Broxton – The war (Civil) is over. You lost. Get over it.Capitalism is a brutal system. I’m sure the globalists will impose some form of it as long as possible — you know, ‘all the kings horses and all the king’s men’. I see barter becoming relevant again although I’m sure the capitalists will outlaw it and when that fails tax it to death.Not a pretty picture.

Posted by RichardinPass | Report as abusive

The great dismantling of 1980-2008 is coming to a spectacularly disastrous end. Either the American investor class re-accepts a certain level of regulation and revised forms of taxation (i.e. a VAT tax) in order to preserve social saftey nets (i.e. social order) and let’s face it, basic consumer demand, or, they can invest in para-military forces to protect themselves. There is absolutely nothing inherently small “d” democratic about capitalism. Trade in medieval Europe ran just fine without the messy notion of voting.

Posted by Michael | Report as abusive

All the globalization ever was, was a way for a few greedy ones to make money. This was the same as the timber companies, the coal mine operators, big plantation owners, and the gold mining companies. Rape the land, take out the resource, pay the workers as little as possible and leave when the resource runs out. I look forward to the end of capitalism and the better way of life. In the article I see many comments out of classic text books, but classic economic text books never did look at the effect on the peoples lives.

Posted by f belz | Report as abusive

Jacque Fresco’s venus project is the way to go…Somewhat idealistic but if the world would get on board with this way of thinking, we would all be better off. We would all be much happier and the world would be a better place to live.

Posted by D.BELLE | Report as abusive

Show me a better system than capitalism…do anyone who has an ounce of grit really think that politicians and government bureaucrats have good judgment or can be trusted?

Posted by rauchfuss | Report as abusive

Benny,Often I come across thoughts so painful, it almost makes me weep. I am not quite sure what you mean when you write about moving beyond “systems”. Are you positing that logical frameworks are useless? Discourse is not needed?What is good? We can make basic moral conclusions, specifically, dealing with violence and theft. However, if we use a basic paradigm, the slaughter of animals for consumption is something that could be labeled as bad. Is your philosophy of good— capable of solving such a dilemma? No. This is because you have adopted what you refer to as a childlike conception of action. Children secure moral clarity by means of their handlers i.e. parents. Therein is the problem, who is supposed to define good for you? Which handler or leader is appropriate in making such a decision? History has answered this question with its free market experiment. Men always have more prosperity when there is no king, no emperor, and no master. People will only voluntarily collaborate through capitalism, that is, property controlled by individuals.Unfortunately, you take the stance of a child who has never taken the time to understand any system, including grammar (your post consisted of a sentence fragment). If you are going to be so fixed in your purpose against “systems” maybe a free republic isn’t for you.Cordially,Abbot M

Posted by Abbot M | Report as abusive

It is just a shame that capitalism already won the cold war.Back in the day, the best cure for socialist ideals was a vacation to the Soviet Union. A trip guaranteed to be nothing but a sad, bitter, disappointing dose of reality to an idealist.Now, you just have to take capitalism’s word that it is the best system available.

Posted by Haha | Report as abusive

AbbotMoving beyond systems is needed.We as a human beings are not creatures of logic and reason, even though we do employ these things. We are actually creatures of desire. When ever we do something, we do it because we have a desire to achieve something. Whether that be to scratch an itch or build an empire. Everything we do, we do out of desire. The mind obeys the desire of the heart. And through its operations the desires of man are made manifest in the material world.Every nation on earth was once an idea about how people could get together. Every marvel of modern technology was once an idea in the mind of a human being. And every idea that ever entered the human mind was born of desire.The heart then, and NOT the mind, is the key to the good. Good has many names. Light, life, love, God. These are all the same thing.Everyone knows how to love their friends and their family. But we are quite content to allow our enemies to suffer. We don’t realize that if ALL of us were to give the kind of love to each other that we give to those who have a special place in our hearts, there would be no desperation. There would be no fighting over things. We would instead work towards making sure that everyone was able to enjoy the very best that our love can provide.If the heart is filled only with love for everyone. Then the mind will use its powers of logic and reason to establish relationships and find the pathways that allow us to achieve results based on love. Results aimed at the benefit of all without exception.This is a tall order for many people. Most people are simply incapable of understanding love in this way because their spirits are not mature enough.I stressed being more child like because children do not know how to hate. They do not have any biases against anyone that make it okay for them to allow another person to simply suffer.So in this way children are more mature than we are. Doing good is what you do when you act from love. Doing what is good is nothing more than giving out of love. Forget about “what’s in it for me?”. When human beings learn to act in love, all needs will be met and no one will need be concerned with their own needs because they will be provided.By nature we are social animals. We have a drive to be together and work together. But when the mind disobeys the heart’s desire for what is good, it goes off on tangents creating alternatives to love centered actions, that require “reasonable justification”. But all justifications revolve around peripheral concerns unless the justification is love itself.I might be making it more difficult for you than it needs to be. Simply put, acting out of love for another is the highest and purest form of action there is. And even though we might make mistakes along the way, if our actions are based in pure love, everything will only get better as we get better at loving.I’m not saying anything new here. These lessons are thousands of years old. And are at the very core of an enlightened society. We have the capacity to do this. But most human beings are still far to spiritually immature to accept it.Living in love is true freedom. All else is bondage to transient pleasures.

For the people that think that the “I do it because its good” is a naive or childish. Think about a family, a sane one, how does the father (asussimg is the one getting income) distribute that wealth and resources? He does it in accordance to the needs of the family members, he does not want to profit from it, he really want to cover all the material needs of his family so they can leave peacefully and happy.If he would behave in a self interest way he would take all the money for himself, but we people, when sane, need the others, we cant live for ourselves, that would leave us to madness (which happens and its common). In a certain way we could say he is behaving selfish, he doesnt want to be alone and thus share. But its not selfish beacuse his needs are now considering the needs of the others, the market doesnt.

Posted by José Manuel Salgado | Report as abusive

I find idealism to be immature.If you are going to complain about a seemingly flawed system, then come up with an alternative. One that works.A system like capitalism is not flawed. It is self propagating. Where there are negative consequences from it, it is intentional. When attempts are made to change it, it is too entrenched.None of these attributes are ones possessed by a ‘flawed’ system, or one that is nearing an end. Rather, it is a sign that the system is the norm. A balance which cannot be changed without changing the nature of society itself.If you are going to propose socialism, then that is bad solution. Because socialism has already been shown to be a worse alternative to capitalism. Both socially and economically.But failing to provide an alternative system at all? That is even worse. Having no solution is even worse then having a bad solution.When you see a child complaining about something they don’t understand, and they have no means of changing, do you listen to them?For the person complaining about capitalism, there are three solutions:1. Change the system themselves, if they can.2. Complain to their parent (God or Government) and ask them to change the system.3. Realise that whether they like capitalism or not is irrelevant, and learn to live with it.

Posted by Anon | Report as abusive

Anon,The proof of the pudding is in the tasting. You are correct in that what I suggest requires societal change. But if you believe me to be incorrect then prove me wrong.I defy you and anyone who thinks I’m being naive to develop the habit of acting out of love towards at least one person they don’t know every day. The action you take can be anything. But it must be rooted in love.Practice doing this and then tell me if the results aren’t worth the effort. You don’t have to believe me if you don’t want to. Just try it.I can point to example after example of how our system is failing. But these failures you call the normal functioning of the system. In a way you are correct. People living in poverty and complete destitution are a normal part of the system. And this is its failing.If human beings suffer to this degree due to their inclusion in the system, then the system is a failure plain and simple. The so called success we’ve had is marginal.We have many technological marvels to be sure. But still we kill each other. We see our fellows starving. We witness families being evicted from their homes. We witness increasing violence among our children. And all we do is blame.But if everyone were simply to do at least one kind and loving thing for another human being at least once every day, these problems would be quickly and powerfully resolved.Prove to me that I’m full of crap by doing it and seeing if it’s true. Our “great experiment” has been quite a technological success. Find out for yourselves what being loving towards your brothers and sisters in this place will produce.Naysayers can dismiss me all they want. But until they put my words to the test, there’s really no argument they can make. We all live in the current system now so we can all see for ourselves how well it’s working or not working. Hold love up to the same test and see what you get.

The proof of the pudding is in the tasting. Those who believe me to be “full of it” or immature, or childish need only prove me wrong.I defy any of you to develop the habit of acting in love towards at least one person you don’t know, every day, for a month. Then you can tell me if the results of your experiment were worth the effort.Our system requires that some of us live in abject poverty. And this is a “normal” part of our system. This normality is the failing in our system. I can point to war. I can point to starvation. I can point to the stories of whole families going homeless. I can show you stories of CHILDREN committing murder.THAT is what our “system” has produced. I challenge ANY of you naysayers to show me the failings of acting out of love towardsanother human being. Try it for yourselves and then get back to me.

Assuming that in a democratic society systems are free to develop as outgrowth of the way of life, Capitalism reflects the people’s desire of how their economy should function. That system will survive and be modified to reflect the people’s wants and needs. It will evolve in an imperfect way — yet satisfying most of the needs and wants — because our society is imperfect due to diverse views of people.

The onus is yours, Benny.If you believe the system is flawed, you need to come up with a workable alternative and figure out how the system is to be changed.As it stands, nothing you have said has any practical applications to changing or replacing capitalism. So even if the onus was on me to prove you wrong, it has already been met simply by your failure to provide a workable solution.It is no different to claiming that a car is flawed because it pollutes, and claiming the solution is to pour cooking oil into the fuel tank. The car doesn’t run on cooking oil and never did. And even if you were in a position to suddenly pour your ideal solution into the fuel tank, all you will achieve is grind the engine to a halt.Capitalism is the same, except the car is owned by someone else. And because the owner knows what will happen when you pour the cooking oil into the fuel tank, they won’t let you do it in the first place.You can speak in idealist terms if you please. The rest of us will stick to systems. Because unless you have a way of changing the current system, no amount of idealism will suffice.

Posted by Anon | Report as abusive

Cheeky Annon,Why would I come up with another system? Are you saying you would implement it?Or are you just saying that it’s too difficult for you do one act of loving kindness for another human being once a day for a month?Is that too much work for you?You tell me to take on a monumental task of creating a new economic system but you aren’t even willing to be loving to another human being? I admit full well that I am not an economist. But I do have some ideas and have mentioned them repeatedly.I put it to you to do something that is well within your ability to do, and the best you’ve got is to tell me to “go first”? I practice what I preach to the best of my ability.Committing an act of love doesn’t have to be spectacular. Lend a listening ear. Lend a hand when help is needed. Give a word of encouragement when it’s needed most. Tell someone that you love them if you haven’t for a long time.Start off small. And as you get more comfortable your acts of kindness will get better. Are you telling me that this is too much for you to handle?So just to make sure I understand this, I’ve been telling folks that we are going in the wrong direction in terms of how we deal with each other. And your response is that unless I can tell you what direction to go in (which I have) that you may as well just accept things like they are regardless of suffering being created?The human being creates the system. If the human is flawed then the system is flawed. So my answer to everyone is to perfect yourself in love. Learn to love and learn to act in love. Then any system you create will be perfect. When all participants behave out of love for each other, what ever system is employed will work for everyone.I already know what being loving gets me. What will it get you?Or do you simply fear it that much?

Well, Ive got solutions, alternatives. They have been there for a while, ever heared of the resource based economy? Its a great alternative that considers that the state of the resources is limited, and does not rely on the asumtion of capitalism that theres unlimited growth.Under this vision, oil, for example, is valuable because it allows you to fabricate things and fuel, not because you can sell it and make money.There are other ways of political economical organization, and no, they are not communism. You have to think that is possible that the systems evolve, in this way feudalism, and tribalism died. Not because it has not been proved yet means it can not happen, theres a great inertia that will continue for long years. Unemployment is getting higher and higher, displacement by machines.And those who think things are great will start thinking different when unemployment and social equilibrium get so bad that the peace of their lives will be profoundly threaten.Excuse my english, dont have time yet to redact properly.

Posted by José Manuel Salgado | Report as abusive

I am not afraid of the ‘love based economy’ which you seem to propose. Nor am I afraid of any solution which seems more based on idealism then practical reality.Because when idealism doesn’t account for reality, it isn’t a threat to anyone. Because without any practical considerations, it never even gets the chance to fail.Now by all means, If you want to complain about the system we have then that is your prerogative. We have a right, as human beings, to complain about things as long and as hard as we please.But unless you have a workable alternative and a means to get there, why should people listen?

Posted by Anon | Report as abusive

Anon,The message I bring is for those who understand. You aren’t one of them. You could be if you wanted to be but that would require that you open your heart.Try explaining what a banana tastes like to some one who has never eaten one and let me know how far you get.You want to understand by way of logic and reason alone. These things cannot communicate the truth of love. If you would understand you must taste and see for yourself.You just aren’t there yet. Be content in your knowledge and may it bring you comfort. No one will truly know love unless they first love.Those who understand will understand.

Its water under the bridge boys and girls, the money is gone ELVIS HAVE LEFT THE BUILDING! Many people still don’t know where all the money had gone? Let me give you a 7 letter word….BONUSES

Posted by emenot | Report as abusive

In my view, Government intervention doesn’t imply the end of capitalism.What it really means is that the Government, evidently the biggest capitalist as a collector of tax on virtually everything and the biggest socialist as using the same money for public welfare, is out full-scale to contain the chain reactions initiated by bankrupt organizations.Protectionism had been always a part of government plans as subsidies and import duties, and is just an extended form of “public welfare” i.e. Socialism. No single organization can claim to take over the status of “biggest capitalist” from Government either.There is no loss of image for capitalism, as it is better to take help even from an enemy ship than sink without traces.

Mufaso, you only tell part of the story. Banking failures and economic collapses plagued the U.S. for 100 years before FDR. President Jackson did not renew the Bank of America Charter. Subsequently the U.S. experienced the worst economic collapse to date. Every 20 years or so the economy went through similar catastrophes. Post Civil war, the 1890s, early 1900s, the late 1910s, early 1920s and the 1930s were all visited by recession and banking collapses. It is interesting to note that in 1913 the signed legislation to establish the Federal Reserve Board in order to address the very issue of banking collapses and the harm they bring.It is clear to me that the Federal Reserve Board is not capable of preventing these severe economic contractions. We are probably not much better off than if there was no FED. Engels and Marx were correct. Capitalism is subject to the cycle of bust and boom continually. It is a naturally occurring cycle. We would probably be better off preparing the citizenry to survive such cycles rather than trying to prevent them. This will probably offend some readers as this a socialist view.England and Europe were plagued with cyclical economic contractions and bank failures going back hundreds of years as well. What is mind boggling to me is that as a nation we have ignored these lessons and not developed a better strategy to deal with these cycles. Perhaps the real core of the problem is not which system is best but the failings of human nature, greed, resistance to change and our general lack of critical thinking.

Posted by Anubis | Report as abusive

Correction for typo error: President Woodrow Wilson signed the 1913 legislation that established the federal reserve board.

Posted by Anubis | Report as abusive

Like most systems, the economy is cyclical. Consider the old example of the rabbits and foxes. tive/v9n6/280_Rabbits_and_foxes_biolog.p hpThe economy grows to the point it can no longer sustain itself, leading to a bust. At that point, there is some reorganization and evolution and the process repeats itself. Each time, there is something learned from that evolution. It is innovation.Consider the dot com bust of the past decade. With the rise of the World Wide Web, there was money to be made in this new marketplace and the possibilities were limitless. This led to an oversaturation. Businesses failed where there was no market for the type of services being offered. Some succeeded, wildly. Google, an internet search engine did nothing innovative beyond what others were already doing, but tied directed advertising based on search queries to make a small profit on each click – This is the difference! Google saw the opportunity to do something in a novel way that made money in a down market. The market evolved, it expanded in ways few predicted. It is the entrepreneur that has the vision to evolve that succeeds.I will give another example. There is much fear and uncertainty in this country, today. Some citizens are fearful that Obama will “take their guns away”. As a result, firearms and ammunition are experiencing a boom market. Companies are running overtime & extra shifts to keep up. Manufacturers of large metal vaults cannot keep up with demand. The price of an ounce of gold is outrageous. You see, it is the innovator, the visionary entrepreneur that can thrive regardless of the overall economic. He can see the demand and the market, and moves in to capitalize.Capitalism allows for the entrepreneur to succeed based on his own work ethic and desire for success. You can achieve the status you desire through hard work and dedication, along with some vision. If one lacks the vision to evolve, or the will, they will fail. They should fail. This notion that the Government says a company is “too big to fail” is not Capitalism. It reeks of Fascism.If one buys a home he cannot possibly afford, then he deserved to lose it based solely on his poor planning. Yes, circumstances beyond one’s control occur. Jobs disappear, income is lost. Natural disasters are unpredictable. It sucks, I know. However, with proper planning these events can be less catastrophic. Buy a house that you can afford on 30-50% of your income. Don’t buy a brand-new luxury car. Live within your means and save. Invest. Budget. Those too irresponsible with their finances should not be buoyed by the responsible. Work hard and be successful. Pull yourself up. Pay your taxes. Succeed on your own merits. You are responsible to yourself. If you so desire, give all you have worked for away to charities and the poor. It is your choice. This is Capitalism.

Posted by Engineer | Report as abusive

Shock Horror! the US won’t be in the drivers seat when the changes take place, so a US centric view is simplistic.Capitalism will alter … has altered due to China a ‘hybrid derivative’ of capitalism.It will be adapt or suffer unknown consequences for post Breton Woods world.

Posted by Tonydd | Report as abusive

Capitalism and the market economy are dead? And they will be replaced by what? Who is going to stop me from working hard, saving my money, and investing my money?

I am going to buy an apartment building using my sweat equity and the bank’s money that comes from other savers. Then I am going to rent-out those apartments to others that need a roof over their head and a decent place to live. And I will collect those rents and use the money to repay the loan to the bank. In the meantime I will build-up equity in the building that is my profit on my capital and my labor.

And who is going to stop me? Price and rent controls? Completely possible. We were there in the 70s & 80s. Did it end capitalism and the market economy? No, it created amoung other things a housing shortage as well as a lucky few that got to live-in subsidized housing at a fraction of its market price.

Sure, if I make money either through rents or through capital gains the government will surely be there to take their cut of my profits. They always are. But unless they are prepared to take 100-percent from me, and everyone like me, I am still ahead of everyone that does not work hard, save their money and invest in revenue producing assets.

If you think the command and control economy changes anything then you are badly mistaken. All you change is who gets to live in the best apartments in the best locations. Instead of letting market rents decide based on the ability to pay maybe you give them to your party elite, their families, a few sports stars and other heroes of the people. But nothing changes. It just becomes more arbitrary based less on merit and more on dictat.

The fundamental failure people make is they do not understand the difference between ‘a market failure’ and ‘the failure of government interference in the market’. You can confiscate my wealth and re-distribute it if you like. But in a relatively free society or social democracy you cannot stop me from creating that wealth in the first place.

Posted by MrBill | Report as abusive

Capitalism has its good points like taking advantage of the less intellectually gifted. However in the end it uses up to many resources and even those who were haughty enough to think themselves beyond the consequences of their greed will suffer and if not them their children or their children’s children. You don’t have to believe in God it’s just the way things work.

Posted by methusealh | Report as abusive

Hey Anubis. I have a great way to eliminate the boom & bust cycles we endure in our capitalistic society. Legislation should be passed to connect all debt instruments and their interest rates to the Fed’s banking rate. Whenever the Fed lowers or raises interest rates to the central banks, all interest on all debt should be like-wise adjusted up or down. This way the Fed will be able to add or remove money from our economy without lag, without re-negotiations. Banks & other investment middlemen will be neutral players. Citizens will carry the cost or savings. Debt is the cause of all our excesses, it needs total controlling.

Posted by Workonthis | Report as abusive