Re: Errrm
The author presumes that future economies must be Capitalist ones and then continues on that basis.Pro Corporate Propagandists always do that.
Society need not be so constrained.
Vendicar Decarian1,
I don't think any society that isn't free market capitalist has ever risen above what we now call "middle income" level.
Of course I'm generalising horribly here, as there aren't many purely capitalist systems out there. But all the world's rich countries are free market mixed economies. Many countries did their catch-up growth under less free-market systems, but liberalised more as they got richer.
China is going to be an interesting case study. There's a lot of discussion as to whether they'll get caught in the "middle income trap", Only about ten countries have managed to make the leap from middle income to rich since WWII. The worst performing bit of the Chinese economy is now the state owned bit, and that's what's looking to drag them down at the moment and causing their huge credit spike. They've done the "easy" catch-up growth, and now need to transition to a more mature economy where you need more innovation. If you want long-term investment you need the rule of law, so the local Party bosses can't just take your stuff/company.
So no, capitalism isn't the only answer. In fact it's not the answer at all, as most successful econmies have a mix of state, cooperative, private and share ownership.
But no state that's tried to run the whole economy has ever succeeded (apart from maybe the UK in WWII) - and it's unlikely to ever happen because it's too difficult. So increasing cooperative ownership might well work if you want less inequality, plus maybe a bit more nationalisation - but if you start seizing assets from the rich and giving them to the poor, the rich bugger off as fast as their little legs will carry them, nobody will invest, and everyone ends up poorer. And the more you redistribute via taxation the more you end up trying to run the economy, and relying on the government's ability to do it competently.
Free markets are best of anything we've tried so far, requiring much regulation from government and a legal system to keep everyone as honest as possible - and mixed economies with a large capitalist element also. Though who owns stuff (capitalism) is less important than free markets.
As for your comment about US wages, that isn't true. US wages didn't stagnate until a few years before the recession. What is true is profit has been taking a bigger share of the pie than wages in the US, UK and large chunks of Europe - but the pie has been growing for both until just before the recession. Also I seem to remember from looking at stats that average wages in the US have grown slower than housing and medical costs since the mid 90s - so people have felt poorer - although consumer goods also got massively better and cheaper in that period so it's not all been one-way traffic. Plus all the stuff you can get on the internet for free, that's only been around for 15 years, but doesn't really hit GDP calculations.
In the UK real wages stopped going up in about 2003 - and housing costs have been rising even more ridiculously since the 90s - which obviously makes everyone who's not got a house feel much poorer.
On the other hand, while large chunks of the West stood still for a few years, billions in Asia, South America and now Africa became massively richer, in the largest rise in living standards in human history. So globalisation has helped companies to make more profit, and hopefully we can rebalance this back to wages in the next few years, but the upside is still pretty huge for the millions of people who didn't starve to death, the hundreds of millions who didn't die of preventable diseases and the couple of billion who now live much more comfortable and longer lives.
We could have managed things better, but it's hard to predict the future and globalisation has still been a good thing.
Biting the hand that feeds IT
