I listen to the Today Program on the way to work about the time they have the slot for “Thought for the day”. Today’s speaker was Jonathan Sacks who discussed the current financial crisis, and summarized that capitalism was the best system we have. He romanticized about economic liberalization and the “free” market (which doesn’t exist outside of an economics textbook), and his key fact that markets have raised people’s standard of living.

Now I’m borrowing heavily from Noam Chomsky, but: that’s an atrocious argument, because, for example, the Atlantic slave trade showed huge economic growth for the nations that used those cruel methods; does economic growth justify the slave trade? Russia under Stalin was also documented to have experienced economic growth—is that a recommendation of his economic and political policies? No. You cannot use the growth argument to justify such means.

But the point at which I nearly screamed was how he suggested that markets were “the best antidote to war”. Oh really? I can’t begin to list the amount of reasons of how stupid this was, and I don’t have the time, so instead I’ll be terribly lazy and link here, and summarize:

The capitalist economy produces things for the market as long as a there is a profit to be made. Profit is invested in further production.

But no national capitalist state can have a self-contained economy because natural resources are unevenly distributed around the world. Also, the consumer market for the things produced cannot absorb the total, so markets for these things must be sought outside the national boundaries. Capital investment outlets must be sought outside the national boundaries as well.

The difficulties of finding markets for over-produced goods, and new sources for capital investment of profits, are magnified in the imperialist stage of capitalist development-where technology creates more efficient production using fewer workers, leading to a tendency for the rate of profits to decline (even while the gross amount of profits increase).

So the imperialist countries try to solve their problems (of increasing their profits by finding markets for their goods and investments) by lowering their costs for raw materials; by gaining, or holding control over sources of these raw materials and extending the range of the available commodity market; by getting new outlets for capital investment; and by the super-exploitation of peoples in the less developed areas of the world.

Do read on for that to be expanded fully, or likewise read here or here. It really is essential reading.

Meanwhile, SF author Ken MacLeod shows, very simply, how the current financial crisis may be resolved without any problems….

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About Mark Newton

Born in 1981, live in the UK. I write about strange things.