I am aware that the West’s best time was essentially at the expense of the rest of the world - but where can one find opportunity and prosperity of those times today? Was this a great anomaly of history? Is it time to hedge your bets on living out the Chinese dream?
Is it time for the West to accept that what our parents experienced will never exist again?
Will the world overall need to accept that the western living standard of that time will never be reached again? (It’s too unsustainable - for the planet, and because superprofits won’t flow as they once did)
What has actually happened that’s caused it to collapse?
It was earlier in the process of capitalism remaking our world, so the level of profit was higher and investment was high and competition was higher. Of course they had recessions, but the booms were self sustaining and brought improvements to people’s lives. Now we have large government deficits and the federal reserve shoveling money into the economy, because the profit machine won’t run without that juice, yet investment is low and mainly seems to go into locking up an asset and charging rent. With low rate of profit, you can expect asset bubbles and crashes, very low interest rates (no one wants to borrow unless they can make higher profit than the rate of interest, so rates will go down below the rate of profit), bouts of inflation, extreme wealth inequality, because the race will be to buy up and consolidate all the existing stable future cash flows rather than to invent new ones. And that’s the world we live in now. And there’s no reason it ever has to end or change.
Thanks for the insight. How would/should socialism endeavour to solve this problem?
What do you think are the new stable cash flows? If no ones got money to spend, then I suppose its just inelastic demands like food, shelter, and energy?
I know Malthusian solutions aren’t be-all solution, but do child caps prove effective in managing this sort of thing at all?
That is a complex question with many answers. Broadly, profit under capitalism is an accounting thing concerning accumulation of capital. But under socialist economics, if the total societal labor produces more enough to reproduce the labor force and maintain the means of production, then is it a surplus, even when it might be a loss for capitalists, which is actually probably the current state of our civilization because like I said, the government already runs permanent deficits and the federal reserve is also constantly injecting money with quantitative easing, which both raise profits.
Industry can be run to meet social needs and growth can slow without causing economic crises. Under capitalism, technology which allows us to easily produce all that is needed means less labor is needed and that means less profit, then low investment, low employment, low wages, and stagnation. Under socialism, this grows the surplus because more labor can be directed to other activities.