Thursday, January 1, 2009

The End of Capitalism

I'm not sure why, but for some reason I always seem to post on major holidays. It was my turn on Thanksgiving, Christmas Day and now New Year's Day. Today I will leave you with a quote that I truly hope is not a prescient view of the next year in investing.

"Another and more fundamental aspect of the crisis involves the decline of American capitalism. It is a crisis of the economic order itself. This is evident in the inability to restore prosperity on any substantial scale. The future is one of incomplete recovery: of economic decline, mass disemployment (including millions in clerical and professional occupations), lower standards of living, and war. Every depression is in a sense a crisis of capitalism."

"Only a deep-going crisis could force government and industry to adopt measures which were formerly condemned as opposed to economic progress. The intervention of government in industry is, of course, nothing new: the development of capitalism has been accompanied by growing government aid to industry. But such aid was limited in scope. It was, economically, an expression of the upswing of capitalism, of the necessity of government action to “regulate” the developing relations of trustified capitalism. But to-day government intervention is on an unprecedented scale. Its economics and politics are an expression of the decline of capitalism, of the necessity of government action to prop up the sagging foundations of the economic order."

This may sound like the rancid sputum of a modern day blogger unfettered and unleashed by the Internet, but it was actually written in 1934 by Lewis Corey.

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2 comments:

  1. Quantitative Easing Won't Work

    In a Liquidity Trap although Saving (S) is abnormally high investment (I) is next to 0.

    Hence, the Keynesian paradigm I = S is not verified.

    The purpose of Quantitative Easing being to lower the yield on long-term savings doesn't create $1 of investment.

    It does diminish the yield on long-term Treasury Bonds but lowers marginally, if at all, the asked yield on savings.

    This and other issues are explored in my tract:

    A Specific Application of Employment, Interest and Money
    Plea for a New World Economic Order



    Abstract:

    This tract makes a critical analysis of credit based, free market economy, Capitalism, and proves that its dysfunctions are the result of the existence of credit.

    It shows that income / wealth disparity, cause and consequence of credit and of the level of long-term interest-rates, is the first order hidden variable, possibly the only one, of economic development.

    It solves most of the puzzles of macro economy: among which Business Cycles, Stagflation, Greenspan Conundrum, Deflation and Keynes' Liquidity Trap...

    It shows that no fiscal or monetary policy, including the barbaric Quantitative Easing will get us out of depression.


    A Credit Free, Free Market Economy will correct all of those dysfunctions.


    The alternative would be, on the long run, to wait for the physical destruction (through war or rust) of most of our productive assets. It will be at a cost none of us can afford to pay.

    A Specific Application of Employment, Interest and Money
    http://www.17-76.net/interest.html

    Shalom P. Hamou
    Tel: +972 54 441-7640
    Email: shalom.p.hamou@17-76.net

    ReplyDelete
  2. Thanks for the link. That's some serious reading. I will take a dive into it a little later today.

    ReplyDelete

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