Dave Riley responds to our ‘Dr. Doom’ Roubini. ‘Karl Marx was right‘ post (promoted from the comments).
We are not so fortunate that the wagon will fall over all by itself as the key question is what is it that it can be so destructive? But herein lies the bare bones of a solution — like an old penny: if there is excess capacity, destroy it and built it up again and/or create new aggregate demands.
Voila!
Welcome to World War II –the means by which capitalism saved itself from the self-destruction long wave of the Great Depression. Maybe it costed a few tens of million dead and maybe capitalism lost markets big time as large portions of the planet went soviet style, but the post war boom merely confirmed the wisdom of the 1939-1945 entrepreneurial enterprise as a ‘solution’.
Good times were to had this side of the slaughter.
The problem is: what now? As the populace gets testy and angsty do we have to put up with another round of fascism so the feral masses are kept in check? Is there any capacity on hand worth the destruction? Laying to waste the infrastructure of Iraq is small potatoes compared to the great European and Pacific wars. And no Marshall Plan is on offer for Baghdad’s high rollers”¦
So the irony is that despite laissez-faire neo-liberal capitalist groupthink the most reliable solution is a state bail out assuming the state is still rich enough still to do it.
What a contradiction!
The irony is that if there weren’t so many ideological constraints — funding a war footing shift to a sustainable economy based on renewables is a short-term panacea as that would suck up capacity and extend markets in a similar way to the state-run infrastructure programs of the thirties”¦as did the Second World War.
Outline (albeit a little dated),
The problem is that when capitalism is in deep shit crisis things get desperate and so do the solutions: fascism, war”¦.barbarism. But you need to recognize that this crisis set in in 1974 and today’s mess is but one symptom of the failure to solve the underlying problem that set in 40 years ago during this current economic wave. Despite the driving down of wages and the looting of the capitalist states; deflector military spending and the collapse of the Soviet Union”¦all we have had is band-aid measures.
I blog about California renewable energy at CAIVN and it’s clear that the California government sees renewable energy and cleantech as the primary way to revitalize their economy. I’m not so optimistic. As Dave points out using other examples, the money to do so just isn’t there. That’s the huge difference between WWII and now. The US came out of the war with a booming economy, make even more powerful by being paid to rebuild in Germany what it had just bombed. But the wars now have had the opposite effect. The economy is weak and getting weaker. Could a massive push nationally towards renewables transform the economy? It would certainly help. But we need jobs in many more areas besides renewables, a sector which is still comparatively small and which requires serious technical chops and skills for most jobs.
It’s those band-aid measures that are the problem. The elites have mostly abdicated any responsibility for society at large. The result is hollowed-out governments with no real direction.
So, if we can’t get out of our economic malaise by war or a switch to renewables, then how will we do it?