Dani Rodrik has always been one of the real smartest people in the room. That last line sure is a polite kicker.
Capital is fungible, but labor is not. However, capitalists think it is.
What’s wrong? There’s two separate economies (and a 3rd, I suppose, if you count 3rd world countries with almost no economic resources etc.): one for the extremely wealthy and another for the rest of us. The financial systems have been designed as a one way street/valve/door…it all goes up and never comes down.
The Russian aristocracy thought the serfs came with the land, and you owned both.
Can someone please get John Judis an editor, or a hand-holder, or something? The edblog blurb gives zero indication of what this article is about, just referring to it as “Globalgate” (wtf?), and on top of that doesn’t even provide a link.
Wow. Absolutely one of the better overviews of the the inherent problems with unregulated global capitalism, esp the discussion about capital flows. Just joined Prime. We need more of this kind of substantive journalism!
The French Aristocracy, who had conquered the farmers in various wars in Europe and taken control, thought much the same thing. Until they ran into the French Revolution.
The modern class structure is between lenders (especially banks and corporations) and debtors. Wars no longer create class distinctions. Money does. If you are a lender you are upper class. If you are a borrower you are plebeian.
Wow, great historical analogy Rick.
Something is definitely going to happen/change. I hope it’s not civil unrest but that is certainly possible. So many things (the earth, our economy and the current form of capitalism, etc) can’t go on the way they have for the past many decades.
Your comment Also touches on a thought I’ve been having since the recession, namely that we are all debt slaves now. Why limit it to just a racial minority under physical slavery when you can enslave EVERYONE financially (at least all the not-rich people)?
Just sent TPM comments a similar request. The tease contained enough information/lingo/gravitas to worry me–more than I already am–and no link the piece. Unusual for TPM.
It’s a complex problem, a problem that has been created by China’s entering the world market. China does not play by the rule and has never respected any rules or laws, especially ones that deal with intellectual properties. The Chinese copy virtually everything and make cheap knockoffs to boost their wealth. Then use that wealth to buy and control the marketplace, especially the real estate markets. Today the Chinese own the majority of commercial centers, apartment buildings, and other capital investments in the US, particularly in California. They also have bought massive farmlands and ship good produces and diary products back to China while leaving inferior products for US consumers, after they jack up the price!
That’s mess world is confronted with today at massive scale: China!
The problem is very meta, I hate to say. Nothing in this conversation touches on it. It being the monetary/financial system itself. Which bring me right up next to the very meta part of so much of the populist right and so it will be dismissed by ‘liberals’.
The amount of credit extant in America and the world is orders of magnitude above any time in history.
Credit is money. Credit creates money. If you don’t believe me then perhaps you will believe the Bank of England. The money banks lend is created out of thin air. Get that through your head. (note how often he says people have incorrect beliefs about money. He is talking about economists)
More money, more credit will not save us. The stupendous amounts of energy and resources consumed, paid for by credit the last 40 years, has insured disastrous global warming. They are intimately entwined. The power of banks and financial players are also entwined with the explosion of credit (money) Of necessity “the banks own the place” That’s the whole point.
As they say, the machines that we build will not save us. So too the money we create will not save us either.
Perhaps the liar and thief actions should hold some weight…when anti-American…
Double dealing on the sly…Lying about it and not getting called out daily is on the media…