By Bernard Weiner, The Crisis Papers (crisispapers.org)
Capitalism is in crisis across the globe. When both the President of the United States and the Pope take out after its worst manifestations within days of each other, you know there's an internal time-bomb inside this dysfunctional economic system.
Though the American population clearly feels and is forced to deal with the ramifications of this failing system, it's highly unlikely that capitalism will be dismantled in favor of full-bore socialism. (Even though recent U.S. polls demonstrate that "socialism" no longer is a boogeyman to be frightened of.) So the question now is which type of economic system do we want to live under: hardline, I've-got-mine-Jack-you're-on-your-own capitalism? "capitalism with a human face"? democratic socialism? a new blend?
While we're considering those choices, let's look at a little history.
Back in the 1930s, following the economic crash and Great Depression, both socialism and communism were gaining force in the United States and around the globe.
To cut the legs out from under those leftist movements, the aristocratic President Roosevelt borrowed a bit of socialism for the creation of the Social Security system and other people-friendly programs, such as the Civilian Conservation Corps (CCC) and Works Progress Administration (WPA) to put out-of-work laborers temporarily on the federal payroll to help construct roads, bridges, parks and public buildings.
OUR OWN GENERATION'S DEPRESSION
In our own time, we're still suffering the after-effects of a semi-permanent economic depression fueled by greed and the lack of tough, appropriate regulation of the finance and banking sectors. The economy remains in dire straits; the gap between the truly wealthy and the rest of us shows little signs of closing. The long-touted "American Dream" no longer offers a means by which many of the poor and middle class can make their way up the socioeconomic ladder.
Outside of the top 1% extremely wealthy, few have much disposable income, there are few good-paying jobs for the working class, partly because of outsourcing abroad, increasing robotization, unimaginative, old-style business thinking, etc. Moreover, violence and threats of violence have increased in our class-based inequality system.
It's the most simple Keynesian prescription: If most people have little money to spend, the economy will remain locked in its present state of torpor. If they have some extra cash, they will spend it, thus greasing the wheels of economic activity.
In an ideal world in this scenario, the economy would bounce back into a robust recovery, jobs would be plentiful, and all those paychecks would bolster a lively and politically stable economic scene. But there is little hope that scenario can take place. All over the world, the battle is raging between the "austerians" -- those "austerity" advocates who want to tighten down the screws on the economy, which negatively impacts mostly the poor and middle-class -- and those who prefer the more Keynesian, grow-out-of-the-recession approach through infrastructure investment, an increase in targeted fees and taxes, aiding progressive entrepreneurial ventures with tax incentives, etc.
In much of the developed industrial world, mainly in the U.S. and Europe, austerity reigns, and the ones benefitting are those at the top of the economic ladder. Much of the conservative rightwing excoriates the poorer classes as "moochers" and "takers," but it's quite clear that the true "takers" are the "one-percenters" who get more and more wealthy on the backs of those beneath them.
GETTING MONEY INTO CIRCULATION
Rightwing "trickle-down" theories are little more than heartless Republican spin on what is, at its core, a socio-political fraud. Far better that the government arrange to get disposable funds into the hands of those who have little such largesse.
In other words, straightforward Keynesian macro-economics, proven time and again by history, as opposed to austerity (cut government and taxes and screw the poor), which history has clearly refuted. In fact, forget history: look at the economies abroad today, where the Keynesian solution is promoting recovery (in Iceland, parts of continental Europe, the Pacific Rim), and where usterity, once again, is failing (in the UK, Greece, Spain).
I am not a trained economist; my degrees are in American politics and international relations. But even ordinary observers can figure out that remaining in our current status quo is a risky, and losing, proposition.