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Reply #83: Is Modern Capitalism Sustainable? Kenneth Rogoff [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-08-11 10:28 AM
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83. Is Modern Capitalism Sustainable? Kenneth Rogoff
http://www.project-syndicate.org/commentary/rogoff87/En...

I AM ASTOUNDED THAT ANYONE STILL THINKS SO--OR THAT IT WOULD BE A GOOD IDEA.--DEMETER

I am often asked if the recent global financial crisis marks the beginning of the end of modern capitalism. It is a curious question, because it seems to presume that there is a viable replacement waiting in the wings. The truth of the matter is that, for now at least, the only serious alternatives to todays dominant Anglo-American paradigm are other forms of capitalism.

Continental European capitalism, which combines generous health and social benefits with reasonable working hours, long vacation periods, early retirement, and relatively equal income distributions, would seem to have everything to recommend it except sustainability. Chinas Darwinian capitalism, with its fierce competition among export firms, a weak social-safety net, and widespread government intervention, is widely touted as the inevitable heir to Western capitalism, if only because of Chinas huge size and consistent outsize growth rate. Yet Chinas economic system is continually evolving. Indeed, it is far from clear how far Chinas political, economic, and financial structures will continue to transform themselves, and whether China will eventually morph into capitalisms new exemplar. In any case, China is still encumbered by the usual social, economic, and financial vulnerabilities of a rapidly growing lower-income country.

Perhaps the real point is that, in the broad sweep of history, all current forms of capitalism are ultimately transitional. Modern-day capitalism has had an extraordinary run since the start of the Industrial Revolution two centuries ago, lifting billions of ordinary people out of abject poverty. Marxism and heavy-handed socialism have disastrous records by comparison. But, as industrialization and technological progress spread to Asia (and now to Africa), someday the struggle for subsistence will no longer be a primary imperative, and contemporary capitalisms numerous flaws may loom larger.

First, even the leading capitalist economies have failed to price public goods such as clean air and water effectively. The failure of efforts to conclude a new global climate-change agreement is symptomatic of the paralysis...

IT'S CALLED REGULATION, TAXATION, AND SOCIALISM, KEN
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