Tuesday, March 25, 2014

These Charts Show What is Wrong With American Capitalism

Click here to access article by Yves Smith (pseudonym) from her blog Naked Capitalism.

As is frequently the case with her articles, this one contains a lot of specialized financial concepts and jargon (for example, ZIRP which means zero interest rate policy). However, I'm really not so much interested in her charts and arguments as I am in the effort, itself, to explain the problems of capitalism.

What is of special interest to me is that Smith is frequently raising questions about what is wrong with capitalist practices and the fact that her blog is followed by a high number of well-educated middle class people in finance, economics, and business. Because of the latter fact, I frequently read the very interesting comments following her articles, and I encourage you to do likewise. 

Liberal critics of current capitalism such as Smith are hampered, I believe, not only by their religious-like faith in capitalism, but also in a kind of trained incapacity or incompetence (see this and this). They confine their views to the specialized knowledge in which they have received so much training, but in doing this they miss the bigger picture as in the blind men and the elephant fable. Notice also that the very framing of her question, as she does in the title of the article, is completely inadequate in this age of globalized capitalism.

What I regard as most significant is that Smith, and the many middle class people who follow this blog, make the system function; and they are questioning it like never before because of the obvious social problems it is causing. Most of them, like Smith, still believe in the system and are almost desperately trying to figure out how to fix it. Think what might happen should sufficient numbers of them begin to understand that the system itself is defective!?