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Old October 1 2012, 03:40 PM   #14
Robert Maxwell
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Re: Can Capitalism be replaced ?

An economic system that properly accounts for externalities will probably be necessary in the not-too-distant future. Increasing energy demands coupled with shrinking finite sources (e.g. fossil fuels) and overall environmental impacts (e.g. climate change) will require some kind of cost accounting, either via taxation (in a capitalist system) or through true energy accounting and rationing (in a technate.)

I think capitalist systems are fatally flawed for the reasons others have described, but also because the public policy side of capitalism trends toward a focus on short-term results over long-term sustainability. Criticism of the financial sector is based on precisely this.

Capitalism is, obviously, materially superior to previous systems. It enabled the explosive growth of the 20th century. However, it must continually be restrained for the sake of sociopolitical stability, and those who benefit the most in capitalist systems constantly agitate against this.

My "ideal" form of capitalist system is one with highly progressive income tax rates, no distinction between income and capital gains, a strong social safety net with no arbitrary time limits, and active government investment in promising cutting edge industries. There is this weird myth in American politics that the government can either help the less fortunate or help business, but it can't do both. This is nonsense. We need to have a system in which losing your job does not mean you then lose your health insurance, your home, your savings, and everything you've worked for in your life--which is the reality for a great many people, due to our flimsy social safeguards. If fixing that means GDP growth is slowed and unemployment is a few points higher, I think that's acceptable, since being unemployed in that context doesn't mean you are one unexpected bill away from destitution. On the business side, the focus should be on growing new industries that can't be easily exported to places like China. That means high-margin specialty goods and professional services. Help foster those with tax abatements and loan guarantees.

I am a big fan of the way they do things in Germany and I think we could learn a lot from them.

If capitalism is to be replaced with anything in the relatively near future (~100 years), my money would be on a technate, which I think I've said before around here.
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