News & Analysis
Harvard's Rogoff: Is Capitalism Finished?
Kenneth Rogoff Asks: Is Modern Capitalism Sustainable? ... Harvard economics professor says there are no alternatives for now to the 'dominant Anglo-American paradigm' ... History may teach that all forms of capitalism are transitional, but the best economic system for now—in the face of no other viable alternatives — is "today's dominant Anglo-American paradigm," says widely quoted Harvard University economics professor Kenneth Rogoff. – Advisor One
Dominant Social Theme: Capitalism is the worst system except for all the rest ... And governments need transparency in the worst way.
Free-market Analysis: Kenneth Rogoff is a brilliant Harvard professor and the International Monetary Fund's former chief economist; he and co-author Carmen Reinhart are somewhat dubious about capitalism's future.
Is this a dominant social theme of the larger Anglosphere power elite? We have, in fact, made the argument that it seems to be. Increasingly the elites seem to be promulgating all sorts of what we call "limited hangouts" that provide rhetorical cover for business-as-usual via the creation of a kind of vast echo chamber.
Within the depths of this echo chamber one finds a number of sympathetic memes. It is as if the bought-and-paid-for mainstream media is engaged in a great listening exercise that then spews back articles sympathetic to the complaints of the larger public in much the manner of a politician running for office.
The idea is to indicate that the public has a "voice" – even though nothing fundamental ever changes. And Rogoff/Reinhart seem to be performing this feat of sympathetic "listening" admirably. Here's some more from the Advisor One article excerpted above:
The former International Monetary Fund chief economist believes that continental Europe's brand of capitalism is generous to workers and ensures a more equal distribution of wealth, but it's unsustainable.
At the same time, Rogoff (left) questions China's "Darwinian" capitalism, with its weak social-safety net and fierce competition among export firms, saying it's uncertain how far China's political and economic structures will transform themselves and whether they can ultimately serve as a role model.
"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," writes Rogoff in a column for the Project Syndicate newspaper association.
But, he warns, as industrialization and technological progress spread to Asia and Africa, contemporary capitalism's numerous flaws may become more apparent, including its inability to address issues such as global climate change, the growing income gap between rich and poor, medical care distribution, and financial crises and the technological innovations that have made them worse.
For Rogoff/Reinhart, capitalism has become a victim of its success. In a widely read column that appeared at Project Syndicate, Rogoff points out that the system has allowed succeeding generations to live ever more comfortable lives. But this may come to an end, he warns, because the system has mortgaged the future of "unborn" generations as well.
He writes: "With the world's population surging above seven billion, and harbingers of resource constraints becoming ever more apparent, there is no guarantee that this trajectory can be maintained."
Of course, this is surely another power elite meme, and one of the hoariest. (Whether Rogoff is aware or not is another question, and we are not implying that he is, necessarily.) Anyway ... the idea is that the free market simply cannot provide for the world's swarming billions. Never mind that the world's entire population could fit into the tiny state of Connecticut with room to spare – we are simply supposed to take this Malthusian promotion at face value.
In his column, Rogoff has other fashionable (politically correct) points to make as well. "As pollution, financial instability, health problems, and inequality continue to grow, and as political systems remain paralyzed, capitalism's future might not seem so secure in a few decades as it seems now."
Gloomy words, to be sure, but as the Investor One analysis notes: "The Dec. 2 column, which went viral on the Internet after publication, drew a large number of comments from readers, many of whom complained that the world's problems are due not so much to economics as to politics."
You see, dear reader, the Internet is increasingly, we believe, an engine of original thought and "pushback" when it comes to these sorts of elite themes. As what we call the Internet Reformation gains traction, people are not nearly so intellectually pliable as they used to be. This also happened, we believe, when the Gutenberg Press was having its initial impact.
Nonetheless, Rogoff/Reinhart seem to have in mind reinforcing the idea that while the system is broken, a political reconfiguration is what's necessary. Here's an excerpt from an Amazon review (one of over 100) that reinforces this elite meme:
The authors say it is "almost comical" that no governments reveal their true financial condition today, nor have they done so in the past. The lack of transparency and the shenanigans that go on behind the curtains contribute, of course, to the human suffering that ensues in crisis after crisis ...The authors persist in saying that they hope their monumental effort will lead to an examination by policymakers of past mistakes and help them avoid future mistakes. I say, "Good luck with that."
It is, of course, entirely predictable, generically anyway. Government indeed has failed. But the solution – according to the elites charged with producing this sort of promotional propaganda – is not freedom or freer markets, but BETTER GOVERNANCE.
We've written about it numerous times. This is surely a purposeful thematic element of the powers-that-be. Government is terrible and new technologies like the Internet are necessary to "reinvent" government and make it more "transparent."
Apparently, Rogoff/Reinhart have (self?) enlisted in this literary conveyance and, as top academics do, have written a scholarly thesis to reinforce it. You can see a Daily Bell article on transparency here: Transparency Meme Creeps Closer.
Earnest middle class people who read such books likely do not know they are being manipulated, or at least they have not known in the past. The power elite NEEDS government, for otherwise it would have to wield its influence nakedly and even more brutally. And while it seems to us that governance of any sort is ultimately a failure, this does not stop the elites from attempting to expand it in their seeming quest to create true world governance.
This is evidently and obviously a continuing project. But slowly, the realization seems to be dawning on the larger public (throughout the West, in fact) that the problem with the current system begins with central banks' destructive, government-granted monopoly over money. The inevitable over-printing gives rise to ruinous booms and busts – and eventually depressions that take years if not decades to unwind.
Get rid of central banking and allow money competition to flourish and the problems that Rogoff/Reinhart perceive and document in such detail will gradually fade away. But not so fast ... Instead, Rogoff/Reinhart propose that governments must improve themselves if they can.
The hopeful signs regarding Rogoff/Reinhart's book seem to come not so much from the text itself, but from the response to Rogoff's column at Project Syndicate. Many feedbackers point out that Rogoff's apparent premise – that the problems of capitalism demand a political solution – is flawed in the first place.
One might argue that to imply that Rogoff/Reinhart have composed what amounts to an elegant promotion of certain power elite themes is unfair to them and their hard-won academic status. Perhaps so. Meme watching can certainly be an unfair and unpleasant state of affairs in this modern age. On the other hand, when one investigates the backing of Project Syndicate, where Rogoff placed his column, one finds (sadly unsurprisingly) that it is supported by The Open Society Institute (OSI).
Conclusion: A quick glance at Wikipedia confirms that this facility – renamed now as Open Society Foundations – is a private operating and grant-making foundation started by George Soros, "aimed to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform." Oh, good.
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Posted by chad2 on 12/14/11 11:19 AM
Capitalism or whatever 'ism' man can devise is going to fail! Why don't we talk about reality, like, what does man do knowing that all his 'ism's' are going to fail? There is no civilization that has lasted without failure.
Do we look to man made ism's as our source of hope? What hope then do we have, yet failure? O, that we could hope in a an everlasting kingdom, now that hope would not disappoint!
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Posted by amanfromMars on 12/14/11 11:25 AM
"But, he warns, as industrialization and technological progress spread to Asia and Africa, contemporary capitalism's numerous flaws may become more apparent, including its inability to address issues such as global climate change, the growing income gap between rich and poor, medical care distribution, and financial crises and the technological innovations that have made them worse."
It is interesting to consider the very real probability that in certain circles is global climate change, a euphemism for radical political socio-economic power shifts to internetworking intelligence networks aka Cloud Phormations, with money controls, which are the old way of enslaving the masses to be able to do nothing, being transferred into more adept hands/hearts and minds. It is certainly the abiding Advanced Persistent Threat which the relentless march of technology and knowledge would harness to avoid an unnecessary conflict which can only have greater intelligence always forging ahead into new fields at the catastrophic expense of any destructive competition and negative opposition.
Fields such as the following, which would appear to be unworthy of Registration in San Francisco ... ... .
[blockquote]Keeping One Abreast of Seismic Virtual Shifts ……. Colossal AIMovements ….. on Click to view link
Posted Wednesday 14th December 2011 08:32 GMT
Hi, Dan Goodin in San Francisco,
Methinks national and even international critical infrastructures and supplying intelligent services reliant upon SCADA methodology and technology have much more to worry about than they can handle ………… as is revealed in this missive which it is as well to share widely so that all are nobly appraised of what the future holds and the present delivers to programmable logic controllers ….. [ Click to view link ... . December 11, 2011 at 11:17 pm ]
And quite a coup for the Register too, methinks, Dan, to be so diligent in preparing everyone for changes which are an inevitability sourced by simple intelligence and/or complex information, and vice versa, which is freely shared for transparent global working and onward SMART InterNetworking with knowledge based systems. [/blockquote]
The future is nothing like the present or the past, and yet so many who really should know better and who would think that they wield power for control, seem to be stuck in a deep dark place with nowhere to go with faded memories of failed glories that never achieved anything other than further conflict and misunderstanding ... .. Ignorance and Arrogance.
Time for some Sublime ReProgramming and Virtual Machine Programming, methinks, courtesy of Global Operating Devices.
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Posted by bewer on 12/14/11 11:39 AM
When materialism and food is no longer an issue, the economy is not an issue. Then we will see a total transformation of human culture, including the possility of self-destruction.
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Posted by ghendric on 12/14/11 11:56 AM
Perhaps we should just get rid of money and live in a world much like Star Trek where money doesn't exist.. Of course, someone would have to invent a replicator and provide it for the common good so that all could live equally where there is no such thing as being poor or rich... just sayin...
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Posted by Don from the Republic of Lakotah on 12/14/11 12:17 PM
"another power elite meme, and one of the hoariest. The idea is that the free market simply cannot provide for the world's swarming billions. Never mind that the world's entire population could fit into the tiny state of Connecticut with room to spare - we are simply supposed to take this Malthusian promotion at face value."
Amen! The Malthusian promotion of self loathing arguably ranks as the hoariest.
My inner engineer notes that three-quarters of the earth's surface is covered in water and another fifth is covered in desert, which leaves an relatively insignificant habitable zone of 5%. A margin of error typically ignored for many engineering calculations.
Did you hear the one about the mathematician and the engineer who die and go to heaven? During St Pete's meet and greet a door opens into room with sexy naked girls on the opposite side. St Pete explains, "Every time the bell sounds you two lucky dogs get to move half the remaining distance between yourselves and those lovely girls."
When the bell sounds the engineer literal leaps into the center of the room in a single bound while the mathematician stays put. With a puzzled look the engineer asks, "What's wrong? Don't you like girls?"
The mathematician answers, "Oh, I like girls alright, but it's theoretically impossible to ever reach the other side."
The engineer then retorts, "Sure, but you can get close enough so that it doesn't matter."
Reply from The Daily Bell
Today, like the Cheshire Cat, you are inscrutable. You endorse Malthus?
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Posted by chad2 on 12/14/11 12:17 PM
You know I find your ideas equal to the concept of a system founded on endless debt and money printing to survive. Let's call both systems: Maddness! It's funny how maddness works for a while and if it works too long we all forget that we are madd, but then the maddness ends as all maddness does and we are left thinking, why did we invest our soul in such maddness? We would have been better to trust our soul to another, one who is not madd!
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Posted by lewfalo on 12/14/11 12:19 PM
"Kenneth Rogoff is a brilliant Harvard professor... "
Intelligence has little to do with it, as Hayek's Fatal Conceit points out. Bernanke probably has a high IQ as well, but central planning just doesn't work. Central planning also fits nicely with the megalomaniacal tendencies of all of these sociopaths. They may even think they have humanity's best interest in mind (which means of course, individuals are expendable... except the planners, right?).
This makes them all the more evil as far as I'm concerned. What disgusting arrogance and a delusional sense of superiority these planners must have. The self-appointed saviors of the human race. They are truly the most horrid creatures on the planet... worse than a common thug, as far as I'm concerned.
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Posted by Abu Aardvark on 12/14/11 12:41 PM
DB: "Of course, this is surely another power elite meme, and one of the hoariest. The idea is that the free market simply cannot provide for the world's swarming billions."
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A little excursion regarding this particular and obviously crucial elite meme: A German Newspaper - the FAZ - is featuring articles and essays for some months now to the effect that, yes, we're all gonna die soon ... unless capitalism, a wild beast that turns people into cannibals of some sort, has been tamed by government ... or so the story goes. To fully grasp just how remarkable this new stance is, one has to dig a little into the established positioning of this prestigious Newspaper.
From Wikipedia:
"The F.A.Z. is one of a small number of high-profile national newspapers in Germany. It maintains the largest number of foreign correspondents of any European newspaper (53 as of 2002).
The F.A.Z. promotes an image of making its readers think. The truth is stated to be sacred to the F.A.Z., so care is taken to clearly label news reports and comments as such. Its political orientation is classical liberal with an occasional support for conservative views by providing a forum to commentators with different opinions. In particular, the feuilleton and some sections of the Sunday edition cannot be said to be specifically conservative or liberal at all."
Click to view link
While it is true that the FAZ' "feuilleton" always comprised controversial, sometimes leftist points of view, for someone who grew up in in the German-speaking world some decades ago, THIS recent evolution boggles the mind. It started, as far as I can tell, on August 15th with an essay by the very publisher of the paper, one Frank Schirrmacher. Headline: "I'm starting to believe that the Left is right"
Click to view link
Then there's Michael Hudson with, at least, two essays of late. Here's one:
"The War of the Banks against the People - There is one way how the euro can be saved: you must only allow the European Central Bank to do what central banks were established for: printing money"
Click to view link
And on it goes. David Graeber, in one essay, is praised to the skies - again by publisher Schirrmacher:
"And forgive us our debts - Every revolution, every revolution begins with debt, which can no longer pay the company. David Graeber's great book "Debt" shows us where we are today."
Click to view link
The latest piece - outright deception and utter madness - by none other than Sahra Wagenknecht, deputy chairwomen of leftist party "Die Linke" ("The Left")
Click to view link
"An End to Mephistopheles' Redistribution"
Click to view link
Again, this may seem extraneous to some not familiar with German media landscape. It is not. Leftist bloggers are celebrating and salivating - many of them with a solid history of not believing a word uttered by government and/or mainstream media and attacking both for being a bunch of liars - which they are, of course. But not this time, it would seem. Now newspapers of old and government will come to the rescue of mankind by domesticating the beast that is "capitalism". Hurray!
I need a drink.
Reply from The Daily Bell
Excellent. This again confirms our hypothesis that is "thought magazines" that are of the most value to the elites, as they "shape" the way people think by being presented as rarified and as attracting "brilliant" writers.
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Posted by Don from the Republic of Lakotah on 12/14/11 12:45 PM
@DB "You endorse Malthus?"
Never. Malthus encourages people to hate other people for simply existing. Hating people for existing is the same as hating one's own existence (Satan's specialty). It's an uphill battle to postulate that a 5% habitable zone detrimentally affects the remaining 95% of the earth's surface. The numbers get exponentially worse for Malthusians as one moves from two dimensional surface areas to three dimensional volumes.
Reply from The Daily Bell
Oh, so perhaps you were pointing out that eventually the oceans and deserts would be made habitable. We agree!
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Posted by Jones on 12/14/11 01:19 PM
"Harvard's Rogoff: Is Capitalism Finished?"
Do you possess a pulse? Criminals rule...
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Posted by Bobby7 on 12/14/11 01:26 PM
Hi,
Where is the "expert" who will say, "OK. This is the situation... ... ... . Now this is the answer to the problem"! I am sick & tired of all the "experts" after the event, who cannot come up with an answer to the financial problem.
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Posted by Szatyor39 on 12/14/11 01:26 PM
The difficulty here is that "capitalism" is used very imprecisely. For example, if it means, among other things, the highly government regulated system in place now, including various monopolistic elements such as the Federal Reserve, than the lack of confidence is justified.
This mixed economy is not sustainable because many elements actually undermine what is capitalist within it. There should be a cautionary adjective in front of "capitalism" in discussions of this type. If capitalism is a healthy economic order, what we have is one with innumerable diseases and ailments any one of which or combination of which can escalate to a fatal condition.
But just as that doesn't mean "healthful," so what we have in all Western systems isn't capitalist either. One would assume a Harvard professor would alert us to these matters.
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Posted by Bobby7 on 12/14/11 01:29 PM
Hi,
In the Book of Job, the satan is an entity that works for God.
Check it out!
Reply from The Daily Bell
You are starting to wander again. Stop.
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Posted by alexsemen on 12/14/11 01:38 PM
Kenneth Rogoff: the best minion the money can buy !
Harvard, Princeton, Yale etc. etc. as the chain production of the insured guaranty of any kind of disasters.
HPY-etc. the prefect institutionalized fabrics to produce standard Moron- ism as well others - -ism, until now.
This Rogoff, is not more and not less than some kind of 'salesman' of shamanic industry to produce different rituals to full around the humanity.
'Brilliant 'Salesmen of the Capitalism, the only product of his Masters they wanted in their megalomaniac , hyperbolic Ego of disgusting arrogance and a delusional sense of superiority of this sociopaths, to sell to us again. Insanity is the first step to qualify such a attitude.
It is the same product in different shine nice colored boxes covered up with different labels. But inside it is the same criminal insanity as Einstein told to us.
Capitalism is horror psychopathic manifestation of the degenerate human nature at his best .
Anyhow the mandatory 'synonyms 'of Capitalism are: bloody exploitation, slavery, colonialism, neo-colonialism, wars, Wars and WarS, organized plundering through the so called revolutions, all kind of crimes against humanity , all kind of on purpose and organized crisis, psychotic compulsive wasting of resources( what else could be all wars until now) , pathological greed and lack of empathy…….
Infinite list of what could be Pandora Box.
His Majesty the Moron en Chef at Harvard ,( K. R) said to us that there is not alternative at 'Modern Capitalism' . He is a idiotic mithomaniac !
Of course it is, plenty of other ways !
There is not and could be not any kind of 'Modern Capitalism' because Capitalism is only Capitalism( the rest is only an idiotic sintagma fallacy inside of one horror tautology) and means anyhow and always only criminal plundering behavior .
Reply from The Daily Bell
Alexsemen, did you take a language course? Your writing is much better today.
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Posted by Bobby7 on 12/14/11 01:39 PM
Hi,
I was NEVER one for eugenics from a spiritual point of view, but as I look around me, I can see the case for eugenics! ALL the wrong type of people are OVER producing. In the animal kingdom there is restraint in reproduction, when it comes to food supply & space, but with humans there is none! If I was in a position to restrain unproductive, ignorant, superstitious humans, such as Muslims & Hindus etc, I would!
Elementary, my dear Editor.
Reply from The Daily Bell
Here at DB we do not endorse violence, nor do we endorse selective killings of human beings.
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Posted by Bobby7 on 12/14/11 01:42 PM
Beam me up, Scotty!
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Posted by Don from the Republic of Lakotah on 12/14/11 01:54 PM
@Bobby7
"ALL the wrong type of people are OVER producing."
Some Q.E.D. leaked out of your baphomet bonnet.
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Posted by Friend_of_John_Galt on 12/14/11 02:11 PM
Typical leftist drivel from a academic institution.
We currently don't have "capitalism" in either Europe or the U.S. We have a mixed capitalist-socialist economy with heavy government regulation of the unfree-market. Now that system is likely to fail, because the unsustainable redistribution and job-killing regulations will bring it down. (Perhaps that is an intended crash, that is supposed to usher in the chaos that will be used to move toward a one-world government.)
It's too bad that most citizens of Europe and the U.S. are so totally devoid of understanding economics.
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Posted by Abu Aardvark on 12/14/11 03:47 PM
"If I was in a position to restrain unproductive, ignorant, superstitious humans, such as Muslims & Hindus etc, I would!"
-------------------------------------------
You mean like ...
"Maintain humanity under 500,000,000 in perpetual balance with nature.
Guide reproduction wisely - improving fitness and diversity ... " ?
Suits you, Bobby.
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Posted by Dilence Sogwood on 12/14/11 04:43 PM
Rogoff is a bore.
He thinks all problems should be solved by a technocrat (self-serving notion). Yet he also thinks that people always get economic things wrong. He seems to include the previous tecnocrats.
However, he implies that now the techocrats know what they are doing. I am not sure how this change took place.
I've seen this attitude before - from the Fed. Oddly enough, 6 or 7 years ago it was Greenspan claiming that the Japanese didn't know what they were doing, hence the Lost Decade. Now the Bernanke uses the same plan that the Japanese used. These technocrats are either brimming with hubris or they are liars.
After 10 years of academic economics, I am more convinced than ever that humans all understand economics. No one is as stupid as Rogoff suggests (well, haha, some are). Also, the assets (productivity) remain the same no matter what the liabilities are.
I think Robert Murphy should have a good response to R&R with his own examples of American depressions in the late 1800s and early 1900s.
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