I recently read Robert Reich's book "Saving Capitalism" and am currently reading "Contending Economic Theories: Neoclassical, Keynesian and Marxian" (Wolff and Resnick). Reich explains that all economic systems are based in definitions and rules and enforcement mechanisms. He notes that there is no such thing as the "free market" that the libertarians and free-market capitalists like to believe. Reich believes that the key issue with neoliberal capitalism that we see dominating the economy of the world today is not fundamental to the theories underlying capitalism, but in the outsized influence of moneyed interests tilting the stage towards those with capital. According to Reich, the key element in saving capitalism is to re-instate (create) democracy, where each individual has an equal voice in deciding on the rules governing society and the economy. With the rules bending to the desires of the masses instead of the wealthy, the market benefits of capitalism can be realized for the majority and a more egalitarian society would result. He is also a proponent of a Keynesian-style approach to guarantee full employment, healthcare for all, etc. which a majority of the population does or would support. I think he has a lot of good ideas, but he overlooks the fundamental issue that capitalism is based on maximizing growth and profit. There is nothing in the equation that takes into account fundamental resource limitations and impacts on the macro-systems or a way to identify a sustainable level of production and distribution. This is clear today as we see the global environmental destruction, anthropogenic climate change, and the inhumane exploitation of the vulnerable and impoverished in pursuit of profit. I think the debate could center around how Reich's version of capitalism, which is well-regulated and embedded in a democratic society (equal voice for each person) would address the current issues of liberty, equality, and fraternity (and justice), versus how a Marxian approach would deal with these fundamental issues of society.
Debate with Robert Reich on the merits of capitalism vs Marxian-based economy
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