Howdy there, pardners, sorry I’ve been out of touch. A housemate moved and we bungled the Comcast handoff; as a result I spent a week in blessed innocence of the outside world. Now I return to find the world has fallen apart! Five hundred points off the Dow Jones, 4.4% off the NASDAQ. Where is the world headed? Is this the end of capitalism as we know it? Fortunately the Guardian has commissioned a survey article on this very topic.
Ken Livingstone, former Mayor of London, says:
Sadly, I don’t think this will be the end of capitalism. But there is going to have to be a return to a much, much more interventionist state. As a system for the distribution and exchange of goods, you can’t beat the market. But the mistake a lot of politicians have made is to think that because the market was good at that, it could be good at everything: it could train workers, create infrastructure, protect the environment, regulate itself. Quite obviously, it can’t.
So the real issue is, what sort of international structures do we need to ensure this never happens again? Thatcher and Reagan deregulated massively and let the financial markets do as they liked — and they’ve turned into one bloody great big rip-off. The good news is, there’ll now be a realisation — even George Bush sees this now — that we need international regulatory mechanisms that will ensure, for example, that these people and operations actually pay tax. There’ll be a realisation in Britain that while it’s certainly useful to host a world financial centre, it has to rest on a solid, genuinely productive real economy. In China now they make things; we’ve decided we’re not interested in that.
Former broker Max Keiser adds a long-term view:
This is not a blip. It’s extremely significant. We will see a shift in power away from the US, and towards the developing world — to countries such as Brazil and the Gulf states that have commodities to sell, and to China, where the savings ratio is high. We are going to see a new world order. America as a driver of the global economy is finished.
The left has nothing to say about any of this. And because the left has no economic programme, we will see the rise of social unrest. We are already seeing it in the US. The left has no real response to that either.