Capitalism's most credible defender is Mariana Mazzucato, an economist whose histories of - and vision for - a strong state that shapes and manages markets is today's most plausible vision for a future under capitalism.
Mazzucato has been warning that we can't afford to squander this crisis the way we did with the 2008 collapse, talking about a future of "climate lockdowns" if we don't make a change:
https://pluralistic.net/2020/09/23/overly-exuberant-youth/#mazzucato
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In "Capitalism After the Pandemic" in Foreign Affairs, Mazzucato recounts how the current emergencies come from the ideological failures of neoliberalism, and lays out a program for "building back better."
https://www.foreignaffairs.com/articles/united-states/2020-10-02/capitalism-after-covid-19-pandemic
She lays out a vision for a post-disaster capitalism that's something like the post-War boom of pluralistic, shared prosperity, and something like the state-sponsored tech boom of the moonshot, in service to building a world that's safer and fairer.
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After all, the current system isn't working. Congress and the Treasury made trillions available to prop up the economy during the crisis, and rather than going into the productive economy, almost all that money has been captured by the finance sector.
Now, if the finance sector was then allocating capital to the real economy, maybe we'd have something. But mostly what the finance sector invests in is...the finance sector. In the UK, only 10% of commercial lending goes to nonfinancial firms.
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In the world's advanced economies, more than 60% of lending is real-estate based. The finance sector pumps money into the finance sector, creates bubbles, the bubbles burst, and we bail them out. Then they do it again. And again.
In the real economy, large firms are gnawing off their own limbs, buying back more than $3T in their own stocks over a decade. Money gets spent goosing share prices, rather than R&D, training, new capital or higher wages.
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Thus do we lurch from crisis to crisis, and each time, the state intervenes to rescue the system, but not to change it. That's why, when the covid crisis struck, we had low-waged/gig workers who had no insurance and no sick leave.
The rhetoric of shrinking the state that has been with us since the Reagan years was never serious. Instead, the state has shifted to subsidizing large firms whose core message is that governments are incompetent, but who profiteer off government innovations.
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Like Gilead, whose remdesivir drug came from $70.5m in federal R&D subsidy, costs $10/dose to produce, and sells in the USA for $3,120.
But it's not just pharma that reaps enormous windfalls from public spending!
Google's search algorithm was funded by the NSF. The US Navy developed GPS. DARPA created the internet, touchscreens, voice recognition and more.
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The companies that commercialized these technologies get 'em for free, dodge their taxes, AND campaign against the very idea of government spending. They back a bizarre ideology that measures the economy with nonsensical measures like GDP.
Under GDP, public school teachers are a drain on the system, while the educated citizens they turn out are not accounted for at all.
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And when Goldman Sachs got a $10b bailout, CEO Lloyd Blankfein was able to claim that his workers were "among the most productive in the world" because such a small number of people had generated $10b in income!
Handing money out to companies with no strings attached doesn't improve the economy, it just lines the pockets of the finance sector. Congress's PPP loans cost $500b and saved 2.3m jobs - that's a cost of $500k per job!
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The $7T in stimulus has not resulted in any real, structural change that will avert the looming crises on our horizon. We need to stop doing corporate handouts and start structuring markets to deliver public benefit.
* Develop a "people's vaccine" that is patent-free and can be made accessible to the whole planet
* Reform wages, health benefits, sick-pay and worker control over workplaces
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* Give preference to payroll support over unemployment support, the latter having thrown 30m Americans out of work
* When companies go bust, don't just bail them out - require an equity for the public
* Ban companies that receive assistance from issuing exec bonuses, issuing dividends, doing share buybacks, debt-loading, using tax-havens, spending public money on lobbying or price-gouging
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* Publicly subsidized pharma should be "narrowly patented and easily licensable"
* Issue a "people's dividend" where "the government takes a percentage of the wealth created with government investments, puts that money in a fund, and then shares the proceeds with the people"
Since the 2010s, a lot of us have been wishing for a "return to normal."
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Normal isn't good enough. It was never good enough. Normal got us into this mess.
We need to build back better: to create a moonshot for climate adaptation that uses a muscular, capable state to invest people and technologies.
A moonshot that structures the economy to produce the clean energy, infrastructure creation and retrofitting, transit, universal health care (and other forms of care), universal network access - a future fit for the human race.
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Image: Molly Crabapple/Years of Repair
https://theintercept.com/2020/10/01/naomi-klein-message-from-future-covid/
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@pluralistic Can I add some minor but very important details. I've write them here just several minutes ago: https://mastodon.host/@_1751015/104977934089980338
Most of the biggest business in the USA is controlled by three "shareholders". The boards of the biggest companies share quite a lot of "directors". And for the end: pension funds and insurance companies are "stimulated" to buy shares in the same companies. IMO a very good and very ridged scheme.
@[email protected] Hmm, this is a good fairy tale which is "прах в очите" (dust in the eyes). Let's start with "shareholders": 1) https://theconversation.com/these-three-firms-own-corporate-america-77072 2) https://hbr.org/2019/02/how-big-a-problem-is-it-that-a-few-shareholders-own-stock-in-so-many-competing-companies Ouuchhh - three "companies" control 40-50% of major part of the US economy (and influence significantly the global economy). They've discovered the power of the oligopoly :) They appoint a bunch of minions (aka "directors") which are "advised" to take some actions. To grasp the full amount of the absurdness of the whole picture add this: https://www.fastcompany.com/90209537/the-web-of-board-members-that-link-american-corporations-mapped In Bulgarian we called this "навързани като свински черва" (завязанные как свиные кишки; tied up like pig intestines). I couldn't find "market pressure" anywhere :thinkingcat: The worst part of the whole picture is the detail that pension funds and insurance companies (where the real money are) MUST "invest" (aka give people's money) to these companies that are controlled from the few and their only interest is to write bigger numbers in a spreadsheets. No matter what are the consequences. Example here: https://www.cnbc.com/2018/04/11/goldman-asks-is-curing-patients-a-sustainable-business-model.html
@pluralistic There was some research paper several years ago that analysed the transactions in the global economy by value and participants. The results were similar to the Pareto principle: 80% by volume was generated by 20% of the companies.
Currently I can't find it (have lost the bookmark). If anyone remembers it, please share the link.
I have a vague memory that it was published in https://en.wikipedia.org/wiki/PLOS_One.
Cory Doctorow
_1751015
marathon 🇨🇦