Sunday, March 11, 2012

The Future Dilemmas of Keynesian Capitalism

Although I do not believe the current economic paradigm will fully collapse on its own, since that would be naïve, there are a few problems the modern market, and even the state, cannot properly solve and Keynesians should consider:

The issue of ecology and environmentalism; during the 2009 Copenhagen Summit this was especially evident, where the state and its corporate interests failed to make any law-binding decisions. This problem has been going on for a while, where the consensus has always been “We urge people to pollute less!” without enacting any legislation to enforce that. And the inevitable collapse and depletion of the oil and the energy market, predicted to happen around 2040, will prove to be destructive to globalization.

The issue of transhumanism and the rapid advancement of biogenetics is an issue the markets will fail to control and the state will probably succumb to, which would ultimately create a physical and intellectual divide between the wealthy and the poor, aside from their socio-economic status, because only the rich will have access to such enhancements.

The issue of intangible capital; the market has always functioned on physical capital that could be exchanged in the real world, but now with the rise of digital assets (which is now worth more than real world assets) all that is changing and it seems that the current laws on intellectual property and copyright are proving to be useless. The problem comes from that regulating this kind of capital and the digital market in general is inherently intrusive and stripping of liberty. The pressure of corporations on the state to enact further laws to limit internet freedom will surely come as a result, representing a new form of censorship and Orwellian infringement of basic rights (more info here).

The issue of new forms of apartheid; Zizek discussed this in a few of his interviews, in which there is a new class of people that are just excluded from the system completely. This is becoming increasingly prevalent in South America, Africa, Asia, and even in the United States, where there are artificial barriers being set up between the slums and the rest of the nation. There is little state control in these areas, and they are completely disregarded in the political sphere and there is little hope of incorporating them back into the system since they are so disproportionately poor. A good example of these “little Berlin Walls,” that Zizek calls them, are the slums of the Romani people (the Gypsies) in Europe, specifically Eastern Europe. Just look up modern antiziganism and you will find the oppressive hatred and exclusion the Gypsies face in modern day Europe, and their rights are completely ignored in the political sphere and even by the transnational bodies like the UN, which is apparent in their reaction to Roma refugees in the aftermath of the Kosovo war. 

And finally, the issue of state interventionism is a problem in itself. I think most Keynesians would agree that if that state did not intervene the market would abolish itself; the allocative capacity of the market is just not efficient enough, especially in a world where there are more overweight people (1.5 billion) than malnourished individuals (925 million), where food is being misallocated to areas where it is not needed because of unethical profits. Industries are attracted to areas with high levels of GDP. Since the ‘Golden Age of Capitalism’ after WW2, there has been substantial growth but with this economic expansion also comes increased state involvement. This destructively centralizes democratic power rendering it useless, and increases state power to bounds that could endanger democracy in itself. Authoritarian capitalism, or ‘capitalism with Asian values,’ as is present in Singapore and China, is at this point in time working more efficiently than liberal capitalism which is something we should all be concerned with. It used to be that argument that free markets will ultimately lead to democracy eventually, but now the authoritarian way is proving to be much more efficient in many respects and that liberal argument for capitalism may soon be disproved.

No comments:

Post a Comment