Quote:
Originally Posted by noonereal
(Post 315593)
Found it... well, a liberal friend who also is open to Trump located it for me. (horrors! right? another one like me, guess what, I know more)
when I first saw this, I thought this guy had followed me around he internet reading my posts and taking notes.
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Have seen, but rewatched it. Very recommended. The last 5 minutes in particular are incredibly right-on.
Capitalism, left to itself, destroys itself. Hanauer touches on why, but there's more to be said. Briefly, it's a matter of micro functionality adding up to macro dysfunction. A familiar example is the way that it's in an individual farmer's interest to maximize his production, but the macro effect is surplus production leading to low prices that impoverish all farmers. Government management of production and prices has been the solution.
Similarly, it's in any individual firm's interest to minimize labor cost. But if too many do too much of it, the consumer market as a whole contracts and the economy in general suffers. The solution in this case would be government support of consumer incomes--minimum wage boosts, and perhaps other measures.
Both of the above examples expose the mythical nature of the orthodox economic claim that unregulated capitalism allocates resources in the most efficient way possible, to the benefit of all. Also laughable is the orthodox assumption that firms always make rational economic decisions in their own interest. Anyway with passing familiarity with the actuality of corporate politics and decision-making knows this assumption is very false. All this supports Hanauer's observation that economics as taught is transparently a prop for the power and privilege of the owning class, and often not a realistic 'science.'
Hanauer speaks of capitalism's role in fostering innovation to produce more well-being for all. Innovation unders capitalism is motivated by a carrot, and a stick. the carrots is the opportunity to enjoy market success by offering more value at less cost than your competitors; the stick is the risk that if you don't innovate, your competitors will and your market will go away. So, competition is crucial both times. But capitalists, particularly already large firms, actually hate competition and do their best to get rid of it. Then the incentives and risks go away, and value for the consumers in the market stagnates or contracts. This is why Hanauer's insistence, at the end, that it is essential to maintain competition, is so right-on. Government regulation of large firms is the necessary solution to maintain the benefits of capitalism, by preserving and fostering competition.
In the last five minutes, Hanauer is basically offering ways to correct the macro dysfunctions of capitalism. But due to the fundamental irrationality of human decision-making (in economic theory's spite!), few of his class will buy into these arguments, I fear. Only a mass movement for radical reform can create conditions in which the situation can be addressed with hope of success.
