Peter Barnes: Capitalism
3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)
Why did this happen? There are many explanations. One is that welfare kept
the poor poor; this was argued by Charles Murray in his 1984 book Losing
Ground. Welfare, he contended, encouraged single mothers to remain unmarried,
increased the incidence of out-of-wedlock births, and created a parasitic
underclass. In other words, Murray (and others) blamed victims or particular
policies for perpetuating poverty, but paid scant attention to why poverty
exists in the first place.
There are, of course, many roots, but my own hypothesis is this: much of
what we label private wealth is taken from, or coproduced with, the commons.
However, these takings from the commons are far from equal. To put it bluntly,
the rich are rich because (through corporations) they get the lion’s
share of common wealth; the poor are poor because they get very little.
Another way to say this is that, just as water flows downhill to the
sea, so money flows uphill to property. Capitalism by its very design
returns to existing wealth owners. It benefits, in particular,
those who own stock when a successful company is young; they can receive
hundreds, even thousands of times their initial investments when
the company matures.
Moreover, once such stockholders accumulate wealth, they can
through reinvestment, pass it on to their heirs, and use their
influence over politicians to gain extra advantages — witness
the steady lowering of taxes on capital gains, dividends, and
inheritances. On top of
this, in the last few decades, has been the phenomenon called
globalization. The whole point of globalization is to increase
the return to capital
by enabling its owners to find the lowest costs on the planet.
Hence the stagnation
at the bottom alongside the surging wealth at the top. ... read
the whole chapter
Joseph Stiglitz: October, 2002,
Q: I was at a conference recently on the French concept of "mondialization" as
opposed to "globalization." The French consider the spirit of "mondialization" to
be more "generous" towards less developed countries, in contrast
to the American idea of pursuing our national interest without regard to
theirs. Would you call yourself a proponent of "mondialization" rather
than of "globalization"?
JES: It is interesting that my book has been selling fantastically in France,
so they obviously sense the commonality on our views. ...
Q: From the conference on "mondialization," I saw a major difference
in attitude among the French with regard to public investment. The French
believe strongly in public funds for public works, whereas Americans believe
they shouldn't be taxed more in order to support public projects. Which view
do you agree with?
JES: There's been a lot of so-called "bad rhetoric" in this whole
area. The real point is that we need to recognize that there are some things
in the area of "the public sphere." We're not having investment
in basic research; we need to have the government do it. And that's what
I've consistently been arguing; you don't want the government building steel
factories. But you do want the government doing certain research, and the
relative size of that depends on the society. Right now, we should be spending
far more on basic research. So what is the message. I think how much we depend
on the government. And the new economy, we take it for granted, but it is
the public sector. I think you're right that we have the wrong view. But
I keep saying, "The Internet." How much as it changed our lives?
And it's [the result of] the government. ... read the entire interview
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