Larry Summers has contributed to a new Financial Times series on Capitalism in Crisis. It merits a read, as an example of tortured reasoning.
Summers is the consummate insider neo liberal Democratic economist. A leading academic, he was chief economist of the World Bank, acolyte and then successor to Robert Rubin as the US Secretary to the Treasury under Clinton, a key member of the Obama economic team until late 2010, and a former President of Harvard. Along the way he has angered environmentalists, feminists, progressive Democrats, and the faculty of Harvard who ousted him in a vote of non confidence.
This strange piece argues that the current travails of capitalism “can be addressed with proper fiscal and monetary policies” and that calls for fundamental reform of the system are off base.
He argues that problems of high unemployment and rising inequality are “real and profound” but that there is “no obvious solution at hand.” Apparently structural unemployment and the rise of the top 1% have nothing to do with the operations of market capitalism. “The roots of the problem lie deep within the evolution of technology.”
Similarly, while he states that “citizens of the industrial world who believe they live in progressive societies are right to wonder why increasingly affluent societies need to roll back levels of social protection”, this is inevitable because public services are just inherently more costly than market services because of higher relative labour costs.
In short, we face a future of high unemployment, rising inequality and deep cuts to social programs. But that’s not because of market capitalism. So “a radical change of direction … is somewhat beside the point.”
No wonder the guy commands such high speaking fees.
- Dead Money (August 23rd, 2012)
- Baskin-Robbins and the Walmartization of Ice Cream (July 20th, 2012)
- Labour Losing to Capital (July 19th, 2012)
- The Big Banks’ Big Secret (April 30th, 2012)
- In the Wake of the Crisis: Bully Capitalism (February 14th, 2012)