Experience shows that in the era of finance capitalism, marketisation succeeds much better in wiping out existing industries, than in creating news ones of any significant size. If unemployment rates peaked only in 2010, it would take five or more years to recover from that.
What the depression does is, that (1) it makes the distribution of income & wealth even more unequal, effectively shutting out a whole bunch of people from participation in markets, and (2) the risk levels and incentives disfavor production investment even more. It creates social-organisation problems, and problems of social stability, and in the longer term they are much more decisive for the survival of capitalism.
The question is "what has to change", for a recovery of capitalism - somehow people have to be reconciled with the fact that they have to give up some things, lose some things, so that Capital may grow.
Jurriaan
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Received on Mon Jan 26 14:19:02 2009
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