Capitalism hits the fan, who do we vote for now?

The history of capitalism & socialism

I recently saw a YouTube video by Dr. Richard Wolff, University of Massachusetts professor emeritus, entitled "Capitalism Hits the Fan" https://www.youtube.com/watch?v=Al12e1EVmZU

The video covers the history capitalism and socialism. 

Professor Wolff describes how Capitalism in the 19th century worked in the US, because the US economy grew by attracting millions of immigrants from all over the world. Because the economy was growing, wages grew, and so did the middle class. As long as the majority could see a gradual improvement in their living conditions, they were willing to put up with the inequities of capitalism.

Capitalism has a pattern of "boom followed by bust".

The "Great Depression" (1929) was one of the largest 'busts' we have seen so far, with millions of jobs lost, and little or no support for those who found themselves unemployed.

In the 1930s and 40s there was revolution in the air, following the Russian revolution in 1917, and the 1929 bust. And, in the United States, workers united to demand a "new deal". United States President Franklin D. Roosevelt (called FDR at the time) (1933-45)  imposed a tax on the rich of over 90%. FDR and his "New Dealers" wanted to finance the upcoming second world war equitably, with stiff tax rates on high incomes.

How stiff? FDR proposed a "100 percent top tax rate".

At a time of "grave national danger," Roosevelt told Congress in April 1942, "no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year."

That would be about $350,000 in today's dollars.

The money raised was used to fund the old age pension, and employ the millions of unemployed, building infrastructure and national parks.

The economy went quickly from bust to boom.

Post war growth & the American Dream

After World War Two, the rich quickly demanded an end to high taxation.

The economy continued to grow into the 1970s, because women went into the work force, almost doubling the productivity of the population.

But the standard of living began to decline as wages failed to keep up with the cost of living. Because most women were now in the work force, families found that they now needed two cars, so both mom and dad could get to work. Child minding costs grew, and workers often worked two or more jobs, to live the so called "American dream".

Reaganism & Neoconservatism

Since the 1980s, the rich have found ways to reduce their taxation, so that many pay almost zero tax. The taxation burden on the working class has had to increase, to pay for public education, infrastructure and health.

This was the period of 'Reaganism and neoconservative politics'.

Wages had not been increasing, as many of the manufacturing jobs had been exported to third world countries, where wages were much lower. The gap between rich and poor was widening. Many found themselves under-employed and struggled to make ends meet. Many used their credit cards and mortgages to finance the lifestyle they thought was their right.

The Global Financial Crisis

In 2008, the Global Financial Crisis (GFC) hit, and all this came to an end.

Governments all over the world bailed out the banks and went into unprecedented levels of debt.

Post GFC

Since the GFC, many countries have had almost zero interest rates, in an unsuccessful effort to stimulate their economies and create jobs.

China, where millions of jobs had been created as the first world jobs and their accompanying pollution had been exported to the third world, continued to grow but the growth came at a high price. Air pollution rose to record levels, well above WHO standards, in many of China's industrial cities. Around the world, scientists were warning of the dangers of carbon pollution and its link to climate change.

Capitalism had reached its peak, unable to create jobs and any continued growth was leading to the global catastrophe of runaway climate change, environmental degradation and species extinction.

The shit had certainly hit the fan.

The future promised more automation and less jobs globally. Continued growth by increasing debt was no solution, in a world where jobs and wages were in decline.

Unfortunately, the old political parties of the 20th century seem locked into 20th century ideas.

Where to now?

Labor and Liberal parties in Australia and Democrat and Republican parties in the US are unable to create a vision that will work for the majority, into the 21st century.

Democracy itself, is at risk, as multinational companies spend millions to support these old political parties and the inequities of the capitalist system.

We must support new political parties and independent politicians that promise to end these so called 'political donations'. We need parties and independent politicians willing to base their policies on science and data, not greed and corruption.

The rich, including the multinational companies who use tax havens to limit their taxation, must be forced to pay their share. And the money raised should be passed into the global economy, to create a sustainable and equitable 21st century economy.

We want an economy that is capable of transforming our world: the 2030 Agenda for Sustainable Development. https://sustainabledevelopment.un.org/post2015/transformingourworld

http://www.un.org/sustainabledevelopment/sustainable-development-goals/

John Pratt