IS CAPITALISM FINISHED?
Lekachman, Robert
rationalize itself at the expense of the millions. In each of these three cases, all of them prime sources of our recession-inflation, there is a characteristically capitalist process at...
...Each year the world’s population rises by some 70 million souls...
...Produced for the most part in highly concentrated industries, these manufactures were sold at pleasantly profitable prices to raw material exporters...
...The disasters of 1929 and after were unexpected...
...From now on, the law will no longer be in absolute contradiction to social customs, and France will find herself on the same footing England, the US., and Germany have enjoyed for the past 20 years-not to mention Holland or the Scandinavian countries...
...Tough old system that it is, contemporary market capitalism will probably resume economic growth at a pace fast enough to distribute acceptable new benefit5 to middle- and working-class families...
...Rational calculation is not the only influence upon events...
...The politics of redistribution are unfamiliar in the United States...
...Businessmen and their political agents are equally willing to manipulate the levers of policy in international affairs...
...When uneasiness turns into panic, economic behavior turns irrational...
...financial austerity intensified and more readily accepted because more fairly shared...
...American grain is a world commodity whose price is bound to rise...
...I1 THEFLAT-EARTHERS have a different tale to tell...
...Or OPEC might reduce oil pumping sharply enough to plunge Japan and Western Europe into deep depression...
...higher taxes on the profits of large corporations...
...Yet, even under these favorable circumstances, mild inflation was chronic in Western society...
...But the new government can boast of being partly responsible for this silence...
...I rather think that if events are controlled by the rational perceptions of OPEC and its customers, capitalism is likelv to survive to exploit another day...
...Consumers cease to spend...
...The ploy of the liberal Right has always been to change “everything” without real change-a 12 COMMENTS AND OPINIONS whose only citizenship is that of tho balance sheet have strong pecuniary reasons to preserve the viability of the leading trading nations...
...The fragile arrangements under which international trade occurs are under their severest strain since the 1930s...
...The ideological emoFans and territorial ambitions of such medieval types as King Feisal and such megalomaniacs as the Shah of Iran enormously complicate th...
...Food panic relates to large quantities of bad luck and cynical electoral politics...
...All importing countries suffer from huge balance of payments deficits which for rickety economies like the Italian are a blow too heavy to be borne, except with emergency aid from the West Germans...
...No modern democratic government can abandon its citizens entirely to the adversities of either inflation or unemployment...
...initiation of long-promised penal reforms...
...The changes include: establishment of the right to vote at eighteen...
...What is even more to the point, the politicians and businessmen at the head of affairs are perfectly awarc of their situation...
...For the United States, increasingly the world’s residual grocer, the prospect is for permanently higher food prices...
...Let’s try round first...
...Since October 1973, the terms of trade have dramatically deteriorated for Americans, Western Europeans, and Japanese...
...In a recent editorial in France Observateur, Jean Daniel phrased an answer that seems close to the mark...
...If cartel solidarity persists, promising oil fields have been discovered in Mexico, the China Sea, the Continental Shelf, and the Aegean Sea...
...Nor, as the hasty action of the Ford administration in halting grain sales to the Soviet Union indicates, is there a present Washington inclination to repeat the uncontrolled shipments to the Russians that were featured in Nixon’s emphasis upon dCtente as a 1972 reelection strategy...
...All importing countries suffer from huge balance of payments deficits which for rickety economies like the Italian are a blow too heavy to be borne, except with emergency aid from the West Germans...
...Nor is emotion unknown in Western politics...
...Save for the promise several years hence of North Sea oil, England would be in no better state...
...Yet, even under these favorable circumstances, mild inflation was chronic in Western society...
...If cartel solidarity persists, promising oil fields have been discovered in Mexico, the China Sea, the Continental Shelf, and the Aegean Sea...
...Rational calculation is not the only influence upon events...
...They threaten the social and class harmony that has accompanied and stimulated Western prosperity in the three decades since the conclusion of World War 11...
...In the 1950s, but apparently not in the 197Os, the CIA was able to put mutinous Iranians in their place by ousting Mossadegh and substituting politicians with more “enlightened” views on oil prices and oil company profits...
...The tendency persisted for the claims of labor and capital to add up to rather more than the value of national output at current prices...
...Not one concerns the country’s economic structure...
...If our experience comes to resemble that of England, we can expect serious industrial strife, ethnic and racial tension, and increasingly unstable politics...
...But what...
...Accordingly, the Federal Reserve and other central banks expanded credit substantially enough to allow all claimants to collect what they demanded in monetary terms and slightly less than they wanted in real terms...
...Shortages of fertilizer and energy, the slowing of the Green Revolution, and the ominous Indian slide away from food 10 COMMENTS AND OPINIONS self-sufficiency all raise in unusually horrifying form the Malthusian specters of famine and pestilence...
...Shortages of fertilizer and energy, the slowing of the Green Revolution, and the ominous Indian slide away from food 10 COMMENTS AND OPINIONS itself at the expense of the millions...
...No modern democratic government can abandon its citizens entirely to the adversities of either inflation or unemployment...
...initiation of long-promised penal reforms...
...The multinaCOMMENTS AND OPINIONS 11 tionals whose only citizenship is that of tho balance sheet have strong pecuniary reasons to preserve the viability of the leading trading nations...
...American grain is a world commodity whose price is bound to rise...
...also, in the near future, possibly a reform of military service regulations, and, assuredly, a liberalization of the abortion law...
...Soon Alaskan and North Sea supplies will loosen the grip of the Persian Gulf monopolists...
...Let’s try round first...
...Farm surpluses are a thing of the past...
...But what...
...Our lords and masters have learned something from experience, notably the necessity of government intervention to protect the victims of economic dislocation...
...also, in the near future, possibly a reform of military service regulations, and, assuredly, a liberalization of the abortion law...
...and even of preserving world peace...
...But we must bear in mind an important fact: all these reforms relate to social habits and merely give legal sanction to current behavior...
...They threaten the social and class harmony that has accompanied and stimulated Western prosperity in the three decades since the conclusion of World War 11...
...The temptations of neomercantilism are visible in Common Market resistance to American exports of farm products, the rush of the West Europeans to consummate special deals with the Arabs, the possibility of English withdrawal from the Common Market, and the growth of American protectionist sentiment...
...I rather think that if events are controlled by the rational perceptions of OPEC and its customers, capitalism is likelv to survive to exploit another day...
...Low commodity prices reduced the cost of finished goods...
...enforcement-at last-of the law concerning contraception and abortion...
...But we must bear in mind an important fact: all these reforms relate to social habits and merely give legal sanction to current behavior...
...There is no reason sensibly to fear that these calamities will repeat themselves, particularly in platoon formation...
...In the last two or three years, the bad luck has included the commuting anchovies off the Peruvian coast, drought in the sub-Sahara (now fortunately ended), floods in Bangladesh, scant rainfall in the Punjab, and drought in our own Midwest...
...For these self-serving arguments, thz Germans and the Americans will continue to bail out the Italians and the English, at thstrong urgings of business leaders in all th-: countries involved...
...Well, as Lyndon Johnson’s legendary job aspirant answered the school board member who inquired about his views on cosmology, I can teach it .round or flat...
...Rising levels of general education and rapid technological progress facilitated the sustained economic growth that conferred its benefits upon all economic classes except the very poor...
...The politics of redistribution are unfamiliar in the United States...
...Accordingly, the Federal Reserve and other central banks expanded credit substantially enough to allow all claimants to collect what they demanded in monetary terms and slightly less than they wanted in real terms...
...Even if OPEC does no more than pursue present price and output policies, the difficulties of recycling the oil billions may be intractable...
...Food supplies have failed to keep pace...
...President Ford’s initial tentative stab at an economic program in October consisted mostly of benefits to business, but it also included gestures, which almost certainly will be enlarged into substantial measures, in the direction of public job creation and tax relief for low-income earners...
...Businessmen and their political agents are equally willing to manipulate the levers of policy in international affairs...
...When uneasiness turns into panic, economic behavior turns irrational...
...The bargain implicitly struck between owners and workers ratified existing distributions of income, wealth, and power (everywhere extremely unequal) in return for high, steady employment, a flood of consumer goods, and steady improvement in average standards of life...
...Oil, bauxite, and other metals were acquired at low prices from weak governments strongly influenced if not controlled by their Western customers...
...Although it is against the long-term Arab and Iranian interest to destroy Western prosperity, it is unwise to discount the impact of sheer fanaticism...
...Is the great and final crash of capitalism at last at hand...
...Consumers cease to spend...
...But the new government can boast of being partly responsible for this silence...
...The fragile arrangements under which international trade occurs are under their severest strain since the 1930s...
...In each of these three cases, all of them prime sources of our recession-inflation, there is a characteristically capitalist process at work...
...If the British desert the Common Market, an operative force is likely to be long-standing English dislike of the “wogs” across the channel...
...Not only for critics of capitalism but also for its friends, this is a messags of qualified optimism...
...If our experience comes to resemble that of England, we can expect serious industrial strife, ethnic and racial tension, and increasingly unstable politics...
...The major trading n3tions are interdependent...
...0 Robert Lekachman Is Capitalism Finished...
...Is the great and final crash of capitalism at last at hand...
...By rumor Arab deposits in the Chase Manhattan Bank amount to $4 billion, a sum of some consequence even to a Rockefeller enterprise...
...0 Jean Bloch-Michel Rumblings on the French left Paris The French Left has seemed strangely silent since its defeat-which was so nearly a victory-in the election of May 1974...
...prospects of resolving the energy crisis...
...and even of preserving world peace...
...Perhaps it had first to overcome its disappointment at having missed out by so narrow a margin...
...But it is a typical abomination of our antisocial economic system...
...The petrodollars slosh around in American and European banks, most of them subject to immediate withdrawal or withdrawal upon notice measured in days...
...A wild card is popular uneasiness about the stability of banks, large corporations, and the economy at large...
...OPEC success in quadrupling crude petroleum prices has been emulated by other commodity producers...
...By withdrawing large deposits suddenly from a major bank * or from a country of whose policies they disapprove, the Arab members of OPEC could conceivably set off a chain reaction of financial disaster...
...The ideological emoFans and territorial ambitions of such medieval types as King Feisal and such megalomaniacs as the Shah of Iran enormously complicate th...
...Produced for the most part in highly concentrated industries, these manufactures were sold at pleasantly profitable prices to raw material exporters...
...Low commodity prices reduced the cost of finished goods...
...Not only for critics of capitalism but also for its friends, this is a messags of qualified optimism...
...If anything, the food situation is even grimmer...
...There is no reason sensibly to fear that these calamities will repeat themselves, particularly in platoon formation...
...The multinaCOMMENTS AND OPINIONS 11 sufficiency all raise in unusually horrifying form the Malthusian specters of famine and pestilence...
...A wild card is popular uneasiness about the stability of banks, large corporations, and the economy at large...
...The disasters of 1929 and after were unexpected...
...The routes to economic disaster are numerous...
...The routes to economic disaster are numerous...
...According to Walter Levy’s estimates, OPEC‘s coup is worth $70-80 billion extra to the oil producers each year...
...The portents of impending global calamity are numerous...
...Our lords and masters have learned something from experience, notably the necessity of government intervention to protect the victims of economic dislocation...
...Food panic relates to large quantities of bad luck and cynical electoral politics...
...financial austerity intensified and more readily accepted because more fairly shared...
...For the impoverished societies of the Fourth World unlucky enough to possess no oil of their own, the menace is that of starvation...
...What is even more to the point, the politicians and businessmen at the head of affairs are perfectly awarc of their situation...
...Our plight was not exactly preordained by some systemic inevitability, and it is certainly not the result of a bourgeois plot...
...Even if OPEC does no more than pursue present price and output policies, the difficulties of recycling the oil billions may be intractable...
...Nonetheless, Giscard d’Estaing has taken it upon himself to change something in France...
...Tough old system that it is, contemporary market capitalism will probably resume economic growth at a pace fast enough to distribute acceptable new benefit5 to middle- and working-class families...
...The portents of impending global calamity are numerous...
...Our plight was not exactly preordained by some systemic inevitability, and it is certainly not the result of a bourgeois plot...
...The petrodollars slosh around in American and European banks, most of them subject to immediate withdrawal or withdrawal upon notice measured in days...
...Total American foreign investment, accumulated over many decades, is only $90 billion...
...The major trading n3tions are interdependent...
...Nor, as the hasty action of the Ford administration in halting grain sales to the Soviet Union indicates, is there a present Washington inclination to repeat the uncontrolled shipments to the Russians that were featured in Nixon’s emphasis upon dCtente as a 1972 reelection strategy...
...The tendency persisted for the claims of labor and capital to add up to rather more than the value of national output at current prices...
...The advanced nations benefited as well from highly favorable terms of trade between themselves and commodity-producing nations...
...Businessmen stop investing...
...Soon Alaskan and North Sea supplies will loosen the grip of the Persian Gulf monopolists...
...Rising levels of general education and rapid technological progress facilitated the sustained economic growth that conferred its benefits upon all economic classes except the very poor...
...enforcement-at last-of the law concerning contraception and abortion...
...I1 THEFLAT-EARTHERS have a different tale to tell...
...Total American foreign investment, accumulated over many decades, is only $90 billion...
...For the impoverished societies of the Fourth World unlucky enough to possess no oil of their own, the menace is that of starvation...
...Nor is emotion unknown in Western politics...
...But it is a typical abomination of our antisocial economic system...
...He pointed out that the new government has merely caught up with the 15-year time lag in France caused by Gaullism...
...Perhaps it had first to overcome its disappointment at having missed out by so narrow a margin...
...In a recent editorial in France Observateur, Jean Daniel phrased an answer that seems close to the mark...
...According to Walter Levy’s estimates, OPEC‘s coup is worth $70-80 billion extra to the oil producers each year...
...The bargain implicitly struck between owners and workers ratified existing distributions of income, wealth, and power (everywhere extremely unequal) in return for high, steady employment, a flood of consumer goods, and steady improvement in average standards of life...
...Oil, bauxite, and other metals were acquired at low prices from weak governments strongly influenced if not controlled by their Western customers...
...OPEC success in quadrupling crude petroleum prices has been emulated by other commodity producers...
...Nonetheless, Giscard d’Estaing has taken it upon himself to change something in France...
...prospects of resolving the energy crisis...
...While th-, importing nations wait, they can conserve energy use, promote development of alternative energy sources, and soothe their own population with the promise of better times over the horizon...
...Since October 1973, the terms of trade have dramatically deteriorated for Americans, Western Europeans, and Japanese...
...Food supplies have failed to keep pace...
...If the British desert the Common Market, an operative force is likely to be long-standing English dislike of the “wogs” across the channel...
...111 IN THE END even that apocryphal Texas teacher had to tell his class something about the shape of the planet...
...Not one concerns the country’s economic structure...
...All in all, if compelled to bet on the future, I’d offer odds of, say, 3-2 that five years from now capitalism will be doing business at the same old stand, though with a product somewhat differently packaged...
...Like other cartels, OPEC will disintegrate because of internal conflicts of interest, particularly if the oil importers begin to play its members off against each other...
...From now on, the law will no longer be in absolute contradiction to social customs, and France will find herself on the same footing England, the US., and Germany have enjoyed for the past 20 years-not to mention Holland or the Scandinavian countries...
...Save for the promise several years hence of North Sea oil, England would be in no better state...
...0 Robert Lekachman Is Capitalism Finished...
...higher taxes on the profits of large corporations...
...Like other cartels, OPEC will disintegrate because of internal conflicts of interest, particularly if the oil importers begin to play its members off against each other...
...Well, as Lyndon Johnson’s legendary job aspirant answered the school board member who inquired about his views on cosmology, I can teach it .round or flat...
...Whether Giscard d’Estaing has acted out of true liberalism or whether, in thinking ahead to the 1976 elections for the legislative assembly, he must take into account the wishes expressed by more than half the country, the fact remains that the new President has responded promptly to certain hopes for change...
...In sum, the delicate social compact among the economic classes that allowed capitalism’s glorious postwar run is likely to be dissolved by the slowing of economic growth, the actual deterioration of English, Italian, and American living standards, and the consequent intrusion in this country of issues of redistribution of income and wealth, which had been papered over while the Gross National Product rose at dependable 3-4 percent average per capita rates...
...For the United States, increasingly the world’s residual grocer, the prospect is for permanently higher food prices...
...All in all, if compelled to bet on the future, I’d offer odds of, say, 3-2 that five years from now capitalism will be doing business at the same old stand, though with a product somewhat differently packaged...
...Businessmen stop investing...
...The changes include: establishment of the right to vote at eighteen...
...Farm surpluses are a thing of the past...
...For these self-serving arguments, thz Germans and the Americans will continue to bail out the Italians and the English, at thstrong urgings of business leaders in all th-: countries involved...
...In each of these three cases, all of them prime sources of our recession-inflation, there is a characteristically capitalist process at work...
...111 IN THE END even that apocryphal Texas teacher had to tell his class something about the shape of the planet...
...The temptations of neomercantilism are visible in Common Market resistance to American exports of farm products, the rush of the West Europeans to consummate special deals with the Arabs, the possibility of English withdrawal from the Common Market, and the growth of American protectionist sentiment...
...Whether Giscard d’Estaing has acted out of true liberalism or whether, in thinking ahead to the 1976 elections for the legislative assembly, he must take into account the wishes expressed by more than half the country, the fact remains that the new President has responded promptly to certain hopes for change...
...President Ford’s initial tentative stab at an economic program in October consisted mostly of benefits to business, but it also included gestures, which almost certainly will be enlarged into substantial measures, in the direction of public job creation and tax relief for low-income earners...
...By rumor Arab deposits in the Chase Manhattan Bank amount to $4 billion, a sum of some consequence even to a Rockefeller enterprise...
...If anything, the food situation is even grimmer...
...Or OPEC might reduce oil pumping sharply enough to plunge Japan and Western Europe into deep depression...
...In sum, the delicate social compact among the economic classes that allowed capitalism’s glorious postwar run is likely to be dissolved by the slowing of economic growth, the actual deterioration of English, Italian, and American living standards, and the consequent intrusion in this country of issues of redistribution of income and wealth, which had been papered over while the Gross National Product rose at dependable 3-4 percent average per capita rates...
...Although it is against the long-term Arab and Iranian interest to destroy Western prosperity, it is unwise to discount the impact of sheer fanaticism...
...The advanced nations benefited as well from highly favorable terms of trade between themselves and commodity-producing nations...
...The ploy of the liberal Right has always been to change “everything” without real change-a 12 COMMENTS AND OPINIONS...
...By withdrawing large deposits suddenly from a major bank * or from a country of whose policies they disapprove, the Arab members of OPEC could conceivably set off a chain reaction of financial disaster...
...All these reforms also had been part of the Left’s program...
...He pointed out that the new government has merely caught up with the 15-year time lag in France caused by Gaullism...
...While th-, importing nations wait, they can conserve energy use, promote development of alternative energy sources, and soothe their own population with the promise of better times over the horizon...
...In the 1950s, but apparently not in the 197Os, the CIA was able to put mutinous Iranians in their place by ousting Mossadegh and substituting politicians with more “enlightened” views on oil prices and oil company profits...
...All these reforms also had been part of the Left’s program...
...0 Jean Bloch-Michel Rumblings on the French left Paris The French Left has seemed strangely silent since its defeat-which was so nearly a victory-in the election of May 1974...
...Each year the world’s population rises by some 70 million souls...
...In the last two or three years, the bad luck has included the commuting anchovies off the Peruvian coast, drought in the sub-Sahara (now fortunately ended), floods in Bangladesh, scant rainfall in the Punjab, and drought in our own Midwest...
Vol. 22 • January 1975 • No. 1
