Author of The Wealth of Nations,Adam Smith, and father of Marxism,

Karl Marx. while apparently at odds over the virtues of capitalism, may

both have been right about its failings.

 

 

Hurriyet, Turkey

Capitalism in Crisis: Smith and Marx were both Right

 

"While Smith emphasized that the market's greatest enemy is a neglect of ethical rules, Marx asserted that insufficient demand would be capitalism's most serious problem. The economic crises of the last 80 years proved them both right."

 

By Erdoğan Alkin

                               

 

August 14, 2011

 

Turkey - Hurriyet - Original Article (English)

Witnessing the serious economic, technical and political difficulties of the founders of Western-type capitalism, Europe and the United States - and the difficulty they are having resolving them - one question refuses to go away: Is this just a short-term fluctuation or an ideological crisis for Western capitalism?

 

During or after every economic crisis, even the wise jump to accuse social, political and economic system or regimes without taking account of simple human error. For example, while one group praises Adam Smith, others likewise praise Karl Marx. But both of these figures determined the capitalist system's founding principles - as well as the threats that undermine its smooth operation.

 

While Smith emphasized that the market's greatest enemy is a neglect of ethical rules, Marx asserted that insufficient demand would be capitalism's most serious problem. The economic crises of the last 80 years proved them both right.

 

It is time to discuss why a reasonable rate of growth in Western economies is not sustainable, and why destructive crises regularly emerge almost without warning. Is it deficiencies in the system or serious mistakes made by democratic governments? It could be both.

 

Smith was right to emphasize ethics in the smooth operation of the market. The last crisis proves that again. But at the same time, the last crisis also showed that such ethical rules are unrealistic. It is impossible to force irresponsible managers, CEOs, presidents of huge corporations, banks and the like to obey ethical rules. If we accept these things, then how can this ideological crisis of Western capitalism be dealt with? These are perplexing questions to answer.   

Posted by WORLDMEETS.US

 

New rules that seem logical but in fact are unrealistic are now being discussed, particularly in the United States. For example, stricter regulation and a more reasonable balance between markets and governments have been suggested. That might seem attractive, but it won't resolve anything in terms of decision making. When there is a deep ideological rift between congressional Democrats and Republicans - something we observed during the recent battle over raising the debt ceiling - it would be foolish to expect them to responsibly cooperate and create new rules for “capitalism.”

 

And even if there were a chance of such wise cooperation over new rules, it would also be foolish to expect such rules to resolve every problem now hampering the smooth operation of the market.

 

 

SEE ALSO ON THIS:
Yezhednevniy Zhurnal, Russia: U.S. Congress is No 'Vestigial Organ'
Los Echos, France: Representative Democracy is Imperiled
Kayhan, Iran: Ahmadinejad Sees 'Hidden Hand' Behind Economic Crisis
La Repubblica, Italy: The Disfunction Follies: Rome vs. Washington
Huanqiu, China: Before Preaching to Others, U.S. Must Reform Itself
Asahi Shimbun, Japan: Washington Must Act to Strengthen Dollar
Magyar Nemzet Konyvek, Hungary: 'No Faith Left in America'
Publico, Spain: Petrodollars to Petro-What?
People's Daily, China: China Still Has No Choice But to Hold Dollar Assets
Guardian, U.K.: S&P Strips U.S. of its AAA Credit Rating
Die Zeit, Germany: Wealthy Americans Get Off 'Scot-Free'
Die Welt, Germany: The Diminishing Power of Money
O Globo, Brazil: Deal on U.S. Debt Ceiling Shows American 'Strength'
Yomiuri Shimbun: For World's Sake, Obama Must 'Provide Leadership'
CRI, China: U.S. Must Consider 'Defects' in its Democratic System
UNT, Sweden: U.S. Must Choose Practical Patriotism Over Party Tactics
FTD, Germany: Take Decisive Action on Debt Ceiling! Do it, Barack!
La Jornada, Mexico: The 'Grand Debt' of U.S. Families
Jornal Do Brasil, Brazil: American Default and the End of 'Zero Risk'
The Telegraph, U.K.: World Needs America to Come to its Senses
El Pais, Spain: Playing Chicken is the World's Newest Sport
Mainichi Shimbun, Japan: U.S. Must Prevent Another 'Made in U.S.' Disaster
Yomiori Shimbun, Japan: U.S. Lawmakers Should 'Stop Playing Political Games'
Yezhednevniy Zhurnal, Russia: The U.S. and Soviets: Pyramid Builders to Raiders
Frankfurter Rundschau, Germany: 'Radical' Republicans Threaten U.S. with Ruin
Tiscali Notizie, Italy: The Fiscal Decline of the 'Apocalypse'
News, Switzerland: Notion: 'Pay Politicians Based on Performance'
Salzburger Nachrichten, Austria: Debt Ceiling Attack By Republicans 'Backfires'
Gazeta, Russia: America's Astonishing 'Battle for the Ceiling'
People's Daily, China: U.S. Game of Chicken Threatens Creditors and Economy
Die Zeit, Germany: U.S. Risks 'Plunging World' Into New Financial Crisis
O Globo, Brazil: Global Economy Hangs on 'Mood' of U.S. Voters
The Telegraph, U.K.: Down on the Fourth of July: The United States of Gloom
Financial Times Deutschland, Germany: For Americans, a Dour Independence Day
Financial Times Deutschland, Germany: Who Cares about the U.S. Economy?
Folha, Brazil: U.S. Conservatives Threaten to Plunge U.S. into 'Lost Decade'


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The situation in Europe is even more difficult simply because there are so many governments, politicians, institutions, banks and whatnot responsible for creating this monumental crisis. It's easy to blame governments in Greece, Ireland, Portugal and even Italy and Spain, but neither are macro-economic indicators in the United Kingdom and even France particularly bright. Germany is quite proud that its economy is healthy, but even Germany lacks the force to be a locomotive for the entire European economy. And there is another question on everyone’s mind that has yet to be openly voiced: When some E.U. nations have been borrowing heavily and irresponsibly, why were those who now accuse them unaware that such a serious debt crisis was looming?

 

In short, it is clear that Western capitalism is not fading away, and that we will continue to live with all of its deficiencies - which from time to time will create new crises.

 

Recall what Winston Churchill once said about democracy: “It is the best of the worst.” The same is also true of capitalism.

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[Posted by WORLDMEETS.US Aug. 15 3:59pm

 

 






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