On economic recovery, capitalism and democracy

A couple of poll questions from LinkedIn.com.

1. What do you think is slowing down economic recovery in the economy today?

I did not vote on this, but commented as follows.

Lack of investment in people rather than in profits. An obsession with short-term gain over long-term investment. Too much emphasis upon speculation and not enough on consistent growth over the long term. Outsourcing good jobs from the developed world keeping middle incomes lower than they ought to be, hence increasing unemployment and debt and cutting demand. An inability to understand that increased circulation of goods and services generates profits and leads to improvements in the markets and not vice versa (i.e. traditional conservative economics, not the neo-liberal nonsense with which we are plagued). Far too much emphasis on debt culture (both public and private). And too much power in the hands of too small a number of people.

2. Are capitalism and democracy at cross-purposes?

My answer was "yes". Of the 6 other people who replied, 3 agreed with me!

I did not comment upon LinkedIn but the the following point is worth noting:

• Ask yourself why so much investment from the capitalist world is going into China. Workers have no right to object and working conditions, pollution and the like are not subject to the laws that have been passed in democratic countries. And then look at the pattern in other Asian countries. I have met more than a few people in Thailand who will tell you economic growth was far greater when it was a dictatorship. Look at South Korea, Indonesia usw - dictatorship was great for economic growth. Not that the majority of the people gained much from it. Their role was as often as not to be a source of very cheap labour. When people can argue, demand rights, and expect a larger slice of the cake (and get elected government parties to support them), then the fast money wielders of the capitalist world tend to take their money and run - to places like China! Where profits are easy to make and people cannot argue!

In case anyone thinks that there is summat of a contradiction in the two answers, let me point out the following.

With a high wage full employment economy, you can get growth - but it needs investment, it does not just happen. Growth though that works for the masses, not just the people at the top. I have been told by an endless stream of idiots in recent weeks that the abominable Margaret Thatcher raised the GDP of the UK substantially, and growth was very positive under her reign. To which the obvious reply was that it was a pity that at least half the population did not experience the benefits! An improved economy should not mean a massive increase in poverty and homelessness and unemployment and debt - the contrary in fact!

Compare the 1950s and 1960s where there was an across the board rise in the standard of living. It is not just how you grow the economy, it is how you spread the benefits of that growth that is important. Which is why I think that my two answers given above are consistent. It is not so much capitalism that is at fault, but the version of it that we are now using and have been for 30 years (and for readers in the UK, the Thatcherite thinking stated as above is also beloved by Nigel Farage of the English Xenophobe Party - so expect 30 more years of the same if you ever elect him and his xenophobic chums). This simply needs to change. Making capitalism inclusive is the key to its future. More of the broken model (see 2008) will improve only the standard of living of the already affluent few! To the detriment of everyone else!