Thursday, August 15, 2013

Private Profit and General Welfare

At this point there is not much left for the defense of US capitalism on the grounds that the pursuit of private profit will lift all boats. The historical record of the last 30 years speaks for itself.

This is one of the core conceptual lessons from Stiglitz's The Price of Inequality -- the relationship between private gain and public good has never been weaker.

Further empirical evidence can be seen in a great post by Martin Hart-Landsberg who, in presenting the graphed relationship between net private investment and profits since 1970, concludes:

Our leading companies, the ones that shape government policy, are now able to make healthy profits without spending on plant and equipment much beyond replacement.  Their profits are now largely secured by globalizing manufacturing production, financialization, intensification of work, wage suppression, and government tax-breaks and subsidies.  Of course, that means that their quest for profits will continue to lead to policies likely to undermine progress in reversing negative trends in majority living and working conditions.

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