Kenneth Rogoff Asks: Is Modern Capitalism Sustainable? … Harvard economics professor says there are no alternatives for now to the ‘dominant Anglo-American paradigm’ … History may teach that all forms of capitalism are transitional, but the best economic system for now—in the face of no other viable alternatives — is “today’s dominant Anglo-American paradigm,” says widely quoted Harvard University economics professor Kenneth Rogoff. – Advisor One
Dominant Social Theme: Capitalism is the worst system except for all the rest … And governments need transparency in the worst way.
Free-market Analysis: Kenneth Rogoff is a brilliant Harvard professor and the International Monetary Fund’s former chief economist; he and co-author Carmen Reinhart are somewhat dubious about capitalism’s future.
Is this a dominant social theme of the larger Anglosphere power elite? We have, in fact, made the argument that it seems to be. Increasingly the elites seem to be promulgating all sorts of what we call “limited hangouts” that provide rhetorical cover for business-as-usual via the creation of a kind of vast echo chamber.
Within the depths of this echo chamber one finds a number of sympathetic memes. It is as if the bought-and-paid-for mainstream media is engaged in a great listening exercise that then spews back articles sympathetic to the complaints of the larger public in much the manner of a politician running for office.
The idea is to indicate that the public has a “voice” – even though nothing fundamental ever changes. And Rogoff/Reinhart seem to be performing this feat of sympathetic “listening” admirably. Here’s some more from the Advisor One article excerpted above:
The former International Monetary Fund chief economist believes that continental Europe’s brand of capitalism is generous to workers and ensures a more equal distribution of wealth, but it’s unsustainable.
At the same time, Rogoff (left) questions China’s “Darwinian” capitalism, with its weak social-safety net and fierce competition among export firms, saying it’s uncertain how far China’s political and economic structures will transform themselves and whether they can ultimately serve as a role model.
“Modern-day capitalism has had an extraordinary run since the start of the Industrial Revolution two centuries ago, lifting billions of ordinary people out of abject poverty. Marxism and heavy-handed socialism have disastrous records by comparison,” writes Rogoff in a column for the Project Syndicate newspaper association.
But, he warns, as industrialization and technological progress spread to Asia and Africa, contemporary capitalism’s numerous flaws may become more apparent, including its inability to address issues such as global climate change, the growing income gap between rich and poor, medical care distribution, and financial crises and the technological innovations that have made them worse.
For Rogoff/Reinhart, capitalism has become a victim of its success. In a widely read column that appeared at Project Syndicate, Rogoff points out that the system has allowed succeeding generations to live ever more comfortable lives. But this may come to an end, he warns, because the system has mortgaged the future of “unborn” generations as well.
He writes: “With the world’s population surging above seven billion, and harbingers of resource constraints becoming ever more apparent, there is no guarantee that this trajectory can be maintained.”
Of course, this is surely another power elite meme, and one of the hoariest. (Whether Rogoff is aware or not is another question, and we are not implying that he is, necessarily.) Anyway … the idea is that the free market simply cannot provide for the world’s swarming billions. Never mind that the world’s entire population could fit into the tiny state of Connecticut with room to spare – we are simply supposed to take this Malthusian promotion at face value.
In his column, Rogoff has other fashionable (politically correct) points to make as well. “As pollution, financial instability, health problems, and inequality continue to grow, and as political systems remain paralyzed, capitalism’s future might not seem so secure in a few decades as it seems now.”
Gloomy words, to be sure, but as the Investor One analysis notes: “The Dec. 2 column, which went viral on the Internet after publication, drew a large number of comments from readers, many of whom complained that the world’s problems are due not so much to economics as to politics.”
You see, dear reader, the Internet is increasingly, we believe, an engine of original thought and “pushback” when it comes to these sorts of elite themes. As what we call the Internet Reformation gains traction, people are not nearly so intellectually pliable as they used to be. This also happened, we believe, when the Gutenberg Press was having its initial impact.
Nonetheless, Rogoff/Reinhart seem to have in mind reinforcing the idea that while the system is broken, a political reconfiguration is what’s necessary. Here’s an excerpt from an Amazon review (one of over 100) that reinforces this elite meme:
The authors say it is “almost comical” that no governments reveal their true financial condition today, nor have they done so in the past. The lack of transparency and the shenanigans that go on behind the curtains contribute, of course, to the human suffering that ensues in crisis after crisis …The authors persist in saying that they hope their monumental effort will lead to an examination by policymakers of past mistakes and help them avoid future mistakes. I say, “Good luck with that.”
It is, of course, entirely predictable, generically anyway. Government indeed has failed. But the solution – according to the elites charged with producing this sort of promotional propaganda – is not freedom or freer markets, but BETTER GOVERNANCE.
We’ve written about it numerous times. This is surely a purposeful thematic element of the powers-that-be. Government is terrible and new technologies like the Internet are necessary to “reinvent” government and make it more “transparent.”
Apparently, Rogoff/Reinhart have (self?) enlisted in this literary conveyance and, as top academics do, have written a scholarly thesis to reinforce it. You can see a Daily Bell article on transparency here: Transparency Meme Creeps Closer.
Earnest middle class people who read such books likely do not know they are being manipulated, or at least they have not known in the past. The power elite NEEDS government, for otherwise it would have to wield its influence nakedly and even more brutally. And while it seems to us that governance of any sort is ultimately a failure, this does not stop the elites from attempting to expand it in their seeming quest to create true world governance.
This is evidently and obviously a continuing project. But slowly, the realization seems to be dawning on the larger public (throughout the West, in fact) that the problem with the current system begins with central banks’ destructive, government-granted monopoly over money. The inevitable over-printing gives rise to ruinous booms and busts – and eventually depressions that take years if not decades to unwind.
Get rid of central banking and allow money competition to flourish and the problems that Rogoff/Reinhart perceive and document in such detail will gradually fade away. But not so fast … Instead, Rogoff/Reinhart propose that governments must improve themselves if they can.
The hopeful signs regarding Rogoff/Reinhart’s book seem to come not so much from the text itself, but from the response to Rogoff’s column at Project Syndicate. Many feedbackers point out that Rogoff’s apparent premise – that the problems of capitalism demand a political solution – is flawed in the first place.
One might argue that to imply that Rogoff/Reinhart have composed what amounts to an elegant promotion of certain power elite themes is unfair to them and their hard-won academic status. Perhaps so. Meme watching can certainly be an unfair and unpleasant state of affairs in this modern age. On the other hand, when one investigates the backing of Project Syndicate, where Rogoff placed his column, one finds (sadly unsurprisingly) that it is supported by The Open Society Institute (OSI).
Conclusion: A quick glance at Wikipedia confirms that this facility – renamed now as Open Society Foundations – is a private operating and grant-making foundation started by George Soros, “aimed to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform.” Oh, good.