Comments

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Given that concepts such as The Long Boom and Financialization have forced such drastic revisions to Marxism, perhaps it's time to retire Marx's jersey and build your team around some fresh young talent.

Zombies indeed.
3
or you could see the 1930s to about 1981 as proof that new deal great society policies work rather well and our best bet is to tame the strong capitalist beast that way. not to spout off about real socialism. more facts showing capitalism works if tamed well comes from all other advanced nations. the notion that there are predefined periods of history was proven to be utter bunk in marx's formulation as he predicted wages would decrease and widespread poverty would make the ever larger working class more radical. instead of that we got the boring german social democratic party, high middle class wages and a fairly well functioning capitalism in Germany after it had the whole new deal imposed on it by our victorious forces. so basically, a more realistic view is that value comes from labor and capital and technology and eduction and things like rule of law, mix it all together to create markets where you can, where you can't tax and regulate and redistribute like hell to have roads, broadband, courts, educated people, and boom! you get high speed trains, the internet, lots of great things and overall a rising standard of living. just because the dems dropped their new dealism for the last thirty years does not mean it does not work. it has worked everywhere it's been tried. will it be more convincing if we all it social capitalism, as it basically takes the wealth of capitalism and redistributes it for more social purposes outside the market through politics and government policies favoring the working and middle class? sorry if a mixed system upsets the ideologue's desire for "periods" and "phases" and clearly defined "systems" and faux truthiness labels.
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@Ken Mehlman: Is it possible that the post WWII boom years were the result of the massive destruction

No. The war and, just as importantly, the Great Depression before it brought about large-scale investment in numerous "socialist" programs (e.g, social security, WPA, SEC, GI Bill, National Science Foundation, etc.) along with a more collectivist mindset among Americans. Contrary to conventional wisdom, that's the kind of environment in which capitalism functions best.

Although the war helped set the political stage for these investments, they would have created an even bigger boom without the inefficiencies and loss of productivity caused by killing people and blowing shit up.
5
WWII did have some other positive side effects.

For example, it threw men from vastly different regional, ethnic, and socioeconomic backgrounds together into the same barracks, which I'd argue helped foster a sense of collectivism among Americans. It also sent thousands of American hicks to Europe and the Pacific, thus serving as the largest cultural exchange program in US history, and producing a generation of men with a more worldly outlook than you'll find among contemporary Americans.
7
After that year, neoliberalism (the social form) and neoclassical economics (the academic form) died but returned as zombies.
Voodoo economics.
8
@Ken Mehlman: That bonanza was a result of massive government military spending. You could produce even better results with the same amount of government spending in non-military industries (e.g., science, technology, cheap/renwable energy, education, transportation, etc.). And in fact, the government did make those investments back then - hence the Long Boom.
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I don't think the cause of the current financial crisis is particularly deep. Con artists have wormed their way to the top of what were previously banks and have used their money to buy off regulators and Congress.
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PS - the non-liberal-democratic world is a hostile place, so some amount of military spending is necessary to protect one's economic interests and hopefully to avoid the need for killing and blowing things up.

But what if, say, the trillions we spent on the Iraq war was instead invested in transportation, education, energy, health care, and/or science? Instead of blowing things up? Long boom.
12
@Ken - government investment in military alone doesn't produce sustainable economic gains.

As I said, though, that era coincided with massive public investment in infrastructure, human capital, and economic safety nets and referees, not just war. You can point to vague global conditions if you like, but the idea that these investments would pay dividends seems obvious to me. And wouldn't you agree that trustworthy rule bound markets brought about by the creation of the SEC and associated legislation are more more efficient and pro-growth than the market that crashed in 1929? Or the cowboy market of 2007?
14
Chaos, Discord, Confusion, Bureaucracy, and The Aftermath.
15
@Ken - In 1929, the US produced over 90% of the world's automobiles (same Wikipedia article). If all the WWII bombing had any impact on competition in that industry, it appears to have created more of it.

The real reason the American automobile industry sank, however, is because it grew moldy with age and failed to adapt and innovate. Most notably, it was caught completely off guard by the energy crisis in the 70's, and thus ceded huge market share to cheaper, more reliable, and more fuel efficient Japanese cars. If the American auto industry is to be reborn, it won't be through stubborn old dinosaurs like GM or Ford, it'll be through new companies like Tesla.
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@13: wait, I thought competition was good for industry? You mean it's actually protectionism and mercantilism that prospers industry? Was there a Marxist mole at the RNC?
19
I think Sean and Ken are both right.

WW2 mobilization boosted demand, WW2 losses contracted supply. every1 hired to fight, lots killed. all factories building bombs, hella factory buildings bombed.

domestic, non-military investment is cool but it would have had to have been way bigger than New Deal was to replicate WW2 growth in a peaceful counterfactual. Keynes wrote to FDR pleading for immense public housing investments. given the crazy high rents in high-productivity areas (and housing's massive share of total nominal wealth) this still seems like the move 2 make, though I'd buy manufactured homes, even if it's apartment towers shipped in story by story from China or the Philippines.

GDP is still growing impressively. people r gonna be bummed if the world's 2nd economy grows 6% this year, and they still have hundreds of millions living in the rice paddies. people are always saying how the min wage would be 22 if it had tracked US productivity. that means productivity is hella high, no?

neoliberalism dead? the most successful countries coming out of the crisis are those with flexible labor markets and active monetary policies. the US is growing with a shrinking deficit. intl tade grows hella each year. currency pegs and price controls are busting left and right. Garcia Linera is VP of a country that runs a damn surplus

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