Charles, that is the biggest pile of nonsense I've seen in a long time.

I knew as soon as I read Dan's last sentence that Chuck wouldn't be able to resist turning this into a philosophical turd.

Please. Just. Stop. It. Are you seriously saying that businesses don't go broke? Right, the business that we see are all 'winners.' That's the whole fucking point. What you don't see are all the businesses that have failed because their business plans didn't pan out.

You're right. Neo-liberalism doesn't live up to its ideals. And it's a good idea to remind people of that fact every now and again, especially when there are such glaring examples as in the present.

But: name ONE political ideology that has lived up to its ideals. None of them do. Welcome to the world. Next: name ONE political arrangement that has led to more poverty erradication than has neo-liberalism. Yeah, I didn't think so

I think you are missing the point of what is happening in the banking and auto industries. The question is not whether these companies should be creatively destroyed. The question is how it should happen.

In fact, they are being destroyed right now in an incremental manner. There used to be 6 investment banks. Now there are none. GM used to have several brands. Now it will probably only have 4.

The alternative is abrupt dissolution, like that of Lehman Bros., which did a lot of unnecessary damage to the economy.

that this is at all a controversial post is beyond me. is it not obvious that these businesses were allowed to continue in spite of neoliberalism's unwavering faith in the 'competitive' market?

Good Morning Charles,
I disagree with you. I don't think capitalism is a failure. No doubt some capitalistic ventures are (some banks and the automakers are examples. No, I don't think GM or Chrysler needed bailing out) but like the 1930s the American example of capitalism merely temporarily relocated it's financing source from Wall St. to Washington. It's a tough call. Maybe some big businesses need to fail in order for the "system" to sustain itself. On the other hand, I do believe central planned economies under Marxism/Communism DO fail (ie. Soviet Russia). Even socialist models are struggling (Iceland just went bankrupt and Sweden, Denmark and the Netherlands are all seriously reevaluating their cradle-to-grave economic models because they are too expensive or too unmanagable). I also think there are tectonic shifts in industries. I, for one believe the automobile is doomed.

But, capitalism as a whole economic "system" will survive.

I don't think you guys get what Charles is saying at all. Which is that the most powerful people in supposedly capitalist societies are "too big to fail." Which is to say that, rather than adhering to market principles, they use the state to create all sorts of monopoly powers (and later sweetheart deals) to sustain their economic dominance. The system is based in part on inhibiting innovation, or at least channeling it ways that can be bought off and turned for a profit by today's economic elite.

The problem of the auto industry is not just that it did not innovate. The main cause for its current failure is political, rather than economic. That is Charles's point, you fools. The auto industry, like other manufacturing industries, was eclipsed by the finance sector after the 1970s, and it did not deunionize fast enough for Republicans' liking. Also it is not a defense contractor, so Republicans don't care as much. We toss trillions to banks because we're scared of regulating them. But we can't even toss billions to the auto industry without all sorts of poison pills meant to push it to fire its progressive unionists, screw its retirees, undermine its advocacy for health care reform. The auto industry is experiencing neoliberal discipline, which is a political project, and not just economic discipline, which is supposedly apolitical.

Charles, until you say what you are for, you are just stamping and holding your breath till it turns blue. What are you for????
The best system is super heavily regulated capitalism with super duper social programs like in Europe -- Sweden, France, etc. And of course, democracy.
GM didn't get regulated enuf so the problem is here in the USA we have a lack of social democracy type regulations.
What are you for, total state ownership of the means of production? If not that, what?

I would not be against marxism if it actually lived up to its ideals—in bad times and good. This, however, has never happened in history.

Fixed that for you.

On re-reading the post, I'm even confuseder. Let me see if I get you right, Charles: (1) Capitalism would not be objectionable if it lived up to the ideals its essence-giving Neoliberalism. (2) Neoliberalism is nothing but the ideology of the winners.

Look, either be pissed because bailing out the auto industry is a failure to live up to capitalist/neoliberal ideals (that's where I'm at) OR be pissed off because the 'essence' (why anybody is still talking like a scholastic from the middle ages is beyond me, but it's your blog not mine so you get to set the terms) of Neoliberalism is the benefit of the stronger over the weaker (which I think is just false, especially if you agree with the first option).

I also think you're going to have a hard time if you want to explain why IBM is getting stomped in the PC market, despite what was once a huge lead. Or why Sears is a shithole despite once being synonymous with retail. Or why Yahoo sucks Google's balls now. Each is a case of creative destruction. I also think you misunderstand what the term means. It's not that they "have to be destroyed" because they don't innovate. They die natural deaths. There's no act of will about it. You tend to anthropomorphize the world in really weird ways, Charles.

And again: why is uneven development a bad thing? If everyone is poor and one person gets really rich, why isn't that a good thing? If nobody else is worse off, I think this is true, but especially so if that person found a way to get everyone something they wanted, thereby making them even better off, just to a lesser extent.