by And, as businesses take on increasing amounts of debt, the percentage of “zombie firms“—corporations whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing—is now close to 20 percent.… But zombie capitalism is real capitalism. Corporations and banks, supported by their political and media representatives, presume that in both good times and bad they are entitled to turn to assistance from a shifting combination of public and private entities, which will allow them to continue and expand their operations, even as the legitimacy of their enterprise as a whole is called into question. They’re only worried about their own profits (or at least their own less-then-profitable survival), confident that the risks and losses will be
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And, as businesses take on increasing amounts of debt, the percentage of “zombie firms“—corporations whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing—is now close to 20 percent.…
But zombie capitalism is real capitalism. Corporations and banks, supported by their political and media representatives, presume that in both good times and bad they are entitled to turn to assistance from a shifting combination of public and private entities, which will allow them to continue and expand their operations, even as the legitimacy of their enterprise as a whole is called into question. They’re only worried about their own profits (or at least their own less-then-profitable survival), confident that the risks and losses will be successfully passed on to others.
A time when capitalism did not involve the shifting of costs from capital onto others is a pure illusion, a fairytale that is trotted out when corporations and banks appear to violate the natural laws of economics and to increasingly call for and rely on cheap money and government bailouts.
The problem is, capital is the one that has kept the zombie story alive, since it has long treated its workers as will-less and speechless bodies, interested only in shirking effort and relying on handouts. That’s why now employers want to cut back on unemployment efforts, to force them back to work....As I've been saying, "capitalism" as private ownership and control is an economic system in which capital is favored over other economic factors based on the assumption that "growth" is dependent on capital accumulation, preservation and reproduction. Labor and the environment, not so much.
An integrated approach is needed instead. The economic subsystem of a social system exists for the welfare of the people, who comprise the elements of the system.
Thus, it is people and their welfare that should be favored over stuff.
And obviously, behavior requires an environment as a field on which individual life and social interaction takes place, so ecology is of the highest priority.
The present system has this backwards. We need an overhaul of the system based on a new design that relegates capital to it proper place as a servant rather than a master.
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Zombie capitalism
David F. Ruccio | Professor of Economics, University of Notre Dame