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Main Street Gets Left Behind.
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Main Street Gets Left Behind.
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Steve Keen considers the following as important:
This could be interesting, too:
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| Main Street Gets Left Behind. |
With an interest rate of 0% the central bank can be seen as completely helpless. QE is only used because the central bank cannot reduce the interest rates below 0%. But QE is not very different: it pushes money into the market which does not need to be paid back. A negative interest rate does the same.
That QE does push asset prices up is no surprise. QE reduces the assets available and adds money, which can be used to drive the prices up. So it is in a double sense inflationary. But since this type of inflation is called an increase of value of the assets, why invest somewhere else.
But don't blame the Fed. The problem are economists, who tell governments, that they should leave the monetary policy to the central bank though the government does have much more tools in its toolbox than the Fed who does only have a hammer.
The economy is not self calibrating, because economists imply a "free market", which cannot exist in capitalism, because capitalism is the opposite of a free market.
How do you define/describe capitalism?
@@angelfebus1732 an economy based on the ownership of capital, which is the means of production like machines or industrial plants.
The owner leaves the capital to the workers and pays only for the workers labor, which makes the owner of the capital also the owner of the product, which makes the producers not being the owner of the product. This allows the owner to live from a rent.
Adam Smith idea of a "free market" was, that each and everybody takes only as much land, as he can process by his own labour and that only such individuals meet on the market to exchange the goods.
To own more land and lease it to farmers he did consider as rent seeking.
A "free market" is the absence of rent seekers.
In capitalism rent seekers are the fundamental structure of the entire economy. Capitalism and a "free market economy" are two completely different things.
And I think Marx was heading into the same direction. He wanted get rid of the capitalists but preserve the capital, since it was the source of an increased wealth. Socialism is basically giving back the means of production into the hands of the producers, which makes them to the owners of their product.
So Adam Smith tried to get rid of the feudal class 1.0 and Marx wanted get rid of the feudal class 2.0.
It is all about the "Wealth of a nation" and not only some of them.
@@ThomasVWorm Interesting perspective.
However that “Adam Smith’s idea of a "free market" was, that each and everybody takes only as much land, as he can process by HIS OWN labour” is not at all accurate. Here is but one short excerpt from Wealth of Nations that contradicts that assessment.
••OF THE ACCUMULATION OF CAPITAL, OR OF PRODUCTIVE AND UNPRODUCTIVE LABOUR••
“Thus the labour of a manufacturer (skilled laborer) adds generally to the value of the materials which he works upon, that of his own maintenance, and of his master's (employer) profit. The labour of a menial servant (unskilled laborer) , on the contrary, adds to the value of nothing. Though the manufacturer (skilled laborer) has his wages advanced to him by his master (employer), he in reality costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed. But the maintenance of a menial servant never is restored. A man grows rich by employing a multitude of manufacturers; he grows poor by maintaining a multitude or menial servants.”