DEFENDING CAPITALISM AGAINST RENTIERS

Abstract

Abstract

Globalization creates fractures but the alternative of rejecting market regulations does not command large majorities, especially amongst the poor. Embedding capitalism is required. Capitalist profit depends on investment spending at the macroeconomic level and not primarily on productivity increases. Rising mass incomes had been a condition for capitalist growth. Capitalist expansion does not transfer its social structure to countries; it opens up through trade and investment on the basis of those economies’ comparative advantage. Even today’s manufactured exports of the South rarely create labour markets, which the poor are empowered on, due to their scarcity. The tendencies are rather for disempowering labour in the South and in the North. Both sides have the options of maintaining the conditions for increasing mass demand and stabilizing profit or for relying on rents. Political appropriation and limited mass demand will weaken profit and strengthen hierarchical power structures. It is, therefore, worthwhile to enquire whether at the global level forces with very different worldviews can come together on pragmatic cooperation for embedding capitalism. Such cooperation would benefit from a universal acceptance of states to follow their enlightened interests instead of having to be transformed by constructivist idealism.