I guess the point is that the crisis has hit different strata of the world population very unevenly. For a group of people, there really is no crisis, they're still making money. For another group, there really is a crisis. I know that myself, because I am unemployed right now. The problem is really that many people still think that society can sustain high unemployment, low investment and low output growth for quite some time, until things get better. But all the indicators suggest that worldwide there is no sign of an upturn being just around the corner, and that is now destabilizing whole countries: what I have referred to previously as the social crisis (social disintegration), the political crisis (the leadership crisis) and the ideological crisis (the disintegration of the certainties of the previous era) - I could add the ecological crisis, since the slump makes it worse. What else does the concern about "inequality" mean, than that part of society is now more or less permanently shut out from the goodies of life?
The whole world economy is now fairly stagnant, except for a few countries (but even within countries that are growing economically, there are a lot of poor people). There is a furious trade in already existing assets, but insufficient growth of the stock of new wealth. The more serious problem is, that there isn't any comprehensive plan or program for economic recovery anywhere, other than the idea that more market activity by business will get us out of the slump eventually. So there is a sense in which economic insight and theory lags behind events already, and can provide little guidance. Economists are taught to believe in market rationality, and faced with economic irrationality, they prescribe a return to market fundamentals, but it fails to generate economic growth of a type that would absorb the millions of new unemployed. Quantitative easing or manipulating credit provision is merely a stopgap measure, to prevent things from getting worse, not a serious program for economic amelioration. I think the narrow focus of the Marxian model of the economy on production is rather regrettable, since the data tell us that out of society's total capital assets, nowadays only the minor portion is invested in physical means of production owned by the private sector, at least as far as the developed countries are concerned. Similarly, the Keynesian equations about the relationship between investment, output, employment and consumption expenditure often tacitly assume that the economy consists only of production and consumption activity, which somehow balance in the social account, largely ignoring economic activity which is neither production nor consumption (principally asset trades), even as it has increased by leaps and bounds. The standard national accounting system is not very well equipped to portray this new phenomenon. If e.g. we compare the structure of society's total capital in Keynes's time, with what it is now, the differences are very striking. Keynesianism persists only in the sense of emphasizing the importance of effective demand, but substantially it cannot make much sense anymore of cause and effect in the modern economy. If the modern economy consisted just of production and consumption, then you would say that if business profitability increases, then it must almost automatically lead to an upturn, but in fact it doesn't, so the whole picture of what empirically "drives" the modern economy nowadays is faulty. In a highly indebted society, "multiplier effects" cannot have the same force as they did in a previous era. Cynically speaking, one might well conclude that the response to the crisis so far, is mainly an effort to drive down labor costs. J.
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