Crisis of Capitalism, The Critique ‌‌ - Lee Doren

so I just came across this lecture by David Harvey who appears to be pushing old marks kyun critiques of capitalism while claiming to be advocating for a new social order and before you think the word Marxian is hyperbole no he actually claims to explain the current financial crisis from a Marxian perspective however as we shall see he bases his entire argument on flawed facts that I will disprove based on objective census data let's begin he begins by outlining different explanations or genres as he calls them for the current financial crisis most of these explanations are straw man arguments as nobody from a free-market capitalist perspective has argued them and nowhere does it even consider talking about how risk was removed from many parts of the economy via government intervention in the markets nor does he address problems with our monetary policy ironically he implies that we've implemented too much Hayek and some have argued for more Keynesian economics the third genre is to say everybody was obsessed with a false theory they read too much Hayek and believed in the efficiency of markets and it's time we actually got back to something like Keynes or so after going through all the genres and leaving out all the arguments made by actual free-market capitalist he decides to give a Marxian explanation for the financial crisis and I thought to myself well what kind of plausible story can I write which is none of the above which is one of the things I always think to myself and it's not hard to do particularly if you're coming from a Marxist perspective because you know there aren't many people who try to do this analysis from a Marxist perspective no and as we shall see there aren't many people who attempt to do it because Marxian theory has been proven false so many times and written critiques and in practice that people who argue Marx in theory are usually disqualified from being taken seriously but let's watch him have a go at it you're talking about the internal predictions of capital accumulation and maybe I should write a thing about the internal contradictions of capital accumulation and try to figure out the role of crises in the whole history of capitalism and what specific and special about the crisis this time around and there were two ways in which I thought I would do that one was to sort of look at what's happened since 1970s to now and the thesis there is that in many ways the form of this current crisis has dictated very much by the way we came out of the last one that the problem back in the 1970s was excessive power of labor in relationship to capital but therefore the way out of the crisis last time was the discipline labor it is true that unions and I make a distinction between labor and unions by the way had enormous control in the seventies and because of the enormous grip that had had on society with large strikes that could shut down the economy policies were implemented that freed up the markets and reduced overall unemployment in fact enormous pensions union members received from companies is proving to be unsustainable today when many companies are going bankrupt and canola compete in the global economy however what is again ignored here is the impact that monetary policy played in the 1970s stagflation we know how that was done it was done by offshore and it was done by you know Thatcher and Reagan and it was done by a neoliberal doctrine and it was done all kinds of different ways off shoring better known as free trade partly resulted from regulations that made it unprofitable to hire local labor but the result in free trade almost unanimously agreed by economists on the left and right is that all people are better off in fact the poverty in India was cut in half in the 1990s as a direct result of these policies ironically Harvey is advocating policies that make everyone poorer but by 1985 or 86 the labor question has essentially been solved for capital it had access to all of the world's labor supplies nobody in this particular instance has cited greedy unions as the root of the crisis well it certainly wasn't the root of the crisis but as I mentioned earlier Union pensions have bankrupted many companies or made them uncompetitive also public sector unions have almost droid states like California and New Jersey nobody this instance is saying is that anything to do with with excessive power of Labor if anything is the excessive power of capital and in particular the excessive power of Finance capital which is the root of the problem now how did that happen well we've been since the 1970s in a phase of what we call wage repression that wages have been remained stagnant listen very carefully he now is going to base his entire theory on the fact that wages have been stagnant meaning if wages aren't stagnant his entire theory falls over like a house of cards remember at the beginning of this video I said I could disprove his entire argument by objective data from the Census watch me do it if I go to the government census data to look of real income there are two pertinent choices one for people and one for households I'll go over the differences in just a minute if I click on people it opens up an Excel spreadsheet for the data sets and what anyone observing can see right away is that the real income per capita is close to doubling over that time period where we just heard it's supposed to be stagnating or even declining you'll get the same result if you go to the economic report of the president 2010 you'll see that real disposable income per capita is close to doubling during the period that we're told income should be stagnating or even declining that doesn't even include employee benefit packages this begs the question why have we heard so often that wages have stagnated or declined because household income has stagnated its individual income that's increased look at the data here you can see household income on the data sets is stagnant over the years what's the difference well household size has decreased over that same time period here is Thomas so LAN uncommon knowledge explaining this concept brilliantly the real fallacies that runs through a lot of talk about income is confusing statistical categories with actual flesh-and-blood people households are of different sizes they vary over time they vary from one group to another they vary from one income level to another so for example there are 39 million people in the bottom 20% of households and 64 million in the top 20% so you're talking you're saying yes 24 million additional people do tend to have more money the household thing is really a tip-off I thing I think whenever I see somebody quitting household income he's trying to make things look bad as simple as that is alright there's a rule of life yes for example over a period of about 30 years the household income rose by only six percent over those same years per capita income rose by 51 percent because the number of people per household was declining all the while I see I see and when you're comparing income brackets the number of working people in the top 20 percent is some multiple of the number of working people in the bottom 20 percent so that they're less and less being paid out in wages well wages turn out to be also the money which buys goods so if you diminish wages then they've got a problem with where's your demand going to come from well now this entire theory has been debunked by one statistic the rest is totally bogus but I guess we'll continue for fun shall we and the answer was well get out your credit cards will give everybody credit cards so we'll overcome if you like the problem of effective demand by actually pumping up the credit economy there was no mass conspiracy to give people credit cards despite the fact that some people take on too much debt lines of credit have allowed people to purchase goods and services when they desperately need them and overall its benefited Society and American households British households have all roughly tripled their debt over the last 20-30 years and a vast amount of that debt of course has been in within the housing market and and out of this kind of a theory which is very very important that the capitalism never solves its crisis problems it moves them around geographically and what we're seeing right now is a geographical movement of that everybody says well ok everything's beginning to recover in the United States and then Greece goes bang Greece went bang because it attempted to implement a social welfare state that didn't produce enough to fund it so it went bankrupt many other countries follow this trend but it has nothing to do with free-market capitalism and then his entire argument culminates with him being envious of people who make a lot of money via innovation let's listen to things about this one is there a number of barrier points in here how is the money got together in the right place at the right time in the right in the right volume and that takes financial ingenuity it also takes the price system and the profits and loss system to coordinate all but let's ignore those concepts for the moment so the whole history of capitalism has been about financial innovation and financial innovation has the effect of also empowering the finance ears and the excessive power of the finance is can sometimes they do get greedy no question about it it is good that people who make money for others get wealthy and greed has been around for thousands of years and will always be with us the problem of this financial crisis is that government intervention removed the risk from the economic system that would otherwise prevent financial innovators from making overly risky and poor decisions any sensible person right now would join an anti-capitalist organisation so though capitalism had nothing to do with the crisis and he bases his theory on the false assumption that wages had declined now we're all gonna be anti-capitalist and you have to because otherwise we're gonna have this continuation and notice it's a continuation of all sorts of negative aspects for instance the wrapping up of wealth you would have thought the crisis would have stopped that actually more billionaires emerged in India last year than ever well isn't that rich pardon the pun wealth is now a problem in of itself in fact the reason India has more billionaires than ever is because India has been bringing itself out of poverty via free trade which Harvey so despises I doubled last year the wealth of the rich I meant just read something in this morning that in this country has accelerated just two years just last year what happened was that mainly leading hedge fund owners got personal remunerations of three billion dollars each this is no longer in economic theory about financial crisis this is Harvey complaining about being envious of others those people made that much money because other people were willing to pay them that much because they made those people a lot of money sure I'd like to make them much money but my economic status world is not worse off because others are rich if that were true America would be the poorest place on earth because we have the most number of billionaires in one year now I thought it was obscene and insane of a few years ago when they got two hundred and fifty million but they're now holding in three billion now that's not world I want to live in and if you want to live in it be my guest actually Harvey I do want to live in a society where people are allowed to make as much money as they want based on what people agree to pay them it's called Liberty I don't see us debating and discussing this I don't have the solutions I think I know what the nature the problem is well simply pointing out a perceived problem doesn't do much good does it in fact that is the very problem with Marxism in the first place it is not that it hasn't been implemented right when it is tried is that it cannot actually be implemented and unless we prepare to have a very broad-based discussion that gets away from you know the normal kind of problem you get in the political campaign and you know everything's gonna be okay here next year if you vote for me yeah it's crap you should you should you should know it's crap and and and and say it is and and we have a duty it seems to me those of us are academics and seriously involved in the world to actually change our mode of thinking although I have some agreement that simply electing someone new doesn't solve the problem but the problem isn't capitalism and having academics pontificate about Marxism certainly isn't the solution overall the only thing that is crap is Harvey's Marxian argument and there I've said it but let's see how this video then zooms into a guy in a jail cell you tell me whether or not it is implying to throw capitalists in jail as a new way of thinking you

  1. You are such an uneducated quack. Your Arguments are completely absurd. Marx theories are disproven, seriously. By who? By neocon muppets like Thomas Sowell. You capitalist fanboys are twisting the facts until they fit your world view. To say that capitalism has nothing to do with the crisis is just delusional. Greed and asocial behavior need to be punished and of course, all these bastards belong to prison for life. Next time before you trying to critique a brilliant man like David Harvey or dismiss Marx theories, try to prepare yourself and your ridiculous arguments a little bit better so that we can take you seriously!

  2. So many people were triggered by your video and they all same the same thing. So emotional they are… Good critique!

  3. Wow this dombo needs to understand what happend to the global economy in 2008. A cheerleader of capitalist.

  4. Wages have doubled since the 70s yet you make no mention of the massive inflation since then. A dollar in the 70s bought a lot more than a dollar today. In that sense wages have stagnated.

  5. The author, Lee Doren, holds a BA in Communications … ? I think Ill stick with the guy actually educated on the subject.

  6. What is guiding purpose does a food industry hold in a capitalist culture? Accumulation of wealth. When the industry of food production is less concerned about the wellness of people it serves and instead concerned about selling as much bullshit as possible, the system which promotes that should be questioned.

  7. If capitalism and free trade are making people better off, they why don't people feel like they're better off?

  8. individual wages HAVE stagnated. you have to look at purchasing power too.

  9. That is so dumb. You're saying that if wages aren't stagnate (and by the way, saying wages are stagnate does not mean it literally does not increase, but in comparison with the inflation, it is stagnate or decreasing), then his entire theory falls apart. That is just wrong: the contradiction of capitalism is that the more you produce with less working force (automatization) the less people have consuption power (a lot of people will be unemployed), which is called a crisis of overproduction, and that aggravates when your products are better designed (modular design and long durability). Solution? Inefficiency. Make designs that break after your warranty, and make it non modular, so that when you break something, the whole must be replaced. Do not find solutions that works forever (do not find cure for bad diseases, but palleatives). Do not replace every job, and jobs that are completely obsolete must stay there.

    Another problem with capitalism is that it is designed to evolve indefinitely to infinity. However, we live in a finite planet, and nature is a dictatorship: we must follow her rules, otherwise, we're doomed. Have you watched the last episode of Dinosaurs?

    Don't get me wrong, I think capitalism was the natural evolution of humans, it made us develop scientifically, but it is in the point where science is overcoming capitalism, and capitalism is trying to stifle the free evolution of science (with its well planned and modular design using sustaintable methods, and its efficiency in production, making work virtually obsolete). One day it will go away naturally. The market simply won't make any sense, and it will collapse.

  10. Capitalism rocks. Within a capitalist market, you get to charge as much as you want for your goods/services and make your own decisions. Decisions like how much you're willing to work for what you want. What you are worth to a prospective employer. What you are willing to pay for a particular good or service. How much you are going to save, spend or invest. Et cetera.

    I can see no logical reason anybody would like to live in any other kind of society.

  11. By God you are so goddamn retarded that you were not even able to understand David Harvey?! And people listen to you?! COME ASTEROID, THIS SPECIES IS NOT WORTH IT.

  12. Oh and by the way…India is STILL one of the most highly regulated markets in the world. Only a complete imbecile would consider India to be a free market.

  13. 'Marxian'? A nobody using fallacious argument to criticise a somebody. I don't agree with Harvey but this video is just childlike….

  14. Our economy is actually in contraction (contraction) since 2005:

  15. Harvey is correct. I would simply add that because Neoliberalism produces economic outcomes that are so bad, Neoliberal-doctrine does not operate without flawed and deceptive ‘fictional’ economic statistics.

  16. You are literally so busy eating Milton Friedman's shit that its blinding you to your own complete lack of understanding of how the world and socio-economic/political spheres actually work.

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