Rogoff: Is Modern Capitalism Sustainable?

Mark Thoma refers via Rogoff: Is Modern Capitalism Sustainable? to Is Modern Capitalism Sustainable?, by Ken Rogoff, Commentary, Project Syndicate.

Rogoff lists five (5) problems with Capitalism:

First, even the leading capitalist economies have failed to price public goods such as clean air and water effectively. … Second, along with great wealth, capitalism has produced extraordinary levels of inequality. … A third problem is the provision and distribution of medical care… Fourth, today’s capitalist systems vastly undervalue the welfare of unborn generations. … Financial crises are of course a fifth problem, perhaps the one that has provoked the most soul-searching of late. …

The first four (4) problems all relate how the market is not calibrated properly. The Capitalist Economist fervently believes that with the correct parameters (aka prices) that the market system will produce the most beneficial outcomes. A much simpler approach would be a law that is unflinchingly enforced to achieve the same result.

Only the fifth problem aligns with Marx's view that crises are endemic to Capitalism. You cannot have Capitalism without periodic crisis.

Rogoff's conclusion is:

Will capitalism be a victim of its own success in producing massive wealth? For now, as fashionable as the topic of capitalism’s demise might be, the possibility seems remote. Nevertheless, as pollution, financial instability, health problems, and inequality continue to grow, and as political systems remain paralyzed, capitalism’s future might not seem so secure in a few decades as it seems now.

As Marx wrote, the future of Capitalism depends on its gravedigger: the proletariat.

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