Finance & the left

Chris Dillow writes on Finance & the left.

First, financial markets right now are corroborating two big leftist positions. Long-term real interest rates are negative and, given the shape of the yield curve, are expected to stay so for some time.

This tells us two things. One is that markets don't give a toss about government borrowing. Negative interest rates are a strong argument against austerity. The other is that low rates reflect low growth expectations - secular stagnation (pdf) if you will. This is consistent with the Marxian claim that capitalism has run out of oomph, that the relations of production have become fetters on the economy, perhaps because inequality holds back growth.

Emphasis Mine

Even though there are great unmet human needs like renewable energy, feeding the world, increased mass transport, affordable housin, etc., Capitalism is unable to meet these needs because it is not profitable to do so.

This is truly a great failing of Capitalism. Despite the myth of the invisible hand of the market, human life is not getting better despite the largest accumulation of Capital in history.

The laws of motion for Capitalism prevent it being invested in areas of greatest human need.

We need to change the laws of motion for the financial so that these needs are met.