Rogoff: Is Modern Capitalism Sustainable?
Ken Rogoff argues that capitalism’s demise "seems remote":
Is Modern Capitalism Sustainable?, by Ken Rogoff, Commentary, Project Syndicate: I am often asked if the recent global financial crisis marks the beginning of the end of modern capitalism. It is a curious question, because ... the only serious alternatives ... are other forms of capitalism.
Continental European capitalism ... would seem to have everything to recommend it – except sustainability. China’s Darwinian capitalism ... is widely touted as the inevitable heir to Western capitalism... Yet ... it is far from clear how far China’s political, economic, and financial structures will continue to transform themselves, and whether China will eventually morph into capitalism’s new exemplar. ...
Perhaps the real point is that, in the broad sweep of history, all current forms of capitalism are ultimately transitional. Modern-day capitalism has had an extraordinary run... But, as industrialization and technological progress spread..., someday the struggle for subsistence will no longer be a primary imperative, and contemporary capitalism’s numerous flaws may loom larger.
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. ...
In principle, none of capitalism’s problems is insurmountable...
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.
Posted by Mark Thoma on Friday, December 2, 2011 at 01:26 PM in Economics |
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