Capitalism an engine of unstoppable inequality: Bloomberg

Karl Marx with daughter Jenny.

Editor's Note: Well, what do you know! Now even outposts of capitalist ideology such as Bloomberg recognise that capitalism inexorably engenders inequality at a vertiginous rate, with fortunes growing in feedback loops at a clip that makes the whole system inherently and, most relevant to this discussion, unstable, not to mention chaotic and totally undemocratic.

Never mind that genuine leftists, beginning with Marx and Engels, the first scientific socialists, said so almost 200 years ago and that other leftists have continued to point out this peculiarity of capitalism, its Achilles Heel. The core of the problem is summed up in the system's central contradiction, derived from capitalism's exploitative genes firmly embedded in deep class divisions, and not amenable to solution unless capitalists (read: today's billionaire class) agree, of their own volition, to euthanise themselves and stop being capitalists. The old boy himself put it rather nicely (and accessibly):

At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution.  (Karl Marx, 1859 Preface to A Contribution to the Critique of Political Economy)

So the capitalists' social, and, above all, political problem (as production is no longer an issue due to advances in science and technology) is the privately owned megacorporation's built-in unresolvable tension (contradiction) between modern industrialism's capacity to produce and the stingy way in which the ouput is distributed, a mode that resembles more and more a form of neofeudalism.

Indeed, while modern industry, incorporating ever more efficient labor-saving technologies, produces a truly bewildering mountain of goods and services each year, the actual producers, the workers who make all this cornucopia possible, receive only a miserable portion of the social income, making it impossible for the system to remain "in balance".  Without getting too technical, or quoting Keynes in detail, let us just say that capitalism has a "consumption deficit" entrenched in its social relations of production, which impedes the workers from buying back the value of what they just produced. And this shortfall is not fixed or alleviated by the lavish spending of the rich, since, as JM. Keynes demonstrated, their "propensity to consume" is always far less than 100% of what they receive, devoting much of their income to speculation or other forms of parasitic "investments". Under such circumstances the system totters, and eventually crumbles (recessions, depressions, "Busts" of the legendary "boom & bust" capitalist roller coaster) while many go without basic necessities in a regime of literal abundance.

In the 21st century, with capitalism turbocharged by the digital revolution and neoliberalism backed up by a lawless global empire, the ballooning of personal and dynastic fortunes has reached such extravagant extremes that it cannot be swept under the p.r. rug any more, even if armies of system apologists and sycophants work overtime to explain away in a satisfactory manner what can no longer be denied. Grotesque wealth—unearned income, as even the very capitalist US IRS calls it— has finally become a very visible pink elephant in the room. An embarrassment, but more than that, a threat to the reigning regime of cancerous inequality. This is now the main vector propelling the crisis of legitimacy in "the West", as the majority of the population must do acrobatics to stay afloat, while social toxicity expands inexorably, product, in every "capitalist democracy", of a rotten leadership structure beholden to the global plutocracy rather than the majorities that supposedly elected them.

Below some excerpts from an eloquent piece found on Bloomberg.

—Patrice Greanville
Main feature image: The Walton heirs, combined fortune estimated at USD$191 billion, but all big fortunes escape exact measurement due to the numerous ways the rich can hide their true wealth.