Write off the debt, bankrupt the banks, nationalize the financial system and start all over again.
Debts that can’t be repaid won’t be repaid. We’ve got to work out how we don’t repay them.
It is not the way to manage an effective society, to be caught in a trap like this…
I am opposed to capitalism parasiting itself, which happens when you let the financial sector take over and generate far more debt than we need.
… you don’t get into as disastrous a situation as we are in now without extraordinarily bad thinking, and the economics departments were the source of that bad thinking…
…the creditors of the world were dominant politically. They certainly set the political agenda for the last 20 or 30 years. The debtors have been down at the bottom of the pile. Now we need to reverse that and turn the power back towards the debtors rather than the creditors.
If you have been paying attention to the crisis in the Euro zone you might be led to believe that the economic woes besetting the western world are primarily a matter of sovereign debt, the specter of Greek default on its debt being only the most currently precarious example. If, on the other hand, it’s the on-going Wall Street debacle that’s been on your mind, then you might well believe that the issue is largely a matter of ill-considered deregulation, financial sector malfeasance, credit-default swaps, casino speculation overwhelming the markets in essential commodities, predatory lending and so on. In either case, economist Steve Keen would assure you that you are wrong. In his view the root cause of the current crisis of western capitalism is the level of private debt, more specifically the ratio private debt to GDP which, he was first to observe, has been rising exponentially in his native Australia, in North America and in Europe for decades.
An additional and related scourge is the neo-classical school of economics which everywhere prevails in think tanks, universities, and ministries of finance, but which is, in Keen’s opinion, catastrophically flawed and misguided. He lays out his debunking of economics in greater detail in the lectures after the break.
His notion of a modern, intelligent, systemic jubilee (a wiping of debt) is, as he readily concedes, a political non-starter for the moment. There isn’t the vision, there isn’t the will, there isn’t the competence in our political institutions to undertake anything so bold. But, as the merchant of gloom observes, this problem, this depression, isn’t going away any time soon; we’ll all have plenty of time to think it over.
A Crash Course in Capitalism in three parts