Capitalism tires down the stretch

Brian
Brian Jones
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If you’re betting on capitalism, ask for good odds.

It looks like the leftie radicals, socialists and unionists might finally start to win a few, even though their arguments have been ignored and mocked for almost a generation by the likes of Brian Mulroney, Stephen Harper and chamber of commerce shills too numerous to count.

Capitalism’s death knell isn’t necessarily sounding, but it is on a gurney in the emergency ward as rescuers desperately try to revive it.

This week, the annual World Economic Forum is being held in Davos, Switzerland, where presidents, prime ministers and CEOs from around the world gather to gab about, well, economics.

High on the agenda is the need for capitalism to evolve to meet the needs of a changing world — a message that came from Occupy tents in dozens of cities before they were unceremoniously removed, and which now finds some measure of agreement among the well coiffed in Davos.

Klaus Schwab, the founder and executive chairman of the World Economic Forum, was reported in the New York Times to have said in advance of this year’s event that, “Capitalism, in its current form, no longer fits the world around us,” and political and business leaders “have failed to learn the lessons from the financial crisis.”

Nicer house

Schwab, presumably, does not live in a tent, but his sentiments are surprisingly similar to those expressed by thousands of Occupy protesters and their sympathizers.

Unfortunately, most politicians and board of trade types perennially utter banalities about austerity and prosperity and so on.

Harper’s habit of boasting about job creation backfired this week, when the Canadian Imperial Bank of Commerce reported that many new jobs are bad jobs, i.e., low-paying.

In fact, there were four times as many low-paying jobs available than high-paying jobs, the CIBC said.

The need for substantial change in the economic system has been obvious for years. Strangely, prime ministers and corporate presidents seem unable to comprehend it. Maybe they will, now that even the attendees at Davos are talking about it.

Perhaps they will finally realize rising inequality and the ongoing decimation of the middle class doesn’t benefit anyone — certainly not average income earners, and not even those at the top of the economic pyramid.

A declining middle class — both in terms of numbers and real income levels — will ensure a stagnant economy. A message to the country’s CEOs: you want recovery? Pay up.

Everybody’s amazed by China. Well, not by their human rights record and their authoritarian political system, but by their seemingly superhuman ability to produce widgets. Need a widget? Chances are, it’s made in China.

Some years ago, the brain trust in North America decided — this being the modern era and the Information Age — that producing widgets was no longer important. Something newer and more admirable arose, and it was dubbed the Knowledge Economy. Its deity was Free Trade.

Demand for plywood skyrocketed in Canada and the U.S., as factories were boarded up.

Meanwhile, China now has something that is only a distant memory for Canadians and Americans: an expanding and increasingly affluent middle class.

Capitalism in North America has become so decrepit that the crisis envelops not just workers, but retirees — current and potential. A healthy economic system would not be facing a massive pension crisis in both the public and private spheres. Freedom 55? A few years ago, it was a dream; today, it is a punch line.

Optimism is consistently contradicted by the headlines.

This week, the U.S. Federal Reserve extended its estimated duration of the current recession/depression, saying it will continue until the end of 2014.

But not in China.

 

Brian Jones is a desk editor at The Telegram. He can be reached by email at bjones@thetelegram.com.

Organizations: World Economic Forum, Canadian Imperial Bank of Commerce, New York Times Information Age Freedom 55 U.S. Federal Reserve The Telegram

Geographic location: Davos, Switzerland, China North America Canada U.S. China.Brian Jones

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Recent comments

  • Dave Moore
    January 28, 2012 - 15:28

    Personally, I think there are a lot of people deluding themselves on both ends of the radical spectrum. Unfortunately, these days, our government falls within that range and is trying to sell the country on the idea that they are too. If you are old enough and grew up in Canada rather than "Harperia" you saw the effects of pushing too far Left in the 1970's and too far Right in the 1980's. We are a country that works best with compromise.

  • Good Riddance to Manfacturing jobs
    January 27, 2012 - 15:20

    Mark is right. The Euro crisis is exactly what would happen here without our current system of capitalism. As long as 51% of the population is happy, the democracy has served. Someone will allways be left behind, forced to do without. All each of us can do is get educated and do your best to get in the 51% and avoid being left behind. That is my view and it has served me well. I also support a system that sheds manfacturing jobs because I manfacturing job is not what today's generation want. We want office jobs, we want to work with our minds, not with our hands. As such, we would gladly support the shedding of hundreds or thousands manfacturing jobs if it created one office jobs. Time are changing, those jobs that were valued as part of the middle class are not the jobs that the younger workers want. So from that point of view, capitalism is working perfectly.

  • Anon
    January 27, 2012 - 13:43

    Talking about ideologies and politics to fix the economy is stupid and counterproductive. The problem is not who is in charge or whether they're right wing or left wing. The problem is that the central banks dictate our monetary policy. There are three things that need to change, We need to end FIAT currency, End Fractional Reserve Banking and End compound interest. We need to stop creating more money than there is energy to serve that debt and we need to eliminate all central banks and back our money with Gold. Until you change the way money works, you change nothing. Occupy the Banks.

  • Mark
    January 27, 2012 - 13:11

    Brian, Come on man. Are you paying attention to what is going on in Europe? The imminent collapse of the Euro Zone is a crisis of unchecked socialism and its legislated entitlements. The US will be fine as long as they don't follow their European trade partners example of how to kill productivity. The growth of China and other developing nations is a testament to the power of capitalism, not its 'tiring down the stretch'. You really missed the mark here.

    • Amazed
      January 28, 2012 - 08:58

      What a bunch of Board of Trade crap!! A bunch of salesmen pretending they know something about an economy.

  • Too Funny
    January 27, 2012 - 08:36

    Just when you thought Jones knew what he was talking about, he pulls out the China is great line. Jones complains about the low paying jobs in Canada but apparently there's nothing wrong with the dollar a day jobs in China, or the lack or human rights, or worker safety, or food safety, etc. Only a fool would hold China up as an example of what we should be like.

    • Amazed
      January 27, 2012 - 11:25

      Dave I can see what you were saying about the poor level of education in Newfoundland.