The longer I live the more convinced I have become that the American style capitalist economy is unsustainable for much longer.
Eventually, our version of capitalism must merge with socialist type system in order to survive.
I know that is a “crazy” statement to make for most of us Americans, but hear me out.
Our consumer driven economy demands that we buy more and more each year. If a company is not growing then they are dying, at least according to those who keep the capitalist score. By our current paradigm we need relentless growth in consumer spending. We must continually be throwing out the old for the new. This is a good thing to start the process but to keep it going we need to hook people on “stuff”. We need them to be willing to mortgage their own financial future in search of more stuff.
Personally speaking, I don’t want my space to be dominated by material possessions.
I jokingly say that the number one industry in the US is storage lockers. Our three and four thousand square feet homes just can’t contain all our stuff.
Getting back to the original question, why do we continue to believe that the stock markets are a barometer of the status of our country? The forecasters and reporters of stock markets are extremely short-sighted. They celebrate a “tremendous” rise in the Dow of 600 points without mention that yesterday it fell 800.
One of the successes of a more socialistic type systems is that consumer demand is pushed to the background in order to promote long-term goals for the “public good”. Instead of being always in search of the latest trends and gadgets they spend their resources on things like earth-friendly energy sources, healthcare for all, and making sure no one has to go to bed hungry.
In order to do these things, we push resources from consumer spending to taxes for the overall public good. The Scandinavian country are the most visible in promoting public good over consumer driven demand. It is no accident that by almost all polls these countries come out as the happiest people on earth.
Another example of a successful merger of the two systems is present-day Germany. Here is a little about that from a recent Guardian article.
Over the last 25 years, the social market economy has offered a genuine alternative to the Anglo-centric infatuation with liberalisation. Reunification provided Germany with a real-life experiment in the balancing of social and economic goals; and Enquete Commission’s study on growth, prosperity and quality of life (to be published later this year) betrays a genuine desire to engage in alternative visions of social progress.
Let me stop here and repeat that we need to find the right blend of capitalism and socialism for our country. Of course, this paradigm shift will not happen overnight but given the accelerating rate of change they will certainly happen much sooner than many people recognize. And that is a good thing.
When this melding of both systems is complete, The Dow Jones Averages will take their rightful place in the back page of whatever our 21st century newspaper might look like. They help guide us in financial matters but are just not that relevant to our everyday life.