September 18, 2020

Fads in Capitalism – Capitalism and Markets

Fads in Capitalism

Fads in Capitalism

Of course, capitalism will amendment its “look” plenty, whereas still conserving its core, underlying options. Several economists and commentators have argued that capitalism nowadays isn’t at all like capitalism in its early days (back within the soot and dirt of the commercial Revolution). These are some of the ways in which modern capitalism is supposedly a “new” system:

Fads in Capitalism – Capitalism, and Markets

The “Post-Industrial” Economy

Every economy produces each product and its services. Over time, a growing share of total worth added in advanced capitalist countries consists of services. Today, services account for about 70 percent of GDP in advanced economies – and an even larger share, if we count nontraded output, like housework. The shrinking importance of products is part because technology and globalization have reduced their prices compared to services, and partly because most customers choose to get a bigger proportion of services (especially “luxuries” such as restaurant meals and tourism) as their incomes rise. As large-scale trade becomes more modest within the massive economic picture, some economists argue that capitalism has modified which old stereotypes concerning“workers and bosses” no longer apply in this post-industrial system.

Fads in Capitalism – Capitalism, and Markets

The “Information” Economy.

 A connected argument suggests that the advent of technology and also the net have created an essentially new economy centered on info, instead of commodities. Some pundits merely referred to as this the “new economy.” They even argued it might be immune to the standard boom-and-bust cycles of earlier times. This theory was well-liked in the late1990s and helped to justify the ridiculous behavior of internet-mad stock markets throughout this point. Starting in 2000, however, the “dot-com” stock market boom folded (like all alternative stock market bubbles before it), and investors lost trillions of dollars. Since then, jargon concerning the information economy” has become a lot of less common.

The “shareholder” economy.

Some observers have focused on the role played by pension funds, mutual funds, and other so-called “institutional” investors in modern stock markets. They argue that capitalism is fairer than it used to be since more individuals now own shares and other forms of financial wealth (either directly, or indirectly through mutual and pension funds). They claim that this new “shareholder” system has somehow “solved” the age-old conflict between workers and capitalists.

There is a grain of truth in each of these portrayals – but only a grain. And in no case is it reasonable to conclude that capitalism has fundamentally changed.

Yes, services are increasingly important. But several services are made in large-scale, factory-like workplaces. Think about a long-distance call Centre, with many employees sitting in little cubicles, whose work is electronically paced and constantly monitored. And also the services sector of the economy is still dominated (just like product manufacturing industries) by profit-seeking private corporations, many of them terribly massive and extremely profitable.



Yes, information is more important and faster-flowing than ever. But people cannot “eat” information; it’s economically helpful mostly as an input to different, more ancient product and services industries.

And far from the introduction of a new era of decentralization and supposed “participation,” computer-related industries are still dominated by vast, profit-hungry corporations (like Microsoft and Google).

Yes, pension and mutual funds are important players in stock markets. But the vast majority of financial wealth is still owned the old-fashioned way: by a surprisingly small elite of very wealthy families. In fact, in most capitalist countries financial wealth has become more concentrated among the rich, not less.

So while capitalism produces more services and fewer goods than it used to; while companies rely on sophisticated computer technology to manage their affairs; and while a significant proportion of households in the developed countries own some financial wealth (but not much, in the grand scheme of things), the core features of capitalism are still very much visible. Most production is accepted by profit-seeking private companies. And most work is performed by people who don’t own those corporations, but those who instead should work for wages. There’s still an unbelievable difference, and an inherent conflict of interest, between those who own successful corporations, and the remainder of us.

In short, there’s nothing much “new” about capitalism at all.

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