Global Connect

My taxpayers bought that Armani suit. Gimme gimme gimme!

Ya ya ya, you are all screaming SOCIALIST right now at me indirectly. Whatever. I’m no socialist, believe it or not. Well, in reality we all are if you read my last post (I’m pausing for you to read yesterday’s post ). Anyway, we had in interesting discussion today in class about the role of society in the marketplace. Are they two distinct facets of human economic existence or not? Before you close the window saying BORRRRINNNNNGGG as you might have before, I implore you to please read on- especially if the recession we have experienced touched you in any way.

Capitalism Will Lead to Socialism:

This is the central tenant of much of Joseph Schumpeter’s work. That is, the capitalist market is extremely successful at creating wealth. There is no doubt about this. Yet, the nature of capitalism puts strain on the human condition and society. As markets are fluctuating, presumably political development is at least legitimate, society demands more protection against market “corrections” (i.e. financial crises, you should all be well aware of those). Hence, the welfare state is born, then socialism. Who knows though? We might get bored of that after a while and go back to capitalism. Interesting guy.

The Market is Subservant to the Demands of Society:

Economist [Sociologist] Karl Polyani says that the market is embedded in society. That is, the economy will do what society wants- especially during those crazy corrections. Why do you think America always tends to bailout corporations affected by the crisis. THEY ARE TOO BIG TO FAIL. Don’t lie to yourself and say this is a capitalist tenant- capitalism would let them fail for making economically poor decisions. We just can’t fathom watching the social costs of letting them fail rise. It’s not good for SOCIETY.

Interesting reads. Just make sure you are careful next time you go to label anything- or the next time you find yourself in an economic crisis. I just might call you a socialist.