Sep 23, 2008

Contradiction of Neoliberalism

This is brief summary of this page:
Capitalism is going down, and it is the time to think about next.
This is an interview article with one of Korean economy professors.

The first crisis started from 1873 to 1895.
Since productivity increases dramatically, the profit ratio decreased fast.
So that many of factories stopped, and it results in depression.
At the time, big monopolized capital appears and it recovered profit ratio.

The second crisis started from 1930.
The giant monopolized capitals also could not avoid the dilemma that high productivity decreases profit ratio.
This time states are involved to save the reproductivity of labors by public services and social security.
It is called Keynesian or national monopolizing capitalism.
Market could survive, because it replied on States.

Now the solution for the third crisis was the Neoliberalism.
The Keynesian brought profit to monopolized capitals, but it failed to increase actual productivity.
In order to overcome the limit Neoliberalism chosen to abolish the functionalities of State, which was supporting the market.
It is self-contradiction.
Neoliberalism tries to abolish States, but it also have to rely on the States.

It is dilemma that market abolishes States.
State does not let market die.
Depression can be overcame by the way that giant capitals die out and preparing new circumstance.
State involves in the situation and tries to alleviate the contradiction so that it slows down, and prolongs the period of depression.
All the cost come from Tax, and the burden goes to everybody.
It is clear that the reason why the world economics doesn't go to critical depression is because States work.

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