Before you get too mad, I am not going to answer that question directly.

I want to plug a nice brief talk by Yannis Varoufakis on this question: "Yanis Varoufakis: Is Capitalism Devouring Democracy?" May 2018,

Varoufakis: "A person who works for 18 hours a day in an Uber is not a person, it is a lost soul, it is a moving monument to misanthropy." (on the impossibility of trade unions for many sectors).

A Highlight of Varoufar-sightism

One of the best moments is when Varoufakis responds to an audience question asking about the decline of trade unions and how on Earth the workers can defend each other now? Varoufakis proposes what he humbly characterises as possible science fiction "but not impossible", which is a different modern form of collective action that does not need a trade union. His uses an example. Your future electricity bill has probably already been sold to fanciers as a CDO. This creates a non-free market incentive for these companies to hike up electricity rates in order to cover other financial risks, completely unrelated to the real price of electricity generation and supply. Obviously highly immoral, but not illegal. What is the consumer to do without trade unions or consumer protection agencies to help? Suppose people do the research, anyone can do this, and find out what companies have bought the CDO's that have purchased your future electricity bills. Then through social media, the internet, neighbourhood activism, all the household in the suburb where one particular company has packaged and fictionalized the electric bills can decide collectively to not pay the next bills. If the electricity gets cut off, so be it, but the company will not survive either. And at least in the USA where the electricity supply is still a public utility, the government can switch back on the power at will.

This was an awesome example. But the general principle of self-organized local collective activism is a difficult one. People generally cannot spare the time to organize on such massive collective scales to fight every injustice that deserves to be fought. Varoufakis does not elaborate, but I know what needs to be said. The thing is, if such methods are used successfully a half dozen times around the country, in future the mere threat of such a "bill payment strike" will be all that is needed to force the vampire companies to behave more justly. People oppressed by financialization of public goods need to do some damn hard gutsy work now, but the pay-off will be incalculably valuable for later.

Varoufakis makes dozens of other great points, but his general thesis apropo to the title of his speech is that "ordinary people" (are there such creatures any more?) are not tolerating corruption and money and filth in politics any more, by in large. He thinks the Brexit and Trump vote were not just racism and xenophobia rearing their ugly heads (those folks would vote the same way regardless) but, looking at the data, they were predominantly votes against the establishment represented by Hillary Clinton and the DNC and David Cameron's Tories, respectively, in harmony with similar contemporary protests against neoliberal thought collective leaders in other countries. I think he is right on that statistically speaking, a bizarre number of Obama voters voted for Trump, and that cannot be explained using racism and xenophobia, it is clearly a class struggle and economic justice vote, and considering Trump's obscene capitalist and corruption pedigree, can we really believe people were fooled by him? Largely no, I think, with the exception of the easily duped MAGA crowd. The absentee voters show that huge numbers just did not vote because they saw no credible alternative (Jill Stein was perceived as a wasted vote due to the Green Party's pitiful polling numbers traditionally, however unfortunate that is -- a sure sign you are not living in a half-decent democracy! Most healthy mature democracies have 5 to 10 officially represented political party's in office, even in fairly small population counties, like New Zealand).

There is another thing about the ground facts about the rise of the Trump circus that many liberals I fear do not understand, or have blindsight on. It is that championing civil rights and equality is fine and good for those who can afford to protect their rights. But the average worker in the American rust belt cares less about your liberal politics, but not because they do not care about your righteous causes per se, but because they are fighting a much more grim and immediate existential crisis which makes their civil and human rights totally secondary, because they are fighting just to retain some shred of dignity from pride in their work. When our coal or steel industry jobs are trashed as obsolete and low-skill by liberals, you are winning no votes from us.

What then should the liberal with a conscience do? You have to champion liberal society values in the background, and that is not a horrible compromise, because the world wide social trends are in favour of liberalism, so there is less a battle to fight there, and more patience and vigilance.

Elite liberals too easily forget that the basis for modern liberal luxuries were hard won through largely the efforts of poor labourers and local organizers who cared little for your modern rights and freedoms. To forget your historical roots like this is hardly any different to the xenophobes who do not want immigrants entering the USA who forget their ancestors were once just such immigrants struggling to find a new home where they were needed and wanted. This is also not just a white Fox News channel viewer bias. It has been well-documented as a general human prejudice, studies show, for instance, that Asian-Americans are naturally resentful of Asian immigrants now entering the USA.

But who is keeping vigil over the jobs disappearing in the rust belt? No one, because there is no vigilance needed when the jobs losses are nakedly exposed. What people with a conscience and with power can do is quietly work to set up alternative industries, re-grow the US industrial base, but with modern skilled work in demand, and modern economic bases, such as renewable energies, sustainable farming, vibrant free schooling, affordable + decent quality housing exempt from renting. And simple innovations like instant civic problem solving solutions that could be originally reported via smartphone apps, along with feedback to your smartphone when the problem is fixed. No one needs to parade and speechify about any of this. If you have the power and connections, you need to just get this stuff done, don't waste time making it political. Put all the money you have earned in life profiting off the labour of the poor to some good societal use.

Do I need remind you that coal workers were never paid the real wage of their labours. Never. Considering the health and hazard costs of their work, and the end economic value, the healthier coal worker retirees aught to by rights be comfortable semi-millionaires, if you had actually valued their productive labour accurately at fair market rates. The labour market for their work was never fair and free. They were largely a captive labour source working under near wage slave conditions. They deserve economic reparations every bit as much as African Americans whose ancestors were slaves deserve reparations today for historic injustices.

Varoufakis on Taxes - should we go to 90% Rates?

In his speech Yannis mentions the 90% tax rates above incomes of $100,000 (I think it was? Or was it above $50,000?) during the post-Depression years under Eisenhower, a period of best sustained economic growth the US has probably ever seen under a modern monetary economy (my quick guess that is, not a fact I have researched assiduously). His comment is that we do not need such high tax rates to stimulate growth, and those 90% tax rates were largely nominal anyway, they were more gimmick than sound policy, and the lesson we draw from them is not so much that high tax rates are great, but that high tax rates on income after $100,000 is simply not much of a worry, it is nominally punitive, but it does not hurt the economy. (OK, I read a bit more into Varoufakis's comments there than he actually gives, but that's my read.)

He is right about the income tax rates I think, and here is why. Governments do not need revenues for tax if they run a fiat currency. Since the government can "print money" electronically, financing the public sector is never an issue. The issue is controlling deficits (which is not a serious issue for the USA, no one really cares how high the US deficit is, it never has much economic impact, other than on insane fiscal conservative budget hawks who read economics out of freshman textbooks) and the other factor low taxes impact is inflation when households get out of debt and can afford to start spending. But that's an easy problem, you just use banking policy to incentivize people to save part of their income, as well as raise the default payroll contributions to retirement accounts, lower home ownership costs for first home buyers, and similar pro-saving pro-investment measures, plus you can get businesses to invest in public sector infrastructure they use and take often for granted (and there are simple ways to do this without allowing businesses to pass off such costs to consumers or in cut wages, by not making them
direct costs).

(Why focus on housing? --- because 60% of the word's total capital is still in real estate I believe).

You never really need to take money out of people's pockets permanently. Although taxes are not always bad, they are not a panacea for controlling inflation either. Some exceptions exist too, like taxes on very high end luxury goods seem to work, because those who can afford luxuries will still purchase them as long as the value added tax is not exorbitant. But apart from such marginal cases where taxes seem harmless, why the USA seems to continue to think taxation policy almost solely alone is the only instrument for fixing the economy is beyond me, I think the politicians there are just woefully educated, most are lawyers I think, which explains a lot.

They would do so much better to not just focus myopically on tax policy debates, but rather on consumer protection, regulation of banking, small business investment, R&D investment, infrastructure investment, funding ethical policing and police non-lethal force training but defunding war, ending the incredibly socially damaging rentier economy, and regulating the emerging highly immoral gig economy, and thinking damn seriously about UBI measures in the likely event of massive job shortages due to possible near-future roll-out of Strong-AI tech (artificial general intelligence --- currently not a reality, but envisaged by some in the tech industry as a technological revolution we could see as soon as 2040--2050).

So is Capitalism in Decline?

Varoufakis argues "yes" in a sense. I disagree with this thesis, but mostly on the syntax informing the semantics. To scare people by saying "capitalism is in decline" is irresponsible and unnecessary. Whenever people say such things for "click bait" you need to take it with a grain of salt. What do they mean by the word "capitalism"? Usually they have in mind a particular narrow pathological variety of capitalism.

Capitalism (private ownership of means of production) will always be with us, as long as we have relatively free societies. What I think is certainly in decline, and for good reasons and for good riddance, is the unbridled capitalism which accompanies bizarre stock market excesses that have become literally legalized Ponzi schemes, almost irresponsibly under-regulated trading, financial derives, the CDO's and CDS's and the rest, options and future trading, and all the other predatory financial sector instruments that have ZERO economic productive value, but which are sucking money out of the actual productive working sector and using it to fill the pockets of the wealthy capitalists and their entitled heirs.

Just to focus a little more on the stock market: the original idea is great --- allow people with spare cash to invest in a business they think is useful. But that is not how 99% of trading is motivated these days. These days no traders really care much about what a company does, they are just shuffling stocks around to make money, that's their only motive. They have even automated it with microsecond, and at the cutting edge nanosecond, trading algorithms -- more money is shifted around in a split second than you or I could trade for profit or loss in a million years --- surly a sign that this form of pathological capitalism is in it's years of fading dying gilded age glory.

When making money becomes a mere algorithm, you know the end will come soon. Algorithms have no inherent productive value, the opposite, they consume the Sun's energy (in some transformed form or another through electricity) and produce waste heat (the large trading rooms of servers need a hell of a lot of air conditioning). What is productive is the human act of designing and coding and debugging algorithms. But these trading algorithms are the worst kind, because when unleashed they are being used unethically, because in the trace analysis they are actually siphoning money fundamentally off poorer investors who make all the loses, and perhaps even more deeply, they are ultimately feeding off failed businesses who have to foreclose and pay all their debts out to banks. So the money made on the financial markets is vampirism. It is profiting, like war profiteers, not off the healthy joyous productive primary work, but from the rich methane infused stench of decay oozing off the corpses of dying businesses. So these algorithms are at the high end of supporting vampire fanciers and ghoulish predatory capitalists.

It is all quite obscene if you stand back and ponder it all for a while. It is what you are supporting when you play the stock markets or invest in any hedge funds or mutual funds.

So I think it is that kind of "capitalism" which is devouring itself.

Now here I do not need a long explanation, because for that kind of capitalism Varoufakis makes the case for a self-implosion very well. But even if is off the mark abut the mechanisms,I think something akin to his predictions will come to pass. The roots will probably be in ordinary working class people who will wake up and become educated about how much their work is truly valuable, and when they realise the work of n executive is hardly ever more than twice the value of their line work, they will not accept the status quo any longer. If this sounds like a build up to a Marxist type revolution though, I think you'd also be wrong. Marx as a bit of a fantasist in this respect. He had a good go at predicting how capitalism would unfold, but the reality is far more complex, and there are already several attenuating factors in play.

One form a softening could take is in the establishment and resurgence of worker coops and cooperative banking. These are well spoken of by Professor Richard Wolff and others, so I will not regurgitate all that stuff here. Just to say, if people start waking up and realize working for a giant like Google or Apple, or Coca Cola, or General Motors, is sucking the life out of them, while a nice humble worker coop is starting up next door --- which does not promise great riches, but does promise and deliver human dignity and justice and a truly democratic voice and say in self-governance for the workers --- well, I don't think it takes much imagination to realise how a 21st Century soft non-violent revolution of the human work place could occur.

In the USA this sort of soft transition to a worker-owned capitalist economy is quite exciting and palpable I feel. Why? Because the two things Americans treasure above all else (other than money and fame perhaps) are liberty and justice. The mirage of free market neoliberal capitalism promised liberty, but not justice, and it has horrifically failed to deliver either(horrific because the opposite is true, under neoliberalism people have become less free, are ruled by powerful corporations --- just think of the obscene credit ratings systems like FICO scores, I mean hell, now insurance firms track credit ratings to set premiums, these systems have outgrown their original humble purpose and become technocratic abominations--- and are basically reduced to slave labour in order to enjoy the pretence of freedom, e.g., you were certainly "free" to vote for Jill Stein instead of Hillary Clinton, but just how much real freedom is that?! None. Real freedom means having not just free will, but the potential to have one's will to do something be actually realized. A democratic social work-place organization within a capitalist democracy, on the other hand, not only promises liberty, but will also deliver justice.

The type of liberty a social democracy delivers is constrained of course, but only by the same principle classical libertarians would espouse:

you have freedom but only to the extent it does not infringe upon the same freedom of others.

Well, that minimalist, and reasonable, libertarianism is almost precisely what a social democracy delivers. Not as a promise, but as structural certainty, burned-in to the society as it were.

So my message all my American friends is: don't worry about capitalism exploding, it will likely survive the present day turmoil, but not in it's present predatory corrupted form. And please do be fair and just to yourselves. There are ways of avoiding totalitarianism by implementing true democracy, but not limiting yourself to democracy at the ballot box (if you actually think you have that now!) but be greedy, be greedy in the most enlightened way, be greedy for the intangible ideal of democracy everywhere, or in every place where it makes sense. And be greedy for the ideals upon which your country was founded. You can have both liberty and justice. They are not mutually exclusive social ideals. They are not exclusively capitalist ideals either, they are deeply social. No one needs to worry about liberty of they do not live in a society. But once you live in a society, then liberty becomes secondary to justice. Justice precedes liberty, but also, once gained, strengthens liberty. Please Americans, please learn this. It is more important than reciting a pledge of allegiance like robots every morning in your schools.