Generalised austerity is producing recession; and structural reforms alone are not going to make it better. Not least because some structural reforms are not necessarily for the better. Furthermore they are effective over the long term - ten to twenty years. In the meantime the absolute requirement for fiscal consolidation reinforces lack of demand. Which is made worse by taxation levels that render the financially competent poor.
Europeans are suffering from social and political parasitism. Certainly today's economic environment is competitive, but parasitism as a concept can be borrowed from Lenin. Indeed, for our economies too, much can be learned from the experiences of state planning and the centrally planned economy that failed the moment its objectives were not the creation of basic development but the creation of a modern consumer-driven economy.
For our capitalist societies to fail because of income inequality and mal-distribution of wealth is as miserable an end for us as the destruction of the dream of realised socialism. However, even though the failures of state planning are well-known and well-documented, the failures of market capitalism are, unfortunately, in part the result of the economically naive and unaware attempting to use the failed techniques and ideologies of realised socialism through an antidemocratic take-over of the state, and its enlargement beyond any local, democratic control.
Yet the hyper-liberal response to the ills of market capitalism is creating the gross increases in inequality that are at the root of our recession. What is to be done?
8 hours ago