With Europe on the verge of imploding and the U.S. searching for yet more government answers to our economic ills, it's time to ask: Was Karl Marx right about capitalism being self-destructive?
NYU Professor Nouriel Roubini seems to think so, suggesting Marx "said it right," in a recent interview with The WSJ. "We thought that markets work. They're not working."
Roubini's comments generated a firestorm on the Web, including a retort from Institutional Risk Analytics co-founder Christopher Whalen.
"Those who laud Marx disparage all things American," Whalen writes in his Reuters column.
As you'll see in the accompanying video, Whalen's beef isn't with Roubini as much as with Marx and Marxist theory.
"Marx created the term 'capitalism'. It's a pejorative, insulting description that says all economic activity is a matter of greed," Whalen explains. "If you're any sort of libertarian. If you believe in American principles of democracy and free enterprise, just the fact we use the term 'capitalism' should insult you. We need new labels."
Indeed, an economy that's kept afloat by massive government spending, unprecedented easing by the Federal Reserve and seemingly unlimited bailouts for banks and their creditors cannot be considered free-market anything, capitalism or otherwise.
"This is corrupt corporate statism," Whalen say. "It's the fusion of the old Robber Baron model with a socialist European model."
While that sounds a bit (to me) like fascism, Whalen believe we have to "remake our economic dialogue," suggesting we are "far too confided by labels and terminology of the 19th century."
Rather than Marx, he recommends viewers read Ludwig von Mises' Human Action, as well as the works of America's great economic thinkers, like Thomas Jefferson and Andrew Jackson. "Let's start talking like Americans instead of like spoiled Germans, which is who Karl Marx was," he quips.
Talk Is Cheap, Bailouts Are Expensive
Economic theory aside, the author and analyst says the only viable solution to our economic issues is to stop the bailouts and let the free market work.
"If we have the courage to reduce government and to restructure and not pretend these pieces of paper are still worth par, then we can fix this," Whalen says. "We have to get government out of the way so people can go and be prosperous and create wealth."
Ironically, here Whalen finds himself in complete agreement with Roubini; at least the part about needing to restructure bad debts, rather than continuing the policies of "extend and pretend," which don't seem to be fooling many people on either side of the Atlantic right now.