It is nearly always working class resistance that stimulates technological innovation.
The rich have too much money. That’s not a moral judgement, it’s an economic fact. An IMF paper last December spelled it out: across the developed world, corporations are saving and lending money, rather than investing it in their operations, while rich individuals are actually running short of profitable companies to invest in.
Among corporations this is the age of the share repurchase. Instead of just merely paying dividends out of the yearly profit, large firms are also using their excess cash to buy back shares from ordinary investors — in many countries reducing their tax burden — while still further concentrating the ownership of assets among the super rich.
Meanwhile, the money of rich individuals and families has the same problem: nowhere to go. Private equity firms, who typically use the cash of rich families to acquire and restructure companies at high rates of return, spent about $500bn worldwide last year — but four times that much, a cool $2trn, remained in their bank accounts unspent, for want of a safe opportunity.
If you combine that with the $3trn in cash unspent by US companies alone, you get a sense of the huge dysfunction at the heart of post-2008 capitalism. The technological basis for a fourth industrial revolution is there, in the form of automation, biotec, robotics and post-carbon energy systems. But it’s not happening. Capital, right now, does not want to participate in capitalism.
As to the causes, the IMF researchers are clear: high net-profit rates, near-zero interest rates and exorbitant tax cuts.
Profit rates have risen because, first of all, workers have little power to bargain their own wages upwards. Meanwhile, the market power of large companies such …read more
Source:: New Statesman