A country is not a big corporation. The habits of mind that make a great business leader are not, in general, those that make a great economic analyst; an executive who has made $1 billion is rarely the right person to turn to for advice about a $6 trillion economy.
.. Even the largest business is a very open system; a national economy is a closed system.
Krugman: a country is not a company
In fact, business leaders often give remarkably bad economic advice, especially in troubled times. And I think it’s important to understand why.
.. The answer, to quote the title of a paper I published many years ago, is thata country is not a company. National economic policy, even in small countries, needs to take into account kinds of feedback that rarely matter in business life. For example, even the biggest corporations sell only a small fraction of what they make to their own workers, whereas even very small countries mostly sell goods and services to themselves.
Soak the Rich: An exchange on capital, debt, and the future
Graeber: .. It is quite clear that this ideological hegemony has now reached its limit. Does this mean that the system is on the point of collapse? It’s hard to say. But capitalism is not old. It hasn’t been around forever, and it seems just as reasonable to imagine it can be transformed into something completely different as to imagine it will necessarily continue existing until the sun blows up, or until it annihilates us through some ecological catastrophe.
.. Piketty: One of the points that I most appreciate in David Graeber’s book is the link he shows between slavery and public debt. The most extreme form of debt, he says, is slavery: slaves belong forever to somebody else, and so, potentially, do their children. In principle, one of the great advances of civilization has been the abolition of slavery.
As Graeber explains, the intergenerational transmission of debt that slavery embodied has found a modern form in the growing public debt, which allows for the transfer of one generation’s indebtedness to the next. It is possible to picture an extreme instance of this, with an infinite quantity of public debt amounting to not just one, but ten or twenty years of GNP, and in effect creating what is, for all intents and purposes, a slave society, in which all production and all wealth creation is dedicated to the repayment of debt. In that way, the great majority would be slaves to a minority, implying a reversion to the beginnings of our history.
.. But debt abolition has also at times produced positive social change. Take the Athenian and Roman constitutions. At the origin of each was a debt crisis resolved in such a way that structural political reform ensued. The Roman republic and Athenian democracy were the offspring of debt crises. Indeed, there is a sense in which all great moments of political transformation have been precipitated by such crises. During the American Revolution, the annulment of debt by Great Britain was one of the revolutionaries’ demands.
Graeber: .. We already have the overarching institutions, which are almost religious in character inasmuch as neoliberalism may be seen as a kind of faith. But instead of protecting debtors from creditors, these institutions do just the opposite.
For thirty years a combination of the IMF, the World Trade Organization (WTO), the financial institutions that came out of Bretton Woods, the investment banks, the multinationals, and the international NGOs has constituted an international bureaucracy of global scope. And unlike the United Nations, this bureaucracy has the means to enforce its decisions. Since this whole structure was explicitly put in place in order to defend the interests of financiers and creditors, how might it be politically possible to transform it in such a way as to have it do the exact opposite of what it was designed to do?
Fed: US consumers have decided to ‘hoard money’
The one thing that has changed, in terms of journalistic practice, is the cause of death. It’s much less euphemistically couched than in the past. When I was growing up, newspapers were very Victorian when it came to describing death. If you saw “short illness” it meant heart attack and “long illness” meant cancer. In small town papers where obits are written to protect the families, you still see that, but we’re much more straightforward.
During the first and second quarters of 2014, the velocity of the monetary base was at 4.4, its slowest pace on record. This means that every dollar in the monetary base was spent only 4.4 times in the economy during the past year, down from 17.2 just prior to the recession.