Brian wrote:... but your point about capitalism acquiring 99% of the world's wealth is an argument that has been peddled from time immemorial...
I didn't talk "about capitalism acquiring 99 % of the worlds wealth". I have no interest in any "ism". Also capitalism died a long time ago. Since I am a scientist I will try to draw a comparison with science.
Nature does whatever nature does. Science does not attempt to explain what nature is, it attempts to explain how nature behaves. Engineering takes the explanations provided by science and uses it to create products. Some of those products may even attempt to change nature's behaviour. There are many features of engineering but there are two very important factors. If the scientific theory on which a product design is based is wrong then the product won't work. Even if the scientific theory is correct, if it is incorrectly applied when designing the product again the product won't work.
Markets have existed since mankind began living in social groups. Markets behave however markets behave. Economics is analogous to science and attempts to explain how markets behave, although, sadly, mainstream economics does not follow scientific methodology. All the "isms" are simply theories produced by the study of economics to try to understand how markets behave. Having begun only relatively recently compared to the length of time science has had to develop it is not surprising that economic theories are still quite immature but most mainstream economists don't seem to recognise that. Government economic policy is the equivalent of engineering. It tries to apply whichever theory it endorses to control how the economy behaves. Effectively how the markets behave. It suffers from the same problems as physical engineering. If the theory is wrong the policy will not work. If the theory is incorrectly applied the policy will not work. The Eurozone exhibits both faults so the failure is particularly bad.
During the Reagan/Thatcher administrations a new economic policy based on moneterism was introduced. On the back of that theory changes were made to how banks are allowed to behave that provided them with the opportunity to engage in wealth transfer. That system has been successfully operating ever since. It is most obvious if you look at USA GDP growth and wages growth. Up to the start of this experiment wages and GDP grew at the same rate. Since the experiment began wage growth has been completely flattened while GDP continued to grow at about the same rate. This means that virtually all GDP growth since Reaganomics began has gone to the top 1 % in society. Another measure is the world distribution of wealth survey. This shows that the proportion of world wealth owned by the top 10 % increasing every year. A third measure shows the incomes of the top 10 % in the UK increasing rapidly from the start of the crisis to the present day while the income of the bottom 90 % decreased in real terms. These are all measurements, not theories.
Since the start of Reagonomics we have not had capitalism at all. All the normal market mechanisms that are described in capitalism have been suppressed. In capitalism the markets are allowed to do whatever they do completely freely. In practise interference in those markets did occur but was limited to correcting the adverse outcomes that those markets throw up. Today all the major countries are operating control economies which are no different in principle to the control economies of the various communist regimes. Obviously they are not based on the same "isms" that communist countries adopted as their economic theory but the control is no different.
I would be delighted to see a return to capitalism with minimum market intervention. The world would be a much better place if it happened. The absolute best outcome would be the wide recognition that capital can achieve nothing without labour and labour can achieve nothing without capital. The relationship between capital and labour should be symbiotic not confrontational. Some companies recognise this but most don't. The responsibility of a board of directors is to achieve the best sustainable long term return for its investors. The responsibility of a trade union is to achieve the best sustainable long term rise in income for the workers. Both sides should recognise that they can both achieve their aims working together. Instead both sides go for maximum short term gain and the overall long term outcome is worse.
There are economists in the world who are using the mathematics that was developed to solve problems in science, especially for complex systems, and applying them to model economic systems and markets. Up to now they are being ignored. Eventually a crash will be big enough that the mainstream will have to take notice of them.