Saturday, September 27, 2008

Walden Bello looks at the Big Picture

Friday evening I was struggling to make heads or tails out of the congressional controversy over the famous $700 billion Wall Street bailout plan.

That was when I came across Walden Bello's Wall Street Meltdown Primer on Common Dreams. (They picked it up from Foreign Policy in Focus.)

Bello argues that
The Wall Street meltdown is not only due to greed and to the lack of government regulation of a hyperactive sector. This collapse stems ultimately from the crisis of overproduction that has plagued global capitalism since the mid-1970s
Briefly, capitalism is very efficient at producing stuff at very low cost. But capitalism is also characterized by economic inequality--most people have little or no access to all that stuff. In order to make a profit, capitalists need buyers for their goods. `Overproduction' takes place when people can't buy all the stuff that the capitalists have made. Under these circumstances, capitalists turn to financial speculation to make a profit. This speculation has very little connection to the real economy. It leads to large profits--and large collapses, like the one Wall Street is experiencing now.

Bello's analysis of this situation is interesting, well-organized, and relatively short. I encourage you to read the entire post.

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