You are here

Capitalism, Closed for business & COVID-19? Oz economist, Steve Keen

Our version of capitalism is something the narcissistic writer Ayn Rand would have adored, but in a headlong rush to hyper-individualism, have we chosen freedom of the individual over the survival of our species…

Host Ross Ashcroft is joined by economist and author, Professor Steve Keen to discuss why coronavirus has closed capitalism.


In 1973, the book Small Is Beautiful: A Study Of Economics As If People Really Mattered, was published. The author was the eminent economist, Ernst Schumacher. Alas, his forebodings about globalisation were ignored. Now we find how the West’s industry has been demolished by ‘our’ captains-of-industry and their lackey politicians.
Essentially, this work was a critique of Western economics. Schumacher argued in the first chapter titled: ‘The Problem of production: the modern economy is unsustainable; it depended upon an international division of labour that contained serious flaws.
The book was published about a year prior to the Lima Declaration. The gist of that United Nations’ declaration was to dismantle industries in the Western hemisphere and transfer them to Third World (now referred to as ‘developing economies’). The ‘motivation’ was supposedly to “distribute the ability for countries to prosper”. However, in reality, what was being claimed by those who would instigate this dramatic movement of transferring industry from the First World, to the Third World, was nothing more than a blatant ruse. The true motivation for the Lima Declaration wasn’t, in any shape or form, in wanting to share opportunity amongst nations. It was simply that the captains-of-industry wanted to dismantle ‘their’ manufacturing hubs located in Western nations and then re-launch them in Third World societies; with the express purpose to ruthlessly exploit as cheap labour the down trodden classes in the poorest nations on earth.
This is increasingly understood as the true agenda of the Lima Declaration. Schumacher’s view, verified those positions. But here we are in 2020 and can look back over those past 45 years and decipher that the consequences of the Lima Declaration are now diabolical for the Western world.
Apropos to this I could convey a plethora of examples to consolidate that case. However, one gem was a commentary in The Australian from March 17/20, courtesy of its regular contributor, Robert Gottlibsen:
The dangers of relying on China for medicine
In the opening paragraph, Robert Gottlibsen writes:
“The US has declared a national emergency as a result of the spread of COVID-19. But it really needs to call a second emergency [with that being how] its dependence on China for many medicines.”
In the next paragraph he writes:
“In the now rapidly disappearing era of unrestrained globalism the US found it cheaper to access vital medicines from China and closed many of its manufacturing facilities and/therefore has become dependent on China for many of its medicines.”
Further, Gottlibsen prattles on as to how detrimental matters are now for [all] Western nations with our dependency upon China and, indeed, other non-Western nations too - for a large swag of nick-knacks to maintain our life styles.
Now, had that commentary [asserting concerns about Western nations being dependent upon China for medicines] emanated from a host of other writers who have been warning about the madness of globalisation for many years, it wouldn’t have been at all surprising. However, that dispatch from Gottlibsen is astounding! And this was because for over the past 6, 7 or whatever number of years, Gottlibsen has been a rabid gloater when it comes to pumping up the tyres of China. In fact, he has been an ardent cheer-leader for China. Hence, to read ˜The dangers of relying on China for medicines, was incredible because it was the antithesis of what he has vigorously advocated for years.
Schumacher predicted/warned in his book about the detriment that would ensue for the Western world by dismantling its secondary industries and transferring them to the Third World.
So with that said, back to Schumacher’s, Small is Beautiful where he wrote:-
What is the point of a pair of sandals which were made in India costing ten cents, if Australians can’t afford them, because they are too poor to buy them? So, perhaps, it might be better that a country produces tangible products to consume, which cost ten times more than what they can be made for elsewhere, if the consumers at least have jobs. Rather, than those societies lose their manufacturing bases and mass unemployment ensues! What is the point if no one is working to earn incomes and can’t afford items even at rock bottom prices?
Essentially, Schumacher was arguing a reasonable thesis:
If a country (in this case Australia) was to totally dismantle its manufacturing sectors and then those other vectors [financing and other services], which were instituted to replace manufacturing also collapsed, it would mean people could be too poor to buy items that were absurdly cheap. Of course, Schumacher was being quite tongue-in-cheek with that thought. However, he was correct in posing that ‘what if?’ scenario.
Of course, globalisation has now spawned Schumacher’s dread. The Western world, in implementing the Lima Declaration dismantled much of its manufacturing base. Gottlibsen so decidedly expressed that the Lima Declaration has permitted China to morph into the monster it has become. And now the West can be held to ransom by China or, any other nation, for its needs. We are now captive to their whims.