Dismantlement of Neoliberalism and the rising predator capitalism, initiation of global forum on a new global economy

American economist James K. Galbraith has stated that neoliberalism is a failure based on three components Galbraith has analyzed in his book The Predator State (2008):

1) "Supply-side tax cuts have no detectable effect on work effort, or savings, or investment."

2) "Financial deregulation, from the savings and loan debacle to the subprime mortgage fiasco, leads to criminal misdirection of the firm."

3) "Cuts in government spending are neither necessary nor sufficient for productivity gain."

Galbraith concludes this introduction in The Predator State by saying: "These are facts now well absorbed by practical policymakers, around whom the vestiges of past conservative verities hang in tatters, only the dedicated academic economist can pretend to be unaware of them [...]"

Galbraith has noted that neoliberalism has failed in the Third World, noting that upon Argentina adopting neoliberalism its economy fell into crisis and collapsed.

Galbraith states that "the International Monetary Fund is today in most of the world a spent force, with no remaining programs in Latin America at all, revenues insufficient to cover its spending, and large layoffs in the works. Even managing director [of the IMF] Dominique Strauss-Kahn has admitted that the organization is 'a factory to produce paper'."

Galbraith notes that former neoliberals themselves are moving toward what is known as "predator capitalism" - a capitalism whereby unlike neoliberalism, it is run by and for the leaders of big businesses who unlike neoliberals do not have any real doctrinaire opposition to regulation and intervention if it benefits them - such as through protectionism in the USA's agricultural industry to prevent competitors in more productive agricultural regions to compete with American agriculture. Second, is the clearly familiar example of the state assisting large private corporations to prevent economic crashes, while fighting against any regulations and interventions that would hinder the maximization of profit.

I cannot do justice to Galbraith's work The Predator State on its thorough condemnation of neoliberalism and the new rising predator capitalism other than to advise fellow people to investigate the claims made by James K. Galbraith in The Predator State, who is a well-known and reputable economist.

However I believe that neoliberalism and predatorial capitalism must be thoroughly investigated, and that sustainable alternatives be presented through detailed research of economists proposing solutions to the current crises that fully erupted in 2007 and 2008. These should be reviewed in a global forum with discussion by people familiar with economics, so that a feasible alternative to neoliberalism and the rising predatorial capitalism, can be delivered.

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7 Comments

  • Supply-side tax cuts are ineffective because they are not met with concomitant fiscal spending cuts necessary to engender an increase in work effort, savings, and/or investment (sometimes they're even met with spending increases)! I completely disagree with the third component which states that government spending cuts are neither necessary nor sufficient. Supporters of government spending implicitly support the notion that public agencies/institutions are better at managing resources than private individuals (which, in my opinion, is balderdash).

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