Washington Post,March 23, 2009 on page A15: "Can capitalism survive? No. I do not think it can " in Italics for emphasis- Joseph Schumpeter, 1942. Samuelson wrote:
"Capitalism is under siege, its future unclear. Schumpeter, one of the 20th century's eminent economists, believed that capitalism sowed the seeds of its own destruction. Its chief virtue was long-term-the capacity to increase wealth and living standards. But short-term politics would fixate on its flaws - instability,unemployment, inequality. Capitalist prosperity also created an oppositional class of intellectuals who would nurture popular discontents and disparage values (self-enrichment, risk-taking) necessary for economic success."
Query: Is Economics a moral science? What is morality? What is the purpose of our lives? Seeking Money,Status? I maintain that the ultimate economic success is the contribution to be made for human happiness. Howver, Samuelson wrote: -
"Almost everything about Schumpeter's diagnosis rings true, with the glaring exception of his conclusion. American capitalism has flourished despite being subjected to repeated restrictins by some disgruntled folks.
We have subordinated unrestrained profit-seeking to other values. We have gradually taken into account the external effects and broght them under control,says economist Robert Frank of Cornell University. External costs include: worker injuries from industrial accidents, monopoly power; financial manipulation;pollution."
Pollution is negative externality in my prior blogs. "Keys for Economic Understanding"(1971)Published in USA and in UK as well. Cf. www.Amazon.com online book catalog. The book is designed to encourage people to have training for marketable skills to supply the demand of a society regardless of so-called economic systems as the brandnames. In my humble view,the significant ingredients would be the people with skills in any nation. Teaching and learning would be skills per se. Robert Samuelson wrote: -
"The present populist backlash may not end well. The parade of big companies to Washington for rescues, as well as the high profile examples of unvarnished greed, has spawned understandable anger that could veer into destructive retribution.
Government inevitably expands in times of economic breakdown. But there is a thin line between saving capitalism from itself and vindicating Schumpeter's long-ago prediction."
Schumpeter is cited in Richard T. Gill(Harvard) textbooks as I sent my blogs in the past to that effect.
I maintain that there are two sectors namely the public sector and the private sector. When public sector in in complete control,there would be less incentive and innovation and reforms are warranted for the wellbeing of the people. But when the private sector goes overboard or runs amack,greed comes into the minds as human frailty. I would recommend the works by Adam Smith,Ben Franklin to be compared with Confucius and Mencius to understand the global economy regardless of the so-economic systems.Such random thought are only my personal views and would be subject to reader's judgment.
Francis Shieh a.k.a. Xie Shihao,a lifelong student of economics and to watch the developments in the 21st century apropos of global economic crisis at present, to be resolved by all nations in the days to come especially the outcome of G-20 on April 2, 2009.
March 23, 2009 at 12 noon.