In previous essays I supported Nobel Prize economist Joseph Stieglitz’ calls for a restructuring of the US economy from the free market to a social market economy model, with tough regulations on Wall Street and the banks. I argued that this Keynesian model should be viewed as a transition to a socialist market or mixed socialist/stat capitalist economy as a stage to a developed socialist economy. I proposed a tough minded Keynesianism (a Keynesian/socialist synthesis), that would break up the “too big to fail banks” and nationalize their parts. The guts of their predatory impulses would be cut out. Like Roubini/Nihm and Stieglitz I agree that the state has to be the decisive player in the economy. However, the state and political systems must be democraticized, and made instruments of people’s needs, rather than of finance capitalism.
The first priority of the economy has to be the needs of the people. Thus an industrial and infrastructure development plan has to be instituted. The people have to give substance to Barack Obama’s green economy idea. Immediately we need a 21st century Works Project Administration that puts people to work on green and infrastructure projects. This must be a multi decade program, with planned and targeted government stimulus.
The US people will need help from the world to reconstruct our economy and society. China and other emerging economies can invest in this reconstruction. Their experiences with state capitalism and the socialist market economy will be helpful. Ideologically the US people have to recognize that we have moved from the Age of Europe and US hegemony to the Age of Humanity, where we must cooperate as an equal among other peoples and civilizations.
More than anything the US people have to initiate a great democratic movement that draws on the movements of the 1930’s and the 1960’s and 70’s, with the aim of creating a people’s democracy, and democratic culture, which takes over the mechanisms of the state. It must be a peace, anti-racist and social justice movement. It must target the military industrial and prison industrial complexes for dismantling. The military budget must quickly be cut by 75% and become a domestic jobs and rebuilding budget.
Roubini and Mihm state that American capitalism will never be what it once was. They conclude that the US financial system has to be reformed and restructured. China, they insisted, will be the major economic and geopolitical player in coming decades. What they do not argue for is a change from a rotten economic structure to a new one. It seems obvious that the existential crisis of US capitalism logically suggests that an alternative has to be considered. A new economic system is what is called for. Like W.E.B Du Bois I believe that system will be socialist.