Wednesday, June 6, 2012

Capitalism Caused the European Debt Crisis

This post is the second in a two-part series of "I Told You So."  Well, that's not really accurate.  More like, I have been arguing against some people who take what I perceive to be more dominant points of view, and I have recently seen a number of articles come out which undermine their positions.

In this case, it is the economic debacle of Europe.  For some time now, I have mostly heard people admonishing the carelessness and irresponsibility of Greece, Spain, et al., while praising the success of the  Germans.  Why should Germany be punished for other countries' mistakes?  But, no matter.  Germany is an unbeatable machine.  Germany has discovered the key to everlasting economic dominance.   And so on.

Part of my argument against this sentiment (I will get to the other part later) is that Germany's economy is entirely dependent on exports, and thus the markets (i.e. "reckless spending") in eastern and southern Europe.  A bail out would not be a punishment for Germany, then, it would be a lifeline.

And now, such an oppositional point of view has been gaining some ground in Europe, and has been championed by some reputable figures.  They even go so far as to allege that Germany purposely set the whole system up to function as it did (not realizing, of course, how it would all pan out) because it was economically beneficial to expand its markets in Europe.  I wonder how much traction these claims will get.  Will Germany be able to maintain its Good Guy status?

As interesting as that dynamic is, there is still the other half to my argument, which I doubt will ever be raised outside of the fringes.  You cannot place blame for an economic crisis on any individual country or industry.  Crisis is systemic.  Do people really think it's a coincidence that the crisis in Europe occurred around the same time as the "downturn" in the U.S., and the slowdowns in other parts of the world?  The system itself caused the crisis.

Overproduction:  investment in the capacity to produce more than what is profitable.  I'm becoming a broken record, but then again, only I read all my posts.  The global economy has been bogged down by overproduction since the late 1960s.  All that has occurred since then is a whole series of bubbles in different parts of the world, and a three-way seesaw game among the U.S., Germany, and Japan (who was pretty much left in the dust after the 80s).  Every industrial power is dependent on exports (including now China), and all are desperately scrambling to create markets.  Deficit spending is encouraged in different times and places to create more demand, which never seems to match the excessive supply.

It's not Germany's fault, it's not Greece or Spain's fault.  But then again, everyone who has participated in and helped to perpetuate the capitalist system is really to blame.

No comments:

Post a Comment