The Occupy Wall Street Movement and the Coming Demise of Crony Capitalism

From my favorite economist, but I think he misjudges intent of OWS creators.  Soros is predicting riots and suppression of civil liberties.  That I fear is part of the elite's plan, and dovetails nicely with the effort to institute indefinite detention of U.S. citizens without trial via the NDAA.  I think Batra's economic solutions are sound, but Obama is a puppet, and it is a mistake to look to him for change.  For the time being, education of the public is incomplete, and must be expanded so that the change, when it comes will be genuine and not managed...rng


from truthout
Tuesday 11 October 2011

by: Ravi Batra, Truthout | News Analysis

In 1978, to the laughter of many and the derision of a few, I wrote a book called, "The Downfall of Capitalism and Communism," which predicted that Soviet communism would vanish around the end of the century, whereas crony or monopoly capitalism would create the worst-ever concentration of wealth in its history, so much so that a social revolution would start its demise around 2010. My forecasts derived from the law of social cycles, which was pioneered by my late teacher and mentor, P. R. Sarkar. Lo and behold, Soviet communism disappeared right before your eyes during the 1990s, and now, just a year after 2010, middle-class America, spearheaded by a movement increasingly known as "Occupy Wall Street (OWS)," is beginning to revolt against Wall Street greed and crony capitalism. Will the revolt succeed? It surely will, because the pre-conditions for its success are all there.

The first question is this: Why does rising wealth disparity create poverty? My answer is that it causes overproduction and hence unemployment and destitution. It is all a matter of supply and demand. Inequality goes up when official economic policy does not allow wages to catch up with the ever-growing labor productivity, so that profits soar and rising productivity increasingly raises the incomes and bonuses of business executives. I have detailed this process in an earlier article. Then money sits idly in the vaults of bankers and big-business CEOs and restrains consumer demand, leading to overproduction and hence layoffs. The toxic combination of mounting layoffs and absent job creation raises poverty, which, according to official figures, is now the highest in 50 years.

The next question is: how has the government either restrained wages relative to productivity or made the rich richer and the poor poorer? It is easy to see that almost all official economic measures adopted since 1981 and contained in the following list have devastated the middle class. The list includes:

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