Capitalism as an Infectious Disease

Joseph Schumpeter once wrote, “the budget is the skeleton of the state stripped of all misleading ideologies.”

Schumpeter, Joseph A. 1954. “The Economic Crisis of the Tax State.” International Economic Papers, 4; reprinted in Schumpeter, Joseph A. 1991. The Economics and Sociology of Capitalism, ed. Richard Swedberg (Princeton: Princeton University Press): pp. 99-140.

Yesterday’s post dealt with the way that budget choices create pressures that shape pension funds’ choices, something like the way that people in desperate states make decisions that they would not make under ordinary circumstances.

However, the skeleton ranges across the body of socitey.  For example, ordinary people often must depend their pensions fall victim to a similar logic.  In fact, one of the many objectives of the privatization of Social Security was to make workers identify with the objectives of capitalism.  Andy Stern of SEIU suggests how that kind of thinking even infects the supposedly progressive union movement.  Here is the exchange from Business Week:

Q: Has the recession led you to rethink the way you operate your

union? What is the SEIU doing to prepare for a recovery?”

A: “Well, it’s made us appreciate that we have to be better
partners with our state governments and employers in terms of
efficiency. It makes us appreciate that our pension funds are tied
to the success of the economy. And it makes us very much want to
come together with other Americans and employers and people in the
nongovernmental part of our country and say we need to create a
21st-century American economic plan so Team USA can compete and

Bartiromo, Maria. 2009. “Union Leader Andy Stern on the Future of Big Labor.” Business Week (28 September).


3 comments so far

  1. Thomas Molitor on

    Speaking of labor unions whom, out here in New Mexico along with environmental and solar organizations, helped pass a cap-and-trade bill which promises to create “clean energy jobs.” I believe cap-and-trade has not worked where it has been in place the longest – the EU. The EU also gave away many “free credits,” plus the EU market has been dysfunctional and in some cases outright corrupt. Nor has the EU system reduced greenhouse-gas emissions after having been in place for several years. Michael, generally, do you have an opinion on the efficacy of cap-and-trade?

  2. mperelman on

    Surprisingly, most economists reject the logic of cap and trade and prefer carbon taxes — one of the few policies that the profession gets right.

  3. mjones on

    Despite the occasional reference to him as a “fire breather” I don’t think anyone who has spent much time working in or around organized labor would confuse Andy Stern with a progressive, and certainly not with someone who would oppose the basic tenets of capitalism.

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