How Would You Reinvent Capitalism?

The Nation put this question to a panel of sixteen activists and economic thinkers. Our own Randy Wray shared his ideas for remaking capitalism into a more stable and equitable system.

2 responses to “How Would You Reinvent Capitalism?

  1. Here are my proposals:1. Investment in our people throughout the lifespan – I would create a government-run full employment program organized to a great extent around a system of regular, adult education. People who are unemployed by the private sector would be paid either to teach or learn in a national adult public education system that constantly updates the skills and knowledge base of our citizens. People would be entitled by law to regular six-month sabbaticals from their jobs every five years to go back to school both to learn new things and to teach what they already know. The full employment program would also use countercyclical hiring as a recession-fighting tool.2. Monetary reform – We need closer consolidation of the monetary and fiscal authority in our system, with much more democratic accountability for the monetary authority. Bring the monetary authority directly under the watch of the elected branches. Perhaps hold elections for the monetary authority’s central and regional governors. The monetary authority should be primarily responsible for price stability and financial sector stability. The primary responsibility for countercyclical stimulus should be returned to a fiscally activist elected government, with the monetary authority playing the supporting role of accommodating fiscal expansion.3. Financial reform – let’s have serious re-regulation of the financial industry and elimination of “shadow banking”. As Minsky argued, poorly financial activity demonstrates inherent instability. All aspects of financial activity need to be under a constant regulatory eye. One regulatory purpose must be the prevention of extravagant and wasteful rents and salaries in a financial system whose fundamental purpose is the efficient movement of capital from savers to entrepreneurs, with the savers receiving a reasonable rate of return for their investments, and the financial functionaries of the system receiving modest and appropriate salaries on the basis of a job well done.4. Income reform – I would employ a combination of maximum wage laws, wage ratio laws and tax reforms to compress the income gap in our society. Inequality always breeds greater inequality as those with the largest shares of the income pie game the system to cut themselves even larger shares in the next round of cutting. If we want to shrink the gap between rich and poor we need to build a more egalitarian distribution of income into the basic legal framework of our economic system.5. A national health insurance program – get private companies out of the irrelevant business of providing health insurance for their employees, and use the power of a single national subscriber pool to force lower costs and greater efficiency and deliverables onto the health care industry. Allow for some experimentation at state or regional levels to ensure innovation.6. Renewed labor protection – The balance of power in our society has shifted dramatically from employee to employer, with an overall loss of security and degradation of working conditions. Restore power to working people.7. Retirement and senior support reform – Change retirement laws to allow for a “throttling down” of the workload as people get older, not just a sharp change from fulltime work to retirement. Promote “gray economy”, helping older Americans start businesses that are specifically geared to providing goods and services for other older Americans, and that have different workplace regulations designed to accommodate the needs of seniors. Eliminate the Social Security “trust fund” accounting gimmick and restore the idea of Social Security as a pure pay-as-you-go system. Expand the payroll tax to higher income groups to fund the system.8. Corporate tax reform – Large and abundantly wealthy corporations paying no taxes? You’ve got to be kidding me.9. An Infrastructure bank and a “civil corps of engineers” – These entities would have a combined charge over our national-scale infrastructure needs.

  2. How about the only solution that will work.Throw it in the dust bin of history, where it belongs, with all other very bad ideas.