Financial capitalism in the United States today is reminiscent of the former feudalism or l'ancien régime in Europe at the end of the 1700th century. In the last years of feudal rule, the money within the elite went mostly to passive, interest-bearing and cike-productive incomes. Industrial capitalism out competed the aristocracy during the 1800th century by delivering goods, albeit brutally. There was also over time in industrial capitalism an idea that the state should take responsibility for e.g. schools, health care, roads and housing so that companies could squeeze down the living wages they were forced to pay workers. That's how it is in China today. Not everyone has a high salary in the capitalist USA, but many do so that they can afford the basics such as school, health care, pension, market rents, record expensive private homes and private universities. The industrial capitalists in Europe crushed the previous feudalism around 1800 according to the economist Michael Hudson.
On November 16, 2022, the Espionage Act was introduced in Sweden. The law risks making foreign journalism more difficult if this risks Sweden's relationship with foreign allied organisations.
There is much that is shrouded in obscurity. But the Espionage Act may exist to prevent us from scrutinizing the wars NATO risks bringing us into. Many people familiar with Right and the left believes that a war against China risks occurring in order to defend the global, economic hegemony of the West and especially the United States.
Wealth is not just a high dividend or rising stock prices. Workers' income also contributes a lot to a country's prosperity. When the West started outsourcing production to low-wage countries to maximize corporate profits, workers' wages went to the low-wage countries instead. If we go to war against China and other low-wage countries, the wages of workers in the low-wage countries will probably drop even more. Then the low-wage countries will be even more the winners. When the capitalists of the West started globalization because they do not want to share the abundance of production with their workers and their middle class, they dug the grave for the prosperity of the whole West.
The site Global Politics agrees and shows with quotes from EU leaders that the Western neoliberal era since 1991 was built on colonial access to cheap Russian oil and gas as well as China's low-paid labor and large market. The neoliberal era brought enormous wealth to the Western elite but eliminated large parts of the Western working and middle classes. I have always said what I learned in law school that ownership is based on a number of different forms of control. When the West became dependent on foreign oil, gas, other natural resources and also dependent on production and consumption outside the country, it lost control over its wealth. At the same time, most of the carbon dioxide emissions have occurred since the fall of communism and the dawn of neoliberalism in 1991. This means that we are now facing an environmental disaster of the highest order.
Had we in the West realized that money is not wealth but a prosperous workforce, a viable environment and a circular consumption of natural resources as Modern Monetary Theory teaches and invested in this, then we wouldn't have had today's crisis.
What happens now?
7 responses to “Financial capitalism and feudalism in the West versus industrial capitalism in the East"
Globalization was and is the thought of the liberal ideology that prosperity and thus peace on earth should be spread through trade. If the countries are woven together in trade structures and thus also the countries are forced into structures created by international organizations such as the WTO, then everyone should benefit from this. This ideological idea of breaking down contradictions with global trade is fine in itself but has proven to be treacherous.
Firstly, it is industrial production that is the easiest and most profitable to move. In other words, jobs in the West that were previously safe and long-term are disappearing. Production that has been strongly controlled for the environment, working conditions, etc. by both unions and authorities is moved to countries where the unions are weak and the demands on the environment are low.
The West would instead seek happiness in "post-industrialism", which was painted as some kind of happy kingdom by thinkers on both the right and the left. Highly skilled jobs in service and research would bring such prosperity that we would have shorter working hours, more welfare and prosperity. It didn't work out, it didn't work out well, the wealth was extremely unevenly distributed. Those who work with passive things like investing money are getting richer, while those who work with producing things and welfare services have fallen behind. The only thing that saved the latter's economy is that globalization has meant that the price of clothes, electronics and food has been able to be kept down when authoritarian countries such as China have been able to supply cheap goods and other authoritarian states in the Middle East and Russia have been able to supply cheap energy. Had this not been possible, the relatively peaceful development in the West could have been changed to something completely different. I wrote relatively peaceful because what we have seen with Brexit and with Donald Trump is how people, often industrial workers in the American rust belt or in the English midlands that have suffered the most from the death of industry, are increasingly moving in a nationalist direction in an attempt to break globalization.
My belief is that prosperity in countries like China or Russia can only come by reforming oneself. It does happen to a certain extent in China, where, after all, they have managed to distribute the income from trade so that poverty has decreased, but in most other countries, globalization is just a way of continuing a colonial economic model where the poor of the producing countries do not get much in return, if even something. The fact that we in the West also think we can get by without the electronics industry, without the textile industry, etc. is also a misconception. On the one hand, it makes us enormously vulnerable, we can't get protective masks for healthcare as at the beginning of the pandemic, we can't get components for our cars etc. and not least we lose knowledge. Today, countries such as India and China have overtaken the West in how to develop qualified products such as cars, medicines and not least qualified electronics. The advanced services that would be the basis of the post-industrial society are also moving away from us.
Personally, I am convinced that only industrial societies can maintain a welfare state. Because the industrial society, unlike the service society, is knowledge-intensive, there is a competence in development and production that is not easily replaceable, and therefore workers and white-collar workers can make completely different demands on both employers and society than in a distinctly service or trading society. There is even a vested interest on the part of the business owners to prevent wrongdoing. The first laws against child labor in England were created by right-wing governments who realized that the child labor that was now made visible was morally and ethically wrong, previously children had been exploited in agriculture etc. just as badly but as long as it was in the family's enclosure, they turned a blind eye. In the same way, the first general pension system was introduced in Germany by the strongly anti-union iron chancellor Bismarck, because he understood in realpolitik the power that the labor movement, through the organization that came through industrialization, could threaten his own power.
I agree with you about the consequences of globalization, but think that the very basic idea was that the West's capitalists wanted a larger share of the surplus value of production.
When you talk about feudal capitalism in the West, I only have Denmark to compare with, and statistics from the other Scandinavian neighboring countries.
In my eyes, Sweden is Scandinavia's asshole, such an absurdly unfair and unequal nation, so I didn't think it was possible.
Paradoxically poorly paid citizens, laughable pension system, grotesque housing costs, a terrible school system, a failing health care system, incomparably high crime rate, unemployment insurance with up to - as in my case - a 26 week waiting period for compensation, the pharmacy where even standard medicines trigger a waiting period and notification via SMS when it arrives, etc.
If we compare with Denmark, and take into account the weak Swedish krona, then the starting salary in Danish kroner for an uneducated person is DKK 25.000, corresponding to SEK 37.500.
My Danish mother has the equivalent of SEK 21.000 after tax in her pension.
In Sweden, the average pension for women is SEK 10.800 BEFORE tax, corresponding to SEK 6.500
At the beginning of the millennium, the richest decile owned 40 kroner of our common hundred, today it is around 75-80 kroner, so all the rest of us citizens have 20-25 kroner to share!
If we had now started to think about, and changed the above, created better conditions for the majority of the population, in relation to distribution policy etc., then it would not have been necessary for so many to favor China, for example, because then the majority of the population would have had both the conditions and surplus to think locally, because it has thus been favorable for precisely the majority of the population.
Scandinavia's asshole, frankly 🇸🇪🌹🇩🇰
But why, for example, is Denmark as an agricultural nation so much stronger than Sweden as an industrial nation?
Is it your thesis about "industrial nation" that asserts itself, in that agriculture is also production?
Why is Sweden's krona so weak, if we are among the "competent"?
I can't answer exactly. To some extent it depends on chance, but here is an attempt at an answer.
Economic Performance Despite Low Government Debt: A Comparison between Denmark and Sweden
Denmark's Economic Success Despite Low Public Debt:
1. Structural and Political Factors:
Denmark's economic success, despite a low national debt, which is often a sign of austerity, can be attributed to several structural and political factors. Although a low government debt usually means limited government spending policies, Denmark has managed to stimulate its economy through strategic investments and efficient use of resources.
2. Investments in Technology and Innovation:
Denmark has made large investments in technology and renewable energy, especially in wind power. This has not only created jobs but also made the country less dependent on imported energy and given them a leading role in the global transition to sustainable energy (https://sv.wikipedia.org) (https://danmarksteknologihistorie.dk).
3. Flexible Labor Market:
The Danish model, known as "flexicurity", combines a flexible labor market with a strong social safety net. This allows the workforce to adapt quickly to change, stimulating innovation and productivity without creating large unemployment (https://danmarksteknologihistorie.dk).
4. Business climate and Export:
Denmark has a favorable business climate that encourages entrepreneurship and small businesses. The country also has a strong export sector that benefits from Denmark's geographic and logistical advantages, contributing to economic stability and growth (https://tessin.com).
5. Stable housing market:
A stable and healthy housing market has also contributed to Denmark's economic stability. The slow and controlled increase in housing prices has avoided the large bubbles that other countries have experienced, leading to more sustainable economic growth (https://tessin.com).
Why Sweden's economy has been affected differently:
1. Fiscal Policy Framework and Austerity:
Since the 1990s, Sweden has followed a strict fiscal policy framework that has meant severe austerity and a focus on keeping the national debt low. This has limited public spending and investment in critical sectors such as education and healthcare (https://grona.org).
2. Focus on Export nation:
According to Sven Grassman, Sweden's focus on becoming an export nation has led to Swedish goods going abroad, while the income mainly benefits the rich. This has created an imbalance where public welfare and domestic investment have suffered, adversely affecting long-term economic stability (https://sv.wikipedia.org) (https://evagesfunderingar.wordpress.com).
3. Economic Structure and Social Services:
Sweden's strict economic policy has meant savings in the welfare sector, which has led to deteriorating public services and increased economic insecurity among the population. This has created a negative spiral where reduced public investment has led to lower growth and increased social inequality (https://evagesfunderingar.wordpress.com) (https://biblioteket.stockholm.se).
Reinert's Analysis: Strong Agriculture and Industry
Economic Success with a Focus on Agriculture and Industry:
Erik S. Reinert in "Global Economy" emphasizes that a successful economy is often dependent on both strong agriculture and strong industry. Countries that have invested in both agriculture and industry have proven to be more resilient and successful in the long term. Agriculture serves as a stable foundation for the economy, while industry drives innovation and growth (https://wikipedia.org) (https://jewishbusinessnews.com).
Price pressure on Swedish Agriculture:
Swedish farmers have for a long time been exposed to severe price pressure, which has made it difficult for them to compete on equal terms. This may have negatively affected Sweden's economic development. Weak agriculture reduces the country's ability to maintain balanced economic growth, as agriculture cannot serve as a stable foundation for the economy.
Differences in Export Success:
Sweden succeeds less than Denmark in becoming rich from exports partly because the economic profits from exports often go to the richest, instead of being reinvested in the country. Denmark's better export performance can also be attributed to their stronger agricultural sector and diversified economic structure that favors small business owners.
Small Business Success:
Sweden's small business owners have had it more difficult than Denmark's, mainly due to strict regulations and less support from the state. Denmark's business-friendly climate has made it easier for small businesses to grow and contribute to the economy (https://grona.org).
Effects of the 90s crisis:
The 90s crisis broke hundreds of thousands of small business owners and created mass unemployment. The economic crisis led to a housing price crash with many home sales at a loss and long-term indebtedness for many Swedish households (https://www.redjustice.net/den-som-ar-satt-i-skuld-ar-inte-fri/).
Housing costs in Denmark:
Denmark has regulated its housing costs by maintaining a stable and controlled housing market. The slow rise in house prices has helped to avoid large bubbles, which has contributed to economic stability (https://tessin.com).
Conclusion
Denmark and Sweden have had different economic strategies that have affected their respective successes. Denmark has done better with investments in technology, a flexible labor market, and support for small business owners, while Sweden has been negatively affected by strict austerity and reduced investments in welfare and technology. The differences are therefore not due to Sweden having too much welfare, but rather to different priorities in economic policy and investments. Sometimes Denmark does better and sometimes Sweden, but the poorer performance in Sweden in recent years can be attributed to the austerity policy and lack of investment in new technology and production.
For more information, read Sven Grassman's work "Det plundrade folkhemmet" and other relevant articles:
Brett Christophers has written a book about rentier capitalism in the West - https://www.versobooks.com/books/4030-rentier-capitalism. He works at Uppsala University. Interview him!
Globalization was and is the thought of the liberal ideology that prosperity and thus peace on earth should be spread through trade. If the countries are woven together in trade structures and thus also the countries are forced into structures created by international organizations such as the WTO, then everyone should benefit from this. This ideological idea of breaking down contradictions with global trade is fine in itself but has proven to be treacherous.
Firstly, it is industrial production that is the easiest and most profitable to move. In other words, jobs in the West that were previously safe and long-term are disappearing. Production that has been strongly controlled for the environment, working conditions, etc. by both unions and authorities is moved to countries where the unions are weak and the demands on the environment are low.
The West would instead seek happiness in "post-industrialism", which was painted as some kind of happy kingdom by thinkers on both the right and the left. Highly skilled jobs in service and research would bring such prosperity that we would have shorter working hours, more welfare and prosperity. It didn't work out, it didn't work out well, the wealth was extremely unevenly distributed. Those who work with passive things like investing money are getting richer, while those who work with producing things and welfare services have fallen behind. The only thing that saved the latter's economy is that globalization has meant that the price of clothes, electronics and food has been able to be kept down when authoritarian countries such as China have been able to supply cheap goods and other authoritarian states in the Middle East and Russia have been able to supply cheap energy. Had this not been possible, the relatively peaceful development in the West could have been changed to something completely different. I wrote relatively peaceful because what we have seen with Brexit and with Donald Trump is how people, often industrial workers in the American rust belt or in the English midlands that have suffered the most from the death of industry, are increasingly moving in a nationalist direction in an attempt to break globalization.
My belief is that prosperity in countries like China or Russia can only come by reforming oneself. It does happen to a certain extent in China, where, after all, they have managed to distribute the income from trade so that poverty has decreased, but in most other countries, globalization is just a way of continuing a colonial economic model where the poor of the producing countries do not get much in return, if even something. The fact that we in the West also think we can get by without the electronics industry, without the textile industry, etc. is also a misconception. On the one hand, it makes us enormously vulnerable, we can't get protective masks for healthcare as at the beginning of the pandemic, we can't get components for our cars etc. and not least we lose knowledge. Today, countries such as India and China have overtaken the West in how to develop qualified products such as cars, medicines and not least qualified electronics. The advanced services that would be the basis of the post-industrial society are also moving away from us.
Personally, I am convinced that only industrial societies can maintain a welfare state. Because the industrial society, unlike the service society, is knowledge-intensive, there is a competence in development and production that is not easily replaceable, and therefore workers and white-collar workers can make completely different demands on both employers and society than in a distinctly service or trading society. There is even a vested interest on the part of the business owners to prevent wrongdoing. The first laws against child labor in England were created by right-wing governments who realized that the child labor that was now made visible was morally and ethically wrong, previously children had been exploited in agriculture etc. just as badly but as long as it was in the family's enclosure, they turned a blind eye. In the same way, the first general pension system was introduced in Germany by the strongly anti-union iron chancellor Bismarck, because he understood in realpolitik the power that the labor movement, through the organization that came through industrialization, could threaten his own power.
I agree with you about the consequences of globalization, but think that the very basic idea was that the West's capitalists wanted a larger share of the surplus value of production.
When you talk about feudal capitalism in the West, I only have Denmark to compare with, and statistics from the other Scandinavian neighboring countries.
In my eyes, Sweden is Scandinavia's asshole, such an absurdly unfair and unequal nation, so I didn't think it was possible.
Paradoxically poorly paid citizens, laughable pension system, grotesque housing costs, a terrible school system, a failing health care system, incomparably high crime rate, unemployment insurance with up to - as in my case - a 26 week waiting period for compensation, the pharmacy where even standard medicines trigger a waiting period and notification via SMS when it arrives, etc.
If we compare with Denmark, and take into account the weak Swedish krona, then the starting salary in Danish kroner for an uneducated person is DKK 25.000, corresponding to SEK 37.500.
My Danish mother has the equivalent of SEK 21.000 after tax in her pension.
In Sweden, the average pension for women is SEK 10.800 BEFORE tax, corresponding to SEK 6.500
At the beginning of the millennium, the richest decile owned 40 kroner of our common hundred, today it is around 75-80 kroner, so all the rest of us citizens have 20-25 kroner to share!
If we had now started to think about, and changed the above, created better conditions for the majority of the population, in relation to distribution policy etc., then it would not have been necessary for so many to favor China, for example, because then the majority of the population would have had both the conditions and surplus to think locally, because it has thus been favorable for precisely the majority of the population.
Scandinavia's asshole, frankly 🇸🇪🌹🇩🇰
Become!
But why, for example, is Denmark as an agricultural nation so much stronger than Sweden as an industrial nation?
Is it your thesis about "industrial nation" that asserts itself, in that agriculture is also production?
Why is Sweden's krona so weak, if we are among the "competent"?
I can't answer exactly. To some extent it depends on chance, but here is an attempt at an answer.
Economic Performance Despite Low Government Debt: A Comparison between Denmark and Sweden
Denmark's Economic Success Despite Low Public Debt:
1. Structural and Political Factors:
Denmark's economic success, despite a low national debt, which is often a sign of austerity, can be attributed to several structural and political factors. Although a low government debt usually means limited government spending policies, Denmark has managed to stimulate its economy through strategic investments and efficient use of resources.
2. Investments in Technology and Innovation:
Denmark has made large investments in technology and renewable energy, especially in wind power. This has not only created jobs but also made the country less dependent on imported energy and given them a leading role in the global transition to sustainable energy (https://sv.wikipedia.org) (https://danmarksteknologihistorie.dk).
3. Flexible Labor Market:
The Danish model, known as "flexicurity", combines a flexible labor market with a strong social safety net. This allows the workforce to adapt quickly to change, stimulating innovation and productivity without creating large unemployment (https://danmarksteknologihistorie.dk).
4. Business climate and Export:
Denmark has a favorable business climate that encourages entrepreneurship and small businesses. The country also has a strong export sector that benefits from Denmark's geographic and logistical advantages, contributing to economic stability and growth (https://tessin.com).
5. Stable housing market:
A stable and healthy housing market has also contributed to Denmark's economic stability. The slow and controlled increase in housing prices has avoided the large bubbles that other countries have experienced, leading to more sustainable economic growth (https://tessin.com).
Why Sweden's economy has been affected differently:
1. Fiscal Policy Framework and Austerity:
Since the 1990s, Sweden has followed a strict fiscal policy framework that has meant severe austerity and a focus on keeping the national debt low. This has limited public spending and investment in critical sectors such as education and healthcare (https://grona.org).
2. Focus on Export nation:
According to Sven Grassman, Sweden's focus on becoming an export nation has led to Swedish goods going abroad, while the income mainly benefits the rich. This has created an imbalance where public welfare and domestic investment have suffered, adversely affecting long-term economic stability (https://sv.wikipedia.org) (https://evagesfunderingar.wordpress.com).
3. Economic Structure and Social Services:
Sweden's strict economic policy has meant savings in the welfare sector, which has led to deteriorating public services and increased economic insecurity among the population. This has created a negative spiral where reduced public investment has led to lower growth and increased social inequality (https://evagesfunderingar.wordpress.com) (https://biblioteket.stockholm.se).
Reinert's Analysis: Strong Agriculture and Industry
Economic Success with a Focus on Agriculture and Industry:
Erik S. Reinert in "Global Economy" emphasizes that a successful economy is often dependent on both strong agriculture and strong industry. Countries that have invested in both agriculture and industry have proven to be more resilient and successful in the long term. Agriculture serves as a stable foundation for the economy, while industry drives innovation and growth (https://wikipedia.org) (https://jewishbusinessnews.com).
Price pressure on Swedish Agriculture:
Swedish farmers have for a long time been exposed to severe price pressure, which has made it difficult for them to compete on equal terms. This may have negatively affected Sweden's economic development. Weak agriculture reduces the country's ability to maintain balanced economic growth, as agriculture cannot serve as a stable foundation for the economy.
Differences in Export Success:
Sweden succeeds less than Denmark in becoming rich from exports partly because the economic profits from exports often go to the richest, instead of being reinvested in the country. Denmark's better export performance can also be attributed to their stronger agricultural sector and diversified economic structure that favors small business owners.
Small Business Success:
Sweden's small business owners have had it more difficult than Denmark's, mainly due to strict regulations and less support from the state. Denmark's business-friendly climate has made it easier for small businesses to grow and contribute to the economy (https://grona.org).
Tidölaget's Investments and Inequality:
According to facts from the report "Where is the productivity?" Tidölaget has minimized investments in production to increase inequality. This has further negatively affected Sweden's economic growth (https://www.teknikforetagen.se/globalassets/rapporter–publikationer/ekonomisk-analys/var-ar-produktiviteten.pdf).
Effects of the 90s crisis:
The 90s crisis broke hundreds of thousands of small business owners and created mass unemployment. The economic crisis led to a housing price crash with many home sales at a loss and long-term indebtedness for many Swedish households (https://www.redjustice.net/den-som-ar-satt-i-skuld-ar-inte-fri/).
Housing costs in Denmark:
Denmark has regulated its housing costs by maintaining a stable and controlled housing market. The slow rise in house prices has helped to avoid large bubbles, which has contributed to economic stability (https://tessin.com).
Conclusion
Denmark and Sweden have had different economic strategies that have affected their respective successes. Denmark has done better with investments in technology, a flexible labor market, and support for small business owners, while Sweden has been negatively affected by strict austerity and reduced investments in welfare and technology. The differences are therefore not due to Sweden having too much welfare, but rather to different priorities in economic policy and investments. Sometimes Denmark does better and sometimes Sweden, but the poorer performance in Sweden in recent years can be attributed to the austerity policy and lack of investment in new technology and production.
For more information, read Sven Grassman's work "Det plundrade folkhemmet" and other relevant articles:
https://biblioteket.stockholm.se/titel/202077
https://tessin.com/
https://www.teknikforetagen.se/globalassets/rapporter–publikationer/ekonomisk-analys/var-ar-produktiviteten.pdf
https://www.redjustice.net/den-som-ar-satt-i-skuld-ar-inte-fri/