On: "Interest rates & the 1%," by Chris Dillow

Chris Dillow:

...the rich can tolerate mass unemployment. Nick's parallel with the 1930s is, I think, irrelevant. Back in the 30s, mass unemployment was a threat to the rich because workers could see a plausible alternative to the existing order in communism. Today, by contrast, there are no big feasible alternatives to capitalism and so unemployment is not a political danger - which means it is more tolerable.

This answers Peter's question: why has the Keynesian coalition vanished from modern politics? It's because it is no longer politically necessary. It was not Keynes who convinced capitalists of the need for full employment but Lenin.

Source: Interest rates & the 1%.


Tom Usher

I think Total Factor Productivity will alter that. There will come a time in the not-too-distant future when labor will not be necessary and human beings will simply have to share the benefits of technology regardless of "capital." It's either that or we'll have to treat each other as completely expendable, which would be, well, inhuman. What are we to become, less than we were? That would not be progress.

In addition, there are arguments other than the one given in the article (nip inflation in the bud) that are used by monetary hawks for raising rates now. They include people living off interest earnings and also that higher interest rates would spur investors out of their complacency.

However, I don't buy the need for any interest at all. Just reread my comment above about technology to see part of why I say that.

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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