Monday, July 26, 2010

No Substitute for Economic Justice

"By making capital and land artificially scarce and expensive, the state forces workers to sell their labor in a buyer’s market and thereby reduces the bargaining power of labor. The owners of land and capital are thereby enabled to collect scarcity rents.

"The economic effects are destabilizing. Income shifts from workers, who work mainly to meet their consumption needs, to rentiers with a high propensity to save and invest. The result is a chronic tendency toward overaccumulation and underconsumption.

"At the same time, the state subsidizes the most centralized, capital-intensive forms of production, leading to mass-production industry with overbuilt plant and equipment that’s constantly plagued with idle capacity."

I think he skates right by how the political class seeks to appease all sides with tax-funded, state-approved privilege and the resulting transfer of power to the state.