A Letter To Capitalists From Adam Smith

Dr. Michael LaitmanOpinion: (David Rubenstein, managing director and a co-founder of The Carlyle Group): “Countries teeter, protests rage, unemployed multiply, deficits abound the virtues of capitalism are questioned.

“I always felt there were two principal flaws – and we saw them come to a head over the past few years. The first is that unfettered exuberance about wealth creation will produce unsustainable booms and inevitable crashes. The great recession, fueled by cheap credit, is a textbook example of this flaw.

“The second is the inequality that results when the charge towards wealth creation leaves behind those less able (in most cases through no fault of their own) to adapt or to compete with the hard-chargers.

“While there is no simple cure to capitalism’s two big flaws, here is what I would do in 2012 to get the system back on its feet and to modulate income disparities.

“1. Save the euro and the European Union. A functioning and vibrant EU – the world’s largest economic unit – is essential to global prosperity.

“2. Fix the US debt and deficit. …This is not acceptable, nor is it good for capitalism.

“3. Integrate the emerged markets. The world needs to acknowledge that the centre of capitalism is shifting to the emerging markets – where most of the growth will occur in 2012. …If they are not, the capital needed to solve many of the developed markets’ current problems, especially residual issues of the great recession, will not be available on tolerable terms. Again, this will hurt the poor more than the wealthy.

“4. Educate. Educate. Educate. Perhaps the greatest cause of income inequality is the dismal state of primary and secondary education.”

My Comment: Capitalism has exhausted itself; it cannot be integral as Nature requires because it is built not on reasonable consumption, but on the continuous growth of production and consumption, which is unfeasible due to limited markets and natural resources.

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