Tuesday, March 6, 2012
Grantham wonders if Marx was right after all
http://www.marketwatch.com/story/grantham-wonders-if-marx-was-right-after-all-2012-02-29?siteid=rss&rss=1
Jeremy Grantham, a legendary value investor like Warren Buffett and the co-founder of the Boston-based investment firm GMO LLC, suggested in his annual shareholder letter that maybe Marx was right on capitalism.
Unlike Buffet, who is comparatively optimistic about the future in his letter, Grantham takes a longer view, and isn’t so “aw shucks” about the future of our broken economic system. “Capitalism,” he writes, “threatens our existence.”
He talks about issues such as globalization, debt, lobbying and the principal agent problem. He says that although capitalism does better on almost everything than other economic system, a sustainable economic system cannot be based on ever-increasing debt.
I think his view on flaws of globalization is interesting and I agree with his statement that a sustainable economic system cannot rely on borrowing.
Subscribe to:
Post Comments (Atom)
1 comment:
The article states that corporations can't be allowed to run governments and loot treasuries. Well the economic system of capitalism never really includes bailout of firms in terms of hard times. If they have taken risks and have lost money, then let it be. That loss will serve as a disincentive to firms to commit those mistakes again. It might also give new firms a chance to enter the market and prove themselves competitive.
However, I do agree with the rest of the points against capitalism. We cannot stay blind to the fact that resources are limited. We need to include social costs in the production of goods and services.
Post a Comment