delusions of capitalism
TRANSCRIPT
The false dawn of capitalism
is an opportunity not to be
missed by our generation
Pyramid of Capitalism
The industrial revolution was
a great time for PROFITS ?
PROFITS
Productivity
Wages
Under capitalism ‘machines’ employ labor, humans become means for increasing productivity
Human capabilities are Displaced .
1. Less demand for workers displaced by technology
2. Cheaper labour
overseas
3. Women go back
into the job market
4. Immigration
Banks make even more profits
Insuring and selling ‘toxic’ mortgages
The Banking crisis
Banks have been the main user of MBS
(40% of cumulative total).
Strong competition in a deregulated
market has made Subprime based CDS
attractive to boost Banks profit rates.
The use of securities baskets by banks
has decreased transparency.
The development of Mortgage Based Securities
MBS are a kind of insurance system for the Sellers and they
are attractive bonds for buyers
But MBS have spread the risk throughout the financial system
and everybody can become an insurance company if it buys a
Mortgage Security
Mortgage Based Securities: an industry which grew too fast...
MBS have
developed
extremely fast
in 8 years.
Risk has been
spread-out
among Banks
and Hedge-
Funds
0
5
10
15
20
25
30
35
40
45
50
1998 2002 2004 2005 2006 2007
MBS
volume (in
Trillion
USD)
US Household indebtedness in GDP %
20%
30%
40%
50%
60%
70%
80%
90%
100%
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Total household debt Household mortgage debt
The US Debt is increasing fast.
2%
4%
6%
8%
10%
12%
14%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Yearly increase of US State and Household debt as a % of GDP
Yearly increase of US Household debt in % of GDP
A Social Innovation Approach
A new Social Innovation compromise would change institutions so that wages (including the social wage) are reconnected to productivity growth.
Profits are distributed among employees, and they make production and location decisions.
Limits on CEO compensation, revival of labor, time allocated to innovation and management decisions by employees.
Greater social spending on health, education, environment and infrastructure.
Market
Opportunity
Social
Benefit
Financial
Returns
ValueOpportunityIDEASocial
Impact
Knowledge Financing
SocialNetwork
Government
IDEA SUPPORT VALUE
Dr. Boaz BernsteinManaging DirectorCareer ResumesCairns, Australia
June 2011www.Careerstampresumes.com.auEmail: [email protected]://www.facebook.com/boaz.bernstein