Covid 19 - the end of Capitalism?

I think a bigger issue could be timely-ness probably to late to implement.

Prolong closure you mean? I’m not sure what else could be prolonged if I don’t understand the scale?

I’d agree but it might also prompt people to do that, or later have a card/ voucher amnesty.

Ha sneaky edit ;-)

Prolong the issue of liquidity. They might be able to get by now, but if they're probebrly likely to go bust at some point down the line. Or have to make drastic cutbacks.

This social distanceing will go on for several months or longer. Buying some gift vouchers wont be enough.

Of course, but prolonged is better than closure no?

Maybe not.

If business go bust now, people can retrain and perhaps find different work. While some industries will suffer. Others will flourish.

The capitalist world is a tough one. Ray Dalios principles has a good one: evolve or die. And it's true here. Business and people that can evolve will thrive.

Local cafe should hire a bicycle deliver persons and deliver to all the people working at home.
Barista could become a child minder. Etc.

I am not saying that's right or fair. But it is life.

I’d broadly agree.
I do think the deeper we go in recession the longer it’ll take to come back though but I fix processes so what do I know 🙂

I would like to see directors and higher paid people taking salary cuts or equivalent for a period of time, rather than low income staff being fired first. But sadly that's how the food chain works.

As consumer we should look to highlight and remeber business that do the right thing in this period, and repay that.

. Still doesn't mean we have a command and control economy with no trade.

Of course 70s Britain had a great state network and key services were nationalised. All alongside private business. Im not proposing communism though there's a place for cooperative and other community based businesses in the mix.

So low interest loans to businesses seems in line with the Tory approach.
More debt to collapsing businesses.

And what about the many gig economy people. Nothing at all for them

And what about the many gig economy people. Nothing at all for them

Supposedly more coming in the next few days

the posters over on zerohedge think it's the end of capitalism .... and the end of the world too
so many doom porn graphs and red numbers

but for economic thoughts and some good humour it's worth a read, a different take on the economy and the crooks in charge of it

If every country spends 300 billion - 1000 billion to see us through this, and will need to borrow to pay for this who is lending the money?

As money is a construct are there really any limits?

Playing with money like this exposes this construct for what it is, (שום דבר- nothing), means Capitalism is dead

Today they guaranteed £330b, not spent it. i.e. the banks will lend it out and government will cover defaults.

Italy and Spain ban cycling completely! Can Boris price match that?
http://cycling.today/italy-and-spain-ban-cycling-completely/?fbclid=IwAR3RgyI9Gpb950GHYlMvqBV5TEhxS8OyF7rYbdFSL6iX-SOXrMwRaYBR_XQ

.

Scathing article from George Monbiot on the Capitalist failure to deal with this crisis

https://www.theguardian.com/commentisfree/2020/mar/18/politics-public-covid-19-tobacco-johnson

As money is a construct are there really any limits?

For a fiat currency, no. M1 money supply is wholly at the discretion of the nation state/central bank.

the posters over on zerohedge

They've been waiting for this for years, and finally they get to revel in their moment.

https://www.theverge.com/2020/3/17/21184308/coronavirus-italy-medical-company-threatens-sue-3d-print-valves-treatments

Unbelievable that a £1 printed valve could cost £11k when bought from a medical supply company. A business on Skye offering "isolation retreats" at £100 per person per night in erstwhile short term lets has been royally torn apart too (in a place young people born there can't afford to rent or buy it's also an indication of the type of person profiting from this situation...) which is good.

For a fiat currency, no. M1 money supply is wholly at the discretion of the nation state/central bank.

So you're saying that to increase the money supply the state can just do this without borrowing from anyone?

Simplistically, yes.

To do so has ramifications both internally (e.g. inflationary pressures) and externally (e.g. exchange rates and balance of trade payments) to the state.

Yes. That's exactly what QE does, and what 'helicopter money' would do.

The reason central banks don't simply print lots more money is the fear of hyperinflation, as happened in Weimar Germany and more recently in Venezuela and Zimbabwe. However, given the low inflation rates and the moment, combined with low growth rates, increasing MB/M0 money supply is probably a fairly safe option.

Edit. P.S. As @TW points out, it also has other effects. It basically devalues the currency, both internally and externally.

Hmmm.

Sorry I'm being completely dumb (despite A-level in economics -grade E)

Austerity is political rather than economic, causing contraction of the state, while benefiting the 'haves'?

Perhaps this crisis will really show laissez-faire economics as a crap approach

Austerity is political rather than economic, causing contraction of the state, while benefiting the 'haves'?

Depends what you mean by 'austerity'. If you mean a political decision to lower government spending, resulting in less governmental borrowing/debt monetization/taxes but also resulting in less money available for state operations, then yes. It's a political decision which will disproportionately benefit the rich and disadvantage the poor, because it will preserve the assets and income of the rich and leave less money and services to be distributed to the poorer sections of society.

Also depends what you mean by 'laissez-faire' economics. Invariably it's a matter of degree rather than black and white binary positions. Any state which has taxation and governmental spending is by definition intervening in the market. Some states do it more than others, and as with most things, there are pros and cons to both approaches and both can be done in a wide variety of different ways. For example, you could raise taxes and spend the money on social services. Or you could raise taxes and increase military spending. Both would involve greater state intervention and action, but the results would be very different.

Austerity is predominantly based out of fiscal policy - reduce govt. spending and reduce govt. debt.

QE is based out of monetary policy, which seeks to influence the economy through interest rate setting.

I rather suspect, however, that corporatism and widening of the wealth gap is fuelled by policy and deregulation shifting power and rights away from the person, as opposed to any taxation & spending.

Money supply just oils the machine.