Private capital and the demands of citizens

Charles Hugh Smith has a blog post “How the Middle Class Lifestyle Became Unaffordable” that succinctly describes the quandary of capitalism today.

The State has two core mandates: enforce quasi-monopolies and cartels for private capital, and satisfy enough of the citizenry’s demands for more benefits to maintain social stability.

If the State fails to maintain monopolistic cartels, profit margins plummet and capital is unable to maintain its spending on investment and labor. Simply put, the economy tanks as profits, investment and growth all stagnate.

If the State fails to satisfy enough of the citizenry’s demands, it risks social instability.

That is the nation-state’s quandary everywhere. With growth slowing and parasitic cartels increasingly difficult to maintain and justify, the State has less tax income to fund its ever-expanding social spending.

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