The economic fallout from COVID-19 is generating a huge crisis of overaccumulation, and no one is talking about it.
The US and UK governments are effectively handing money to rich people, making inequality worse. But that excess capital has few options for profitable returns...
The US and UK governments are effectively handing money to rich people, making inequality worse. But that excess capital has few options for profitable returns...
Where will it go? A few likely possibilities:
1) It will pile into assets, which are presently in any case being massively boosted by the government printers. The effect will be a huge increase in house prices, similar to what happened after 2008.
1) It will pile into assets, which are presently in any case being massively boosted by the government printers. The effect will be a huge increase in house prices, similar to what happened after 2008.
2) How do you keep returns on capital rising while the economy is shrinking or stagnant? Suck existing money from the public and the poor. The bailout does this, and so too will the rise in asset prices.
3) We will see predatory behavior, with monopoly consolidation, mergers... big companies taking the opportunity to wipe out small businesses for good. Look at what Amazon is doing right now.
4) I bet billionaires will invest in eccentric future growth opportunities... things like space mining, sea walls, military technology, private security firms... the growth sectors of climate collapse.
5) Probably also predatory behavior toward indebted countries... as governments, particularly in the South, come under debt pressure, we'll see austerity profiteers ready to gobble up privatized assets.
Overaccumulated capital becomes extremely dangerous. But we can prevent all of this violence by disaccumulating capital, say, with a maximum income policy and a wealth tax.
