What if capitalists actually LOVE economic crises, unemployment, and stagnation?

Adapted from a graph from Nitzan and Bichler’s essay. Click it to see the source.

“Follow the money” is generally good advice for getting to the bottom of why many things happen, and it’s just what Jonathan Nitzan and Shimshon Bichler did. They looked at U.S. economic data from the past century, tracking the ebbs and flows of money and came to this conclusion: the last thing that capitalists want is an economic recovery.

They wrote:

Conventional economic theories tell us that capitalists are hedonic creatures. Like all other economic “agents” – from busy managers and hectic workers to active criminals and idle welfare recipients – their ultimate goal is maximum utility. In order for them to achieve this goal, they need to maximize their profit and interest; and this income – like any other income – depends on economic growth. Conclusion: utility-seeking capitalists have every reason to love booms and hate crises.

But, then, are capitalists really motivated by utility? Is it realistic to believe that large American corporations are guided by the hedonic pleasure of their owners – or do we need a different starting point altogether?

So try this: in our day and age, the key goal of leading capitalists and corporations is not absolute utility but relative power. Their real purpose is not to maximize hedonic pleasure, but to “beat the average.” Their ultimate aim is not to consume more goods and services (although that happens too), but to increase their power over others. And the key measure of this power is their distributive share of income and assets.

Simply put, for the very rich, it’s not just enough to win: they have to win and everyone else has to lose.

Where did this hippie diatribe come from? From the blog of the LSE, as in London School of Economics and Political Science.

Found via AZSpot.