Interviewer: On a broader topic, is interest a kind of rent in the classical sense? Is it income without a cost of production?
Steve Keen: Absolutely. This is why...I see the main dilemma in capitalism as being the conflict between financial capital and industrial capital. Industrial capital is ultimately productive. And if you look at workers and capitalists, they both ultimately benefit out of the technological developments over time and demands over wages. If unemployment is not gigantic, they benefit out of the improvements in current technology and out of productivity at the time as well. The real albatross around the neck of capitalism is financial capital [inaudible] when you let it get beyond the level necessary to simply finance working capital in some new investment. And it’s what happens every time capitalists take over...
...The thing I think we’re both in agreement on is we have to stop people, and particularly social classes, becoming dependent upon unearned income. Ultimately the only way to get a functioning capitalist society—or a society in general—is to have one where the source of income is earned, not unearned. And when you look at land speculation, or you look at any other form of speculation, people are trying to get income without earning it. That’s the real dilemma in capitalism. And if we direct ourselves toward that particular principle then we’re both on the same side. (Renegade Economists, April 21, 2010, at 13:30)There's lots of good insight here. A fine glimpse of "Keensian" economics. And I totally agree with the general point of the last sentence: "...then we're both on the same side". There's plenty of commonalities out there. We just need to focus on these.
PS: I'm entering a busy period at work. Posting will be limited and mainly consist of short thoughts on and snippets from economists I find interesting.
