Dr Nouriel Roubini, the man who predicted the credit crunch and ensuing global financial problems has now predicted that the social unrest seen in the Middle East, Greece and Israel as well as the UK will spread.
Well, according to Globes anyway, the Persian American professor of economics at New York’s Stern School of Business said that "Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China – and soon enough in other advanced economies and emerging markets – are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities."
Roubini, says Globes, claims that the modern capitalist system will remain in crisis until wholesale systemic reforms of the economic system are conducted, just as Karl Marx had predicted over 100 years ago.
What he is actually saying, says Business Insider , is that ‘capitalism itself is threatened’. Driven by the ongoing transfer of wealth from the labourers to the capital holders (rich to poor).
Globes reports that Roubini says that the demonstrations are all being driven by capitalism’s most serious crisis since the 1930s Great Depression, linking back to ‘…globalization, financial intermediation run amok, and a destructive redistribution of income and wealth from labor to capital’.
Many in the UK, especially David Cameron, would vehemently disagree with this hypothesis putting the UK riots firmly down to more criminal elements of society as opposed to political action.
But maybe that is part of what Marx and Roubini see as a result of social inequality.
Roubini says that the remedy lays in stimulus created ‘productive’ infrastructure investment, progressive taxation, debt reduction, central bank support, more financial services oversight and the breaking up of big banks.
But Globe's analysis may be one side of the story. The original article from Nouriel Toubini can be found here: www.project-syndicate.org/commentary/roubini41/English