Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx. The sooner they recognize were facing a once-in-a-lifetime crisis of capitalism, the better equipped they will be to manage a way out of it. The spirit of Marx, who is buried in a cemetery close to where I live in north London, has risen from the grave amid the financial crisis and subsequent economic slump. The wily philosophers analysis of capitalism had a lot of flaws, but todays global economy bears some uncanny resemblances to the conditions he foresaw. Consider, for example, Marxs prediction of how the inherent conflict between capital and labor would manifest itself. As he wrote in Das Kapital, companies pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an industrial reserve army of the poor and unemployed: Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery. The process he describes is visible throughout the developed world, particularly in the U.S. Companies efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant. U.S. income inequality, meanwhile, is by some measures close to its highest level since the 1920s. Before 2008, the income disparity was obscured by factors such as easy credit, which allowed poor households to enjoy a more affluent lifestyle. Now the problem is coming home to roost. Over-Production Paradox Marx also pointed out the paradox of over-production and under-consumption: The more people are relegated to poverty, the less they will be able to consume all the goods and services companies produce. When one company cuts costs to boost earnings, its smart, but when they all do, they undermine the income formation and effective demand on which they rely for revenues and profits. This problem, too, is evident in todays developed world. We have a substantial capacity to produce, but in the middle- and lower-income cohorts, we find widespread financial insecurity and low consumption rates. The result is visible in the U.S., where new housing construction and automobile sales remain about 75% and 30% below their 2006 peaks, respectively. As Marx put it in Kapital: The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses. Excerpt; more at Give Marx a Chance to Save the World Economy: George Magnus - Bloomberg. Most of us have known for years that Obama and his useful Democrats are Marxists with their rich vs. poor and zero-sum idiocy. When I first saw this article I kept thinking the writer was joking. Like, nobody admits he's a Marxist. This guy admits it.