Internationalization of Production and Capitalism's Dilemma

To be competitive, capitalism must lower the cost of production by lower wage costs, lower inflation, lower interest rates, and lower taxes. The welfare state has become the greatest hindrance because it supports costly wage rates even in a recession with high unemployment. The consequences of a weak welfare state, however, are rising unemployment, poverty and crime. But an internationally‐oriented economy does not need to depend on local demand, much of which is created by full employment. One solution is for the unemployed to become self‐employed. Capitalism, over the years, has achieved an unlimited capacity to produce, improve and diversify output at a declining cost per unit of output, but paradoxically has created an increasing problem in marketing its ever‐expanding output. Attempts to explain this.