Karl Marx, founder of scientific socialism, was right about self-destruction of capitalism, economist Nouriel Roubini said in an interview with the Wall Street Journal.

Nouriel Roubini, nicknamed “Dr. Doom”, is the American economist known to have predicted the collapse of U.S. housing market. Roubini, born in Istanbul, Turkey, to Iranian Jewish parents, teaches at the New York University School of Business.

“Karl Marx said it better. At one point, capitalism can destroy itself because you can’t transfer income from labor to capital without having an excess of production capacity and lack of aggregate demand. This is happening now”, Roubini said.

Marx, philosopher, economist and journalist, is considered the founder of the theory of scientific socialism with Friedrich Engels. In 1848, the two wrote The Communist Manifesto.

The economy can’t recover itself without consumption, which has been affected in recent years.

“In the last 2-3 years there has been a great redistribution of wealth from labor to capital, from wages to profits. Inequality between income and wealth increased”, said Roubini.

Roubini showed that the economy does not adjust itself.

“We believe that markets work, but they are not. Every company wants to survive, so it reduces labor costs and lowers other costs. Labor costs consist of salary income and consumption of others. Because of this, it is a destructive process”, says Roubini.

The American economist said that U.S. is not yet in this situation, but the danger is significant.

“At least in Germany they have taken steps to maintain jobs. The U.S. does not believe in it and we have a 16% unemployment”, Roubini said.