Trite as it seems, comparing capitalism with evolution still makes sense to me. (And to others.) Companies struggle with each other to survive, and the losers disintegrate. But individuals (i.e. people, er, I mean humans) in our system are in a similar Darwinian struggle for jobs and income- now sharply accentuated with globalization. When individuals succeed, the results are clear- they get rich, maybe famous. But what happens when they fail?
That is a bit of a problem in capitalism- those who fail don't conveniently disappear, but linger in poverty, creating political and moral problems. They test a culture of pure rapacious competitive greed for the presence of human values. For her part, Ayn Rand couldn't give a fig for the fate of the losers- the proles, the leaches. That would be the orthodox capitalist position, though there is the small complication that after the money has all been taken from the losers, the winners still need workers to give them food and pedicures. Exactly how little can workers be paid and still arrive to work? And secondly, how can the moral claims of losers in unemployed poverty be best ignored and dismissed?
This brings us to our political moment and the Occupy Wall Street movement. The last few decades have featured a cult of the market and the demonization of human values in the name of supposed efficiency and just deserts. The result has been a well-oiled economic machine that transfers wealth upwards and glorifies the rich. Only, the market turned out to have a screw loose. Greed unleashed led to fraudulent banking on a cataclysmic scale, among many other pathologies in finance. Profligate lending to unqualified borrowers was not bumbling, generous, or inadvertant, but a pattern of fraud perpetrated by businessmen motivated by personal greed over organizational, not to mention systemic and public, responsibility.
They won, sure enough- took the money and ran. Virtually none have been called to account. It is the line where "winning" in the capitalist competition crosses from serving customers to fleecing them and destroying their lives. Obfuscating this basic dynamic is what current Washington politics is all about, especially on the Republican side. And exposing and resolving this dynamic is what OWS is all about.
The losers in capitalism don't quietly fade away, but linger on as citizens, voters, maybe protesters. This is where humans transcend evolution and the bare laws of competition. For all of biology's glories, it has been an extremely painful and slow process, and has resulted in sub-optimal solutions. The fact that humans, once evolved to have enormous brains, could take the world by storm, occupy all lands, commandeer all resources, and fly off into the solar system ... well, that shows how limited the scope of evolution had been up to that point in comparison. It testifies to a consciousness and intellect that reaches far beyond competitive narrow-mindedness- so faithfully modelled by market competition- to a revolutionary capability to foresee the future, to alter circumstances, and to adopt a whole new vision of humanity.
It is a humanity that engages in common effort, plans in common for future prosperity, and shares the fruits of that planning. It is a humanity that harnesses markets and competitive logic as tools, but not as a theology that places Mammon ahead of all else. Polls show that most people share this vision- one of rational forethought, mutual moral obligation, fundamental legal/political equality, and measured economic inequality. Everyone, perhaps, except the most stultified economists.
So, somehow, we have gotten blown off track by the ideology of greed and false efficiency, back to a Herbert Spencer-era economic Darwinism as an ideal of human affairs. Yes, some degree of competition and unequal reward is neccessary to make the economic wheels go around on a micro level. But other values are required as well: a democratic political system that directs the economic system, instead of being corrupted by it; recognition of public goods as essential goods; and progressive mechanisms (specifically, a financial transaction tax, among other means) to counteract the ratchet of wealth accumulation in the hands of the few so that other virtues besides greed can have a place in our society.
- Roubini analyzes inequality ... Karl Marx was right.
- Regulating money power.
- What do we want? Impunity for the rich! When do we want it? Yesterday!
- The right competes to propose even more presents to the rich.
- .. and can be Keynesian when needed, showing intellectual er.. flexibility.
- What is missing in Greece? Taxes from the rich.
- Martin Wolfe meditates on economic justice and efficiency.
- An army of fobbits ... and a lesson in providing jobs for all.
- How was Iceland's crash resolved? By default, fiscal support, putting women in charge, and forcible bank resolution. An object lesson in who has control- the government, not the markets.
- Economic quote of the week, from Bill Black- Whom do the euro masters serve?
"The ECB has no statutory mission to protect the interests of Greece’s creditors. Its decision to side with the interests of Greece’s creditors (overwhelmingly European banks, particularly German banks) against the interests of a member nation makes clear why the ECB poses an enormous danger to Europe. The ECB is dominated by theoclassical economists who glory in their “independence” from democratic institutions but are slavish servants of the systemically dangerous institutions (SDIs) – the misnamed “too big to fail” banks."