So Karl Marx was right after all

Bostonians tar and feather John Malcolm, Customs officer, 1774

Bostonians tar and feather John Malcolm, Customs officer, 1774

Mark Steel in The Independent (UK)

The sudden change is disconcerting. For years I might suggest society would be improved if we sacked these vastly overpaid bankers, and the response would be some variety of “Here he goes again”.

Now if you say the same thing the response is “SACK them? I’ll tell you what we should do, we should cover them in marmalade and lock them in a greenhouse full of wasps, then scour the stings with a Brillo pad. Then prick them with hedgehog spikes, smear them with fish paste and dip them in Sydney Harbour, then glue them to a pig and send them into an al-Qa’ida training camp with a letter announcing they’re a work of art, never mind sack them.”

But [Karl Marx] might also dispute the idea attributed to him, that slumps make the collapse of capitalism inevitable. Because while he said SLUMPS were inevitable, he also said the outcome wasn’t inevitable at all, but depended on whether the poor allow the rich to make them pay for it.

Marx also had not foreseen a interlocking, worldwide financial system of the complexity that we have now, although he certainly understood what Credit Default Swaps (CDS) were about, he called such bizarre creations “fictitious capital.”

And therein lies the problem, if first thing we do is kill all the bankers and blow up the CDS then, rather than a worker’s paradise, we’re liable to have shrieking chaos. As an example, look at Lehman Brothers. the US government didn’t prop them up, and allowed them to fail. The resultant carnage ended up, among other catastrophes, cratering Iceland (because their banks used Lehman as their primary lender.)

The gaping black hole that is AIG is sucking up more billions of our money. Why? because they wrote zillions in CDS and the counterparty risk is everywhere. If Lehman tanked a country when it fell, the collapse of AIG would wreak severely more damage.

The workers are part of the system too. Collapsing economies fall on them harder than on the monied class. So how to we reform / change / replace the current dysfunctional economic system with one that works without unintended consequences like hundreds of millions more out of work and more demolished countries (assuming we even have the power to effect such changes?)

And while tarring and feathering someone looks like it might be jolly good fun, it’s really just a form of torture, isn’t it? Hot tar on naked skin while being abused by a mob…

  • DJ

    The problem is not merely the system, it is system dependence. So long as we need the bankers (and the larger system), we are dependent on them. In 1929, banks were allowed to fail, and people disovered how dependent on them the economy really was. But they hadn’t seen anything. As you say, today we can’t afford to let them fail. We are more dependent than ever.

    If the problem is dependence, the answer is independence– divest ourselves of the system; marginalize it. You’ll probably say that I’d have you living in a yurt and eating cow dung, but that’s not the only alternative. It wasn’t that long ago we banked at community banks, bought from small farms, and worked in small businesses. And I don’t know about you, but as a child I didn’t live in a yurt or eat cow dung.

    The answer is not that hard: it means giving up a little bit of convenience and security (and having banked at the big banks, belonged to a union, and worked for a multi-national corporation, I would argue VERY little convenience and security). It requires paying a little more for a more valuable product (namely food and other goods that employ our neighbors rather than factory workers in China). It requires a little more perceived risk– though there’s no such thing as job security anymore anyway.

    Above all it requires a change in thinking: toward a community-centered approach that hasn’t been out of our consciousness all that long, it just seems that way.

    When spiritual lefties like A.T. Ariyaratne, radical Catholics like Niphot Thienvihan, and right wing security experts like John Robb all come to the same conclusion, maybe we ought to take another look.

    • Absolutely, we need more community-centered approaches. But we can never divorce ourselves from the world at large. All the stuff has to be made somewhere, then shipped. Without electricity, motorized vehicles, telephones, the Internet, etc. your farm would be a mighty isolated and lonely place.

  • DJ

    The answer is not divorcing from the system, it’s having the power to do so should we choose. And yes, in some ways my wife and I HAVE chosen to divorce from the system: we gave up TV because we don’t care to pay for it. We bank ONLY with the local, community-owned bank. Local real estate represents a sizable chunk of our investment portfolio. And (horror of un-American horrors) we paid off our mortgage.

    So long as we don’t have the choice to forego the services of the system, we’re dependent– and they can do to us what they will. Fair trade suggests equal footing, which we won’t have as long as we think we can’t live without them.

    Our own act of independence likely has little effect on the system as a whole. But hopefully others will join us. “[C]an you imagine fifty people a day, I said fifty people a day walking in singin a bar of Alice’s Restaurant and walking out. And friends they may thinks it’s a movement. And that’s what it is…”

    And I promise: no yurts.

    • What you’re doing is great, and should be a model. I guess my point is, you can’t drop out of the system entirely. To put it in 60’s terms, Tim Leary said, Turn on, tune in, drop out and Ken Kesey said take the culture as it is and make something better of it. Kesey, I think, was right.

      Either way though, strong, self-sufficient local communities are a good idea.

      We don’t have a TV either. But I do have the fastest DSL available. 🙂

  • DJ

    It sounds like you can envision our relationship with the system as like India and Nepal, where one completely dominates the other, or like 19th century Japan and the U.S.– no interaction at at all. But those are not the only two models.

    The reason we are dependent on the global financial system is because we’ve gotten lazy and complacent– and we let them sell us stuff we don’t need. I’m not saying drop out, I’m saying expand your vendor base to include non-system partners. At the very least, make the global system compete for your business. Seriously, my local bank is paying 3.56% of a free checking account. Can any of the big boys match that?

    I have internet too, and it’s provided by a local company. I try to shop at locally-owned stores, use locally-owned banks, and buy gas from a locally-owned chain of gas stations. But I do admit to having a Verizon cell phone.

    • Absolutely, shop and deal locally when you can. Which maybe paradoxically, is easier to do in the country than in a city.

  • DJ

    For groceries it’s easier in the country. For manufactured goods– even clothing– it’s easier in the city where small manufacturers abound.

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