What happens when death becomes profitable? Like in buying specially-discounted bonds using a terminally ill person to get the discount. This happening. Now. What could possible go wrong (except if granny takes an unfortunate stumble down the stairs, that is…)
Adam Smith believed governments can and should intervene, that oversight is crucial, and excess political influence from economic power was dangerous.
Of course, what we have now is hardly capitalism, but more like a kleptocracy where money gets siphoned to a few who are stealing from the many.
With high-frequency trading dominating the market, frontrunning, permanent bailouts, government-sponsored credit rating scams and enterprises, the creation and maintenance by the government of banks so big that their very size warps the entire system, socialism for the big boys, and all of the other shenanigans going on, we don’t currently have free market capitalism.
1. Clarity in the boundaries and rules. Lawful people that we are, anarchists have a great appreciation for the minimization of unnecessary conflict. When people know what is and isn’t acceptable behavior to others, it is easier for us to adapt our actions in accordance with those expectations. Of course, the idiots who spout nonsense such as “ignorance of the law is no excuse” are inevitably government prosecutors: the rest of us understand that common law provides its greatest service by clarifying expectations so that people can interact cooperatively and peacefully.
2. Local input and acceptance of these rules. Friedrich Hayek, co-winner of the first Nobel Prize in Economics, would be proud. The closer someone is to a situation, the more things they’ll know that others do not. Central planning, even were it performed by angels, would not produce good rules because of information problems. The fact that angels AREN’T in charge is, of course, another problem. Ostrom is well versed in “public choice” theory and knows that government regulators are humans with their own information AND incentive problems.
3. Active involvement of those most likely to be using the commons in the monitoring of use. The ones who care the most need to either directly involve themselves or else delegate to monitors who are accountable to them. Again, central planners, especially government officials who are accountable, if at all, to a much wider variety of people than those most interested in the commons in question and for a larger variety of activities than just the management of specific commons, cannot effectively monitor them and be held accountable. If the people who most need the commons can’t fire those who fail to protect it, the tragedy is inevitable.
4. Methods for dispute resolution. Central to anarchist theory is the idea that parties with disputes will agree to third party mediation or arbitration of those disputes. One of the inanities of government is that any dispute between the government and private persons is adjudicated by the government itself. The evolution of common law went far beyond the ad hoc choice of an arbiter to arrangements that let parties know in advance how disagreements would be resolved. Disputes are inevitable: dispute resolution methods are necessary, and do evolve.
5. Sanctions for violators. Naturally, those found liable by arbiters or, worse, those who declare themselves “outlaws” by refusing any third party arbitration may need to be encouraged to comply by proportional sanctions. Common law anarchists emphasize the value of non-violent enforcement through ostracism and boycott, most effective against those who are part of the local community, but recognize that some cases may require force against violators. Clearly, the arsonist may need to be restrained physically to protect the forest. Still, when local acceptance and monitoring of rules is strong, violations are rare, usually accidental, and typically resolved without the need for violence.
This will hopefully be the final nail in the coffin of Garrett Hardin’s overly simplistic “Tragedy of the Commons.” Ostrom provides us with clear empirical evidence that people can successfully manage commons without the profit motive and without government interference.
However, I have learned there is an apocryphal basis for that position. It turns out that biblical archaeologists have unearthed a little-known text that offers a somewhat different understanding of the teachings of Jesus. In this new Gospel, Jesus draws his teaching not from Isaiah (“He will not break a bruised reed, or quench a smoldering wick, until he brings justice to victory”), but from Proverbs (“If you have nothing with which to pay, why should your bed be taken?”).
In Matthew, Jesus says, “The kingdom of heaven is like treasure hidden in a field…” But in the new Gospel, Jesus says, “Treasure is like the Kingdom of heaven, leave it not hidden in a field.”
Likewise Matthew quotes Jesus as saying, ““If any want to become my followers, let them deny themselves and take up their cross and follow me.” But the new text says instead, ““If any want to become my followers, let them deny their obligations to society.”
Here are some other representative quotes from the new Gospel that differ somewhat from the traditional texts:
“Beware of practicing piety; for then you have no reward.”
“Do not store up for yourselves treasures on earth, where moth and rust consume and where thieves break in and steal; but store up for yourselves treasures in banks, where professionals may decide how and when your wealth should be dispersed.”
“Render prayer unto God, and money unto bankers.”
“Truly I tell you, when you stole from the least of these who are members of my family, you enriched me.”
As these passages reveal, Jesus was in fact a capitalist. He stood not for justice for the poor, as some weak-minded do-gooders would have us believe, but for the accumulation of wealth by any means available. After all, why would God want the poor to join him in heaven when he could have a better dressed class of people who truly appreciate the treasures He placed on earth?
Michael Moore has wasted not just millions of dollars and two hours of my time. He’s wasted a once-in-a-lifetime opportunity We are at an unprecedented moment in history right now: where the corrupt and immoral economic superstructure we live under is actually up for debate; a time when people are finally questioning why their toil and time should be subordinated to the whims of what appears to be little more than a crooked casino. He could have used the near-universal revulsion at the Wall Street bailouts to preach to someone other than a now-bored choir.
But, while Moore does take the Democrats in Congress to task, he gives an unforgivable pass to the Dem presidents, and thus, completely loses any claim to intellectual integrity.
Indeed, Clinton repealed the Glass-Seagall Act, which deregulated banks and unquestionably led to the current financial crisis. Obama has let Goldman Sachs and the rest of the investment banks do just about whatever they want. Look, I like a lot of what Obama is doing but as Congressman Kucinich said in Sept. 2008 during the bailout debate “Is this the US Congress or the Board of Directors of Goldman Sachs?” This has gotten worse not better under Obama. Moore’s huge flaw is he can not see that Democrats hold just as much responsibility and culpability as Republicans. The problem is not one party or the other but a corrupt system with a revolving door between high paying private sector jobs and government ‘service,’ awash in a flood of thinly disguised bribes pretending to be campaign contributions along with a lack of ethics and concern for the nation at large.
Matt Taibbi responds to Childers saying yeah, the movie is flawed, definitely odd in spots but give the guy credit for what he’s done.
But let’s give Michael Moore credit. Most of the movie isn’t about Michael Moore. It’s about what’s happened to this country, how far it’s fallen, in the age of financial deregulation.
Even just looking at the historical context provided by Moore’s own movies, the progression is kind of scary. Back when Moore made Roger and Me, he was describing how blue-collar workers could no longer could find jobs to support themselves. In Bowling for Columbine he talked about the workfare programs we cooked up to keep those ex-employed blue collar workers alive, how brutal and inhumane those programs can be.
In Capitalism: A Love Story we’re now talking about how the compensation for professional jobs we used to consider upper-middle class, like the job of airline pilot, have dropped below subsistence level. This is a portrait of a society steaming toward a feudal structure.
At least Michael Moore is getting us talking about the right topics.
It’s a good first step. But maybe he could have spent fifteen minutes on detailing how European socialist / capitalist systems work so people would know that genuine alternatives already exist (with decent health care.) Not that those system are perfect, not hardly. But most Americans don’t even know they exist or that the American system – based on what “The father of capitalism” Adam Smith envisioned it as – could scarcely still be considered capitalism anymore. It’s really just government-sanctioned organized theft by the few from the many. That is what Moore is talking about, right? But unless you delve into the economic systems deeper, you’ll see the movie and be left rudderless as to solutions.
And why is it titled Capitalism. A Love Story. Does he think capitalism is currently flawed but redeemable? Is he trying to be ironic? You tell me.
Capitalism is dying, boy. It’s dying of its own internal contradictions.[He was, after all, a Wall Street financier, so I listened carefully.] You think the revolution’s gonna take five years. It’s gonna take fifty! So keep your head down and hang in for the long haul, because I’ll tell you something. The sons of bitches running things don’t give a shit about their children or their grandchildren, and they certainly don’t give a shit about you! They’ve paid their dues, and they want to get out with theirs! They’re gonna sell off everything that’s not nailed down to the highest bidder. Don’t get crushed when it topples down. Take care of yourself and your family. If you can make a difference, do it, but there are huge forces at work here, and they have to play themselves out according to their own design, not yours. Watch yourself.
– Wall Street Financier, Morris Cohon, to his son, Peter Coyote—Winter of 1969/1970
The above passage is from Peter Coyote’s excellent memoir, “Sleeping Where I Fall”. In the next sentence, Coyote adds,
As far as I can determine, everything he prophesied has come true.
Sure enough, last year, 2008, balls out free market capitalism stepped on its dick and fell on its ass. We had lived a fantasy for nearly thirty years.
Yet we cling to the notion of capitalism as if it were the only thing that keeps us American. We still demonize any form of Socialism.
I personally, have no problem with Socialized Medicine, even when called by its proper name. To me, Socialized Medicine means the lady that checks me in at the hospital doesn’t first ask me how I intend to pay for services rendered, but rather asks me, “Where does it hurt?”
I’ll pose a question to those who’s greatest fear is socialism. Those bankers that you hate so much, those bankers whose bailouts your grandchildren will be paying for while they’re also paying for the wars and maybe a bit of healthcare, those terrible evil banker people . . . are they socialists?
No, they damn sure aren’t socialists. Instead they’re doing things like plundering companies to make millions for themselves. If the companies are destroyed and employees lose their jobs, it means nothing to them. This isn’t even capitalism any more and they aren’t investment bankers. They’re just gangsters, no better than Russian Mafia really.
Yes, there are huge forces at work now and it’s most definitely a time to be careful. But such huge forces also provide openings. We can make a difference. Now is the time to do so.
If / when socialism or something like comes to the US, it’ll be due to a genuine populist uprising from the heartland and not from the machinations of increasingly isolated and useless Marxist grouplets in the US, most of whom couldn’t find the actual working class if they had a road map. (Hint: Most of that working class is white.)
In a recent NPR interview, singer Steve Earle said he was a redneck and a socialist, and that about everything Karl Marx said about capitalism seemed true enough to him. McMurtry’s example of the hospital asking ‘where does it hurt’ not ‘do you have money’ is a great way to get the ideas across to the public at at large.
Before we talk about America’s self-destructive love affair with capitalism, we need to define it. So many still fail to make the distinction between capitalism, as envisioned by its “father” as markets regulated by a central government, and economic anarchy envisioned by Rand. Adam Smith would be appalled by so many aspects of what passes for capitalism in the U.S. today. Even Keynes envisioned economics as local and national, not global.
First and foremost, selfish and immoral (or at least amoral) greed had no place in Smith’s theory– the whole intent of “self benefit” was not just personal wealth, but a stable market and a strong society, both of which benefit the economic actor. To do otherwise qualifies as economic terrorism. Smith wrote an entire (little-read) volume about how morals were an essential part of capitalism.
Secondly, Smith realized that government MUST perform certain functions that the market cannot efficiently perform. Public education, roads, etc are essential public works that can only (fairly) be provided by the government. The drive for privatization of everything has nothing in common with capitalism.
Thirdly, Randian anarchists favor more subsidies and less regulation. Talk about looting the treasury! Smith envisioned the opposite: a strong central government that could manage a market to prevent it from getting out of control. Today we subsidize the powerful– banks, oil and coal, mega-farmers– giving them a competitive advantage, despite the fact that we know their impact on our society is negative. And we demand little in return.
Fourth, progressive taxation was one of Smith’s brilliant features. It helps prevent too much wealth from accumulating at the top. The flat tax, the efforts to reduce taxes on the rich, these are NOT consistent with a healthy capitalist system.
Capitalism isn’t perfect. But lately it’s not even practiced.
Byron DeLear, who I knew when we both lived in LA and he ran for a House seat as a Green, just kicked off his debut in Examiner with a column on Michael Moore’s new movie.
The failures of the S&L crisis, Enron, subprime mortgages, Bear Stearns, Lehman, AIG, reveal a deeper social pathology; an epidemic of self-serving materialism, eating away at the soul of America.
“Capitalism: A Love Story” challenges a morally complacent and slumbering nation unaware that the compound depredations of excessive profiteering and consumerism just don’t jive with our most revered ethical and religious teachings.
I disagree a bit with the assumption the nation is slumbering. It’s more that people don’t quite know what to do yet. They see the corruption and fraud, the gaming of the system by an elite few, the compliance by D.C. to do what financial interests want – and it angers them. What they aren’t sure of yet is what the solution is.
As for the economic royalists who attempt to control us now DeLear offers this quote;
“These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power.”
That quote was from a speech by FDR in 1936. The genuinely patriotic thing to do in such cases is remove from power the slime who are corrupting the country as they enrich themselves.
With my ear to the street, I sense a fight like no other welling up in the people. The folks in upper echelons of national power need to honor their commitments and start serving their real master, the American people, or we will find a different crew.
I’m continually stuck at how financial blogs are 1) providing the most incisive analysis of the current crisis and 2) are getting seriously pissed at what’s happening. They genuinely thought our markets were free and open. Now that it’s become obvious to all that the game is rigged (and at the highest levels too), such bloggers, often libertarian, are providing invaluable commentary because they know precisely how the game is played. And they want change. Real change.
The most intractable part of the current financial crisis, and the ongoing problem of the US economy is the huge tax which is levied on the American public by its corporations, primarily in the financial and health care sectors, and a political system based on lobbyists and their campaign contributions.
There are hidden taxes and impediments to ‘free trade’ at every turn. The ugly truth is that capitalism-in-practice hates free markets, always seeking to overturn the rules and impose oligopoly if not outright monopoly through barriers to entry, manipulation of the political process, distortion of regulation, predatory pricing, brute force, and the usual slate of anti-trust practices.
Remember, this is coming from a capitalist, not a Marxist.
Discussion rarely proceeds very far because of the dialectical nature of American thought. Both extremes are wrong, but they seem to content to merely bash each other, pointing out their errors, while repeating the same mistakes over and again.
Precisely. Red and Blue screaming at each other solves precisely nothing. And allows the current corrupt system to continue.
Because our system has been abused for so long, and is so distorted and imbalanced and dominated by a relatively few organizations beholden to a self-serving status quo, reform is not an afterthought, it is the sine qua non.
It means that until the banks are restrained, and the financial system is reformed, and balance is restored, there can be no sustained recovery.
Can you see the angry populist mobs in the background of that quiet call for reform. I can. And that’s what’s coming if reform continues to be blocked. The teabaggers are just the leading edge of that. Their anger is genuine, if unfocused. There’s plenty of common ground between them and the left, but everyone needs to stop screaming first to realize that. Then we could start to move together towards real change. Without destructive, mindless mobs.
The notion that “if only government would not regulate markets at all everything would be fine” is a variation of Rousseau’s romantic notion of the noble savage which no one believes except those who wish to continue to act like savages, and those who get no closer to the real work of an economy than their textbooks. Economic Darwinism works primarily to the advantage of the sharks. Anyone who believes that ‘no regulations’ works well has never driven on a modern highway at peak periods.