Despite Bernie Sanders' campaign bringing some degree of enlightenment to the 2016 presidential race (by making it okay to criticize capitalism), much more needs to be done. That includes holding its sundry apologists to account for the loose thinking, and false logic they consistently display.. One such case emerged in the August 15th issue of The Economist in a review of John Plender's book: Capitalism: Money, Morals and Markets.
The anonymous reviewer observed how "capitalism lacks defenders while protests against it have fresh vigor" forgetting that most of those protests have not occurred in the mainstream media but in the marginal media or blogs, as well as on the streets. Hence, it's debatable how much of an impression has been made.
What we can say is that when an illustrious person like Pope Francis speaks out on capitalism's ills, or a Thomas Piketty (in his books) then it's more likely the mainstream news takes note - but more often than not criticizes the critics for their short sightedness. Thus, in the review of Plender's book do we see a faint damning of ancient critics like Socrates who "declared that the more men think of making money, the less they think of virtue."
Which is probably true for most humans, just look at the tallies of those who win giant Powerball jackpots then blow them on booze, drugs, unwise gambling or unwise investments (often in the same category as the previous one). Money -sighted people then, as I've often found, are basically two dimensional operating on the existential axes of time vs. money and seldom express an original thought outside this reference frame,
Gordon Gekko, of 'Wall Street' movie fame, may be something of a caricature but his basic persona is often replicated in many of the Street's money men (bond traders, investment bankers - once referred to as "big swinging dicks" by one of them in a FORTUNE piece, or plain old stock brokers.) Their failure in morals then, if it transpires, usually occurs by virtue of a failed larger vision or perspective. One that transcends their yearly bonus and where they will spend their grand vacation or how - killing protected lions in Zimbabwe, or going on a week -long million dollar golf binge at a St. Kitts resort, while their wives enjoy $250k each rose and wine wraps - with or without cucumbers.
Usually, the defenders of these guys just plain fail to see the vast harm of which they are capable. Consider just the credit meltdown and freeze of 2007-08. How many attribute the cause to the correct source? Very few! Usually the lazy media (often right wing) blames it on poor dopes who had maybe $100 in an account but were offered sub-prime mortgages by unscrupulous scheisters (such as depicted in the film, 'The Big Short'. Based on the excellent book by Michael Lewis).
Seldom (either) do they look at the pseudo-intellectuals or “quants” that helped develop the Gaussian Copula formula (see embedded graphic at top) who were quite confident that when they applied it to the development of credit default swaps (a bastardized form of credit derivative) they’d be virtually home free. On account of the lingo used and the complex nature of the underlying formula – few ordinary mortals would figure them out before it was too late.
To refresh memories, these nasty devices were geared to enable commercial banks (the ones that hold your passbook savings) to leverage their assets to preposterous ratios, sometimes as high as 33:1. In other words, their generation of profits would largely be based on phantom money – since they lacked the reserves to make good if the bets (which is what the credit defaults swaps were) failed. In the meantime, the Gaussian formula itself allowed the credit derivatives to be sliced and diced numerous ways to package them throughout ordinary securities such as collateralized mortgage obligations. The failure of the credit agencies themselves to be onto the junk bond nature of CMOs and allowing the presence of one fraction of ‘AAA’ bonds in each – then designating the whole AAA - led directly to the collapse of the credit markets in 2008.
All
of which supports Chris Hedges’ condemnation of these mental zombots, i.e. p. 98, The Empire of Illusion:
“They
cannot grasp that truth is often relative. They base their decisions on
established beliefs such as the primacy of an unregulated market or
globalization, which are accepted as absolutes.”
But
see, at least physics has and uses empirical testing before advancing – so the
odds are less that physicists will make asses of themselves. Not so with these
economic, political elites. Unlike
astronomers, who can accurately predict the position of Jupiter or Mars
in 2050 or the next lunar eclipse or occultation of a star, the economists
can't even predict simple stuff in their immediate domain - say like
forecasting the growth would be 3.2 % in 2011 when it was only 1.7%
Remarkably, Plender is aware of the cost of high finance on capitalism's rep and this is pointed ou by the reviewer (p. 75):
"It's not just that few people can see the benefits of complex financial products like credit default swaps. He adds that 'bankers have undoubtedly done their best to give capitalism a bad name. The extraordinary scale on which big banks have been rigging interest rates and foreign exchange markets and ripping off their customers is almost beyond comprehension."
Fair enough, but it still doesn't let the system itself off the hook, which breeds these tactics and the money men who use them. This leads to a blindness about perceptions of capitalism.
For example, the reviewer's claim - echoing Plender- that the financial crisis was the latest example of "the inherent stability of capitalism", i.e. "allowing it to benefit from creative destruction". In fact, the financial crisis was just the opposite, a glaring example of capitalism's instability. We actually came within a hair's breadth of another Depression and only barely escaped because the political system and party in control at the time was enabled by votes to use taxpayer money (nearly $897b) to bail the system out and interject liquidity.
In the same manner, if a series of nuclear reactors were to "nearly melt down" - governed by the same computerized control algorithms - one would not argue or assert the "system is stable" or "shows stability". But no one - after all the taxpayer money was spent - came after the clowns that nearly wrecked the financial system, leaving it open to future predations.
Why do we keep paying attention to these clowns? Just because they have Harvard, or
At root of it all, which none of them or the bought out media will tell you, is that the trillions of bucks circulating in the capitalist markets represents FORCE. A force that can crush opponents underfoot, including presidential campaign opponents who dare to bring its nefarious consequences (to our electoral system) to light.
They also don't want too much exposed because they know deep down as capitalism ramps up it generates millions of losers a year, not to mention destroys what's left of our natural environment. As Naomi Klein has pointed out, it's no coincidence that a capitalism has spread and consumerism reached exponential levels, the planet's atmosphere has been laid waste to via the Greenhouse effect.
The Economist reviewer's claim then that (ibid.):
"For all its faults capitalism has raised the living standards of billions of people since the 18th century and improved their life expectancy"
Is only a half truth, since it ignores the other side: that this enhancement of living standards and life expectancy has come at the cost of the planet as a habitable future abode. These long lived consumers (no longer seen as citizens) now plunder the planet to the tune of the equivalent of 1.5 Earths' worth of finite resources per year. They are driven by capitalist-based advertising to do so, as it generates ever more 'wants' as opposed to fulfilling actual needs. Thus, every manjack has to have his own car to drive and pollute with CO2. Every unused computer or 'Barbie' tossed into the landfill - along with soiled diapers and plastic bags - creates ever more waste and hazards.
It is no surprise that pollution and cancers have reached a peak now as ever newer weedicides and pesticides have to be created - not to mention GMO crops - to feed a growing population in which food sources must keep up with numbers.
But the other perverse aspect is that capitalists love overpopulation because it means - n their minds- vast "markets" of global consumers to buy their ever larger quotas of crap, that ever lowers Earth's store of non-renewable resources.
Perhaps no one has better explained the connection of global warming, especially, to capitalism, than Naomi Klein. Readers who are interested should get hold of her book, This Changes Everything: Capitalism Vs. Climate Change. Basically, as Klein argues, capitalism is unable to affect or alter the course of climate change due to its dependence on fossil fuels and need for continuous growth. Also, the time for marginal fixes has expired, thus forcing us to now make radical changes in how we live.
We simply don't have the luxury of using all the carbon that lies in the Earth. Yet capitalism's never ending growth engine would demand we do so to support the expansion of new markets for exploitation and wanton consumption. Failing to note that the more we take from the Earth the less real wealth we have left: a zero sum game.
2 comments:
Honestly, I think much of econommic theory is a kind of fundamentalist narrative in which a very simple theme is pushed well past the limits of reasonable judgement. Gecko is sadly quite on target for much of what passes for wisdom in some circles.
That is a fact. My brother attended UW Whitewater for business back in the 1980s. It was the norm for those business professors to wear their tie clips akimbo like GG's as well as spout the 'greed is good' nonsense as legitimate business philosophy---they'd actually repeat GG quotes verbatim from the podium.
Of course the sane rejoinder to all this zero sum business is that God will always provide to the true believers. Who could argue with that plank of the right wing platform?
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