THURSDAY 11 DECEMBER 2008
http://www.opednews.com/maxwrite/linkframe.php?linkid=77569
Capitalist Fools
by: Joseph E. Stiglitz, Vanity FairJanuary 2009 Issue
Behind the debate over remaking US financial policy will be a debate over who's to blame. It's crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes - under Reagan, Clinton and Bush II - and one national delusion.
There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history - a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it's crucial to get the history straight.
What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road - we had what engineers call a "system failure," when not a single decision but a cascade of decisions produce a tragic result. Let's look at five key moments.
No. 1: Firing the Chairman
In 1987 the Reagan administration decided to remove Paul Volcker as chairman of the Federal Reserve Board and appoint Alan Greenspan in his place. Volcker had done what central bankers are supposed to do. On his watch, inflation had been brought down from more than 11 percent to under 4 percent. In the world of central banking, that should have earned him a grade of A+++ and assured his re-appointment. But Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of the objectivist philosopher and free-market zealot Ayn Rand.
Greenspan played a double role. The Fed controls the money spigot, and in the early years of this decade, he turned it on full force. But the Fed is also a regulator. If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you'll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.
Greenspan presided over not one but two financial bubbles. After the high-tech bubble popped, in 2000-2001, he helped inflate the housing bubble. The first responsibility of a central bank should be to maintain the stability of the financial system. If banks lend on the basis of artificially high asset prices, the result can be a meltdown - as we are seeing now, and as Greenspan should have known. He had many of the tools he needed to cope with the situation. To deal with the high-tech bubble, he could have increased margin requirements (the amount of cash people need to put down to buy stock). To deflate the housing bubble, he could have curbed predatory lending to low-income households and prohibited other insidious practices (the no-documentation - or "liar" - loans, the interest-only loans, and so on). This would have gone a long way toward protecting us. If he didn't have the tools, he could have gone to Congress and asked for them.
Of course, the current problems with our financial system are not solely the result of bad lending. The banks have made mega-bets with one another through complicated instruments such as derivatives, credit-default swaps, and so forth. With these, one party pays another if certain events happen - for instance, if Bear Stearns goes bankrupt, or if the dollar soars. These instruments were originally created to help manage risk - but they can also be used to gamble. Thus, if you felt confident that the dollar was going to fall, you could make a big bet accordingly, and if the dollar indeed fell, your profits would soar. The problem is that, with this complicated intertwining of bets of great magnitude, no one could be sure of the financial position of anyone else - or even of one's own position. Not surprisingly, the credit markets froze.
Here too Greenspan played a role. When I was chairman of the Council of Economic Advisers, during the Clinton administration, I served on a committee of all the major federal financial regulators, a group that included Greenspan and Treasury Secretary Robert Rubin. Even then, it was clear that derivatives posed a danger. We didn't put it as memorably as Warren Buffett - who saw derivatives as "financial weapons of mass destruction" - but we took his point. And yet, for all the risk, the deregulators in charge of the financial system - at the Fed, at the Securities and Exchange Commission, and elsewhere - decided to do nothing, worried that any action might interfere with "innovation" in the financial system. But innovation, like "change," has no inherent value. It can be bad (the "liar" loans are a good example) as well as good.
No. 2: Tearing Down the Walls
The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act - the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest. For instance, without separation, if a company whose shares had been issued by an investment bank, with its strong endorsement, got into trouble, wouldn't its commercial arm, if it had one, feel pressure to lend it money, perhaps unwisely? An ensuing spiral of bad judgment is not hard to foresee. I had opposed repeal of Glass-Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to make sure that the problems of the past do not recur. As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest - toward short-term self-interest, at any rate, rather than Tocqueville's "self interest rightly understood."
The most important consequence of the repeal of Glass-Steagall was indirect - it lay in the way repeal changed an entire culture. Commercial banks are not supposed to be high-risk ventures; they are supposed to manage other people's money very conservatively. It is with this understanding that the government agrees to pick up the tab should they fail. Investment banks, on the other hand, have traditionally managed rich people's money - people who can take bigger risks in order to get bigger returns. When repeal of Glass-Steagall brought investment and commercial banks together, the investment-bank culture came out on top. There was a demand for the kind of high returns that could be obtained only through high leverage and big risktaking.
There were other important steps down the deregulatory path. One was the decision in April 2004 by the Securities and Exchange Commission, at a meeting attended by virtually no one and largely overlooked at the time, to allow big investment banks to increase their debt-to-capital ratio (from 12:1 to 30:1, or higher) so that they could buy more mortgage-backed securities, inflating the housing bubble in the process. In agreeing to this measure, the S.E.C. argued for the virtues of self-regulation: the peculiar notion that banks can effectively police themselves. Self-regulation is preposterous, as even Alan Greenspan now concedes, and as a practical matter it can't, in any case, identify systemic risks - the kinds of risks that arise when, for instance, the models used by each of the banks to manage their portfolios tell all the banks to sell some security all at once.
As we stripped back the old regulations, we did nothing to address the new challenges posed by 21st-century markets. The most important challenge was that posed by derivatives. In 1998 the head of the Commodity Futures Trading Commission, Brooksley Born, had called for such regulation - a concern that took on urgency after the Fed, in that same year, engineered the bailout of Long-Term Capital Management, a hedge fund whose trillion-dollar-plus failure threatened global financial markets. But Secretary of the Treasury Robert Rubin, his deputy, Larry Summers, and Greenspan were adamant - and successful - in their opposition. Nothing was done.
No. 3: Applying the Leeches
Then along came the Bush tax cuts, enacted first on June 7, 2001, with a follow-on installment two years later. The president and his advisers seemed to believe that tax cuts, especially for upper-income Americans and corporations, were a cure-all for any economic disease - the modern-day equivalent of leeches. The tax cuts played a pivotal role in shaping the background conditions of the current crisis. Because they did very little to stimulate the economy, real stimulation was left to the Fed, which took up the task with unprecedented low-interest rates and liquidity. The war in Iraq made matters worse, because it led to soaring oil prices. With America so dependent on oil imports, we had to spend several hundred billion more to purchase oil - money that otherwise would have been spent on American goods. Normally this would have led to an economic slowdown, as it had in the 1970s. But the Fed met the challenge in the most myopic way imaginable. The flood of liquidity made money readily available in mortgage markets, even to those who would normally not be able to borrow. And, yes, this succeeded in forestalling an economic downturn; America's household saving rate plummeted to zero. But it should have been clear that we were living on borrowed money and borrowed time.
The cut in the tax rate on capital gains contributed to the crisis in another way. It was a decision that turned on values: those who speculated (read: gambled) and won were taxed more lightly than wage earners who simply worked hard. But more than that, the decision encouraged leveraging, because interest was tax-deductible. If, for instance, you borrowed a million to buy a home or took a $100,000 home-equity loan to buy stock, the interest would be fully deductible every year. Any capital gains you made were taxed lightly - and at some possibly remote day in the future. The Bush administration was providing an open invitation to excessive borrowing and lending - not that American consumers needed any more encouragement.
No. 4: Faking the Numbers
Meanwhile, on July 30, 2002, in the wake of a series of major scandals - notably the collapse of WorldCom and Enron - Congress passed the Sarbanes-Oxley Act. The scandals had involved every major American accounting firm, most of our banks, and some of our premier companies, and made it clear that we had serious problems with our accounting system. Accounting is a sleep-inducing topic for most people, but if you can't have faith in a company's numbers, then you can't have faith in anything about a company at all. Unfortunately, in the negotiations over what became Sarbanes-Oxley a decision was made not to deal with what many, including the respected former head of the S.E.C. Arthur Levitt, believed to be a fundamental underlying problem: stock options. Stock options have been defended as providing healthy incentives toward good management, but in fact they are "incentive pay" in name only. If a company does well, the C.E.O. gets great rewards in the form of stock options; if a company does poorly, the compensation is almost as substantial but is bestowed in other ways. This is bad enough. But a collateral problem with stock options is that they provide incentives for bad accounting: top management has every incentive to provide distorted information in order to pump up share prices.
The incentive structure of the rating agencies also proved perverse. Agencies such as Moody's and Standard & Poor's are paid by the very people they are supposed to grade. As a result, they've had every reason to give companies high ratings, in a financial version of what college professors know as grade inflation. The rating agencies, like the investment banks that were paying them, believed in financial alchemy - that F-rated toxic mortgages could be converted into products that were safe enough to be held by commercial banks and pension funds. We had seen this same failure of the rating agencies during the East Asia crisis of the 1990s: high ratings facilitated a rush of money into the region, and then a sudden reversal in the ratings brought devastation. But the financial overseers paid no attention.
No. 5: Letting It Bleed
The final turning point came with the passage of a bailout package on October 3, 2008 - that is, with the administration's response to the crisis itself. We will be feeling the consequences for years to come. Both the administration and the Fed had long been driven by wishful thinking, hoping that the bad news was just a blip, and that a return to growth was just around the corner. As America's banks faced collapse, the administration veered from one course of action to another. Some institutions (Bear Stearns, A.I.G., Fannie Mae, Freddie Mac) were bailed out. Lehman Brothers was not. Some shareholders got something back. Others did not.
The original proposal by Treasury Secretary Henry Paulson, a three-page document that would have provided $700 billion for the secretary to spend at his sole discretion, without oversight or judicial review, was an act of extraordinary arrogance. He sold the program as necessary to restore confidence. But it didn't address the underlying reasons for the loss of confidence. The banks had made too many bad loans. There were big holes in their balance sheets. No one knew what was truth and what was fiction. The bailout package was like a massive transfusion to a patient suffering from internal bleeding - and nothing was being done about the source of the problem, namely all those foreclosures. Valuable time was wasted as Paulson pushed his own plan, "cash for trash," buying up the bad assets and putting the risk onto American taxpayers. When he finally abandoned it, providing banks with money they needed, he did it in a way that not only cheated America's taxpayers but failed to ensure that the banks would use the money to restart lending. He even allowed the banks to pour out money to their shareholders as taxpayers were pouring money into the banks.
The other problem not addressed involved the looming weaknesses in the economy. The economy had been sustained by excessive borrowing. That game was up. As consumption contracted, exports kept the economy going, but with the dollar strengthening and Europe and the rest of the world declining, it was hard to see how that could continue. Meanwhile, states faced massive drop-offs in revenues - they would have to cut back on expenditures. Without quick action by government, the economy faced a downturn. And even if banks had lent wisely - which they hadn't - the downturn was sure to mean an increase in bad debts, further weakening the struggling financial sector.
The administration talked about confidence building, but what it delivered was actually a confidence trick. If the administration had really wanted to restore confidence in the financial system, it would have begun by addressing the underlying problems - the flawed incentive structures and the inadequate regulatory system.
Was there any single decision which, had it been reversed, would have changed the course of history? Every decision - including decisions not to do something, as many of our bad economic decisions have been - is a consequence of prior decisions, an interlinked web stretching from the distant past into the future. You'll hear some on the right point to certain actions by the government itself - such as the Community Reinvestment Act, which requires banks to make mortgage money available in low-income neighborhoods. (Defaults on C.R.A. lending were actually much lower than on other lending.) There has been much finger-pointing at Fannie Mae and Freddie Mac, the two huge mortgage lenders, which were originally government-owned. But in fact they came late to the subprime game, and their problem was similar to that of the private sector: their C.E.O.'s had the same perverse incentive to indulge in gambling.
The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, "I have found a flaw." Congressman Henry Waxman pushed him, responding, "In other words, you found that your view of the world, your ideology, was not right; it was not working." "Absolutely, precisely," Greenspan said. The embrace by America - and much of the rest of the world - of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.
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Joseph E. Stiglitz, a Nobel Prize winning economist, is a professor at Columbia University.
Stumble It!
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Joseph E. Stiglitz, a Nobel Prize winning economist, is a professor at Columbia University.
Contributed By
Ed Deak
Indeed, if nothing else has been demonstrated by right wing ideological practise, of the period since the rise of Reagan and Thatcher, and of course, who can forget the godfather of this so-called "neo-liberal" economy, more just fascist ideology really, Thomas Freidman, is the complete failure of the again so-called "Free Market". Outside of the fact that the "market" is really anything but free, dominated as it is by big capital and its corporate creations, and the global systems of laws, state provided corporate welfare assistance and trading arrangements which assure this ruling class system of domination and marginalizes everyone else in the market. All of whom,these true starry eyed true believers are reduced to mere bleating bit players and wannabes before the sacred stacked deck that is capitalism for true. And at worst, naive failures.
But which is alright. This system and this ideology has finally run its course, soon to become obvious to everyone, and none more than the working class masses, who if the scales don't soon start to fall from their eyes here, capitalism in all its cyclical gyrations and poverty generation go 'rounds, really will go on forever.
And, as capitalism was in the last Great Depression, finally saved by the World War, which shock defibrillated it back to another Kondratieff life cycle, then assumedly, something currently unknown or foreseen could arise to save it again, for yet one more go round. Are the masses slow to awaken and come back to life, for example, and act in their own self-defence? But the system is already "over-stretched" in imperial wars already, to an extent that the bleeding of treasure and real human blood has become part of the problem. Soooo, it is unlikely to be another World War that comes to its rescue again... though one can never be 100% certain, even in the nuclear age. Lunatics abound in politics and within the economy of capitalism, and the masses can be turned onto fascism rather than progressive "socially and economically transformative" politics.
So, from here it is a race to see what forces become the New Power in this, yet another failure of capitalism period. Will the ruling class of capitalism be able to continue the somnambulating of the working class masses, or will they be awoken, only to be turned on again, as they were in Hitlerian Germany, to fascism and its war driven "final solution" one more time?
Or will the working class masses be successfully turned on, finally, to the realization of their own potential power, and engaged to deal with the oligarchical state of affairs and arrangement of society, moving them in the direction of finally resolving the "class arrangement" of society, and to the creation of a truly "democratized" economic and political model, that includes them in the power equation and re-arrangement of society?
We should soon begin to see, one way or the other.
http://www.takimag.com/blogs/articl...fore_christmas/
Funny thing.....I was once pounding the table, as usual, on a World Bank economic forum, when Stiglitz was still their Chief Economist, but rumoured to be on his way out.
Received an unsigned email "From the Office of the Chief Economist" congratulating me over some of my postings. It is still buried somewhere in the old files brought over from one of my old computers, but have no idea how to find it?
Always wondered if it came from Stiglitz ?
Ed Deak, Big Lake, BC.
If I wasn't so polite, I'd say, "Horseshit!"
The choice is NOT merely between a "capitalist regulated market", passing itself off as a "free market" and a USSR style "state regulated" economy. Though we are certainly experiencing that the "capitalist market" does not function very well over time without a great deal of "state intervention" on its behalf. So, it's past time you wingnuts cut the crap and faced up to your own reality. Everyone by now is already onto you.
In place of laws, rules and regulations that impose the capitalist market, and facilitate its corporate dominance over all other forms of possible socially responsible market activity, is conversely needed laws, rules, regulations, and all the other state provided largess, guarantees and assistance going instead to labour/community co-operatives, farm and other small producer controlled co-operative markets. Such an economy and market alternative development, in any rational view, I would think, would certainly be closer to and more tapped into the real material and spiritual needs and wants of the "consumer citizen" than is certainly the "corporate dominated market" of capitalism. After all, it is these workers and other farm and small producers who, along with their families, actually make up the real "mass consumer base" of any economic form. It is their needs, rather than the desires and wants of the far more limited corporate owners of capitalism, given worker/consumer access to sufficient "purchasing power", that is the real driving and underpinning demand force to any economy. (Consumers are not merely hypothetical, faceless "bodies" that drop down out of the sky to play a "purchasing" role within the economy. Consumers, in the main part, are the working masses of society, and their families. Capitalism would like us to forget that, and think that the economy is merely all about "them", the ruling class and their bottom line needs, and some faceless, classless consumer that doesn't require good wages and viable, sustainable communities.)
So it stands that the real problem with the economy of capitalism is, it is not free, and the isolation of these working and consuming masses from real power within it. Even unions, though they certainly mitigate against the worst excesses of "the capitalist market" and workplace, are still themselves subject to contract and other rules that restrict their role to bargaining for wages and working conditions. They are not there to, indeed it is prohibited by law, save where they have the militant leadership that is prepared and leads them to defy the law, from encroaching on what are defined as "the management rights" of the owning class. They are prevented by law from making political demands of the owning class. Which doesn't always work, of course.
It is this "big capitalist-centric" view of the economy, private property, and the rights of labour, the community, interest groups, farmers, small producers and all others that make up the great creating and consuming community of society, that is at the heart of the problem of capitalism and its currently free falling so-called "free markets". (Really only "free" through capitalist eyes, even when the system is more or less working reasonably well.) This view of the economy and society as a whole, including politics from the community to state levels, needs to be revolutionized in ways that passes control/power over enterprises AND markets to the producers, consumers and other community stakeholders effected by outcomes there.
In short, economic power needs to be wrested from the ruling class controllers of both the economy and the state, and pass to the working masses, their community interests, and other producers. It is not a choice merely between "the State" or "the capitalist market". There are other alternatives that need to be articulated and developed, then worked upon and assisted to success, with financial investment and all other political wise, to come into being and take root in an entirely new social order that is neither capitalism or state capitalism, the latter often confusedly called "socialism".
Cut the crap, capitalist market herd followers. The choices are NOT just your way or the highway.
Markets aren't the answer to everything, but they are a very powerful and effective tool for allocating scarce resources.
Yes, they "allocate" carbon emissions quite well, even as the source of these emissions are virtually to a few people who "allocate" quite a lot of cash to their own pockets, while not "allocating" any of the cash to keep their carbon emissions to themselves.
Face it, "individualist", the object of the consumer marketplace is to consume. Take something, use it up, and go on to something else about sums it up. And the object of capitalism in al this is to acquire the "something" for the least price possible -- nothing being the ideal. That's what the oil companies have done with the Tar Sands..........
The ONLY way to go about "allocating scarce resources" is to ration them. Just because one person has more cash than another, doesn't "entitle" that person to more of a scarce resource. Likely by now, you've quit reading this post, but for any others, let me present the example of several people in a lifeboat, with "scarce resources". Should the one with more cash in his pocket be entitled to more biscuits, and the one with no cash starve?
Were government to withdraw this support, the corproate world in its current incarnaton, would collapse like the bubble it is. Even if the government were to assume an impartial stance (which in a democracy, it is supposed to do), and support union movements (and other worker-oriented systems) the samw way it does corporate movements, the latter would still collpase ignominiously, because it has shown itself that it cannot exist in a competitve environment.
BTW thanks for the kudos. Is it my turn to scratch your back now..........?
I actually don't disagree with this.
Basically, when I refer to "laws" and "regulations", I assume these systems which "back them up", or "enforce them". All of which works to keep the existing "system" in place.
(AND, if ways can evolve of completely "withering away" the state, at least as we know it, which is where I think this is all really headed, if we can get it right here in the creation of a "transitional system" that will truly democratize the economy and the political structure that "regulates/or chooses not to regulate" it, ( currently in a shallow sense, because really it always "watches over it" and remains ready to intervene on behalf of the ruling class.
Perfection never exists but is always pursued is the reality for us as individuals, and for the socio-economic systems we create, indeed have created from the time of slavery. What we have to do is continue to "evolve", which may or may not periodically involve "revolutions" in the "radical transformation" sense.
The historical task right now is for humanity to "evolve" beyond capitalism-, which no doubt has proven difficult. That done, does it mean than the socio-economic form that replaces it arrives from the womb full blown perfect? Of bloody course not.
Even though the ruling classes might wish it, there is no standing still anywhere in the univerxe. Change is the eternal law, to this point in evolutionary time anyway. The same will be no less true for whatever socio-economic system, whatever we may come to call it, that may come after capitalism.
All that is really clear from this point in time, insofar as I can see anyway, is that it is time for the greed driven capitalist dominated economic, social and political system, the "competitive system" to go-, and to be replaced by a more co-operative, non-competitive system that is democratically dominated and comes to be day to day managed by the working, farming, small producer masses of society, their community (communities), local to at least national, and that is done so within the constraint limits of what the planet can/will actually sustain.
Does that rule out the possible need for/ evolution of large scale, even global scale enterprises? I think not. But who the hell knows one hundred years from now?
Within the constraint limits of my time, and what limited view I have beyond that, THIS is the need and way forward, in my view. Capitalism must become history. A more democratic and co-operative arrangement of social and economic norms must replace it, is indeed the only possible other alternative to the pursuit and dominance of "private/narrow individualist", planet destroying interests.
That is the real cross-roads crux, contrary to the narrow choice of corporate or corporate state regulated capitalism (sometimes, mistakenly in my view, by such as NDPers), called socialism. Through the cross-road crux, and on the other side of capitalism, folks WILL make choices, whatever we might think, and take it wherever it seems to make sense and serve the species interest.
(AND, if ways can evolve of completely "withering away" the state, at least as we know it, which is where I think this is all really headed, if we can get it right here in the creation of a "transitional system" that will truly democratize the economy and the political structure that "regulates/or chooses not to regulate" it, ( currently in a shallow sense, because really it always "watches over it" and remains ready to intervene on behalf of the ruling class.
Sounds like that's what the intent of socialism was. The problem then, as now, was that those "chosen" to lead the people out of the pit and into the chosen land succumbed to the power they wielded, devolving into a petty dictatorship.
My first post here. Generally, I use discussion forums as a kind of magic notebook where I am able to record my attempts to build ideas from information in ways that mostly satisfy myself. I'm coming to think of the results as 'content,' and I recognize it in others, whether I agree or not. There forums really are magic to me, because unlike their ancient paper counterparts, they regularly present interesting things to think about (which become the basics for the sketchy stuff I write. Of course, interesting ideas present themselves only if most participants, in my terms, recognize that numbers, events, opinion and attitude are all varieties of information, and information is uninteresting in absence of context.
Having set my sights on lofty beginnings, I'll realistically duck, and resort to places of content.
Since some of the above comments talk about left/right orientations and post-capitalism, I found a video panel presentation titled 'Capitalism: What is it Good For.' The speakers are academics; several economists, a sociologist and a philosopher/theologian. The FORA TV version is at HTTP://fora.tv/2008/11/01/Battle_of_Ide ... t_Good_For. A micro-screen versions for persons with slower IN service can be found by searching Battle of ideas, which is part of the Institute for Ideas in the UK. I found Philip Blond's presentation (a senior lecturer in Philosophy/Theology) particularly interesting. Some ideas were that both the mass left-economies (command communist) and mass right-economies (free market capitalism) failed utterly. What else should we expect. they both accrue power to central elite and both economically disenfranchise major groups in society--just different groups.
Blond makes a reference to post-capitalism, which is a reference that is becoming almost commonplace, but I'm not sure anybody has very concrete ideas of what it might mean and how it might work. In counter-point, references also are almost commonplace that we have many forms of capitalism, not all are of the free-market (or monopoly accrual) type, and some may be more sustainable than types. THE NORDIC COUNTRIES DO NOT HAVE SOCIALIST ECONOMIES OR GOVERNMENTS, but then neither are they post--capitalistic. Getting decent economics from a philosopher rather than an economist may seem strange in modern times, but it hasn't always been so.
What are becoming rare are of the 'free market w/o government interference fixes everything references. Even a 93-year-old Paul Samuelson pops up on der Spiegel saying that unregulated markets don't work (much more eloquently of course). A CUNY Great Issues Forum panel discussion among Joseph Stiglitz, Hernando de Soto and Naomi Kline on Economic Power (also on FORA TV) is another example. De Soto (director of ILD) traces many problems of capitalism, and the historic success of the west, to property rights. De Soto states things such as 'the success of the west is largely due to its legal system of property rights, AND THE DOCUMENTATION THAT INCIDENTALLY IS REQUIRED). the legal system has evolved over centuries, and distinguishes the west from the developing world. We discarded, compromised and bull-dozed that system of rights as applied to legal person corporations but retained it for individuals, and a result may be where we find ourselves today. Today, there is not so much a financial crisis as a trust crisis. Nobody knows what is behind assets or how to value them. We have property that's not.
Coyote (a revered trickster among many peoples): I certainly don't know the way toward a post-capitalistic world, but maybe I have a starting place for myself. I believe in communities, and a community is more an emotional more than an empirical truth. We know what community is without analysis, and our modern nation states doubtfully quality. Towards a post-capitalistic world perhaps requires systems of empowered governance at the level community. I note that traditionally, we governed ourselves in fairly immediate communities on the basis of stories and myth rather than constitutional documents. We took our truths from poets, singers, story tellers, philosophers and artists. Today we have politicians and scientists. I have trouble finding community at the level of nation states.
Grey Owl, a contemporary native holy man, in the books about him once rhetorically asked his interviewers: Where are your stories; without stories, how can you know who your re or what is right to do? Indeed, how do we know who we are? The writer JG Ballard writes of our frayed or collapsed societies in books like 'Super Cannes' and 'Kingdom Come.' The fictional worlds he describes are corporate excesses with a failing consumerism elevated to near religions proportions. He gives us madness as the remaining creative solution and therapy. The corporate world reduces we individuals to the single corporate raison d'?tat of maximizing profit. We fit in by accepting a moral compass stuck somewhere between duty and cauution. Our emotional lives slowly drain away.
Perhaps we need to reclaim ourselves as complete human individuals and insist on a governance to match. Perhaps the economy will sort itself out if we give it a sound human foundation. Does any of this have any practical application? Perhaps not, but then any start requires a place, and mine doesn't seem all that bad. For a survival strategy in the mean time, I'll mention a 90's book by David Whyte titled 'The Heart Aroused: Or Survival of the Soul in corporate America.' David Whyte is a poet who earned his living as consultant to Fortune 500 corporations. Who knows, if we are looking for community perhaps Poets, Philosophers, story-tellers and artists have what seems to be missing from modern life.
I don't expect to often be read or replied to. I write mostly for myself. I try for brevity but usually fail. My serious attempts at on-screen proofing also are wanting.