It is difficult not to feel vindicated in an “I told you so” sort of way, given that I have been labeled an “anti-capitalist clown” on Thought Leader — as I pointed out at the time, clowns or jesters have customarily been allowed to speak the truth, where others could not.
It had to happen sooner or later. After decades of unregulated, so-called “free” market capitalism, the world has seen a forced return to state intervention and regulation of the financial sector in the United States, European countries and Britain. It must stick in the gizzard of those dyed-in-the-wool neoliberal Republicans who voted against the $700-billion bailout plan in the US Senate and House of Representatives to witness a virtually unavoidable reversion to what, in their eyes, amounts to nothing less than socialism.
Which is not the case, of course; for four decades in the 20th century, what has been called “decent (regulated) capitalism” was accepted in the US, and what the new turn of events entails is the forced reintroduction — possibly too late — of what one may call a “mixed economy” in the US and elsewhere. In my view, this would be a jolly good thing, were it not for the economic hardship that, by all accounts, lies ahead — not merely for people in those countries where investors have greedily driven neoliberal economic processes most vigorously, specifically in the financial sector, but also for the whole world, given that economies are globally interlinked.
For too long most people have countenanced the operation of the hallowed “market” in an unregulated fashion, in the supposed belief that the wealth generated at corporate level would “trickle down” to the poor. Even the choice of phrase is an insult — “trickle” implies a slow movement of at best a small quantity of liquid, and at worst a few drops, which is more or less what the world’s poor have received during the heyday of Friedmanite, Chicago-style neoliberal capitalism.
Part of the reason why supporters of such an unregulated economic system have promoted the idea seems to me to stem from their unawareness that when a system or process is permitted to function unimpeded and developments within the system are described with phrases such as “the market has corrected itself” or “the market has absorbed the outcome of the legal process”, they are one-sidedly and unjustifiably (and conveniently) ignoring the fact that these systemic developments in the abstract realm of virtual money have very concrete effects on ordinary people’s lives, and sometimes on entire countries’ economies and social histories.
In fact, the present crisis may be understood as the result of allowing this system to proliferate endlessly, piling numbers upon numbers (of loans and corresponding debt) on one another until the loan system starts crumbling because of one, and then more layers of the chain of debt collapsing.
While imputing a “purely” abstract mode of existence to it would therefore be correct, it is precisely the “separation” between the accumulation of virtual wealth, on the one hand, and concrete production processes, on the other, which has been the problem.
An abstract system has been allowed to grow limitlessly, mainly through “derivatives”, as if its abstract “infinity” could be sustained in a world of finite economic production. This is why there is nothing to back up the endless mountains of debt that have been emerging recently. Except, of course, taxpayers’ money, in the form of government loans to banks, in an effort to inject new liquidity into the system.
My feeling is an uncomfortable one: it’s too late. To solve the problem in this way, by encouraging more of the same kind of loans and credit (and credit guarantees or securities) that caused the problem in the first place is merely to exacerbate it by prolonging the operation of an inherently entropic system. Warren Buffet, who has never hidden his scorn for the accumulation of wealth on the basis of financial speculation not rooted in “real” value (in some form or another), must feel vindicated, too.
Moreover, from the perspective of ordinary people, it is important to remember that an abstract system or process does not have feelings, or even, minimally, a social conscience. And executives who show a capacity for conscience or sympathy when it comes to corporate or managerial decisions usually don’t make it very far up the corporate ladder, because of the obedience they owe the non-negotiable principle of deified principles, namely to make profit at all costs.
This is why it is a good thing to re-regulate economic processes; if this had been the case in the US, Wall Street and banking sector executives would not have been as reckless as they were in their efforts to maximise profits. As Joe Klein put it in a recent issue of Time magazine, “the middle class will pay, in perpetuity, for the sins of the powerful”.
Small wonder that, in the same issue of Time, Bill Saporito pokes (serious) fun at America’s bizarre resemblance, of late, to the French “semisocialist” system. Americans used to show nothing but disdain for France’s “regulated capitalism”, but now, as Saporito points out, America has, in effect, done exactly what it customarily mocked on the part of the French: it has virtually nationalised the financial system, it is on the verge of doing something similar to what France did in the car industry when it nationalised Renault, and excessively subsidised American farmers are more mollycoddled than the French.
All in all, the Americans’ sudden imitation of French capitalism seems to me to signal something better, more humane, in what used to be, since Reagan, the land of cut-throat capitalism. A pity that the throats did not belong to the fat cats who have escaped the sinking vessel with millions of ill-gotten gains. For the time being, anyway. I have a nasty feeling that the world of economics will never be the same again — human beings seem to learn only by bumping their heads very hard. Let’s hope a better “economic” world will emerge from the ashes of the one that is collapsing.
A prince with dignity and determination
Prince Ngarambe’s goals are to become Rwanda’s first transgender model and to uplift the country’s youth
The EFF’s principles are unshakeable
Unlike the ANC, the core values of the freedom fighters do not change with each leader it elects
