From: http://rwer.wordpress.com/2014/05/01/the-enlightened-capitalist/
The world is rapidly changing, and not for the better. First, the liberal economic model is now being
questioned. The global financial crisis and the Great Recession have revealed
not only that the market is not
self-correcting, but also that policymakers might be unable to fix what markets
have broken. Second, the material outlook for much of humanity remains dim.
Despite the victory of capitalism over communism, large segments of the world’s population live in utter poverty,
with little prospect for change, while many of the so-called middle classes, particularly the younger
generations, are threatened by chronic unemployment and dead-end jobs. And
third, capitalism seems to be destabilizing the natural environment. Pollution is intensifying, habitats are being
destroyed, resources are being depleted, and the overall climate might be
changing, possibly for the worse.
And
yet, despite this triple calamity –
or perhaps because of it – the upward
redistribution of income and assets continues unabated. While much of the
world’s population is stuck in the doldrums, dominant capital seems to be
growing ever more powerful. The leading capitalists and their investment organs
are taking over larger and larger chunks of our natural resources, human-made artifacts and collective knowledge; they formulate and steer public policy to
their own advantage; and they dominate ideology, education and the mass media.
Some
capitalists, particularly the bigger ones, are beginning to fear that this
divergence is untenable. They realize that if this sabotage-led redistribution
continues, something will have to give; and when that happens, they might find
themselves heading for the hills.
As a class, though, capitalists
are unable to do much about this systemic risk. First, no ruling class voluntarily gives up its power, particularly not at the
hubris stage, when that power seems unassailable. Second, the very power
logic of accumulation – the need to strategically sabotage others in order to
increase one’s own share of the total – forces capitalists to continue and dig
their own graves, so to speak.
The world we live in isn’t capitalistic at all. It is
statist.
Real capitalism has no
distorting entities. It has
no government, no central bank, no
judicial system, no courts, no police and no jails. It has no army, no
ideology, no public education or public transportation. It has no paper money,
no enforced units of measure and probably no common language. It also has no
corporate coalitions, labour unions and NGOs. And, as educators, it is our duty
to present this true vision of capitalism to our students. Otherwise, they
might end up confusing the world around them for reality.
The original state of nature. Now, once upon a time there existed a real, undistorted
capitalist system as outlined above. In this true system, money was weighed in
gold and the price of a commodity reflected its true value. Regrettably,
though, true capitalism no longer exists. Somewhere along the way, and for
totally exogenous reasons, it gave way to a distorted statist system. In this
new system, money is monopolized by the government and private banks. Together,
they create private credit out of thin air and then force the rest of us to use
this credit as if it were ‘real money’.
Unlike true capitalism,
distorted statism is manifestly unfair. Statism favours
large corporations, which in turn influence governments and the banks to give them cheap credit – while at the same time
screwing the ‘unconnected’ little guy. The situation is particularly bad during
crises, when the banks don’t create enough credit for everyone. Now, to repeat,
this setup has absolutely nothing to do with true capitalism. In fact, and here
you might want to hold onto your seat, the executives and owners of firms that
rely on the government – i.e., the S&P 500– are not capitalists at all!
There is no denying that, for the past 70 years, the U.S. rate of
unemployment and the domestic income share of capital were positively and very
tightly correlated (Figure 1); and it is equally true that, over the past 90
years, the income share of the Top 1% and the growth rate of employment were
negatively correlated (Figure 2). Moreover, these facts make perfect sense –
they show how statist policymakers and
central bankers skew, distort and undermine the system in favour of their
big-business buddies. But then remember that none of this is related in any
way to real capitalism, real capital, and real capitalists.
Saving
the planet. To see real
capitalists in action, you need go to their ‘impact investing’ gatherings,
where they deliberate saving the world, capitalist style. In these conventions – which unfortunately have to host
detested government officials who subsidize the proceedings, as well as
confused academic economists and token civil-society representatives – the
discussion focuses exclusively on the world’s gravest problems (caused, no
doubt, by government distortions, market imperfections and assorted
externalities). The mood in these conferences is happily collective. The goal
is usually practical: to come up with ‘business ideas’ and ‘market solutions’
that ‘actually work’ (needless to say, non-business/non-market platforms are
viewed with great suspicion, while anti-business and anti-market ideas are
rarely if ever allowed in the door). In this context, there is obviously no
need to speak about ‘beating the average’ and certainly not about ‘gaining
power over others’.
Outperforming. However, when
the conference is over and the participants return to their offices, the
imperatives of accumulation take over.
Unlike the collective/cooperative language of the convention hall, here the
parameters are entirely differential and totally unsentimental. Whether it ends
up saving the world or not, the key imperative here is to outperform. So in
the end, the only way to beat the big unreal capitalists of the distorted world
is to joint them. Just don’t tell anyone, or there will be blood.
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