We are tired of this blindness

Modern capitalism has ignored the lessons of history in the ignorant and short-sighted pursuit of individual wealth. See for example the article Economics for the People by economic historian Dirk Philipsen in Aeon magazine, from which I quote at length, due to its eloquence:

In preindustrial societies, cooperation represented naked necessity for survival. Yet the realisation that a healthy whole is larger than its parts never stopped informing cultures. It embodies the pillars of Christianity as much as the Islamic Golden Age, the Enlightenment or the New Deal. In the midst of a global depression, the US president Franklin D Roosevelt evoked an ‘industrial covenant’ – a commitment to living wages and a right to work for all. During the 1960s, Martin Luther King, Jr gave voice to the broader idea when he said that no one is free until we are all free. On Earth Day 1970, the US senator Edmund Muskie proclaimed that the only society to survive is one that ‘will not tolerate slums for some and decent houses for others, … clean air for some and filth for others’. We should call these ideas what they are – central civilisational insights. Social and economic prosperity depends on the wellbeing of all, not just the few.

Cultures that fundamentally departed from this awareness usually did not, in the long run, fare well, from the Roman Empire to Nazism or Stalinism. Will neoliberal capitalism be next? Rather than acknowledge the endless variety of things that had to be in place to make our individual accomplishments possible, it is grounded in the immature claim that our privileges are ‘earned’, made possible primarily by private initiative.

But what a claim it is: where would we be without the work and care of others? Without the food from the farmer? Without the electricity and housing and roads and healthcare and education and access to information and hundreds of other things provided to us, day in and day out, often for free, and routinely without us knowing what went into their existence? Seeing ourselves as seemingly free-floating individuals, it’s both easy and convenient to indulge in the delusion that ‘I built it. I worked for it. I earned it.’

The painful flipside are the billions of those who, through no fault of their own, drew the short end of the stick. Those who were born in the wrong country, to the wrong parents, in the wrong school district – ‘wrong’ for no other reason than that their skin colour or religion or talents didn’t happen to be favoured. The limited focus on the individual can here be seen as nakedly serving power: if those who have privilege and wealth presumably earned it, so must those who have pain and hardship deserve it.

Make no mistake, this is the mistaken direction that the US and UK have increasingly taken since the 1980s, the ideology that has driven tax cuts for the well off and austerity for the public good. This is the ideology driving the right wings of both the Republican Party in US, the Conservatives in UK and similar parties across the Western world.

It is time that the direction of travel changes. Covid-19 and climate change are making this crystal clear; the system has produced these, and they are the necessary corrective. We really are all in this together, and making a good life for everyone really is the answer, and should be the goal.

The pendulum needs to swing big-time. Some call it socialism, with a derogatory tone to their voice. It is basic human dignity and the basis of civilisation.

Featured image is from the article in Aeon magazine.

Private gain must no longer be allowed to elbow out the public good

This excellent post by Wayne Woodman is an essay by Dick Philipsen, who summarises quite succinctly why ‘the system’ has gone too far in privileging private gain over the public good. Covid-19 has brought this crazy situation into sharp relief, where we absolutely depend on those who have been least well regarded and rewarded over recent years.

Adam Smith had an elegant idea when addressing the notorious difficulty that humans face in trying to be smart, efficient and moral. In The Wealth of Nations (1776), he maintained that the baker bakes bread not out of benevolence, but out of self-interest. No doubt, public benefits can result when people pursue what comes easiest: self-interest.

And yet: the logic of private interest – the notion that we should just ‘let the market handle it’ – has serious limitations. Particularly in the United States, the lack of an effective health and social policy in response to the coronavirus disease (COVID-19) outbreak has brought the contradictions into high relief.

Around the world, the free market rewards competing, positioning and elbowing, so these have become the most desirable qualifications people can have. Empathy, solidarity or concern for the public good are relegated to the family, houses of worship or activism. Meanwhile, the market and private gain don’t account for social stability, health or happiness. As a result, from Cape Town to Washington, the market system has depleted and ravaged the public sphere – public health, public education, public access to a healthy environment – in favour of private gain.

COVID-19 reveals a further irrational component: the people who do essential work – taking care of the sick; picking up our garbage; bringing us food; guaranteeing that we have access to water, electricity and WiFi – are often the very people who earn the least, without benefits or secure contracts. On the other hand, those who often have few identifiably useful skills – the pontificators and chief elbowing officers – continue to be the winners. Think about it: what’s the harm if the executive suites of private equity, corporate law and marketing firms closed down during quarantine? Unless your stock portfolio directly profits from their activities, the answer is likely: none. But it is those people who make millions – sometimes as much in an hour as healthcare workers or delivery personnel make in an entire year.

Simply put, a market system driven by private interests never has protected and never will protect public health, essential kinds of freedom and communal wellbeing.

See the full post here.

Featured image: Adam Smith.

Has neo-liberalism reached use-by date? Ayn Rand and the failure of philosophy

It has long been evident that the extreme neo-liberalism that followed Ayn Rand’s views has had a malign influence on the world economy leading to massive inequality. And the system is now like an unstable house of cards. Matthew Wright explains in this super post.

Matthew Wright

A good deal of what I’ve been seeing of late on social media – but also in mainstream journalism – revolves around the notion that the Covid-19 pandemic will be the trigger for a shift away from the neo-liberalism that has characterised leading western economic policies since the early 1980s.

That might be right. Back then this ideology was trumpeted as a ‘more sophisticated’ approach than the liberal democratic western policy mixes of the mid-twentieth century. When the eastern bloc fell over in the early 1990s its triumph seemed complete. History, Francis Fukuyama declared, had ended as a result. From then on, The Future would consist of a changeless neo-liberal nirvana.

Well, quite. It was an absurd statement, curiously built on the same faulty assumption that Karl Marx had applied to his thinking in the 1840s: that societies, by nature, move towards an ideal end-point – a meaning summed up…

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Time for the Magic Money Tree

One of the great things my children tought me was that, when you are playing a game with defined rules, if the rules are not working well you change them. The meta-game of manipulating the rules is itself of value, and extends the life of the game. This has application in real life!

It seems not long since UK politicians were proclaiming that the magic money tree does not exist, and there was no alternative to austerity. Yet it turns out that it does indeed exist, and is being deployed by central banks to help governments to handle the financial crisis erupting in the wake of covid-19. Money is created, by the central bank, at the stroke of a key on a keyboard, is used to solve the problem, and may get paid back eventually. There is now no alternative to the magic money tree.Read More »

Chickens coming home

It has long been apparent that free market capitalism, as currently practised, is running into the buffers of climate breakdown, species extinction, pollution and gross inequality. A system that favours profit maximization at the expense of all else, including nature, cannot expect to go on and on without consequence.

Similarly, globalisation of finance, tourism and product supply with consequent massive movement of people, products and living beings around the world is foundering on the sands of the coronavirus panic and the apparent inability of the system to withstand shocks, and the human fears that follow.

Further, the overemphasis on sovereignty of nation states, with the related rise of populism, and with a weak United Nations, means that collective attempts to resolve these problems is easily nullified by powerful actors.

The chickens are indeed coming home to roost. Yet this process seems to be necessary before humanity can build up the collective will to make the necessary changes.

Change there will be, but only when the consequences have effectively forced it. Human nature seems to work that way.

The coronavirus outbreak – the economic impact

This fascinating post by Matthew Wright explains why the world financial system is so vulnerable to shocks to the system like COVID-19. The world economy is indeed a reflection of the collective psyche. Collective confidence and fear play very real roles in the direction of the economy. And this is without further considering the increasing effects of climate breakdown.

Matthew Wright

What worries me about the COVID-19 coronavirus outbreak isn’t so much the virus itself. It’s the economic effects of the way people – and societies – have been reacting to it since the outbreak began. Because of the way western economics has gone in the past forty-odd years, what economists call a ‘shock’ can have real-world effects that run far beyond the scale and nature of whatever that ‘shock’ might be.

In economic terms, a ‘shock’ refers to an unexpected shift, usually to do with pricing associated with a commodity. The classic western example is the 1973 oil shock, which sent oil availability plummeting and prices skyrocketing. The resulting economic impact was significantly greater than the scale of the oil embargo that provoked it.

These days, world economies are far more fragile. It’s not just the fact that the ‘General Financial Crisis’ of 2008-10 wasn’t actually resolved. It’s the fact…

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Trade Deals

Trade deals are bandied around by its supporters as one of the advantages of Brexit. We will be able to do all these wonderful trade deals which will make us better off.

Let’s just take a reality check. Now I’m no expert in trade deals, in fact few people in UK are, because we were part of the EU team. That’s maybe the point.

UK is joining the big league of trade dealers. Let’s just suppose it’s a league of the 10 top world economies. All the other teams are highly skilled and proven in the world trade dealing. The UK is just putting together a team to compete with the others, all at the same time.

If it were football, where do you think UK would finish at the end of the season, with a cobbled-together team playing against the best in the world, with a highly congested fixture programme? Bottom, obviously.

History tells us that trade deals are used by rich and powerful countries to control and exploit other countries. The British Empire, for example, is replete with examples, from cotton to salt. The current trade war between US and China is part of that pattern.

But the UK is rich and powerful, you say, the 5th or 9th largest economy in the world. So we can deal on equal terms with the others. Maybe. At the end of the day, sheer numbers mean that the smaller economy will usually have more to lose by not reaching a deal.

I’m not betting that we’ll have any deals any time soon, and the prospect of a ‘no deal’ exit from the EU is as real as ever.

However, all is not necessarily negative. The impinging of reality on the Brexit project may result in Prime Minister Johnson agreeing to a deal that keeps us reasonably close to the EU. Of course, this would annoy the hard Brexiteers, just as he annoyed the DUP with the withdrawal agreement. We live in hope!

Featured image of President Trump attending agreement of beef deal with EU,
by The White House from Washington, DC via Wikimedia Commons.

Stakeholders and Davos

It was around 1985/6 that I became aware of shareholder capitalism. Up to that time, our company had been a business that designed, produced and sold computers, and was proud of its contribution to the local economy. Then along came these ideas of shareholder value, and suddenly the accounts became oriented to optimising the share price. My area, software, became ‘capitalized’ and included in the sums.

It was not evident to me at the time where this was headed, and indeed in the early years of the Blair government (late 1990s) I remember quite an excitement at the idea of stakeholder capitalism, whereby the purpose of a company was not just to make money but to be concerned with all its stakeholders – customers, suppliers, employees, shareholders and the surrounding society. Unfortunately, this idea gradually seemed to disappear and full-blooded shareholder capitalism resumed – all that mattered was to make money for shareholders.

Since then, the dysfunction of this system has become apparent, in that companies have become global, relocate operations at will, produce obscene inequality, and avoid paying local taxes that enable governments to adequately function in their sphere. And the corporate world does not appear to accept responsibility for addressing the social and climate breakdown they have caused, indeed some actively try to avert action.

Now, the World Economic Forum and the annual Davos gatherings do not have the greatest of reputations, but their founding ethos is undeniably good – seeking to provide a forum where corporations and governments can discuss key issues and the way ahead.

The Davos Manifesto 2020 outlines what I’m sure most of us would like today’s corporations to be like. If only they were, we could all have more confidence that humanity was at last headed in the right direction.

The companion page why we need the Davos manifesto articulates well why such stakeholder capitalism is desirable and why it is better suited to addressing today’s challenges than is either current shareholder capitalism in the West or state capitalism in the East. The thing is, it allows its management to act as moral agents, rather than as self-interested accountants.

It will take a long time to convert all the diehards, but all power to Davos for its annual meeting 21-24 January.

It might help if we each hold them in mind, send positive thoughts, or pray for them!

The Narrative

What is Brexit but a clash of stories, or narratives. In the first, UK is a part of a collaborative European Union that arose out of the ashes of the World Wars to establish an island of peace and commerce that is a beacon to the rest of the world. In the second, UK frees itself from the tyranny of an overseeing and threatening superstate, and goes forth free again to trade on its own terms with the world, as in some mythical past times.

These two stories are so completely incompatible that the country is now riven. We are in the midst of a narrative war. Of course, we always are. The conventional left-right prism in politics is a characterisation of two stories – we are all in it together, or we are self driving and independent individuals that owe nothing to anyone.

These thoughts were provoked by Tim Jackson’s review of Robert J. Shiller’s book Narrative Economics: How Stories Go Viral and Drive Major Economic Events – well worth reading (the review, that is). I quote from Tim’s review:

“Stories are more powerful than statistics… The irrationality inherent in financial exuberance (and despair) defies the neat territory of numbers and demands a deeper excursion into the decidedly unruly world of narratives”

Tim goes on to quote economic historian Deidre McCloskey in 1990:

“Economists are tellers of stories and makers of poems”

As in economics, so in politics and other areas of human affairs. Our world is really a world of meaning and story, not a world of atoms and molecules, as materialists would have us believe.

In recent years social media have clearly increased the ability for the stories accepted by large sections of a population to be manipulated by unknown actors, and beneficiary politicians appear reluctant to do anything about it. The battle of narratives is the battle of our times.

Tim’s conclusion:

“We must all choose carefully which stories we live by.”

 

This Is Not A Drill

this is not a drillThese days, daughter is much more clued up about the latest ‘must read’ books on green issues than I am. So this book, subtitled An Extinction Rebellion Handbook, was kindly left for me to read. And an incredible book it is, outlining the thinking and practicalities behind the recent phenomenon of Extinction Rebellion.

The premise is that we can no longer continue to ignore the issue of climate breakdown, as argued so many times in this blog. So we cannot continue with ‘business as usual’, which has been the response to pretty well all climate change protests and initiatives so far. The first part of the book presents evidence of climate breakdown and its consequences from all over the world – you can be in no doubt that change is needed after reading this. This leads to the conclusion that the needed system change will only come about though some sort of non-violent revolution/rebellion, whereby the status quo is disrupted sufficiently to evoke and force through the necessary changes. And non-violent it must be, enabling peaceful and democratic change; violence always begets more violence and leaves the wrong sort of people in control of societies.

It is a handbook, in that it outlines the approach that was taken recently in the London protests, and the experience of many of the protestors. It really was a quite incredible operation.

This is needed to evoke the necessary economic and political change needed for continuation of human societies on the planet in a form that is a recognisable continuation of today’s societies. Otherwise, the status quo is driving us towards increasing disasters, wars and breakdown of societies and ecosystems.

Yes, this book outlines a vital aspect of the needed New Renaissance of humanity. It is not the whole story, but a vital part of it, comparable to that played by Mahatma Gandhi and Martin Luther King in their struggles for justice.

Read This Is Not A Drill, and you might even be inspired to become an essential part of the necessary change that is ever more pressing.

 

 

An idea whose time is coming?

“Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

Milton Friedman

This quote by economist Milton Friedman is used by John Lanchester in his recent article in London Review of Books on Universal Basic Income. As one of the most influential economists of the 20th century, Friedman probably has a point.

Lanchester takes us through many experiments in Universal Basic Income from across the world. The evidence is that it works, that it reduces stress among poor people, reduces drug and alcohol use, reduces crime, etc etc. Depending on the level set it can also remove the need for much other public spending on benefits for the poorer sections of society.

The direction we are moving, in terms of increasing disruption due to climate change and robotic technology, suggests that some such solution is going to be inevitable unless we are willing to revert to Victorian approaches of almost washing our hands of the problem of the ‘undeserving poor’, and leaving it to charity.

What is not clear is what would be the optimum level for such a basic income, how fraud and coercion could be avoided, etc. Which is why it is suggested that it be introduced at a low level and gradually increased.

Of course, the question is how to pay for it. The inertia in the current taxation system suggests that it is unlikely to come through ‘steady as she goes’ political change. But Lanchester suggests that with the coming crises the situation will be ripe for just such a change.

The article does not mention the possibility of more fundamental change to the underlying money system to ‘pay’ for such a system. What if money were created as basic income for people, rather than as debt to fund the banking system? Or some hybrid of the two. I.e. we change the nature of banking and money itself to be more in the interests of the people. Now there’s a thought. See Positive Money.

Utopia for Realists

It’s surely obvious that the current economic system is not working, what with increasing inequality, increasingly low wages at the bottom, squeezed public finances,  financial crashes, resulting populism, ever-increasing automation, ineffectively-addressed global warming and so on. And it seems equally clear that the global elite haven’t a clue what to do about it and plan to just let it run while they continue their comfortable lives.

utopia for realistsRutger Bregman’s book Utopia for Realists: And How We Can Get There brings up the heretical suggestion that we can do something about it, all we need are the visionary ideas and the determination to follow them through.

There is no reason why we cannot end poverty, give free money to everyone (basic income), move towards a shorter working week, pay important workers like nurses and bin men a commensurate salary, and open borders once the imperative to move anywhere but home is removed.

That sounds like a Utopia, you say. Yes it is. But we need a stretching vision of where we want to get to and then maybe we’ll start moving there.

Bregman cites the fascinating story of how neoliberal free market ideas moved from being the interest of just a few economists in the years after WW2, when Keynes dominated economic thought, to becoming the dominant force behind world economics from the 1970s to the present. These ideas have now run their course and are actually the cause of the predicaments we increasingly find ourselves in.

We desperately need these new Utopian ideas to gain momentum. So go read Utopia for Realists.

What human energies could be freed up for a New Renaissance!

 

 

Gödel, Maths and Physics

Edmund M. Law has some fascinating posts on his blog. A recent one had the following quote from Freeman Dyson.

Fifty years ago, Kurt Gödel, who afterwards became one of Einstein’s closest friends, proved that the world of pure mathematics is inexhaustible. No finite set of axioms and rules of inference can ever encompass the whole of mathematics. Given any finite set of axioms, we can find meaningful mathematical questions which the axioms leave unanswered. This discovery of Gödel came at first as an unwelcome shock to many mathematicians. It destroyed once and for all the hope that they could solve the problem of deciding by a systematic procedure the truth or falsehood of any mathematical statement. {53} After the initial shock was over, the mathematicians realized that Gödel’s theorem, in denying them the possibility of a universal algorithm to settle all questions, gave them instead a guarantee that mathematics can never die. No matter how far mathematics progresses and no matter how many problems are solved, there will always be, thanks to Gödel, fresh questions to ask and fresh ideas to discover.

It is my hope that we may be able to prove the world of physics as inexhaustible as the world of mathematics. Some of our colleagues in particle physics think that they are coming close to a complete understanding of the basic laws of nature. They have indeed made wonderful progress in the last ten years. But I hope that the notion of a final statement of the laws of physics will prove as illusory as the notion of a formal decision process for all of mathematics. If it should turn out that the whole of physical reality can be described by a finite set of equations, I would be disappointed.

— Freeman J. Dyson, Infinite in all Directions, 1985

Law presents this under the heading ‘Inexhaustible Mysteries’. To me, it’s just important to be reminded of Gödel’s Theorem from time to time. Mathematics is inherently open-ended, and I believe the implication is also that physics is also open ended. We can never have a model that fully describes reality. There will always be more for mathematicians and physicists to do.

Equally, we will never have a perfect economic system. There will always be space for economists and politicians. And those who seek single solutions to complex problems (e.g. ‘free markets’) are inherently misguided.

See also my post on Godel’s Theorem.

Picture of the tomb of Kurt Godel in the Princeton, New Jersey, cemetery by Antonio G Colombo, from Wikimedia Commons. What a legacy!

Removing poverty

Contrary to what some politicians might like you to believe, it is easy to remove most poverty. Simply give poor people, indeed everybody, enough money to subsist. It’s called basic income.

How to pay for it? There are two ways.

1. Pay out of current government moneys

There are many benefits to the economy:

  • more economic activity, so more taxes
  • less need for benefits, so less government costs
  • reduced minimum wage, so more employment, so again more taxes
  • less crimes of desperation
  • more intelligent behaviour from the poor (yes)
  • disincentive to immigration, as would apply to citizens only; there is also less incentive for people to move from other countries with a similar policy
  • reduced inequality means reduced discontent with governments
  • of course, you would net off against current tax and benefit schedules so that most people were not directly affected and continued to be paid the same as previously
  • etc.

So it wouldn’t cost as much as you might think.

2. Just create the money

The central bank simply creates the necessary cash, outside of government accounts. You could regard this as pump priming the economy. (Compare QE, but this time for the needy.)

If just one government does this, this will inevitably cause its currency to slowly decline against others, but we are talking small percentages, so slow, here.

If a majority of world governments do it, there is no cost. It is free money.

Basic Income is a no-brainer. Why doesn’t it happen?

There is this obsession among the empathy-bypassed richer classes that the poor are feckless and not trying hard enough, so they should be forced into desperation so that they will do any job at any price for all hours of the day and night. I suspect this came from the early days of industrialisation, when cannon fodder was need for the emerging industries. It went away after WW2 (did you know that Richard Nixon tried to introduce basic income in the US in the 1970s?) But this prejudice has been reinforced since the 1970s by right wing parties in UK, US and elsewhere.

It is nonsense. Basic income has been tried many times, and the evidence suggests that if you treat people like paid-up members of the human race they will behave like it. Give people a decent start and they will make their way.

In a world of increasing automation and concern about where the future jobs will come from, basic income seems even more needed.

It’s about political will

In the end, in a world of plenty as we have in the West, poverty is about political will and little else.

Eradication of poverty is also surely an essential precondition for a New Renaissance.

The inspiration for this post came from ‘Utopia for Realists’ by Rutger Bregman. Beware reading it, it might haunt you with the sanity of its ideas!

Featured image is Caricature of poor people at a workhouse having dinner; by Phiz (?), via Wikimedia Commons

 

 

 

Trickle-Down Economics – child’s view

We should be looking more through the eyes of children at this crazy world. They see the nonsense that is being propagated by the status quo. Brilliantly captured in this blog post by Paul Duncan.

The Out And Abouter

Julie Wilson, 8, trying to work out how to let the big guy know he’s been had.

BROKEN FORKS – Saying she just wasn’t ready for the look on her dad’s face when she tells him that there’s no such thing as trickle-down economics, little Julie Wilson, of Broken Forks, Montana, today admitted it was getting pretty hard to answer her Republican father’s increasingly probing questions.

“At night, when he’s getting ready to head out to his second job – the one he works in the evenings to pay for our health insurance – it can be really hard to look him in the eye and say supply-side theory isn’t going to let him down this holiday season. Not like last year. And the 39 before it.”

Eight-year-old Julie says that the elaborate charade she goes through to avoid dashing her dad’s belief in the inherent decency of rich people…

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‘Everything, in short, except that which makes life worthwhile’

I just discovered Tim Jackson’s excellent website and blog, particularly this item with the above title. (Thank you, daughter.) Tim seems like the sort of economics thinker that we need so much, questioning the conventional wisdom that is not working, and pointing the way forward.

In the post he reminds us of Robert Kennedy and particularly his thoughts on the usefulness of GDP as a measure for the health of an economy.

The GDP ‘measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country… It measures everything in short, except that which makes life worthwhile.’

Robert F Kennedy, Kansas 18 March 1968

You can hear the Kennedy speech in greater length on the video included in the above blog item.

Tim goes on to identify a number of modern initiatives that give hope that the professionals in this area are really eventually going to move on from the obsession with GDP, which is stopping us from addressing many of today’s problems (I will not bore you by listing them all again). When will the politicians and media follow suit, one wonders? The obsession with GDP and ‘growth’ is still evidently pervasive in UK ‘mainstream’ discourse.

Of course, this is just one example of the modern business and political approach of managing by metrics, which gives the illusion of control, without actually addressing the real issues that need to be managed. Metrics can be useful, so long as you are aware of their limitations, and so long as they do not become the dominant factor in what you are managing.

As Tim reminds us, Robert Kennedy was assassinated a few months after his Kansas speech, while mounting his run for the US presidency. I well remember the devastating effect that event had on young people in the UK, including myself. Robert Kennedy seemed a beacon of hope in difficult times. How different history might have been…

Picture shows Robert Kennedy addressing a crowd in 1963, by Leffler, Warren K., via Wikimedia Commons

The Next Crash

Why should I lie awake in the middle of the night thinking about the next financial crash, when we’ll again see failing banks and governments frantically trying to stabilise ‘confidence ‘?

Of course there will be another financial crash. There always is. It’s built into the system.

Maybe next time we should apply some common sense, says my feverish nighttime reverie.

  • Put failing banks into special administration, keeping current contracts going where possible.
  • Remove and investigate bank directors, recovering mis-spent money where possible.
  • Break up big banks rapidly into saleable and social banks eg regional banks.
  • Crucially, the money it costs should be created by central banks as ‘sovereign money’, not taken from the people and public services by increasing public debt and resulting ‘austerity ‘.
  • Of course this will slightly devalue the currency, but then that is simply a recognition of its true value in this situation.

If only…

Featured image of bank run 1933, via Wikimedia Commons

Saving Capitalism

Readers of liberal media know the story. Inequality is getting worse, banks, corporations and rich individuals distort ‘the system’ to their own advantage. Communities are being gradually destroyed, as is the ability of the mass of people to support public services. In short, modern capitalism has become unfair and unsustainable. And then on top of that, increasing automation is destroying ever more jobs, just as education is creating ever more people capable of doing them.

saving capitalismRobert Reich is a professor on public policy at Berkeley and well known author. His book ‘Saving Capitalism’ explains it all, particularly in the context of the US. His subtitle ‘For the Many, Not the Few’ expresses well where he is coming from.

Reich points out that typical public debate between right and left between ‘free markets’ and ‘more government’ actually obscures the real issue. Governments are responsible for designing, organising and enforcing markets, and this is where the focus should be. Particularly in the US, moneyed interests have successfully subverted the process in their own favour. The resulting increased inequality is there for all to see.

As Reich explains, this direction has been supported by both Republican and Democratic establishments from the era of Reagan, through Clinton, Bush, Obama. The countervailing powers to the extremes of capitalism have been gradually eroded, organised labour largely destroyed, ever-reduced and ineffective regulation, lack of control on monopolies, lax bankruptcy laws for big companies, shareholders given preference over other stakeholders, legislation influenced ever more by big money, revolving doors between corporations and government, obscene rewards to chief executives… All of course came to a head with the financial crash of 2008, after which banks were deemed ‘too big to fail’, were bailed out and the American people paid the price.

As Reich points out, this sort of thing has all happened in the US before, and the system has eventually righted itself, notably when ‘big oil’ was dismantled, when Franklin Roosevelt’s ‘new deal’ came along, when AT&T was dismantled and so on.

The challenge today is to restore suitable countervailing power to the political-economic system, so that the system can again flourish, and democracy itself be renewed. And this in a climate where technology increasingly means that the old ways of mass employment will no longer work.

The ‘rules of the market’ need to be designed anew, and the corporation ‘reinvented’. Reich is confident that this can be done. But to do it people need to begin to care and maybe re-establish some of the grassroots movements that provide necessary countervailing power. The Bernie Sanders and Jeremy Corbyn movements begin to show that the impetus is there among younger people, in both UK and US. Indeed on the other side of the spectrum the Tea Party showed similar characteristics.

The populism currently sweeping the world is not the answer, rule by over-blown egos is ultimately non-democratic. Reich highlights the problem and the needed direction with a clarity that is commendable. We all need to be listening and using what influence we might have.

Animal sentience

Animals clearly have an inner life, feelings, emotions, and so on. You only have to observe them. Start with a pet.

So why the great animal sentience debate? Because somewhere along the line some people started treating animals as objects whose sole purpose was to be eaten, shot at, exploited. Great factory farms became necessary to give cheap food (in the US, Soil Association estimates 99% of chickens, 90% of pigs, 78% of cows are ‘produced’ in concentrated animal feeding operations – CAFOs – animal factories). Farms in UK are gradually increasing in size to stay economically viable. Great swathes of land in the UK are managed to produce birds to be shot at, which is indeed a common sport across many countries. How long is this barbarism to continue?

Fortunately scientists have decided that animals are sentient. Thank God they’ve confirmed the bleeding obvious!

Hurrah for organisations like the Soil Association, whose ambition for animal welfare is for all farm animals to live ‘a good life’ within 10 years.

It seems that EU is moving in the right direction of recognising animal sentience, as is the UK. But this is clearly going to be a major issue in any future post-Brexit trade deal with the US, when they will want us to buy their barbarically produced cheap food as part of the deal.

The root problem is abstracting human affairs from inner values and morality, leaving the money monster in control. We really do need to reclaim our humanity, our inner compass, our conscience.