economics
2 Nov 2011
Save Capitalism From Greed
The Occupy movement has registered global discontent about the failure of parasitic capitalism. Business and governments must work together to ensure the real economy flourishes again, writes Ian McAuley
The only odd thing about the Occupy Wall Street Movement is that it didn’t happen three years ago, when Americans saw their taxes — taxes that they reasonably expected to be spent on schools, roads and hospitals — appropriated to bail out banks and auto companies whose executives had mismanaged their businesses to the point that America was on the brink of economic collapse, and had rewarded themselves amply in the process.
Perhaps they believed that the newly elected Democrat administration would steer America back to a path of economic justice and prosperity, as the Roosevelt administration had done in the Great Depression. Perhaps it was only when they saw that once rescued, the bankers resumed their irresponsible behaviour, that they took to the streets.
James Arvanitakis and Juan Salazar, Lauren Carroll Harris, Ben Eltham and Kate Ausburn have all written in New Matilda about a global wave of discontent exemplified by the protestors in New York’s Zucotti Park. They point out, correctly, that this discontent has many dimensions. (Some conservative commentators disparagingly say the protestors have no focus.)
There is, however, a unifying theme, and that’s about economic failure. A failure of the American model of capitalism, and of the government that they reasonably expected would ensure the economic system delivered shared prosperity.
America’s specific economic woes are well documented at Business Insider web here.
Drawing on official statistics, they show how the spoils of economic growth over the last half century have gone to so few people. Most tellingly, they point out that since 1964 there has been no increase in average hourly earnings. In fact they have fallen from their peak in 1969, when the post-war era of growing and shared prosperity ended. As those days slip behind us — most Americans alive today were born after 1969 — the "American dream" is looking more like a dreamtime myth.
Some may say that all that’s on display is the politics of envy, and some others may say that inequality, while undesirable, does not in itself constitute economic failure.
But this is about more than envy. Psychologists point out that we are envious only of those whose circumstances are close to our own. An unemployed steelworker may be envious of an employed steelworker, who may be envious of the person who beat him for the foreman’s job, but they are not envious of their steel company’s CEO who is taking 350 times the worker’s pay, or of the bank executive who has just taken a seven figure bonus in spite of having almost wiped out depositors’ savings. That sentiment is stronger than envy: it’s moral outrage — an outrage clearly on display at the demonstrations.
Capitalism needs mechanisms of rewards to encourage innovation and effort, but when those rewards lose any connection to contribution, and when the well-off can protect themselves from their own folly while throwing others out of work, the system loses its legitimacy and heads down a the path of self-destruction.
For a start, when the rewards of hard work are hoarded by a few bankers and senior executives, the incentive power of monetary rewards is lost. Even more destructive is the influence of privilege itself, because the privileged group finds there is more to be gained from using political influence to protect and extend privilege ("rent seeking" in economists’ terms) than from the hard work of investing in new activities in competitive markets.
As income disparities endure, wealth disparities become even wider. The wealthy start to separate themselves from society in literal or metaphorical gated communities with their exclusive suburbs, private clinics and private schools. This isolation impedes social mobility — one of the contributors to economic dynamism — and within a generation or two there emerges an oligarchy with a sense of entitlement.
Having excluded themselves from society, the wealthy engage in a tax revolt, using their influence to fight against progressive taxation and against public services in general. The governments, bullied by these campaigns, try to cope by cutting services. Because rising inequality and unemployment increase the need for social security and outlays, the only way governments can respond is to cut outlays on services such as health, education and infrastructure — the very services that contribute to a nation’s long-term prosperity.
One particularly destructive phenomenon of recent times has been the detachment of the finance sector from the real economy. A hundred years ago Rudolph Hilferding, in his work Das Finanzkapital, forecast the emergence of a capitalism in which the processes of production would be subordinated to the accumulation of money in the financial system. His prediction has come true, and within what were once seen as real-economy firms, financiers have displaced engineers and entrepreneurs from the top ranks.
The business theorists of earlier times (Chester Barnard, Peter Drucker. Kawakami Hajime, Adolf Berns, Gardner Means to name some) taught that a firm’s purpose was to do something useful — to operate an airline, to make cars, to distribute and sell goods — and to share the resulting prosperity between employees, shareholders and customers. Of course that was a pure model, but in the brave new world where finance dominates, that model doesn’t exist even as an ideal. The purpose of a firm now, particularly a publicly listed firm, is to make money.
That’s a parasitic model of capitalism — a parasite so stupid that it eventually kills its host. That parasitic process brought down the Soviet Union, where the Party oligarchy wrecked the economic system that maintained their privilege. We now see it among the financial elites, who don’t understand that making money makes sense only so long as there is a real economy to provide the real services which money can buy. When people fail to understand the difference between wealth and money, when they fail to understand that money is worthless unless it is backed by real wealth, they are on a path to economic destruction.
There may be some protesters in Zucotti Park — anarchists, romantics, communists (they’re rather old by now) — celebrating the troubles of capitalism. But they also have supporters among those who understand that capitalism, if it functions well, is far preferable to any competing economic system, and who are concerned that it is now in danger. They know what happened in the 1930s, when economic systems collapsed. In Europe both capitalism and communism were discredited, as were the weak democracies which could not get economic systems functioning. Hitler’s stormtroopers marched into that political and economic vacuum.
Post-war, in the democracies at least, a new order flourished: the political and economic order hammered out at the Bretton Woods conference in 1944. That was essentially an international order, to protect against beggar-thy-neighbour trade policies that had contributed to the problems of the 1930s, and to protect against currency crises.
There were also domestic compacts, largely unwritten, including the notion that one of the prime functions of the state was to protect capitalism from its own self-destructive tendencies. The state was to provide or regulate where markets fail, and to provide those public goods, particularly education and infrastructure, which the market does not provide efficiently, and which are necessary for economic growth. One government function was to sustain reasonable minimum wages, so that businesses have an incentive to employ people productively, and to ensure that the state is not left with the burden of paying out welfare to compensate for corporations’ failures, because public revenues are needed for public goods.
Those compacts became unfashionable, but, if capitalism is to survive they need to be restored. That will be difficult, because governments too have lost legitimacy; like indulgent parents who have spoilt their children, they convey the impression that they will always yield to the petulance of those who seek to sustain or extend unjustified privilege.
In Australia’s case the federal government has a particularly hard task because it has dispensed so much privilege over the years — to miners, health insurers, licensed clubs, pharmacists, superannuants, and private schools to name a few — and such privilege has given their beneficiaries the power to lobby for more. If the government doesn’t yield to petulance, there is always an opposition which can take the side of privilege, and ridicule the public interest in three word slogans.
Yet, there are surely some in business who understand that this model cannot sustain itself. Greed and short-sightedness need to be curtailed to allow the real economy to flourish.
We can do it. Humans are adept at developing cooperative arrangements to protect themselves from their own dysfunctional behaviour. We develop formal and informal contracts among ourselves to regulate social behaviour. Practical philosophers, such as Thomas Schelling, Robert Axelrod and Mancur Olson demonstrate that we rely on regulation as a way of enhancing opportunities for mutual gain. Expressed in everyday terms it becomes a no-brainer: I welcome the road rules, for instance, because others are bound by the same rules, and that means I have the freedom to use the roads safely. In the absence of such rules lies not freedom but a Mad Max scenario of mutually assured destruction.
In the world of public policy, however, there is the notion that regulation of business is undesirable — a failure to understand that business too, needs its road rules. And there is the notion that governments can and should buy peace through appeasing bullies, when, in reality, each appeasement results in a loss of respect and the encouragement of even more bullying.
Policymakers and businesspeople need to change their ways of thinking. And, to encourage them, my recommendation to the protesters in New York, Sydney and around the world is a short placard-friendly slogan: "Save Capitalism From Greed".
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Posted Wednesday, 02 November 11 at 11:41AM
Save capitalism from greed? What nonsense!
Capitalism is based on greed. Capitalism is driven by greed, insatiable greed. Look at people like Murdoch. Such people can’t help themselves. The more they get the more they want!
We know that power corrupts. So does greed. We need to convince people that greed is unworthy, that it creates inequality, that for every rich person there are thousands of people living in poverty or existing in a web of endless struggle.
Hopefully capitalism will implode soon. Then we can decide on a new paradigm, one that is based on sharing and equality for everyone rather than the current one that rewards the unscrupulous and the avaricious!
www.dangerouscreation.com
Posted Wednesday, 02 November 11 at 12:24PM
David Grayling, please, inform yourself about the issue before you post.
Your ignorant bleating (Murdoch personifies capitalism!) does the whole left a disservice, a bit like those idealistic socialist alliance kids whose hearts are in the right place, they just cant be bothered reading up on what they are supposedly fighting for.
Posted Wednesday, 02 November 11 at 12:50PM
NATO, you are well-named! NATO is a pawn of America and, as such, embodies evil like promoting endless war and greed and the exploitation of weak nations.
You are entitled to your opinion and I am entitled to mine. Are you a bit twitchy because your shares and super have dropped in value?
Many folk don’t have any shares or super!
Posted Wednesday, 02 November 11 at 1:57PM
It’s not as if that the wealthy, powerful, and/or influential practice capitalism, the is a reason “Socialism for the rich, capitalism for the poor” resonates honesty, and I think this article captures it well. After spending over a decade on various boards, advocacy at local, state and federal levels, it repulses me how easily these few manipulate the public assets for their own experiments, and mechanisms for empire building. Similarly having friends of similar or align-able philosophies who sit/sat on a diversity of other boards, we see the myth of efficient private business, and the various charges against public ownership of critical systems, a thin but effective veneer of filth.
With that said it is deeply refreshing to not have to read the brilliance of Noam Chomsky et al and wonder where are the documentations of Australia’s ill health? Thankyou Ian for a succinct and informative piece. Now to get it out to the masses.
Posted Wednesday, 02 November 11 at 3:19PM
NATO posted Wednesday, 02 November 11 at 12:24PM
Re.: DG. His posts are slight variations of the same theme also known as the “Grayling mantra”.
Don’t worry he is harmless, repetitive, short tempered, sometimes abusive, but basically harmless. He truly believes he is the only one with all the answers.
Humour him he is a poor sod.
The “dangerouscreation” bit is just a decoy.
Posted Wednesday, 02 November 11 at 3:19PM
Every dog has their day, Capitalism your day is fast approaching. Greed doesn’t need capitlaism, (it just helps) all greed needs is a greedy person/organisation to flourish.
Posted Wednesday, 02 November 11 at 4:06PM
OK all - can we keep discussion focussed on the article? Thanks. Marni (Ed)
Posted Wednesday, 02 November 11 at 5:00PM
rumtytum
It’s clear that the system isn’t working, but those with most to lose have most of the power and will not easily relinquish their hold on wealth and privilege. One has only to look at America’s response to the GFC, where the same economists who created the mess were put in charge of cleaning it up, seemingly having lost no credibility at all. Ordinary shareholders have no way of changing company behaviour as long as the big funds are run by the same people who run the big companies. They went to school together, did their MBAs together (every child wins a prize!), they belong to the same clubs, their wives help out at the same charities. Why would anybody whose snout is in the trough, or who hopes to get his snout in it one day, want to change anything? The truly bizarre thing is that so many people are prepared to accept the Chicago School version of reality, though it’s been repeatedly discredited. In the US people who can’t pay for health care or decent accommodation despite working at 2 or more jobs nod their approval of the tax cuts for the wealthy. These people are not mad and they’re not actually stupid, they’re just conned blind by fairy stories that are as absurd as the bible but have been said so often that they’re accepted as truth. People don’t believe what the scientists tell them about global warming, but they believe the economists who tell them they’ll be better off if they give the wealthiest 1% a tax cut. Pah.
Posted Wednesday, 02 November 11 at 5:29PM
Peter, yours is an excellent comment, one that is worth reading slowly and carefully.
Your mention of the wealthy ‘club’ is pertinent to this thread as is your observation about their ready belief in fairy tales.
The crunch is coming soon and reality will crush many but not the rich! They’ve had it too good for too long.
Posted Wednesday, 02 November 11 at 6:57PM
That so many journalists label the OWS worldwide protests anti-capitalist shows they are either stupid or disengenuous and possibly both. The OWS movement is actually protesting against socialism. Particularly, the socialisation of finance and manufacturing business losses with taxpayer bailouts, the socialisation of finance sector risk with taxpayer guarantees for banks and the socialistation of finance sector employee bonuses through the development of a self-indulgent superannuation industry sucks on the teat of our compulsory superannuation contributions.
99% of OWS protestors support the form of capitalism that once delivered fair wages and condition’s and a fair and equitable taxation regime.
Posted Wednesday, 02 November 11 at 8:45PM
Ben Eltham suggests:
Policy makers and businesspeople need to change their ways of thinking. And, to encourage them, my recommendation to the protesters in New York, Sydney and around the world is a short placard-friendly slogan: “Save Capitalism From Greed”.
That will do it. Problem solved!
Ian McAuley says: “Save Capitalism From Greed”. The Occupy movement has registered global discontent about the failure of parasitic capitalism. Business and governments must work together to ensure the real economy flourishes again.
Sounds good. How do we do it?
David Grayling thinks: Save capitalism from greed? What nonsense!
marnic posted: OK all - can we keep discussion focussed on the article?
Maybe just for once based on articles like these we could attempt to focus on possible “practical” solutions.
I listed a few on a different thread. No interest. No takers. Too difficult it seems for mere armchair critics.
Posted Wednesday, 02 November 11 at 10:15PM
A trenchant article, Ian, but isn’t it the profit motive at the heart of the system–the one that supposedly allows for self-regulation–that drove the global economy to this point in the first place? A system where the only logic is the drive to maximise profits–within the law or outside it–can only obey that mandate, even when regulated. It becomes nonsense to do otherwise, and the government has to intervene on the public behalf to hold up the other end. See, for example, alternative energy. A majority recognises that we need it, but there’s another opinion piece every day about how it’s just too expensive and how the market will only allow shale oil or some such thing. It’s left up to governments to subsidise renewables, or come up with fancy tricks to force the market to somehow accommodate them.
And what ideal capitalism are you holding up as the model?
Cheers!
Craig J.
Posted Wednesday, 02 November 11 at 11:03PM
Excellent article Ian. Probably one of the best I have come across on NM.
Ashar also sums up our system perfectly.
DG - you consistently confuse “capitalism” with “Americanism”. A truly capitalist system does not reward “greed” but “success”. The American system rewards those who hold sway over Govt - financial companies, energy companies etc.
In particular, in the case of the banks, their existence (in present form) would not be tolerated in a capitalist system since they simply couldn’t survive the various economic cycles. “Occupiers” are well within their rights to ask why Governments the world over used taxpayers money to bail them out rather than simply protecting depositors whilst the institutions were blown to smithereens by their failure to risk manage.
The reason of course is that indebted western Governments as much as anyone are reliant on debt markets (ie the banks) for their financial survival. Hence the massive sway held by the banks and the financial markets generally over the Govts of the world and why they are able to force Govts to rescue them when they are in trouble and delay the onset of any regulation to make them more robust.
But this is not capitalism DG and nor is a system of ever-increasing personal and/or Government debt. This is massive interference by Govts of the world - who refuse to accept that they can’t control economic cycles - and a bunch of greedy/clever people taking advantage of the profit opportunities that such intervention creates. PR
Posted Thursday, 03 November 11 at 7:36AM
‘A truly capitalist system does not reward “greed” but “success”,’ says our worthy Perfidious. Wot?
Perhaps it does on the planet you live on, Rex, but here on earth things are different! Cheers.
Posted Thursday, 03 November 11 at 10:03AM
Strong rebuttal DG. With such compelling and persuasive arguments you will have me (and others) converted to the cause in no time!
Emotive statements and grandiose conclusions are neither facts, evidence or argument.
“Capitalism is driven by greed. Look at people like Murdoch.” What does this even mean?? Does Murdoch have a tattoo on his forehead that contains the evidentiary proof of your pre-drawn conclusion?
Clearly “state run pseudo-capitalism” is open to being manipulated by greedy people due to their sway over the political process. However I would suggest to you that the problem arises because of the “state run” aspects of this system! PR
Posted Thursday, 03 November 11 at 1:28PM
Focus on Australia:
1. What makes Aussies likeable is our “she’ll be right” easy going attitude.
That in turn is our greatest liability. The ready acceptance of mediocrity, our tolerance to incompetence and our general unawareness of fundamental and vital issues are holding us back from implementing long overdue essential reforms.
2. On the other hand, despite our obvious shortcomings, compared to many other countries in the world we are at present in an enviable position financially, socially and economically. Do we realise it and appreciate it?
I don’t think so!
Posted Thursday, 03 November 11 at 2:39PM
It will never work so long as you have people like Joyce, Murdoch and there sidekicks around that insist in ripping the system off.
No man or woman is worth the exhorbitant salaries they get paid and don’t offer the excuse that they work long and hard hours for what they do, that excuse wore out ages ago.
I work long and hard hours in my business but my take home pay is no where near what Joyce, Murdoch and there sidekicks get and yes I do have trade certificates after self funding at uni.
Posted Thursday, 03 November 11 at 4:14PM
Perfidious, I would have offered you a strong rebuttal but not to such an absurd assertion.
Keep in mind that I majored in psychology and my second major was economics. Heard of it?
Cheers and best regards.
Posted Thursday, 03 November 11 at 8:53PM
DG
Did you ever get a job in either?
Whilst you have admirable persistence, i question how “capitalism is bad because I say so” went in your economics job interview? Or how you went when you explained that as a psychologist you weren’t there to listen to patients problems but would instead be treating them with a half hour sermon on the dangers of American imperialism?
Cheers PR
Posted Friday, 04 November 11 at 1:15AM
I wanted to add a little Australian context for discussion - we are seeing billions invested in the expansion of gas and coal exports - with public concessions and asset depreciation public revenue doesn’t see returns for sometimes up to a decade. There is job creation and income tax but we often pay for infrastructure - the investment makes sense in the medium to long term (putting aside potential adverse effects like wage pressures, inflation, house prices from the boom etc) but what about climate change? We have a 20th century strategy. What happens if the next el nino season brings another cyclone - do we introduce the levy to re build the railway to export the coal. I agree with a lot of sentiment in the article and have participated in the Occupy movement but I wanted to add another observation - the democratic deficit in our systems has I think made us less responsive to change at a time when the world and consequence are greatly accelerating. So putting aside the moral musings of greed gone mad which I agree with David about, existing institutions and political cultures that produce people like Martin Ferguson and Colin Barnett are simply failing to produce effective management regardless of your political perspective. Look at the present crisis in Europe - the response is slow and financial sector centric - Italy is a highly leveraged economy that is only sustainable if the medium and long term outlook has growth - no Italy no Euro -there has been little attention on stimulus, in fact austerity is going to bring stagnation - we are seeing out of date thinking masquerading as leadership. So the left right discussions are being replaced by broad based discontent - Its time to think about what we want Australia in the 21st century to look like and accelerate there very quickly. What I’m about to suggest isn’t realistic but never the less…. Julia get yourself in a room with the independents and the greens and start acting ahead of the curve - you are never going to win the spin - people have decided they don’t like you - so spend these last two years if you have them laying the ground work for the next century - move forward faster now.
We talk about the tax system becoming fairer and simpler - do it put the numbers in the machine and give us a deduction free simple tax system
Have a 5 year revolving door policy for lobbyists so former ministers and staffers can not lobby for people they have been regulating - make representations formalised and on the public record
lets have a 21st century sustainable housing industry rather than the hopelessly vulnerable to downturn one that we have.
add here……….
Posted Friday, 04 November 11 at 9:54AM
douglas jones I am not an economist so maybe I prattle.
Sure Government regulation is necessary as the removal of regulations posted 1930 on show, but is there not something else.
Economic stakes as given an environment, resource base if you like that is infinite if only via substitution but this is now being shown to be false whether one takes pollution disposal, high value energy sources, oil, coal, or food given that having treated the land as infinite we have mined rather than nurtured. Economics also assumed the efficiency of the market along with rational investors and we found, again in a rerun of the depression 1929 on, that the market is not efficient (in the sense economists mean) rather it is weak and the players rather than rational herd, follow the leader.
If we treated the environment and its resources as capital entering our balance sheets and subject to audit (by honest folk, when such is found please advertise the fact) we may have been better off. That is the past the present is the economy needs consumers to run, consumers need jobs to obtain money in order to consume. Austerity will as post 1929 decrease economic activity and shed jobs whilst the overhanging debt is played out.
But to do other we need growth which means more GHG and a greater run on declining resource particularly oil. Perhaps this is off topic but none of this appears above.
Posted Friday, 04 November 11 at 2:35PM
Ian MacAuley made good points as did some others (eg GoComSys) , while again others did not heed Marni’s advice.
Here are a few points I would like to add:
* We moved from classic capitalism to neo-classic capitalism and lost Nature in the proces. We only work with Capital and Labour. In truth we work with Nature + Capital + Labour. If all those ‘greedies’ would have to pay for the use and abuse of Nature a charge which would benefit the common wealth, things may begin to look different.
* Capitalism lurched too far to the right. There is no longer a distinction between public goods and private goods. Everything has been privatized. We should not now lurch to the left and nationalize everything. Rather we should use common sense and good analysis to separate the public from the private.
* Bank bashing has become a popular exercise. Banks don’t hurt me because they don’t get anything from me, I benefit from them. But I don’t like it when they create money rather than one controlling body.
* Individually and corporately we have become too big a Nanny-state where everyone tries to rip off everyone else. We need sound social insurance systems for both individuals and businesses and do away with the rest.
The big question of course is: how to implement it when there will be so much resistance from those with vested interests.
Posted Friday, 04 November 11 at 11:36PM
Zerox
Agree with your suggestions.
However I would probably start by getting us out of debt. If we want to have the freedom to achieve our goals then we have to first stop being slaves. PR
Posted Saturday, 05 November 11 at 6:05PM
When people say ‘Capitalism is not working’ what do they really mean?
Do they mean that the infrastructure of modern society has broken down to the extent that they are unable to buy a dinky donut?
No.
They mean that at the very top, the 1% are making a lot of money off the many, however the middle class is still doing pretty well from it, much better in fact than any time in history.
The occupy movement is not saying ‘capitalism is not working’ it is saying:
‘Why are these financial institutions making ordinary people pay for their stupid mistakes’
Posted Saturday, 05 November 11 at 7:01PM
This is deeply silly (the article, not the comments, although there is not a lot there to be proud of either). The idea that we should just ask corporations nicely to behave in a manner we approve of, is amazingly naive. Thankfully, I don’t think the Occupy movement will be so gullible.
Capitalism is a system with built in incentives - the main one, the whole point of capitalism, is the use of the profit motive as the theoretical driver of innovation. There are plenty of rules and regulations required but they are about protecting private property not redistributing wealth or protecting those that don’t own anything. If you design a system with such a perverse logic you can’t expect people - at least not all people - to play nice.
Posted Saturday, 05 November 11 at 9:52PM
Excellent article, so good I read it twice, however:
“capitalism, if it functions well, is far preferable to any competing economic system”
I see three systems “competing”, being: 1. command-and-control (e.g. USSR, Nth. Korea); 2. state-capitalism (Germany, Japan, Sth. Korea, parts of the U.S. tied up with the military-industrial complex, China is heading this way too), and; 3. laissez-faire capitalism (much of the U.S., U.K., Aust. and many developing and ex-communist economies).
…but do we have to pick one of these three? ALL of these systems are now known to have serious problems.
Perhaps there is a better paradigm out there which we just have not tried yet. E.g. has anyone ever seriously tried applying democracy to the economic sphere on any kind of scale? Ther have been some small experiments in individual factories like Zanon/FaSinPat, but that’s all.
Or maybe we should be looking to pick the best bits from systems which we have tried. E.g. market-based pricing is good, but letting people use those markets as casinos is bad; regulation to prevent companies externalising costs onto the public (e.g. banning CFCs) is good, but complex or unnescesary regulation is burdensome; guaranteeing people to opportunity to work for a living wage is good, forcing people to do a particular kind of work when they could find other opportunities is bad etc., etc..
In any case one of the most serious problems we face is our strange confusion regarding economic and social systems. Why, for example, does no-one in the West seem to be aware that democracy (the people are in charge, or more strictly a majority of the people) and capitalism (the money is in charge, effectively “one dollar, one vote”) are by definition mutually-exclusive? Why do we say things like “we are a democracy” and “we are capitalist”, when the very obvious truth is that we organise some things democratically, and other things capitalisticallty?
Posted Sunday, 06 November 11 at 10:53AM
Capitalism is dead! Or at least it should be!
It has allowed the rich to become obscenely rich while bleeding the rest of us and bringing about poverty on a large scale. It has promoted war so that corporations can do what they like in other nations.
We need a system that combines the best elements of capitalism (there are a few) with the best elements of socialism. We need a system that encourages motivation and hard work but punishes both greed and laziness.
We need a system that is based on local communities that work together, that support its members, that ensure equality via a rigidly enforced tax system (no lurks for the jerks). We need better social structures based on caring and cooperation rather than competition and survival of the fittest.
We need to get our fingers into the soil, to respect nature, to care for all other species, to develop our non-vocational talents in areas like art, writing, sculpture, philosophy, etc.
To have our needs satisfied, we need to destroy the current system and get rid of all the Predators and the Parasites. Then, with great care and deliberation, replace it and ensure it never reappears.
Are you ready for change, real change?
www.dangerouscreation.com
Posted Sunday, 06 November 11 at 12:57PM
Misnomer.”however the middle class is still doing pretty well from it, much better in fact than any time in history.”
I do not know how you come by that idea.
Every article I read or hear or see tells me that the Middle Class in all Western Capitalist systems is being thoroughly gutted. Those ‘aspiring’ Middle Class people who made it through to the 1% are now OK, but if they did not make it before the collapse of World Economic Order, particularly in the USA, they are now well and truly back in the 99%. Most have lost their well paid jobs and their homes. The double car, two storey Middle Class home on leafy streets in well scrubbed suburbs are now sitting there empty and derelict. Those Middle Class jobs have been sent to China and India, along with all the ‘worker’s class’ jobs. Australia is well advanced down this road, and as long as we grovel at the feet of American Big Business and their paid pollies and keep on signing so called Free Trade Deals which actually destroy our economies, we are sitting ducks for mass job losses.
Some economists even state that without this Middle Class, our Capitalist systems are moribund. But it is the corrupted Capitalist Economies that have gutted the Middle Class, by allowing Big Capital/Big Business to gain so much control over rewards for work, by putting more and more power into the hands of Big Business, and totally emasculating Organised Labour. The Middle Class came out of good, well paid jobs, often in Manufacturing, and Small Business, and both these are disappearing in Australia, as well as in the other US style economies, as we capitulate to Organised and absolutely GREEDY Big Business.
We in Australia now have a small (and I DO mean small) coterie of very well paid people who are working in the Mining Industry, and this has totally distorted our economies, especially in regional areas. They may well be Middle Class at least in income, but all this is short term as far as our economies are concerned, and terribly disruptive to our society, probably on the long term. This is a Middle Class with a short life span.
Meanwhile, the 1%, the millionaires and billionaires, lunch greedily on our social capital, and control OUR Governments to THEIR OWN benefit. Dazza.
Posted Sunday, 06 November 11 at 6:49PM
Dazza, your last sentence was the clincher in an excellent comment.
More and more Australians are waking up to the fact that the economic system is rigged in favour of the ruling classes (the rich and the legal/political dynasties).
It’s time the cards were rearranged so that everyone has an equal chance of sharing in the resources of earth. It’s time to give the ‘Never give a Sucker an even Break’ mob what they deserve: SFA!
Let’s strive for equality and peace. It’s never happened on earth before!
Posted Monday, 07 November 11 at 1:24PM
I agree with sentiments that the finance sector has become parasitic, and that tax payer bailout of private companies is wrong, and that some regulation (ie share/derivative transaction tax) to minimize speculative gambling makes sense.
BUT…
This article places too much emphasis on how the pie is divided and nothing on why the size of it’s growth is stagnating in the west and surging in china/India. The reason for this is also strongly related to the reasons of increased inequality in the west - ie corporations are making heaps but the workforce is being outsourced because it can be done cheaper (and increasingly better) overseas.
Capitalism is not dead and the invisible hand (some call it greed) is doing wonders to boost millions out of poverty in china/India. They are just playing the game better and harder whilst we are wasting time fighting over what’s left of our time in the sun, getting lazier day by day.
People need to stop expecting others to provide for them and start creating enterprises to provide for themselves, and governments should do everything the can to facilitate this.
Posted Monday, 07 November 11 at 2:33PM
Thank you for a well thought out article. A breath of fresh air for NM to see the C word not immediately connected to murder and theft and the like while keeping the criticisms sharp and sustained.
Posted Tuesday, 08 November 11 at 4:10PM
What exactly is the ‘real economy’, Ian.
Is it a bit like the ‘real Julia’ ?
Posted Sunday, 13 November 11 at 7:14AM
Here is a time bomb posted elsewhere, most applies.
Go and read a great Book.
“Globalization, Global Justice and Social Work”
and read what has happened to our Social Systems when we Privatised for “Wealth Creation.”
Read what it says about “Cracks in the Neo Liberal consensus” on page 208?
Or.
The rest must be Targeted, means tested and kept to a minimum of provision lest the burden threatens,
“Wealth Creation”
They must remain consumers of food at all cost, but they must not be allowed to see that they are a burden to wealth creation or more correctly, hamper the Governments ability to channel Tax money towards “Wealth Creation.” Why hamper.
77% of all Australians earn their money from the Tax payer in some way or form. Nurse 100%, Butcher who sells to the Nurse between 10 and 80% depending on how many Government payed people buy his products.
Infastructure Companies and their employees like Serco earn 100% of their wealth from the Tax payer.
Only 36% of Australians are in full time Employment and paying Taxes full time.
A lot of these people get 100% of their income of the Tax payer and pay 33% Tax back through their income Tax. So the Tax System is actualy in Deficit, so where does the Government get the short fall. The mining Taxes/Royalties, selling OUR Resources overseas.
People just don’t realize how corrosive of our once great society this Privatisation, Dog Eat Dog World, has become.
Yes, they Parade their over rated, Glamourised, Marilyn Monroe’s with their Platex support Bra’s and Panty Girdle’s, who are in fact nothing but Obese Bimbo Junkies to make this Capitalist System look good. Then try and hide the fact that she died from a Cocaine Enema with a 2” hose up her rear.
Its great when you are now the Footballer who drives around in a 350 Thousand Dollar sports car.
Or the Guy that now lives on the North Shore because his Company now makes the Number Plates that our Inmates in our Jails used to make to pay for their incarceration which the Tax Payer now has to do at great cost.
This cost to Society became Transparent because Jails were Government Dept., so they try to Privatise the Jails to hide the true costs, until they too become the next Qantas or Telstra Saga because the CEO opens all the Jails, lets murderers out onto the street because the Profits are not coming or as great as they wanted.
There is a lot more to this Qantas thing, it goes much deeper, it goes to the root of Globilisation, Privatisation. The warning bells should be ringing, but the Media is too stupid to ask those fundamental questions.
What was and is Economics for, the individual and/or society
Go to http://www.chrismartenson.com/crashcourse
view the 20 odd power Point Presentations.
Trade between Villages was the first form of Business, but because the Barter system was not very efficient at trading goods, a form of trading currency was necessary.
The world had no problems while we used Gold, it is when we created Currencies and gave Banks the right to lend money into existence, that we began to fail and our inflation crises showed its ugly head.
The world began to fail many years ago and its the Harvard Business Model thats Failing, Nixon, Reagan and Thatcher put the final nails in our worlds coffin.
We must take Industrialization into the equation and how it caused the population explosion that has now reached 7 Billion, if these have 2 Children each
they become 14 billion, give and take, birth losses and old age deaths.
All of these people want Jobs, Cars and Women or Man and the right to Pollute the planet.