JR'S Free Thought Pages
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Is There a Way Out of our Economic Malaise?

by Johnny Reb

Under the present global economic dogma, it's highly unlikely. How can we patch up a completely failed economic model when there's no serious endeavour by politicians to even entertain the idea? Personally, I doubt its fixable because too many wealthy and powerful people and their political pimps have too much invested, in all senses of the word, in the current decaying unsustainable corrupt system to ever want to dismantle it even as a necessity for our very survival.

First, the choice is not between Capitalism and Communism. It never has been; it's an egregious false dichotomy employed by the right wing controlled media and the conservative corporate welfare state. Second, economic systems must be designed to serve people, not the other way around. Third, the only worthwhile economic ideology is one of compassion for the other and environmental sustainability, neither of which is possible under the present economic order of corporatism. Fourth, economists would have us believe that economics is independent of societal concerns and the common good. A simple analogy of why this independence is nonsense would be the example of organized crime such as drug gangs and cartels. They spend their ill-gotten gains on houses, cars, clothes, entertainment and so on. The money spent trickles down through the economy, so one could argue that their activities benefit society. But does anyone other than supply side neo-conservative ideologues believe that? Anyone who really believes that economics is independent of moral and social concerns has to believe that the ends justify the means. It's a morally bankrupt economic theology. One might argue that at least the biker gangs and drug gangs are honest in that they don't claim any pretence to honesty as do our banks and financial conglomerates. The activities of corporate finance are just as criminal as the biker gangs. The only difference is that the banks carry out their illegal activities with impunity, often with the blessing of government.

In North America we are taught very early on by our institutions of indoctrination on that capitalism is synonymous with free markets, democracy, justice and freedom. This is blatantly false on all counts but the fairy tale seems to have worked wonderfully well on most of us. We're really quite a credulous lot. Simply put, a capitalist democracy is nothing more than "democracy" for capitalists, a regressive system that in recent years has descended even further beyond to a corporate controlled autocracy. The Wall Street and Bay Street economies are, not unlike the economy of the old USSR, centrally planned and managed by big banks and corporations for which money is both a means and an end. As claimed by neo-conservative ideologues, the primary goal is not competition, but monopoly control of markets, physical resources, and technology to maximize profits for shareholders and support obscene salaries and bonuses for management. This planning is carried out with a totally compliant, cooperative and equally criminal government, controlled, not by the will of the people, but huge business lobbies. The hierarchical anti-democratic system that we suffer with has become nothing more than a corporate oligarchy, what I have called in an earlier essay, the Conservative Corporate Welfare State. US imperialism, including its gratuitous wars, is in essence a facilitator for corporate power to enable it to impose its exploitive will on the resources and labour of countries abroad.

What no one seems to want to admit (or is simply ignorant of labour and civil rights history) is that it was the progressive left, often in the form of socialists and yes, even communists, during the first half of the twentieth century that brought about the civilizing changes to capitalism in civil rights and in the workplace, changes that are now being systematically  rescinded.* And we continue to turn a blind eye to the fact that much of our recent and present prosperity is out of sight and out of mind on the backs of slave labour in third world sweatshops, places like China, Indonesia and Bangladesh. The length of the chain, the number and criticality of connections on the network that brings economic goods or services from one end to the other through inventor, developer, designer, entrepreneur, producer, licensor, distributor, transporter, service provider, stock trader, wholesaler, retailer and finally to consumer. Just think of each step trying through any means to maximize return and minimize competition. It then becomes obvious the bigger the web the greater the chance for abuse and the more need for regulation.

*Thank you Ronald Reagan, Margaret Thatcher, George Bush (both), Brian Mulroney, Paul Martin, Bill Clinton, Stephen Harper, Gordon Campbell and dozens of other neo-con dogmatists.

One must not confuse Wall Street with the economy of Main Street which consists of workers and small businesses who self-organize to provide sustenance for themselves, their families, and their communities producing real goods and services in response to community needs. Main Street exemplifies the small scale bottom up market economy envisioned by Adam Smith, the very antithesis of Wall Street. On a small personal scale such as the traditional Main Street, markets can become very near self-regulating, primarily by mutual trust,  a caring community atmosphere and peer pressure. Largeness is the real villain here whereby powerful hierarchical top-down corporations governed by a culture of greed and a belief that their only legal duty is to maximize profits requires a strong and intrusive equally hierarchical subservient government that pretends to limit the innumerable abuses and cleans up the inevitable economic disasters.

Notwithstanding that neither capitalism nor communism* have ever existed in a pure form other than as theoretical constructs, there's a huge grey area between these two ideologies. Anyone who has read the great works of Adam Smith and Karl Marx knows this. Communism we're told is dead, but the reality is it's never been given a chance for survival for more than a few months anywhere in the world. The western capitalist countries made sure of it. The United States for example made sure the Cuban revolution would fail with its incessant interferences, assassination attempts on Castro and brutal economic embargos. The US also sent arms, money and about 10,000 troops to support the Romanoff monarchy against the Bolshevik Revolution, to sabotage the transition to a worker's democracy in Russia. And anyone who thinks the economy of the USSR under Stalin and his successors up to 1990 was communist knows nothing about history or political ideologies and ought to read the primary sources of Smith and Marx. But they won't because they're not interested in truth.

*Capitalism may be called the dictatorship of business and communism the dictatorship of the proletariat. In this sense neither is democratic.

Let me return to the oft repeated claim by conservatives that the only alternative to capitalism is communism. This false dichotomy, sometimes called the black-and-white fallacy, is one of the most insidious of all logical fallacies. The Manichean Jesus freak, George W. Bush ("you're either with us or against us"), was notorious for spewing them out, especially following 9/11. No, the only alternative to capitalism is not communism. There are ideologies to the right and left of these two and many hybrids between, including the many varieties and adaptations of anarchism.

Wall Street traders often invoke the name of Adam Smith but have quite clearly never read any of his works - or his critics. Neither did their goddess, Ayn Rand who wrote a disturbing book with the self-contradictory oxymoronic title, The Virtue of Selfishness. Adam Smith in The Wealth of Nations and The Theory of Moral Sentiments wrote that people have a natural and appropriate concern for the well-being of others and an innate duty not to do them harm. He also believed that government has a responsibility to restrain those who fail in this duty. Smith and the political economists who followed in his tradition developed a clever theory of the marketís capacity to self-organize in the community interest based on a number of carefully articulated assumptions, including the following:


A point made by anarchist philosophers is that buyers and sellers in any market must be sufficiently small to influence the market price and must honour basic principles of honest dealing.


Income and ownership must be equitably distributed.


Complete disclosure and pertinent information must be accessible to all participants with no trade secrets.


Sellers must bear the full cost of the products they sell and be absorbed within the sale price. Sadly today much of the risk and losses are offloaded onto governments; i.e., taxpayers. This cost also includes frequent economic collapses as we have recently experienced that have included massive bailouts of bankrupt corporations, deemed "too big to fail." Under these sweetheart arrangements corporations are able to "privatize profits and socialize losses." Real risk is incurred by workers and their families who become not only unemployed but victims of the corporate scams such as sub-prime mortgages and usurious interest rates on credit.


Investment capital and profit must remain within national borders and trade between countries must be balanced. Globalization and so-called "free trade" agreements have permitted corporations to register their charters offshore and protect profits as they do business in their home countries.


Savings must be invested in the creation of productive capital rather than in speculative trading, the primary game played by banks and financial institutions like Goldman Sachs.

These are just a few of the characteristics of a civilized market economy. Globalization and Wall Street capitalism violates them all. What many doctrinaire capitalists call "free enterprise" is in reality duplicitous Orwellian doublespeak - in short, a sham graphically revealed by the credit collapse in 2008. It's another term for unfettered exploitation of labour, consumers and resources by criminal syndicates engaged in counterfeiting, predatory lending, usury, tax evasion, fraud, bribery and extortion. It's legal because Wall Street bribes and literally owns the politicians, thereby writing its own rules. Corporatism as Mussolini called his brand of fascism is centralized power over the combined realm of the entire political economy with the military power necessary to back-up decisions with media power to hide the evidence.

Acknowledge the truth of history. Capitalism does not require democracy as a form of governance. As we now know from the history of the last century and the first decade of this one, capitalism is entirely politically opportunistic: it will flourish wherever capitalists can make profits, as evidenced by Nazi Germany, Fascist Italy, Franco's Spain, dictatorships in Brazil and Argentina, the Chile of Pinochet, Suharto's Indonesia, post-World War II Japan and Korea (which were one-party bogus democracies for decades), and of course, the U.S.'s newest pal Communist China. Capitalists could care less about democracy, often holding it in contempt and an obstacle to exploitation and profit. Their one and only concern is profit and its maximization, not freedom, democracy and free elections, and other such civilities.

Greed and selfishness emanate through the economic system that controls every aspect of our lives. Consider the recent events in Egypt where the entire edifice of their system was challenged. We have witnessed a fraternal coming together of people, with mutual respect and support for one another. We've seen many sacrificing for the common good. It's not impossible to construct such a society where the greedy are not rewarded as is the case in the present modus operandi of the state capitalist system - the Conservative Corporate Welfare State. Rather, those who are benevolent and caring and willing to work for the good of the whole, ought to be the beneficiaries of societies rewards and recognition. Many early North American native societies were built on what Marx called non-hierarchical "primitive communism", but they were closer to pure anarchist communities in line with the vision of Marx's nemesis Michael Bakunin. Within their own communities indigenous Native American societies were stateless, had no police, had reverence and respect for the natural environment, did not believe in punishment or private property and through peer pressure were able to eliminate or at the very least mitigate greed and duplicity within their communities. Giving and generosity were deemed the prime virtues. And native men and women were not born into sin or moral depravity. If the Chief did not at all times have the common good of the tribe as his primary goal, he was quickly replaced. All this flew in the face of the ethos and religious beliefs of the Christian white man. Consequently they had to be eradicated like vermin. Perhaps we can now start to learn a few things from these "primitive", "savage" cultures.

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