CAPITALISM - February 12, 2009

In the wreckage of the neoclassical idiocy, one might hope to detect some understanding that the model of capitalism that dominates the world’s economy these days is in need of fine-tuning in the direction of socialism to prevent continuing repetition of the boom and bust cycle that has now reached one of its episodic cataclysms. Rather than continue in the same direction with the ignorant hope that it will somehow lead to a different end, we see all the major players in the world economy looking for a quick fix that will somehow make it be 1965 again. Yet it must be clear that greed and predation are not a recipe for a fruitful and well-managed economy, no matter how much the plutocrats seek to continue to pull the wool over the eyes of the onlookers. While it is true that socialism on the pattern of the Soviet Union has its problems, so does capitalism. But bureaucratic corporate capitalism, in which greedy predators run corporations owned by a diffuse body of stockholders, has all the vices of both. We see it clearly in the banks, in which short-term gains wind up in the pockets of the executives, while losses must be borne by the stockholders or, in the worst cases, by the public at large. One might think that a sane public would come to realize how it is being abused, and socialize the giant corporations at least. But the plutocrats seem to be able to keep the blinders on the public and their leaders, so that the old untruths continue to dominate the thinking of those charged with finding our way out of the pernicious maze. A public bank, operating through small local banks as agents and dealing in public funds at a reasonable profit and paying sane wages, could surely do better than the kind of piracy we have just been witnessing. But Obama and Gordon Brown and the other leaders of EU nations seem chained to the idiocies that have carried us to this new Depression.