I will start off with this quote by Albert Camus: “I speak for no one: I have enough difficulty speaking for myself. I am no one’s guide. I don’t know, or I know only dimly, where I am headed.”
It’s odd how when an economic system that is known to be inefficient, prone to irrational behavior, and tends to exploit all except those who have more than benefitted from it gets such a cult-like following. Everyone will agree that an economy dictated wholly in a top-down fashion is more than inefficient – they do not work. Also, states that have an overly powerful hold on the regulation of things ranging from institutions to social practices will evolve into totalitarian rule of law. But, as Tony Judt writes in his newest (and perhaps last) book Ill Fares the Land: “Are we doomed indefinitely to lurch between a dysfunctional ‘free market’ and the much-advertised horrors of ‘socialism’?”
Debates about what is and is not Socialism are raging as never before (at least in my life) in America right now. Topics ranging from health care reform to levying taxes on the banks that were “too big to fail” in order to have a private market solution to failures next time around have stirred passionate debates about how far America will go into enacting laws that could possibly make our economic and social system more secure from the excesses of unregulated capitalism.
But what is disturbing to people is how far will you let government in to keep uncertainty out?
What culminated in 2008 was not the making of some bad policy passed during George W. Bush’s presidency. It was not even the legislation passed in 1999 under Bill Clinton that put pressure on Freddie Mac and Fannie Mae to begin underwriting subprime mortgages. Nor was it solely the result of the rating agencies failing to live up to their standards and purpose in not rating debt infused with sub-prime mortgages correctly.
What could be blamed was the systematic reduction of regulations and oversight in the financial sector as a whole. With the trend since Reagan and Thatcher that government regulation and oversight is all bad and the private market is all good, what guidelines were in place for the banks not to make loans to people who couldn’t afford them? What about then the banks selling these loans in bundled packages to other banks and investment companies – or to insurance companies? What about the legislation passed by both parties that allowed for these things to happen?
If you are saying, “Well, the banks should have known better and been more responsible” you don’t get it. The banks were doing exactly what they were suppose to do – make money. Make profits. Make short-term profits for their shareholders. And if there is anything that the unregulated capitalism of the past 30-years in America has proven, is that it is unsustainable.
America’s real growth and industrial might was from the 1950’s – 1980’s. During that time, the American economy depended on protection for overseas competition, not to mention regulation of some markets while getting subsidies in others, price supports and government guarantees. All of these things in reality were part of the growth of American industry, and all of these things are considered “Socialist” in today’s terms.
Again, why is it that the people who are suffering the most from unregulated capitalism – and who have not much of any kind of safety net – the ones who are championing the idea of de-regulation and systematic free-markets? These are the same people who say unabashedly that Communism doesn’t work, why can’t they apply the same logic to unregulated capitalism? Just because Communist (and Fascists) had State regulation, it doesn’t disqualify the public sector from holding a place in free societies. Indeed, Western society (but in particular America) seem to have abandoned one 19th century belief – that of the economic necessity of Marxism – for another 19th century belief – that of belief that all affairs and policies, private and public must turn to the globalized economy and its never ending demands?
But moreover, is the “welfare state”, even on a small scale, an overt act of Socialism laid upon people? The idea of the “welfare state” was part of public life for Europeans to a degree before 1914. Included in this “welfare state” package were universal medical services, old age pensions, unemployment and sickness insurance, free education, and subsidized public transport. And ironically, these “welfare states” were actually the culmination of late-nineteenth century reformist liberalism - not the first stage of twentieth-century socialism.
After the failures of Democratic regimes (such as Germany, Czechoslovakia, and Spain and a high degree of unrest in France and Great Britain) caused due to economic and social disturbances (to say it kindly), high quality “welfare states” were created to prevent a return to the past (Fascism) and the threat at the present time (Communism).
Today, there are some similarities to this in America especially. With the housing crisis causing many middle-class homeowners to be in upside-down mortgages, forced to declare bankruptcy, or well behind payments due to the artificial cost of the houses due to the inflationary pressures put upon the market by cheap money and wild investment (supported by the banks and the government, without oversight), the rich are getting much richer while the middle-class and below are being completely wiped out.
This would seem to be the setting for 19th century political-theory movements, but what leadership do we have now, in 2010? This is very dangerous, as it allows for demagogues such as Glenn Beck and Sarah Palin to make a very strong influence into some very angry people – and that is the recipe for violence. And what happened for us to get to this point: Unregulated capitalism and its excesses – exactly what these people are fighting to protect.
It’s almost like an alcoholic being upset at water for making him sick and hung-over.
I really do have a lot more to say on this topic, but I think I will leave it at that for tonight.
Is It Self-Sabotage?
3 years ago