Yves here. The post below is ambitious, which is difficult to execute well in a short space. Even though it makes quite a few good observations about the nature of market economies and capitalism, it ignores some elephants in the room. The big one is corruption. Author Ken Melvin has a touching faith in “independent experts” as a remedy for the wealthy increasingly ordering society to suit them, which includes extracting more from most of the rest of us. Here, they serve a role much like the “magic board” in debate contests of Lambert and my youth, where a newly constituted board would be devised and depicted as able to set up and manage a new bureaucracy flawlessly.
When you have America’s epitome of independent experts, McKinsey, going from scandal to scandal, and not even ashamed of its rap sheet, it’s hard to see experts as anything other than intellectual mercenaries, ready to serve the highest bidder.
Another lapse is not acknowledging that the early industrial era was accompanied by the enclosure movement, which stripped formerly independent yeomen of their ability to support themselves by the seizure of common pasturelands and denying them the right to hunt on private estates. We have a new enclosure movement underway with software serving to limit property rights, such as the ownership of tractors and cars.
Nevertheless, this is a meaty piece and should provide grist for discussion.
Once the birthright of lords and kings, the association of wealth with power, is, of late, more often than not, the prerogative of the very wealthy; theirs as a right derived under the aegis of capitalism, and, one defended, it seems — under the aegis of the Constitution.
For a long time now, capitalism has provided both the rationale and method for continuing the status quo; it granted the wealthy the right to employ the power of their wealth to control a nation’s wealth, and more. Of late, the US Supreme Court has ruled that this right to power extends to politics and beyond.
Surely, the wealth of a nation is a consequence of production by its many, or, even if stolen from another land, that other land’s many; not the efforts of a handful of men. Just as assuredly, the wealth of a nation, the world, belongs to all its citizens; not to a handful of them. And, again, just as assuredly, the right to decide what to do with a nation’s wealth, belongs to all its citizens. So, surely, too, the political power of the Nation belongs to its citizens.
Today, in these, our United States of America, to an extent unseen at least since the Gilded Age, the struggle is about who gets to decide everything. That’s everything as in: What is legal and what is not. How the laws are enforced, …. The distribution of wealth, of healthcare, …. Whether or not to go to war, …. Even what to think. Today, we are seeing the extremely wealthy spend $millions and $millions on think tanks and lobbyists, political campaigns, getting justices appointed to the US Supreme Court, …, in order to ensure that they, not we the people, continue to get to decide what to do with the Nation’s wealth, …, to decide everything. These are they, the very same, who took our wealth, invested it in Asia, then told us, we the people, to go fish.
Why would anyone think that the wealthy really are those most qualified to manage the Nation’s wealth? Perhaps this was so a long time ago; in the days of lords and kings. But that was then and this is now; the 21stcentury. If the wealth of a nation belongs in the main to its citizens, shouldn’t they have a say in the management thereof? In theory, we the people, through our elected representatives, get to decide how our government spends a portion of our wealth in our collective interest. In theory, this works pretty well. In practice, the wealthy have a far greater say about who gets elected, and thus how this portion of our money is spent, than we the people do. In practice, at present, we the people have little or nothing to say about how the rest of our nation’s wealth is spent.
Once, back in the days, the wealthy were more likely to be the more learned, the poor were more likely to be illiterate. This is no longer the case. No doubt, some of the wealthy have expertise, but for most of them, the wealth is inherited. In many cases, we the people are better educated. Today, most of the wealthy hire experts from amongst we the people to manage their wealth. Our legislators, our Government, routinely calls on such experts as these for advice on how best to spend the Nation’s wealth. Should our economy be run by the very wealthy, or by groups of independent experts?
Can we the people be resolved enough to withstand the certain and powerful storm, and take charge of our wealth? Can we fashion an economic constitution under which our representatives choose unconflicted experts to better manage the wealth of our Nation? In law, we trust independent judges and juries to decide such grave and weighty matters as criminal guilt or innocence, civil right or wrong. Could committees of independent experts make better decisions about how to employ, how to distribute, the Nation’s wealth? Seems possible that John Kenneth Galbraith was a man ahead of his time.
Better manage? Capitalism worked well enough as long as waste wasn’t too big a problem, as long as natural resources seemed unlimited, as long as there was always room for growth — for ever more consumption, as long as its lust for power was restrained. That time has passed. Capitalism bears a major portion of the responsibility for global warming, and for the untenable inequities and disparities we are facing. Simply put, the earth can no longer afford capitalism.
We read and hear that, today, nearly half the families in America could not raise $400. We also read and hear that we are host to four of the world’s five centibillionaires. America is experiencing inequality and disparity at levels unknown since, at least, the 1920s & 30s. In re this mal-distribution, as labor becomes ever less in demand, would it not be better to devise a way to provide every citizen a sufficient basic income, and more to those who contribute in proportion to their contribution?
It may be that aspects of capitalism can be used as an economic tool going forward, that it can be kept in the bottle. None come to mind. It seems certain that we can not go forth with capitalism as she is being practiced.
“Let the market decide,” said the not so very good, not too very smart, Senator.
If we the people take control of our wealth, we will also be, directly or indirectly, taking control of what gets produced, what gets brought to market, what is offered for sale. How to decide these things? How do we go about finding out what people want? We could ask them, or, we could have them let us know. The demand part of markets seems to work fairly well, excepting those instances where we get stuck with stuff like plastic waste. But, that demand for plastics didn’t swell up out of the ground; it took $millions worth of ‘Marketing’ to create. Likewise, with the demand for cars, electronics, …. Consumption was always the oxygen for capitalism; as were the waste of Edsels and human burn-outs that wind up in junkyards its ash. Throwing stuff at the wall was never a good strategy. It is something we can no longer afford. A wiser economic model would never have allowed for the marketing of non-recyclable plastics. Products should be created for a purpose, in response to a need. Markets shouldn’t be created just for the purpose of selling something.
These days, market surveys can accurately measure demand. What about markets for new, innovative, products? Here again, market surveys have been shown to work well. How do we encourage the introduction of new, innovative products; something that to this point has depended on investors; private or public. Rather the hazard of the die, let’s let the inventors and innovators compete for the investment of our wealth by submitting their proposals to a team of unconflicted experts. Going forward, let’s go with our best thinking.
Humans have centuries of experience with markets. We well know how effective and powerful, an economic tool they can be. They are a way of imposing competition on suppliers that leads to improved efficiencies in production methods, processes, transportation, … They are fairly simple to affect; bids can be let, rules can be imposed, performance verified, …. An independent, unconflicted, group of experts could solicit bids for producing an existing or a new product. Imposing the competitive bid process would ensure that the cost of the product was kept as low as economically feasible.
The not so very good Senator’s remark was in response to America’s healthcare crisis, a most abject failure of the ‘market’s’ ability to provide a solution. Perhaps, if our elected representatives had put a well specified contract for healthcare out to bid? If only, but they didn’t. They did market their good offices to lobbyists from the healthcare industry. Other abject failures of the ‘market’ include housing, income distribution, education, pandemic response, ….
Capitalism had at least two Achilles Heels: One, its demand for copious, wasteful, consumption. Two, it requires perpetual growth. Though the second employs the first, they work hand in hand. Either one alone would have eventually been fatal. In the name of capitalism, we have depleted our orb and corrupted its environment. With our failure to restrain its inherent lust for power, we have lost control of the beast; of our nation. Perhaps the world. It wasn’t capitalism that propelled China’s recent growth. It was their best thinking in combination with our blind fealty to capitalism. While it is more and more obvious that capitalism is not suited to this 21stcentury. Greater efficiency, better decision making, is required. For the environment, for all of nature, the price of capitalism has become too much.
Slaves brought from Africa to Charleston, in what would become South Carolina, brought with them the knowledge of how to grow rice and, it seems, somehow, the seeds themselves. On the rice plantations, it was they who did the arduous labor of planting and the growing of rice in the lowland heat, rice that made antebellum Charleston’s planters and merchants, and Charleston, very wealthy. To whom should the wealth have gone?
Well regulated markets work well; can be, are, a most useful economic tool. In well regulated markets there are no monopolies unless they are of benefit to all; no monopsonies, if avoidable. Maybe market capitalism with well regulated markets and without the capitalism?