By Edward-Yemil Rosario
Greed is good
Check this out… I came across a similar post a few years ago. I’ve changed it to suit my purposes, but I think it works:
Rape is a basic and necessary expression of human nature. Sexual assaults have been present in every society since the dawn of time. It is the natural drive of man to reproduce, to compete successfully for advantage in the marketplace of life and evolution. In fact, it is this innate compulsion to reproduce that motivates man to do anything productive and worthwhile in the first place.
It is this competitive drive that motivates man to aspire to greatness. Can you imagine men striving for greatness were they not motivated by their drive to reproduce by any means? Of course not, because the drive to reproduce is at the very core of mankind’s fundamental nature. As long as we disregard childish “God” superstitions and recognize that a man is ultimately responsible only to and for himself, we therefore recognize that any measures that attempt to suppress this natural and intrinsic drive to reproduce by any means are inherently wrong.
To suppress sexual assaults is the perverse anti-human dream of the superstitious rabble. In fact, no human society has successfully eliminated rape, despite innumerable measures designed to curb sexual assaults. If man were only truly free to pursue this integral part of his nature we would walk as the masters of the Earth that we are.
Anyone with a relatively functioning forebrain will immediately see that this is an excruciatingly faulty and dangerous chain of reasoning. Just because the drive to reproduce is inherent in humans, it doesn’t follow that sexual assault and rape stem from that drive and are a part of human nature. Furthermore, the assumption that every society has had sexual assault and none has successfully eliminated rape, doesn’t necessarily mean that sexual assault and rape are good things that should be encouraged; or that there wouldn’t be disastrous and apocalyptic consequences were people given carte blanche to rape.
Now, reread the paragraph but this time replace every occurrence of the words “sexual assault” with the words “free markets,” and replace every occurrence of the word “rape” with “capitalism,” and every occurrence of the word “reproduce” with “acquire wealth.” It is now word-for-word the position of economic neoconservative types. You will find this same line of thought in the looneytarian/ Randroid diatribes against universal healthcare, for example. The problem with slavish devotion to dogma (as with a crackpot such as Ayn Rand) is that there is a thin veneer of what appears like logic at the surface. Dig a little deeper, as with my rape example above, and you come to the realization that it is madness adorned with lipstick. I have written previously how neoliberal ideology has resulted in a freedom has been redefined in narrower, more restricted terms by people like Ayn Rand and Hayek and how their adherents view that redefinition as doctrine. Rand herself didn’t adhere to her own ridiculously flawed epistemology (“objectivists” are more like a cult than a legitimate school of philosophy).
The paradox of capitalism is that it appears rational but in actual practice, it is delirium; it is madness. As a system it is demented, yet it works very well at the same time. I guess we can say that capitalism is rational or efficient, but the question begs: is that efficiency something that works for the best of all of society? The answer is an unqualified no. Not just because I say so, but because there’s ample proof unfettered, Casino Capitalism, doesn’t work. Oh! It works, but how and for whom? The current financial crisis has deep roots. Some are in the inherent contradictions embedded in capitalism, others in the particular form current capitalism has taken (neo-liberalism). Some flow from the ideological justifications for neo-liberalism which allowed the notion of unregulated finance markets to gain such influence. These are to be found in the neoclassical analysis of the finance market.
I’ll give a brief example. John Maynard Keynes was one of the few important economists who was also a successful investor. He made a fortune speculating in futures, which is to say he was well-acquainted with financial markets. Yet, Keynes was most critical of their performance. His views were reflected in the financial regulations adopted by governments in the wake of global wreckage of World War II. The historic international negotiations conducted at a meeting in Bretton Woods, New Hampshire, in 1944, where Keynes represented the British government, was where national governments similarly adopted policies of stringent financial regulations. They also established a range of publicly owned financial institutions in response to failures of the private market.
During the ensuing decades of the extended Keynesian economic boom that followed World War II, financial markets were tightly regulated. One consequence of this tight rein was that financial crises disappeared almost entirely from the developed world. In the United States, a range of regulatory bodies were established to control the financial sector. The Glass-Steagall Act established the Federal Deposit Insurance Corporation (FDIC) and prohibited bank holding companies from owning other financial companies.
Although the details of interventions varied from country to country, the effect was the same everywhere. Banking in the 1950s and the 1960s was a dull but secure affair, resembling public utility in many ways.
But then came the Efficient Markets Hypothesis (EMH) and it changed all that.
According to the EMH, information is distributed equally among all market participants, they all hold similar interpretations of that information and all can get access to all the credit they need at any time at the same rate. In other words, everyone is considered to be identical in terms of what they know, what they can get and what they do with that knowledge and cash. This results in a theory which argues that stock markets accurately price stocks on the basis of their unknown future earnings, i.e. that these identical expectations by identical investors are correct. In other words, investors are able to correctly predict the future and act in the same way to the same information. Or more simply put, EMH is the belief that by some miracle markets will take care of problems that arise.
The logical fallacy here is so obvious that I wouldn’t bother to take it apart if it weren’t for the fact that EMH adherents insist continuing to defend it!
Look, if everyone held identical opinions then there would be no trading of shares as trading obviously implies different opinions on how a stock will perform. Similarly, in reality investors are credit rationed, the rate of borrowing tends to rise as the amount borrowed increases and the borrowing rate normally exceeds the leading rate. In fact, Eugene Fama, the developer of the theory was honest enough to state that the “consequence of accommodating such aspects of reality are likely to be disastrous in terms of the usefulness of the resulting theory… The theory is in a shambles.” (W.F Sharpe, quoted by Keen, Debunking Economics, p. 233).
Despite the obvious problems with the theory, it flowered because it was used as a theoretical rationale for deregulating markets. In fact, those who adhere to the EMH are like religious fanatics in their defense of the theory. If you’re interested in a more academically rigorous smackdown of the EMH, I would refer you to Joseph Stiglitz, who published a proof showing that if the efficient market hypothesis was true it would be logically irrational to spend money on research — which people clearly do. Stiglitz would eventually win The Nobel Prize in economics for his contributions.
Suffice it to say that the empirical case for EMH was never made; it was mostly an ideological belief. The failure of EMH didn’t come quickly, it was a gradual unraveling, but by the 1990s a number of developing nations experienced crippling financial crises though their governments had done their best to follow the dogma of Efficiency Markets Hypothesis apostles, in particular by deregulating financial markets and encouraging foreign investment.
The experience of the United States itself provides ample evidence against the validity of EMH. The dot com crash and the government-supported rescue of hedge funds provided a harbinger of the massive bailouts of 2008 and 2009, in the process undermining the key assumptions of the Efficient Market Hypothesis in the process.
Tragically, these lessons have gone unlearned. Despite repeated failures to meet the test of experience, the Efficient Markets Hypothesis has remained central to finance theory and to policy even now, after the disastrous financial shitstorm of 2008.
Well, boys and girls: what have we learned? First, my aim here is not to equate capitalism with rape (which upon further reflection is not a stretch). Rather, my aim is to point out fallacious reasoning. Certain things might (or might not) be inherently part of human nature or cannot be completely eliminated, but that isn’t a sufficient condition for a logically cohesive argument that they should be encouraged. If you want to argue that they should be encouraged, you must give other reasons.
The only other reason I seem to get is the ridiculously reactionary response of “Communism doesn’t work,” or “socialism is dead” (it isn’t), which displays an ignorance of the enormous and diverse body of economic and ethical thought that is not neoconservative.
My name is Eddie and I’m in recovery from civilization…
L. A. Breaux
Not to rain on your parade here, but you do realize that we don’t actually live in a society that even remotely adheres to the core principles of capitalism, right? What most people call “capitalism” today is in reality Corporatism – which uses a lot of capitalist rhetoric to justify its existence as well as underfund and/or shut down institutions it calls “socialist” while at the same time has no problem with “socialist” intervention of government when it is the beneficiary (subsidies, bail-outs, etc…).
While I have my criticisms of capitalism (particularly its belief in “free markets” – is any market ever 100% “free?” I doubt it…), the institution you attack in your essay (which otherwise is an insightful read, BTW) is capitalist in-name-only – I don’t want the readers to confuse what passes for “capitalism” in the present establishment for the real thing (which, like Marxist-style Communism, has never really existed on a large-scale).
Azazel: Well, you’re not raining on my parade since I never stated the US has a purely capitalistic system. NO economy is purely capitalistic because it couldn’t exist. Most economies are mixed economies. HOWEVER, the US has the most capitalistic system amongst advanced nations and the Efficiency Markets Hypothesis IS a prime theoretical construct in the US.
If you disagree with how I plotted out how invalid economic theories and failed neoliberal policies undergird our economic polices, I would be more than happy to hear it. Not rhetoric, give me some links to CREDIBLE sites showing how my main points here are incorrect or misguided. However, mischaracterizations of what I wrote don’t warrant many substantive responses.
Of coiurse, there are underdeveloped nations, such as Somalia for example, that actually demostrate what libertarariansim and capiltaism would look like if they were followed to the letter.
This is brilliant and you have been missed (on PS). Everything that I am, from my upbringing to my education to my career and now retirement, I owe, not to Capitalism, but to socialistic programs of education, social welfare, and collective endeavors. Your analogy between rape and Capitalism is an apt one. There is no profit in saving the lives of most people, so it is not done unless it can be done by profit-making medical endeavors. No profit in education and *surprise* it is under attack unless it is private profit-making education.
Capitalism homicidal? Not such a stretch – look at the very recent (and still on-going) attack on PP. Some time ago the Wealthy discovered a button in the religious belief that fetuses are humans and they have used this to garner the support of those who will be hurt by the very programs they are deeply cutting.
Little reported fact: there is a thriving Communist party and many socialist parties in the former Soviet bloc. Having lived for almost a generation under Capitalism, they want their countries back.
” those who will be hurt by the very programs they are deeply cutting.” This is badly stated. The tea people et.al. will be hurt by the cuts, not the programs.
Very Slick!
[Quote=Eddie]Well, you’re not raining on my parade since I never stated the US has a purely capitalistic system. NO economy is purely capitalistic because it couldn’t exist. Most economies are mixed economies. HOWEVER, the US has the most capitalistic system amongst advanced nations and the Efficiency Markets Hypothesis IS a prime theoretical construct in the US.[/quote]
Yes, it is a prime *theoretical* construct here – but it’s not put into practice. If it were, there would be no subsidization of big business (which is merely a payment to industries to *not* produce a product), nor would the Wall Street bankers have been bailed out to the tune of over 12 trillion dollars (that includes the Federal Reserve’s “backdoor bailout”): if the powers that be in this fucked-up country truly believed in this construct, they would have simply allowed these industries to fail and let their rotting corpses be the fertilizer for newer, more innovative businesses to spring up and replace the dead behemoths that rule the markets today.
You pay far too much attention to the espoused values of the establishment – don’t listen the words of the established order, look at their *actions* (which speak far louder).
[Quote=Eddie]If you disagree with how I plotted out how invalid economic theories and failed neoliberal policies undergird our economic polices, I would be more than happy to hear it.[/quote]
I have no arguments with you there – my concern was only that you confuse this neoliberal economy (one of an unholy alliance between big business, the state and organized religion) for capitalism. I’ll be the first to admit that capitalism has it’s own share of problems (hence the reason I prefer a mutualist society that recognizes the individual as sovereign instead), but the problems our economy faces has less to do with the practice of capitalism and more to do corporatists rigging the markets to suit there interests (which directly contradicts the idea of a “free market”) under a banner of “capitalism” to fool the masses into believing that they represent a “free” economy.
Many years ago, before the dissolution of the Soviet Union, a political science major once told me that we needed communism to keep runaway capitalism in check. The one extreme keeps the other in check. While it was a theoretical statement, the years following the Soviet collapse has marked the beginning of a shameless, corporate monopoly over all business and resources. Without counter-balances, there is no balance.
Projections of future success are based on past performances. While this shows some advantages in measuring consumer appeal, there are several things wrong with simply attending to growth rate charts. These charts do not take in degree of affluence. When people are prosperous, they buy more things, take more vacations, spend more time on recreation and hobbies. These charts do not make allowances for generational populations. The smaller populations of the twenty to forty year old set do not have the same interests and pursuits and the larger plus-forty generation, but they are our primary work force. Most crucial of all, these charts do not predict the changing aptitudes of people. Success has been folded into a formula, unflexible and unprepared for a future that thrives best on new ideas, experimentation, and adaptation.
The underlying principle of economics is supply and demand. Because of the upward buying swing beginning in the late seventies and early eighties, the assumption was a continued supply would guarantee a continued demand. The market crashed when supply overtook demand. It crashed because of the delusion that the cost of supply could go higher and higher as there would always be a demand, failing to take into account that spending is limited to what the public can afford. It has crashed because instead of our government being a social enterprise regulating big business, it has become a big business regulating the social system.
Azazel: the absence of “pure” capitlaism doesn’t mean it tenets don’t influence our econiomy. don’t be dense. Capitlaism has influenced our economny and the economies of the world for centuries. You seem not to be able to see the forest for the trees. In this case, the issue is smacking you in the face: extremes of capitalism arew the core of neoliberal policies: deregulation and the belief that invisible hand of the market is the answer to everything is a capitalistic sentiment.
You need to read/ understand more effectively beofre spouting off nonsense. as you individualist sentiments? They make no sense. there are nations around like that (Somalia comes to mind) but i doubt you’d last there.
Karlsie: supply and demand is not the basis for many economic theories, it’s a capitalistic construct. It’s a map for a consumer-based/ zero-sum society. I’m saying that assuming this is an absolute truth is faulty reasoning.
[Quote=Eddie]the absence of “pure” capitlaism doesn’t mean it tenets don’t influence our econiomy.[/quote]
The tenents of capitalism influence the public *perception* of the economy (that is, it causes the pubic to see the markets as “free” – even when they are not), but they have little or no influence on the actions of those with the power to control the markets – that is, the people who actually count when all is said and done: lobbyists, politicians, corporate executives and the like – as much as they preach these ideas to the masses, they don’t practice them when push comes to shove.
[Quote=Eddie] In this case, the issue is smacking you in the face: extremes of capitalism arew the core of neoliberal policies: deregulation and the belief that invisible hand of the market is the answer to everything is a capitalistic sentiment.[/quote]
It is a sentiment of capitalism and yes it is being cited as a justification for “deregulation” (as selective as such measures are) and the like, but those in power don’t actually *believe* in the validity of these sentiments – otherwise why subsidize big businesses to stop them from producing or bail out failed banks? If they truly believed in the concept of an invisible hand regulating market efficiency (the presence of which would make such actions redundant, to say the least…), they would simply let those institutions fall of their face and die.
You seem to be the one that can’t see the forest for the trees – you’re focussing on the theory cited as justification for the corrupt actions of the state entity and its coporate leaches while ignoring the utter hypocracy with which they actually *apply* said theory. The disease afflicting our society isn’t capitalism, but rather centralized power itself (which, at the moment, is wrapped in various nationalist sentiments – including the notion of capitalism): as long as power is easily commandeered by a small collective (such as a government, for example) it will always attract the most power-hungry elements of society to it (in this case politicians, corporate executives and other interest groups) – railing against the theory they use to justify their existence (whatever that happens to be at any given moment – be it capitalism, communism, nationalism or something else) is pointless. The only solution is to destroy the source of their power (i.e. the involuntary union called the state) once and for all that makes it possible for such power blocks to be formed in the first place.
As I said before, quit listening to what those in power say and start paying attention to what they actually *do* – the difference is like that between daylight and dark…
I am not an educated economist or modern historian but it seems to me that the issues arise from the “enabling” that the capitalist construct gives rise to. It enables corporates and centralized power bases to collude under the auspices of “freedom and democracy” and make deals with government agencies etc.
I have to say that what capitalism is in it’s pure form and what it is today may or may not be too different things but what is called capitalism by the capitalists themselves is the problem.
Dangerous memes.