Capital, public good, and the real economy

Every once in awhile, I get this strange feeling that the entire economy is a sham, my optimism in capitalism and entrepreneurship a farce, my own path much more manufactured by a system than carved out on my own. Luckily, these moments are fleeting, so I am able to go on with my life, pursuing my goals confident that the end result will be substantial public good, and even a personal gain.

One of these moments happened recently when I watched the documentary An Inside Job. Though the facts presented by this excellently-shot film were not new to me — I had heard the same facts in the writing of Matt Taibbi, the Giant Pool of Money special on NPR, the terribly underrated film The New American Ruling Class, and on blogs such as Naked Capitalism and 13 Bankers — no other single source of information has so connected the dots between the political, academic, private and public problems which culminated in the financial crisis we witnessed in 2008.

Joseph Stiglitz recently wrote an article about the richest 1% of Americans, and their increasingly better relative wealth and income over the last 30 years. His points are well-argued (and again, nothing new for those well-versed in history of economics of neoliberalism). But, perhaps most interesting is Stiglitz’s recognition of the shrine of finance.

To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy.

John Maynard Keynes also had something to say on the subject:

For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight. But, capitalism in itself is in many ways extremely objectionable. [… As for] Economics, it is a very dangerous science.

When I swirl that together with my vantage point in 2011, looking back on the crisis of 2008, I find it very hard to not wish we were doing a rethink of the system altogether.

It is not enough that the conditions of labour are concentrated in a mass, in the shape of capital, at the one pole of society, while at the other are grouped masses of men, who have nothing to sell but their labour-power. Neither is it enough that they are compelled to sell it voluntarily. The advance of capitalist production develops a working class, which by education, tradition, habit, looks upon the conditions of that mode of production as self-evident laws of Nature.

The organisation of the capitalist process of production, once fully developed, breaks down all resistance. The constant generation of a relative surplus-population keeps the law of supply and demand of labour, and therefore keeps wages in a rut that corresponds with the wants of capital. The dull compulsion of economic relations completes the subjection of the labourer to the capitalist.

Direct force, outside economic conditions, is, of course, still used [at times], but only exceptionally. In the ordinary run of things, the labourer can be left to the “natural laws of production,” i.e., to his dependence on capital, a dependence springing from, and guaranteed in perpetuity by, the conditions of production themselves.

But, then I snap out of it. Of course, I don’t have to tell you who wrote that quote and what that thinking led toward in history.

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