Keith, I don't think you give enough credit where credit is due. Several
things in combination are causing today's crisis. Globalization, technology
and the movement of jobs to the "developing world" is one such thing. The
increasing economic dominance of the FIRE sector(finance, insurance and real
estate) in advanced states, plus the fact that much of what it does takes place
out of sight, is another. The growing gap between rich and poor and the
increasing saleability of politicians is yet another. And most recently, the
trumping of democracy by ideology (the Tea Party, for example) appears to have
become a very important factor.
Poor old hunters/gatherers have nothing to do with it. What I found in my work
with people who still hunt and gather in northern Canada is that they are
highly cooperative. If one person invented a better method of hunting or
gathering, everyone shared in it.
And it may not be capitalism that's in crisis, but governments and nation
states certainly are.
Ed
----- Original Message -----
From: Keith Hudson
To: RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION ; Robert Stennett
Sent: Monday, August 08, 2011 2:49 AM
Subject: Re: [Futurework] Capitalism in crisis: 80 years ago, a banking
collapse devastated Europe, triggering war | Mail Online
Barry,
Capitalism is not in crisis. So long as man retains his curiosity streak and
wants to make and do new things then, to bring them off, he has to devote time,
effort and (these days) money beforehand. The first hunter-gatherer who
investigated his hunting weapon -- a crude piece of stone -- and discovered
that, with skill, it could be fractured into sharp edges and points was the
first capitalist. The time and effort spent was the first investment -- the
first capital -- before money was invented.
What's in crisis today is governmental and banker-led capitalism. In previous
times there has been military-dominated capitalism, as also religiously-led as
also industrialism-led. Each has the effect at their zenith of exploiting the
masses. But then they inevitably go too far and lose their 'mandate from
heaven' as the Chinese put it.
Today's crisis has been caused by (a) governmental printing of money way
beyond normal productivity; (b) banks' inventions of all sorts of credit
schemes which have vastly enhanced the existing money supply. In fact,
governments and banks in the advanced countries are synergistic. It's revolving
doors for the chief players. Senior politicians hardly fail to become rich when
retired; senior bankers hardly fail in being able to influence legislation.
If it's of any consolation there are clear signs that both banks and
governments have bitten off far more than they can chew. Having grown from
something like 5% of GDP to something like 15% in the last 100 years, banks are
now contracting, both in personnel and schemes. Having grown from something
like 10% of GDP to something approaching 50% (in some of the most advanced
countries) in the last 100 years, governments are already contracting, both in
personnel and scope. This hasn't reached America yet but it will do.
In this increasingly specialist world new power groups will arise in due
course as the whole pack of cards is reshuffled. Don't ask me what the next
specific power centre(s) will be. For example, it could be education or
medicine (and perhaps one particular specialization within this such as
neuroscience for happiness purposes or genetics for breeding purposes). Both
education and medicine already have the appearance of being much larger
economic growth sectors in the coming years. Both of them have the potential of
gaining power over the personal lives of politicians, bankers and their
children. Or it could be something quite unexpected which might carry great
economic, and thus political, power with it, such as quantum computing or
particle physics perhaps.
Unless you happen to think that mankind is about to fall into chaos or
oblivion or both, then capitalism will survive. The real point is -- in whose
hands?
Keith
At 23:56 07/08/2011, you wrote:
http://www.dailymail.co.uk/news/article-2022993/Capitalism-crisis-80-years-ago-banking-collapse-devastated-Europe-triggering-war.html
I think the following quote summarizes much of my current thinking about
economics.
Barry
"At bottom, capitalism is as much a moral enterprise as it is an economic
one. If those lucky enough to become successful ignore the virtues of thrift,
self-discipline and sobriety, as well as the moral imperative to look after the
weak, then capitalism degenerates into cronyism and self-interest."
Article to follow....
Capitalism in crisis, a warning from history: Eighty years ago, a banking
collapse devastated Europe, triggering war. Today, faith in the free markets is
faltering again
Last updated at 6:03 PM on 6th August 2011
Exactly 80 years ago, international capitalism stood on the verge of
meltdown.
The collapse of the banking system in the summer of 1931 sent shockwaves
through Europe, bringing governments to their knees and thousands out onto the
streets.
In the United States, an increasingly careworn president and his
congressional critics fought a bitter battle over government spending and tax
rises.
The collapse of the banking system in the summer of 1931 brought
governments to their knees and thousands out onto the streets (Pictured: the
Jarrow March)
And in Britain, with the Labour government broken by the economic crisis, a
Conservative-dominated coalition imposed the deepest spending cuts in a
generation, slashing benefits in an attempt to restore confidence in the
nationâ?Ts finances.
With the banks refusing to lend, and millions of people thrown out of work,
capitalism itself seemed utterly discredited.
In other countries, many turned to the far Right, swelling the ranks of the
Nazis and their allies.
In Britain, a generation of intellectuals turned their backs on capitalism,
placing their faith in the utopian idealism of Soviet Communism and closing
their eyes to the horrors of Stalinâ?Ts barbaric regime.
For decades afterwards this extraordinary historical moment - when
capitalism itself appeared to have failed - was forgotten, and looked like the
stuff of ancient history.
But in the summer of 2011, with the eurozone in chaos, the British economy
stagnant and the U.S. crippled by debt, with social mobility at a standstill
and millions of ordinary families squeezed until they can barely breathe, it
feels disturbingly familiar.
In the past two days alone, stock markets have been in free-fall across the
capitalist world. With investors manifestly losing confidence in Spain and
Italy, two of Europeâ?Ts biggest economies, a second devastating world
recession cannot be ruled out.
Although the share-price plunge does not yet come close to the infamous
Wall Street Crash of 1929, this weekâ?Ts market mayhem is a chilling reminder
of the sheer fragility of the capitalist system.
If the worst happens, if Spain and Italy go down and the euro crumbles,
then the world economy really will be in trouble.
Only 20 years ago, the capitalist West was congratulating itself on victory
in the Cold War. The Berlin Wall had come down, the Soviet Empire had broken
up, and American intellectuals were even proclaiming the â?~end of historyâ?T.
Marxism was dead and capitalism triumphant, or so we were told. Having
lifted millions in the West out of poverty, having showered them with goods and
opportunities, the free-market system could do no wrong.
Today, the picture is very different. For although the Left has never
recovered from the fall of the Soviet Union, capitalism has rarely seemed in a
more desperate condition.
Last year Barclays boss Bob Diamond pocketed an incredible £6.5 million -
and that's on top of his £8 million-plus annual pay package
And with bankers still pocketing gigantic bonuses and Europe swept by a
wave of austerity, even the Right are beginning to wonder whether the system is
intolerably loaded in favour of rich metropolitan elites.
Only last week, for example, the Tory MP Douglas Carswell suggested that
â?~the free market all too often turns out not to be a free market at all, but
a corporatist racket for the fewâ?T.
Modern Conservatives, he said, should be â?~as suspicious of Big Business
and Corporatism as we have been of Big Governmentâ?T.
On the surface, this may sound shocking. Yet when you dig a little deeper,
it is not hard to see why so many people have lost faith in the free market.
The entire premise of the capitalist system, after all, is that in a free
market, hard work will produce its own reward. For capitalists, the important
thing is equality of opportunity. If you put in the effort, then you can be
whatever you want to be, regardless of your background.
So when Margaret Thatcher, one of capitalismâ?Ts most passionate champions,
ran for the Tory leadership in 1975, she defined her values as â?~the
encouragement of variety and individual choice, the provision of fair
incentives and rewards for skill and hard work, and a belief in the wide
distribution of individual private propertyâ?T.
And when she walked into Downing Street four years later, she promised to
ensure that â?~hard work paysâ?T.
But you do not have to be a card-carrying Left-winger to see why millions
of people - not just in Britain but across the world - feel completely cheated.
When most of us contemplate the results of the bankersâ?T greed, for
example, talk of â?~fair incentives and rewardsâ?T seems a sick joke.
In every corner of Europe, ordinary families, through absolutely no fault
of their own, are paying an intolerable price for the outrageous avarice of the
financial elite.
Recent figures show that City bonuses came to a staggering £14â??billion
last year, with one executive, Barclays boss Bob Diamond, pocketing an
incredible £6.5â??million â?" and thatâ?Ts on top of his £8â??million-plus
annual pay package.
When she walked into Downing Street, Margaret Thatcher promised to ensure
that 'hard work pays'
Yet at the same time, banks are refusing to lend to ordinary families and
small businesses.
Indeed, last month the banks actually took in as deposits £3â??billion
more than they lent, which goes a long way to explaining why growth is
virtually non-existent.
â?~No wonder economic growth is barely visible to the naked eye,â?T
remarked the Coalitionâ?Ts former Treasury spokesman, Lord Oakeshott, â?~when
the banks keep sucking billions out of the economy.â?T
These are, incidentally, the same banks, such as RBS and HBOS, that British
taxpayers had to save from the consequences of their own reckless gluttony.
Three years ago, the Government spent £500â??billion to bail out the
collapsing banking system. And now, while the bankers toast themselves with
vintage champagne, the rest of us are picking up the bills.
But the bankersâ?T greed is only one symptom of a wider malaise. The stark
truth is that millions of ordinary families feel the system gives them no
chance of success.
The facts are simply unanswerable. A child born in 1971 has less chance of
moving up the social ladder than one born in 1951.
On top of that, the gap between rich and poor has grown steadily since the
1970s, with some of the biggest increases coming during the 13-year New Labour
regime.
Half a century ago, during the Fifties and Sixties, grammar schools, job
opportunities in manufacturing and the death of deference meant that
working-class children felt they had a decent chance of getting on.
And in their different ways, state-school educated prime ministers such as
Harold Wilson, Ted Heath, Jim Callaghan, Margaret Thatcher and John Major gave
the impression that anybody could make it, regardless of their background.
Even in 1931, during the last great crisis of capitalism, Britain was run
by a prime minister, Ramsay MacDonald, who was the illegitimate son of a
Scottish labourer and a poor housemaid. At a time when it would have been easy
to imagine that power belonged exclusively to the rich, MacDonald was a shining
example of social mobility.
Nobody could possibly look at our leaders and draw the same conclusion
today.
From Cameron, Clegg and Osborne - respectively the son of a millionaire
stockbroker, a banker and the heir to a baronetcy - to Ed Miliband and Ed
Balls, one the son of a North London intellectual, the other the privately
educated son of a professor, British politics has become the plaything of a
tiny self-regarding elite, totally out of touch with ordinary families.
Looking at our political class, you begin to suspect that modern capitalism
is loaded in favour of those who already enjoy wealth and power. It has become
a closed system, impossible to penetrate unless you are incredibly lucky.
Other facts tell a similar story.
As the Tory minister David Willetts showed in a provocative book last year,
Britainâ?Ts youngsters are being cut adrift. Thanks partly to ferocious
competition from Eastern European immigrants, workers in their 20s today earn
far less than their parents did at the same age.
And with house prices having soared and banks refusing to lend, they find
it impossible to get onto the property ladder.
As a result, the old Conservative dream of a â?~property-owning
democracyâ?T is increasingly reserved for the silver-haired.
Most experts recognise that home-ownership is one of the keys to a stable,
prosperous, hard-working society - yet since 1997, home ownership among people
in their 20s has steadily fallen.
Of course there was a time when education offered a leg-up: but those days
are becoming a fading memory. Thanks to the unforgivable abolition of the
grammar schools, the gap between private and state education has become a
chasm.
In a country that claims to value competition, it is nothing less than a
disgrace that just four expensive private schools - Eton, Westminster, St
Paulâ?Ts, St Paulâ?Ts Girls - send as many students to Oxford and Cambridge as
2,000 state schools put together.
Meanwhile, the Governmentâ?Ts education reforms mean that working-class
children face the prospect of paying back £9,000 a year in tuition fees if
they choose to go to university.
And this, of course, comes at a time when fat-cat vice chancellors, already
rewarded with grace-and-favour residences and boundless expense accounts, are
being paid an average of more than £220,000 each.
On holiday in Tuscany - something well beyond most British families -
perhaps David Cameron should spend an afternoon with his great predecessor
Benjamin Disraeliâ?Ts book, Sybil.
In this work, first published in 1845, the greatest Tory statesman of the
Victorian era warned that Britain had become â?~two nations .¦ who are as
ignorant of each otherâ?Ts habits, thoughts, and feelings as if they were
dwellers in different zones, or inhabitants of different planets; who are
formed by a different breeding, are fed by a different food, are ordered by
different manners, and are not governed by the same laws: the rich and the
poorâ?T.
Disraeli was no socialist. But as an outsider himself, born into a Jewish
family, he recognised that capitalism could only take root in ordinary
peopleâ?Ts hearts and minds if it gave them a stake of their own.
At bottom, capitalism is as much a moral enterprise as it is an economic
one. If those lucky enough to become successful ignore the virtues of thrift,
self-discipline and sobriety, as well as the moral imperative to look after the
weak, then capitalism degenerates into cronyism and self-interest.
At its best, the free market is a tremendous liberating force. During the
Fifties and Sixties, it gave millions of people opportunities their parents
could barely have imagined: happy childhoods, good schools, well-paid jobs and
contented retirements.
On holiday in Tuscany - something well beyond most British families -
perhaps David Cameron should spend an afternoon with his great predecessor
Benjamin Disraeli's book, Sybil
But when capitalism fails, as in the 1930s, then it allows extremism to
thrive.
During that unhappy decade, some were bewitched by the false promise of
Stalinist Russia; others flocked to the blood-drenched banners of the Far Right.
Eighty years on, capitalism has once again lost its way. With millions
betrayed by their under-performing schools, locked out of the job market,
forgotten by the banks and abandoned by their politicians, Britain is in danger
of becoming two nations again.
Modern capitalism is not beyond redemption. But it badly needs to
rediscover its moral dimension, lost amid the scramble to protect the
privileges of a narrow metropolitan elite.
It is time that our politicians cracked down on non-domiciled billionaires,
and time they made sure the rich elite paid their fair share of our national
tax bill.
And if David Cameron really wants to rekindle the British peopleâ?Ts faith
in the capitalist system, then he should go further. He should force the banks
to lend more money to individuals and small businesses, getting our economy
moving again.
He should restore a culture of competition and excellence to our state
schools, giving working-class children a genuine sense that they can climb the
ladder. And he should make it a priority to encourage real jobs in real
businesses, reinvigorating a manufacturing sector that has been abandoned for
far too long.
The stakes could not be higher. Unless capitalism opens its arms to the
common man, then an entire generation will conclude that it is no more than a
fig leaf for the super-rich.
That would be a tragedy. For despite all capitalismâ?Ts weakness -" despite
the flaws, inequalities and hypocrisies that are an inevitable part of any
human endeavour - it remains the only way to promote real and lasting
opportunity.
Other systems have been tried, and they have collapsed in bloodstained
ruins. Only capitalism - the free exchange of goods, skills, services and ideas
- has proved itself true to the instincts of human nature.
Today, we can only hope that capitalismâ?Ts champions learn the lessons of
history.
For if they fail, then the results could be too dreadful to contemplate.
Read more:
http://www.dailymail.co.uk/news/article-2022993/Capitalism-crisis-80-years-ago-banking-collapse-devastated-Europe-triggering-war.html#ixzz1UO1xowqN
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Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/08/
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