How to Change the World by Being a Neo-Capitalist
With the Global Financial Crisis in full swing and global corporations of the standing of General Motors filing for bankruptcy it is pertinent to ask whether or not we are seeing the death of the capitalist system.
Australian Prime Minister Kevin Rudd and US President Barack Obama have both scolded the players in the financial markets for their unrestrained greed but almost in the same breath they have reached into their pockets (read ‘our pockets’) to provide billion dollar bailouts.
The bailout packages and stimulus measures that governments have taken around the world are premised on one thing – that this recession, no matter how big it is or how much it is compared to the Great Depression – is in fact just a momentary blip on the ever expanding growth of global capitalism. In fact Government forecasts in Australia go so far as to predict that we will come out of this economic downturn on a roll and go back to above average economic growth which will see all of the debt accumulated now, wiped out very quickly. So, pop the champagne corks now, we’re going to be back to boom times before we know it, just rest up and take a Berroca until the worst of it passes!
But is this true? Are we in fact in the midst of a massive structural shift that will transform the way we live and work?
Charles A. Beard was a historian who was asked what he had learned from history. He replied,
“First, whom the Gods would destroy they must first make mad with power. Second, the mills of God grind slowly yet they grind exceedingly small. Third, the bee fertilises the flower it robs. Fourth, when it is dark enough you can see the stars.”
Let’s consider the application of this wisdom to the current situation. In the world now we are seeing the result of what happens when greed and free markets are allowed to run rampant – millions of dollars in bonuses and severance pay has been gifted to executives all around the world even whilst their companies have failed or gone backwards. Sol Trujillo – ex CEO of Telstra being a case in point.
Even more distressing is that the very governments and economic advisers who championed the free market system have been afraid to let it be truly free because of what might happen if it fails to deliver the equilibrium they promised it would. Instead of simply allowing companies to fail so that the system can come back into balance they have seen themselves as great saviours and have pumped unheard of amounts of money (read ‘our money’) into the system. Desperate to keep things afloat they have even resorted to printing money. Hmmm, let me think, isn’t that what they have been doing in Zimbabwe?
Sounds to me very much like they have become ‘mad with power’.
“Second, the mills of God grind slowly yet they grind exceedingly small.”
Fundamentally societies rest on the foundations of moral truth. A society that violates these truths may survive for a time but eventually it will collapse like a house of cards. Witness the French Revolution, Slavery in America, the apartheid regime in South Africa to name a few.
There are five lies that currently undermine the foundations of modern western free market capitalist society.
- That rampant materialism provides for lasting happiness.
- That the Earth is an infinite resource.
- That we as human beings hold a privileged position above all the other creatures on Earth.
- That we, as human beings, are separate from each other.
- That there is only one God/answer/pathway to heaven and enlightenment.
One could write a PhD thesis on each one of these lies but just consider each of them briefly.
Rampant materialism and the never ending urge by global corporations for us to buy more things may work in the short term but long term it leads to societal division between the haves and the have nots – both within countries and between countries. New long term research shows that after a certain point it is better to limit growth and build social networks. (see ‘The Spirit Level: Why more equal societies almost always do better’, by Richard Wilkinson and Kate Pickett (Penguin 2009) – which by the way identifies Australia as one of the most unequal nations in the world!)
Point 2 – clearly the Earth is not an infinite resource however someone forgot to tell the people in the mining industry. I’m sorry but you can’t keep digging up coal, oil, uranium and other toxic products without there being some long term effect on the Earth and therefore on us.
Point 3 – in the movie ‘The Matrix’ one of the characters refers to the human species as a virus. Let’s hope that the kids who watched ‘The Bee Movie’, and saw how the devastating it would be if bees stopped pollinating flowers, get a chance to see the world in full bloom before we wipe out too many more endangered plants and animals.
Point 4 – well this is fundamentally at the base of our current problems isn’t it? The system we have works on a win/lose basis but last time I checked we didn’t have any colonies on planets outside of the Earth so surely we are living in a closed system. That means, for instance, that secretly sending IT waste to be buried in China doesn’t actually get rid of the problem – it just hides it. On a more energetic level, Quantum Physics is now showing us that there is a quantum field that links us all together – so yes we are all one – and therefore if one person suffers on some level we all suffer.
Point 5 – a key to enlightenment, ascension, or whatever you like to call it is that you are able to live and let live and truly embrace all beings as brothers (see Point 4). The sooner we get this and stop pretending that our way is the best way or only way to enlightenment – the better.
These five lies are slowly being revealed to us and the ‘wheels of God’ are cracking them open for all to see.
“Third, the bee fertilises the flower it robs”
Well what should we do about this? Reject the capitalist system? Disengage from society and go live in a humpy? Waiting until it all collapses around us so we can reappear just in time to say ‘I told you so?’
If we view the development of Capitalism from a historical perspective it could be argued that it has never really reached its full potential. Adam Smith, the first of the free market proponents, proposed that if all forces were operating in the market effectively, then the so called ‘invisible hand’ would reach in and set a fair and equitable price. A ‘perfect market’ would be one where; everyone has the same information; there are no entry or exit barriers; products are freely available from different suppliers; quality is the same; and prices are the same. Instruments such as the Capital Asset Pricing Model rely on this concept of Perfect Markets. But without a ‘perfect market’, pricing inefficiencies creep in and fairness goes out the window. Something which, by the way, many financial markets players have been the beneficiary of.
The evolution of the Internet has moved us a huge step closer to this theoretical concept. Not only has the Internet increased the flow of information across the globe but it has also increased access to markets and broken down the barriers that once existed. Effects of this change can be seen in the percentage of individuals that now own shares (either directly or through superannuation funds) and the amount of goods now being bought over the Internet.
So, where does this leave us ? If we are closer to the ‘perfect market’ stage what are the implications ?
Try this on for size - old style capitalism is out and Neo-capitalism is in. With old style capitalism, people spent their dollars, saw themselves as citizens protected by the state and voted at elections. Neo-capitalism turns this on its head – people vote with their dollars, judge Governments on how well they manage money and see themselves as stakeholders who collectively own the assets of the state.
In pressing for the deregulation of financial markets the ‘bee’ did indeed rob the flower. Large global corporations have indeed plundered the world and relocated resources from third world countries back to the developed world. The rich have indeed become richer over the past 20 or so years of economic rationalism.
However, the ‘bee’ has also pollinated the flower. We have been left with the gift of being able to truly participate in the economic system. We are free to purchases goods from anywhere in the world. And most importantly we are free to be able to seek information about companies around the world and how they behave. The gift is that we are informed and empowered to change the world.
Those leading this trend are making decisions on how they interact with the economic system based on their deepest held values. That is, where they work, where they shop, what they buy and what they invest in.
“Fourth, when it is dark enough you can see the stars”
Right now it is dark. Corporations are going bankrupt, governments are in disarray, people are losing their jobs.
But now you can see the stars. The companies that have taken measures to look after their people by cutting back executive bonuses, sharing the burden by cutting working hours rather than staff. Organisations that are taking the time to adopt more sustainable working practices and environmentally friendly products. People and organisations that are building community rather than the single minded pursuit of profit.
So – how to change the world by being a good capitalist? Or should I say Neo-capitalist.
Recognise that knowledge is power.
Know what values you stand for and how they translate into the financial system.
Know that every time you interact with the financial system you are implicitly supporting the values and vision of the corporations you interact with. The four key areas are:
- Where you work – be courageous enough to question unfriendly work practices and to leave as a last resort.
- Where you shop – check out the companies you buy from – what do they stand for and do they live it.
- What you buy – where does it come from? How is it made? How is it transported? How are the people treated who make it?
- What you invest in? – is your superannuation with a socially responsible fund or are you indirectly investing in arms manufacture? What values does your bank stand for?
I contend that the current crisis is not a blip on the never ending growth cycle but rather a massive structural shift in the way we live and work. We have a chance now to change the world not by waiting for the current system to collapse but by recognising how the changes of the past 20 years have left us truly empowered. Our challenge now is to determine what we stand for and then to act on it by being good neo-capitalists.