Surviving Capitalism (Not) : The vulnerability wildcard and Kenneth Rogoff

We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Wednesday, April 6, 2011

The vulnerability wildcard and Kenneth Rogoff

by Jim O’Reilly from his blog, "Comments on Global Political Economy".

Even after a career in banking and finance, this blogger not only doesn't subscribe to the TINA thesis (there is no alternative...to capitalism), he thinks the existing system is absurd. It is designed to enrich a few, and it has succeeded. The system was not created by some god--it was created by people. We don't have to accept it when it is causing so much human suffering and environmental devastation. We can create a new, sustainable system.

It’s the height of absurdity to think society – humanity itself – can be truly vulnerable to a clique of financiers. US and European society are indeed vulnerable to rising debt: but only to the extent they choose to acquiesce to the system. There’s nothing in nature or physics that requires them to rely on a handful of individuals in order to live. Society is vulnerable only to the extent it so chooses and is therefore not really vulnerable at all; concentrated wealth on the other hand, with its undying lust for power, is absolutely vulnerable.

Capitalism is just like the game of Monopoly. I played this game frequently with a friend when we were adolescents. I remember that after several years of playing it, we at one point decided to keep the game going after one of us went broke. The winner simply loaned the money to the loser and played on. It didn't work.

The loser just kept getting deeper in debt simply because he had little opportunity to earn money except by passing "Go", while frequently having to pay rents to the winner. This is very similar to a capitalist economy in which much more money can be made off the ownership of property than can be made off labor, even though it is labor, mental or physical, that provides us with food, fuel, shelter, education, medical care, etc.

If we had been even more creative when playing Monopoly, we could have changed the rules of the game so that we earned far more money passing "Go" and not charged each other rent because all the properties would be owned in common.

The point is not that an economy is very simple to operate, but that its rules are man made, and as such the rules can be changed to promote different outcomes.