The Real Economy and the Finance Economy
- Business & Economics
- 19989 Words
- Ages 12 and up
In 2013 economic crisis is marked by systemic and structural contradictions, exploding inequality, ecological overshoot and the erosion of trust, democracy and community. Trillions were given to Wall Street banks to avert financial collapse on the ground of "too big to fail." Private losses morphed into public losses. Taxpayers shouldered the losses from financial speculation and unbounded deregulation. Government acted as the "errand boy for the banks" (Bill Moyers).
Economic problems are systemic and structural, not psychological and motivational. Risk-takers and job-creators have been unmasked. Risk-managers turned out to be risk-producers.
The system must be changed because the systrem leads to stagnant wages over 30 years, totally inadequate creation of family-wage jobs paying into social security. Our clientele system confuses public and private, ignores long-term necessities (e.g. universal health care, free or affordable education and rights of nature) in favor of profit maximization and shareholder interests.
We face system (collective and political) problems since lobbyists write legislation, corporations are treated as persons, money is regarded as speech (the disastrous 2010 Supreme Court decision in Citizens United) and investment is confused with speculation. Financial investment eclipses real economy investment. Wall Street banks spend over $4 billion over 10 years for lobbying and campaign contributions.
The myths of neoliberalism and shareholder value were and are the basis for the 2007-2008 financial crisis. The myths of the invisible hand (that self-interest leads to the public interest), corporate beneficence, money created out of thin air, the Enron-model, the Apple-Google model of billions in dummy corporations or tax havens, the investors-suing-states model and the myth of nature as a free good, external or sink must be deconstructed and abandoned.
Cooperation and competition are not opposites but depend on one another. Education, health care, air waves, food, housing and information are public and must remain public. Otherwise they become privileges and we live in a plutocracy or 21st century feudalism.
The time is right for alternative economics, reducing working hours, labor-intensive investment, person-related work, access not excess and enough not more. Unlike a chair, an idea can be shared by a whole people!
The following articles by Swiss, Austrian and German critical economists could revitalize public debate and understanding. The present system is unsustainable and the future system is still being designed. Radical change is a necessity given the end of cheap oil, climate change and the need to redefine work, security, happiness and health.
Only dead fish swim with the stream. You can make fish soup out of an aquarium but you can't make an aquarium out of fish soup.
A public debate on job creation, shrinking the financial sector, market failure, motors, models and myths is imperative. [more]
Keywords: neoliberalism, finance capitalism, speculation, distribution justice, social justice, sharing, community, public sector, invisible hand, exploding inequality, ecological economics, economic ethics, critical thinking