If you really believe in the free market, you don’t think governments should bail out private entities. The whole essence of free marketeerism is the belief that markets will most efficiently allocate resources. Econ 101, and all that.
So why are so many “conservatives” defending too big to fail banks and pushing for Iceland to pay off investors in its private banks? Check out my friends at Baseline Scenario here and here for more investigation and analysis.
I was recently reading a transcript of a speech that theologian Sallie McFague gave on religion and ecology. In the speech McFague works her usual metaphor magic, discussing how language drives thought, and thought drives actions. Specifically, she called for a reimaging of the Christian worldview, from one in which the world is seen as a thing, a machine in which humans live, to one in which the world and the humans therein are seen as shared parts of a holistic body of God. This view – “that the world is from the beginning loved by God and is a reflection of the divine” – would forefront the inherent value of the environment and the religious importance of its conservation.
Interestingly, McFague claims that this reimaging is not new, but instead a return to a traditional worldview, held by Christians and non-Christians alike. The concept of earth as machine, she claims, “is an anomaly in human history, for until the scientific revolution of the seventeenth century, the earth was assumed to be alive, even as we are.” McFague is not calling for a return to pre-scientific thinking, in which we must appease tree spirits and illnesses are caused by foul humours (although the current use of medicinal leeches is totally cool), but rather a recognition that all of creation is equally part of God.
For McFague, the culprit is less the scientific revolution than the drive toward individualist consumption that the market economy has engendered. Consumption of goods is linked to consumption of the earth’s resources.
“From the time of Aristotle to the eighteenth century, economics was considered a subdivision of ethics; the good life was understood to be based on such values s the common good, justice, and limits. Having substituted the insatiable greed of market capitalism in place of these values, we are now without the means to make the qualitative shift in thinking that is required.”
While I would not be inclined to say “insatiable greed,” there is no question that a market economy is inherently consumptive and that it drives people to focus on the individual rather than the common good. McFague would have us work within the current system, but temper its impact on our behavior by changing how we think and speak about the world.
To McFague’s argument from metaphor I would only add that it’s not nice to fool mother nature.
Posted in Business, Environment, Philosophy, Religion, Trends
Tagged capitalism, christianity, consumption, ecology, Environment, free market, nature, Religion
Speaking of reasonable voices when it comes to financial regulation (see my post below), Paul Volcker is coming out strong for a much more rigorous set of regulations. Volcker ran the Federal Reserve before Alan Greenspan, and was considered a guru while Greenspan was still ladling Ayn Rand’s soup on Saturday nights.
Here is a link to an interview Volcker gave to the WSJ, and here is a link to a New Republic article by Simon Johnson about that interview.
The money quote from Volcker: “I have found very little evidence that vast amounts of innovation in financial markets in recent years have had a visible effect on the productivity of the economy.”
Again, that is a voice of reason. We all agree that capital markets are important to the economy, and that some financial innovation is a good thing. For example, developing ways for big companies to hedge their raw materials risks can help the economy. But developing ever more complicated derivatives and securities which are backed by securities which are backed by securities which are backed by assets? How do those innovations help the economy?
This last point is the one that puts the lie to free market ideologues. They say that financial innovation is key to fueling the American economy. But financial innovation has nothing to do with the economy outside of Wall Street. Think about the great engines of American growth that these ideologues love to mention: Wal-Mart, Apple, Home Depot, Google or Tommy Hilfiger. They all grew large and hired thousands of people without building their business on credit default swaps or mortgage backed securities. None of them care about the hundredth of a penny reduction in spread that dark pool trading creates. Real innovation in the American economy is disassociated with Wall Street. The only thing that Wall Street innovation drives is Wall Street pay packages.
The deeper I get into Moral Man and Immoral Society, the more I realize that Reinhold Niebuhr was tremendously prescient. Or, perhaps, the world just hasn’t changed in the 70 years since he wrote the book.
“Thus, for instance, a laissez faire economic theory is maintained in an industrial era through the ignorant believe that the general welfare is best served by placing the least possible political restraints upon economic activity. The history of the past hundred years is a refutation of the theory….The men in power in modern industry would not, of course, capitulate simply because the social philosophy by which they justify their policies had been discredited. “
And yet, since the Reagan presidency, we have seen nothing but deregulation and an emphasis on laissez faire economics. And even after the meltdown of the past two years, the Right is clinging more than ever to its free market mantra, following the siren song of Ayn Rand, letting the Howard Roarks of the world build their luxury highrises while the city crumbles around them (that was buildings as metaphors and as concrete examples (and THAT was using a word which is a component of buildings also as a descriptive (Thoughtbasket has layers, baby))).
Just yesterday the NY Times reported on how Congress is gutting the Sarbanes-Oxley bill, removing the post-Enron regulations that were meant to prevent corporate chicanery, succumbing to corporate and banking lobbyists at the expense of small investors. Were Niebuhr alive he would be knowingly, and sadly, shaking his head.