Capitalism's Inherent Inequality as a Global Economic System and a Possible Alternative

I think it is obvious that humanity will require, in some sense, a global economic system. We humans have gone too far in technological development, overpopulation and planetary destruction to assume otherwise. Further I think such a global economic system must have the welfare of human beings, in their totality, as its fundamental objective. Given these assumptions and values, can capitalism, no matter how modified, measure up?

I suggest that the European Union (EU), having as members a mixture of nations and their national economies can serve as the best example of what capitalism, as a global economic system can be expected to do. But why is Greece, for example, so wanting in productivity to elicit from Nicholas Sarkozy, Angela Merkel and David Cameron the openly expressed regret that Greece was ever admitted to the eurozone? Could it be that Greece does not have the natural resources, e.g. coal, major rivers, a variety of mineral resources, that their northern neighbors do and therefore must do with less in health care, education, etc. than those northern neighbors? It would seem so. Is this not the naturally wealthy nations dictating to those of less endowed nations how they must live if they are to be loaned a portion of that natural wealth as a bailout? Again, this division of nations along the lines of natural resources would, if capitalism is the governing global economic system, condemn billions of the worlds population to, at best, second class global citizenship.

The EU's economic system, commonly called the eurozone, is much like any national bank. Not all member of the EU are members of the eurozone. An EU member nation must have a sufficiently viable national economy to become a eurozone member. Every EU member that has such an economy must join the eurozone. There are no protocols for withdrawal, either voluntary or otherwise, from the eurozone once admitted. The eurozone, as any nation, has its own central bank (ECB) which, among other things, issues its own currency and bonds.

Given this background what has capitalism done as this amalgam of nation states seeks to survive and prosper in the global capitalist market place as it currently exists?

As we know, the eurozone did not protect the citizens of the EU from the greed-driven shenanigans of Wall Street's securitized mortgage fragments. Some EU national economies, i.e. Ireland, Greece, Portugal, Spain, and Italy are all being required to impose severe cutbacks in social services in return for eurozone bailout funds. This is causing riots in Greece and Portugal and, as noted above, a variety of disparaging remarks from the French, Germans and English to the effect that Greece for example, should never have been admitted to the eurozone. Here we see a group of nations struggling to form a more perfect union to avoid the wars that so frequently have plagued their lands and, in consequence struggling to form a common economy, being defeated in that attempt by capitalism's single focus on wealth. Indeed, Spain, in its recent election, has decided to opt out of its social programs and follow the ER/IMF imposed drastic reductions in social services. This, despite the fact that Wall Street was the ultimate cause of their social distress. Extrapolate this to a global scale, with much greater natural economic potential, and billions of human beings will not qualify for membership in a global economic system. Wealth once again trumps human need and human potential.

Well, what can we do? David Korten in his book Agenda for a New Economy, articulates 12 steps to be taken to achieve an equitable and sustainable world economy. Korten presents no utopian construct, but takes the real world seriously in his proposals. While I agree with much of what he proposes as a remedy for what we now have, I believe his call for more local units of economic organizations flies in the face of the level of technological integration and population density that humanity has developed. Humanity, if it is to survive, will require a global economy to assure a sufficient measure of equality in the distribution of the world's economic productivity.

One possibility I find heartening is to view humanity itself as our primary resource. By way of illustration let us consider Japan and South Korea. Both countries are exceptionally short of natural resources, yet both countries have thrived economically. However, initially in Japan and in South Korea the population was viewed as their only significant resource. More specifically, the brains resident in that population, as with all human brains, were known to be very powerful. All they needed was sufficient education to become a major resource for doing all the things those humans do well, such as innovate and organize. This, by the way, is an illustration of what I meant by an economy based on understanding rather than power in an earlier column.

Here, however, because this reliance on human intelligence had to function within a capitalist system, the educational process was highly competitive and resulted in significant numbers of student suicides.

Nonetheless, these countries have demonstrated that it is possible to develop viable economies when the only significant resource is human intelligence. The fact that this resource is widely distributed on our planet provides the basis for mitigating the problems created by maldistributed natural resources. In brief, human intelligence provides one of the essentials for a viable world economy--equitable resources.

The other essential requirement, in my judgment is that we must move the basis for exercising that economy from competition to cooperation. An economy in which people contribute to achieving societal goals and through that personal satisfaction will, for example, devote sufficient resources to insure that everyone can get as good an education as he/she can master instead of competing to the point of suicide to win acceptance to a university. Culturally we must pass from being focused on winning to being focused on creating a better society and the development of human potential. This may sound like it is expecting too much of humanity, but as our options continue to diminish we may be forced to focus on our better selves instead of surrendering to our lesser selves as we have done for so long.

Bob Newhard

Here We Go Again

In an interview with Al Jazeera Jin Liiqn, the supervising chairman of China Investment Corporation, China's sovereign wealth fund, was asked whether China intended to invest in the European Union's new bailout fund. He did not think so unless Europe's labor laws, which provide for shorter work weeks and longer vacations than found elsewhere, were made more demanding of the workers. He accused European workers of being given to "sloth and indolence."

This from a high official of a government that allows its corporations to work people so hard they commit suicide as in the company that produces Apple's iPad; allows deceptive recruitment of young, poor, rural women to work in immense factories working long hours cheek by jowl as they sew clothing and assemble electronic parts only to then be housed in controlled corporate dormitories when off work; that is throwing peasants off their land in Africa as they plant massive, GM laden monoculture crops to feed its population. In China we are witnessing the worst aspects of capitalism being played out once again, but with all the "efficiency" trappings of the 21dt century. We have been here many times before. The initial Industrial Revolution in England forced peasants off their land in order to graze sheep and provide wool for the new machines of textile factories. The resultant poverty, slums, and other social dysfunctions are powerfully depicted in the engravings of William Hogarth and the novels of Charles Dickens. In the United States it resulted in the 1911 New York City Triangle Shirtwaist fire in which 146, mostly teenage immigrant girls, died because of locked doors and grossly inadequate fire escapes. Many chose to leap to their death on the concrete 9 stories down rather than burn to death. Some apparently 'froze', their skeletons still bent over their sewing machines. Would that the greed-driven connections between Goldman Sachs' Commodity Index and its speculative increases in the price of grain-based food, causing death by starvation, could be so explicitly drawn. Now, after three hundred years of this repeated barbarity, we have China, with the world's largest population going hell-bent down the same road focused on becoming the world's next dominant economy, not on the welfare of its people. Reading Arundhati Roy, India is little better and it is expected to exceed China's population soon. The enormous slums of Mumbai India, substantially created by the same process of driving rural farmers off their small land holdings, abut the skyscraping condos of the rich. All of this vicious imposition on a poor and desperate humanity is, of course, called progress.

In contrast, the object of this Chinese economic disdain, Europe, is the only area on this planet where a sustained effort has been made to insure that capitalism's capacity to produce goods and services is harnessed to human welfare. After World War II, amid its massive destruction, Europe was so focused on making its society and its economy function for human benefit that the British, within three months of the end of the European phase of that war, rejected their charismatic war-time leader, Churchill, and elected Clement Attlee's Labour Party. They, as Wikipedia notes, presided "over a policy of nationalizing major industries and utilities including the Bank of England, coal mining, the steel industry, electricity, gas, telephones and inland transport including railways, road haulage and canals. It developed and implemented the "cradle to grave" Welfare State conceived by the economist William Beveridge. To this day the party considers the 1948 creation of Britain's publicly funded National Health Service under health minister Aneurin Bevan its proudest achievement.^[68] Attlee's government also began the process of dismantling the British Empire." That, I suggest, is reform, in contrast to the pusillanimous efforts made in this country.

Recently Al Jazeera presented a video report on China's expanding military might. It showed Chinese military jets flying in formation, not unlike the Blue Angels (What a name for a killing instrument!) of the United States. Chinese civilians, men, women, and children were ecstatic at the display of military might. More often than not, achievement of economic prominence has led to military prominence and then military dominance. The political mechanism for this process is called "national interest." As every "great power" has done, China can be expected to define its national interest in ever widening spheres of influence. America's national interest requires 737 military facilities around the world, often at the host country's reluctant acceptance. The enormous Okinawa military base, occupying a large amount of prime farm land, is a constant source of resentment by the Okinawans. This sequence of economic power being converted into military power and the constant threat of war it engenders is very well know, yet our species has yet to be the fundamental concern of humanity and we repeats this sequence again and again with an ever increasing power of destruction. Indeed, as of this writing it has just been announced that the United States will establish a new Marine base in Darwin, Australia said to be directed at containing China. As Denis Kucinich cried out during the 2008 presidential campaign, "Wake up America! Wake up!," so we need a clarion call to humanity to wake up to the deceptions it practices on itself.

Now let us consider some of the consequences for this planet and humanity as the world's two most populous countries, China and India, rush to produce and consume at the ever increasing rates that human technology can produce.

Not long ago Lester Brown of the Earth Policy Institute published a small book titled "Who Will Feed China?" to draw attention to the impending global food shortage. The answer is, of course, we all will, but the burden, given the price structure that will govern food distribution and availability, will be the poor of this earth. As noted above, Goldman Sachs is already playing its role in this impending disaster as well as Archer Daniels Midland (ADM), the agricultural corporate conglomerate converting corn from food to fuel. According to the United Nations, there is already famine in parts of drought stricken Somalia. Delivery of sustaining food is compromised by warring faction, a phenomenon we may expect to accompany food shortages elsewhere. This, again, is a scenario that most of humanity will not take seriously.

Additionally, as wealth and its concentration increases in these two countries, food tastes will move to meat and the vast waste accompanying the consumption of animals will make itself felt, especially in the consumption of water, already in short supply. Add to all this the increasing trend toward agricultural monoculture and the patent control of seed and you have the makings for further sources of conflict. Finally, add to this the still increasing world population and you have the basis for massive conflict, not just over national sovereignty, but over the basics of human life, i.e. food and water, and those conflicts will taking place in the context of weaponry that can destroy civilization if not our species.

In this context the United States, China, Russia, etc. are planning their military strategies in terms of winning any confrontation or, at least, reaching some level of fear-driven mutual detente, however fragile.

Much of this scenario is known with a probability verging on certainty, yet the powers that be do not for a moment consider a policy and practice of cooperation in dealing with the massive problems we humans have created. We will waste enormous portions of what the planet has left fighting for ever-diminishing resources. This is childish schoolyard behavior! Every institution that either practices or promotes practices inimical to the continued survival of our species should be called vigorously to account, whether religious groups against abortion and birth control, the over consuming wealthy of the planet, financiers and their spurious economies of investing money in money and not for human needs, advertisers aiming to induce people to consume the unnecessary, and any number of other destructive practices.

In all of this we are not talking about niceties, but about necessities.

All of this mad rush down the road of unfettered capitalism and the greed, waste and conflict it entails must be stopped. It is clear that competition is, as this list of consequences notes above, a wasteful means to get things done. It also distorts or misses its objectives because it tends to focus on the competitor, not the problem. Cooperation takes far less of human effort and planetary resources to get better things done than does competition. Cooperation to deal with what we have done globally requires that we see with clear and distraction-resistant perception our common human destiny and, if we survive, our common human ability to understand ourselves and our potential for understanding the universe we inhabit. To constantly remind ourselves of our common destiny we need to use this planet as the basic frame of reference in dealing with all that would divide us. This is our common home. This is what we should pledge allegiance to. This is the only frame of reference that can address the massive problems we have created for ourselves. In 1940 Wendell Willkie, the Republican presidential candidate running against FDR, articulated his vision of one world so effectively the after the election Roosevelt asked him to become a roving ambassador for Roosevelt's efforts to persuade the nations that would be left exhausted by that conflict, that creation of a world organization would be imperative. Without commenting on what Republicans from Ronald Reagan to G. W. Bush have done to that party since, we need to reinstall Roosevelt's and Willke's vision and articulate the necessities that then and now make it imperative that we change our human mindset from nation, religion, or any other subset of human thought and attachment, to articulating our commonality in fact and in destiny.

Bob Newhard