For those with an interest in moving the global economy in more humane directions, the story of the hour is the Occupy Wall Street movement that has now spread worldwide. Its eruption has spurred a discussion on Anthro-L from which I take the following exchange.
On Thu, Oct 20, 2011 at 6:40 AM, LINDA SCHINKEL <email@example.com> wrote:
I believe that many of us these days don't believe that evolving Capitalism forward, in a more humane direction, means we have to give up the good life. We certainly don't have to all ware the same colored cloths or have stagnant, planned central economies--that would be boring. We can have more fun and variety--without having to worry if our small business fails or our last paycheck stops we might die for lack of basic medical care. Would you place doing away with multinational corporations as we now know them and financial institutions too big to fail in the reform or revolutionary category? I am interested in your opinion, I really don't care what we call the process, but I do believe these business forms need to go.
Short answer. Reform. The question is what changes to make and what ideas should guide those changes.
When I think about these things, I share the premise presented by George Soros in The Open Society: Capitalism is the most successful wealth-generating mechanism in human history. That said, it is driven entirely by private interest. There is nothing in the market per se that ensures social justice. On the contrary, we know that unregulated markets inevitably lead to Pareto distributions of wealth in which we find precisely what we have in the USA today: more and more going to the few at the top of the curve, and a shrinking share to the many at the bottom.
How should we think of social justice. Here I turn to Amartya Sen, who in Inequality Reexamined observes that all economic arrangements present themselves as fair. The critical difference is the units in which "fair" is calculated, units of capital (US dollars or stock shares, for example) or human lives. If units of capital is the measure, it is fair that larger stockholders have a bigger say in how organizations are run than those with fewer shares. It is fair that the wealthy control the government. They literally own more of it. If human lives is the measure, these arrangements are not fair.
Combining the two arguments creates a foundation for a number of policy recommendations.
- Eliminate corporate personhood. Treating corporations as persons under the law entitles them to the same rights and protections as human beings. These rights and protections can then be invoked to, for example, allow corporate donations to political campaigns. If corporations were not persons, laws restricting their political activity could and should be passed.
- Inheritance taxes should be radically progressive, above 90% above, say, ten million dollars. Dismantling great fortunes at the death of those who create them is essential for ensuring a fair approximation to equal opportunity. Taxes captured in this way might, for example, go to a fund that provides every child with an investment whose capital will become available to them at age 21.
- Simultaneously, secondary education should be reformed to ensure that no one graduates from high school without a grasp of basic money management, basic accounting principles, the power of compound interest, and how to read basic financial reports (balance sheets, income and cash flow statements).
- Draw a line between public and private goods and pursue an ongoing and vigorous debate about what belongs in which category. A good place to start is Robert Kuttner Everything for Sale. We need to think about why that is. Market fundamentalism, which eliminates the distinction between public and private goods, assumes that consumers are able to make rational decisions. But if you are sick and in deed of urgent care or a child with no control over where she goes to school, there is no rational choice involved. The point is that, while there are goods that plainly belong in one category or the other, health care and education in the public sector, soft drinks and smart phones in the private sector, there is plenty of room for debate. What about cosmetic surgery, for example?
While supporting these sorts of reforms, I would not, for example, argue for the dismantling of transnational corporations. I would argue, instead, for international regulation enforced by effective global bodies. Why? I see no great advantage in returning to a world of isolated sovereign economies which, in the larger scheme of things, turn out to be either immense gated communities for the relatively wealthy or indefensible slums for those excluded from them.
I am genuinely concerned about the current state of higher education in relation to economics. But several years ago, I read Robert Reich's Work of Nations which predicts what we are seeing today, a world in which repetitive manual labor is cheap and easily off-shored, personal service wages are depressed by loss of high-paying jobs in the repetitive manual labor sector, and only a few symbolic analysts (knowledge workers) do well in what are becoming increasingly cut-throat winner-take-all markets. More recently, just a few weeks ago, I read an issue of China Daily devoted to the story that advanced and developing economies throughout Asia (examples included Japan, Korea, Vietnam, India, as well as China) face the same problem, a surplus of college graduates for whom there are not enough jobs. Given the similarity to what I see in the States, my nightmare is that the myth of a college education as a pathway to the middle class and upward is increasingly hard to sustain. What its collapse will mean for young people today and generations to come is something I worry about a lot.
The only suggestion I have is that this is their generation's Vietnam. Being put in harm's way by the draft is no longer a threat that drives thousands of people into the streets and bends the arc of history. But millions, young and old, now face the brutal threat of continuing unemployment. OWS is the leading edge of the response, as groups like SDS (of which I was once briefly a member) were to Vietnam. And this, I suggest, is true, not only in the USA, but in all of the advanced and developing economies. It is no accident that "Occupy X" has spread worldwide. This gives me another reason for rejecting the "take care of our own first" view so popular with the Tea Party. If 2011 is to be this generation's 1968, it, too, will have to be global. And it looks like it already is.
Those are my thoughts. Thanks for helping me get them together.