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miriam_eMoney was one of the greatest inventions humans managed to come up with. It let people form bonds with others far beyond their clan or village and helped to discourage xenophobia by using the market to extend laws to protect its participants. Money has its dark side too, facilitating concentration of power into few hands and making it easier to enslave people, but on the whole I think the advantages of money have greatly outweighed its disadvantages.
Politicians and economists are fond of saying that most of the economy is powered by small business. That always made sense to me. I wonder then, why they invariably bow to interests of a very small number of ultra-wealthy interests. When we talk of the good of the market we tend to think of the millions of small to medium sized businesses. Giant businesses are usually seen as a threat to the health of the market because of the distorting pressure they can bring to bear. This is why monopolies are frowned upon. Lack of competition tends to be coupled with corruption.
As I see it, capitalism's achilles heel has always been its inexorable consolidation of power and money into fewer and fewer hands. This is countered by only three factors, as far as I can see.
1. Occasionally a giant will be toppled by smaller, more nimble businesses, often through shifts in technology too rapid for the giants to follow. This happened to IBM, which went from the world's biggest, most powerful computer company, to a bit-player. The fall was breathtakingly fast. The whale-oil industry was brought undone by the discovery of oil in the ground. As Amory Lovins likes to quip, the whales were saved by the petroleum companies.
2. Sometimes the government will step in for the public good and forcibly break up a monopoly, or stop the collusion of a group that price-fix to form a virtual monopoly, or prevent a sale that would deliver a monopoly or dangerously large part of the market to some buyer.
The failure of giants and their break-up by government are rare events. The government now bails out giant corporations such as banks when they would have otherwise failed, and creates laws to safeguard the outrageous profits of media companies so that they don't have to adapt to new technology. The government, elected to look after the public interest, neglect their reason for existing and increasingly serve the richest minority. Enormous companies are allowed to build to a size and power that dwarfs those that in the past were deemed too powerful to be safe for society. Some of these new giants have more power and money than most of the world's countries.
3. Another way that money and power can move against this dangerous current is tax. Unfortunately this route is being rapidly lost. A propaganda war is being waged upon society, arguing that tax is bad, that spreading costs through socialisation of common services is somehow inefficient, and that welfare damages its recipients. The brainwashing has become so effective that I've met people living at the poverty line who have been so taken in by it that they ferociously argue for things that would disadvantage themselves even further and make the richest few vastly more wealthy. Not long ago I saw an economist explaining, with a straight face, that the result of Japan's social safety net in giving them the longest lifespan in the world is a bad thing. He was insisting that they should do what the USA does, with its grossly inefficient and expensive health system, delivering lifespans shorter than Cuba's and the infant mortality of a third-world country.
So we have a problem. How can we reverse this dangerous concentration of wealth and power? Capitalism as it exists doesn't seem to have the ability to do it, and in fact appears to enhance it. The government, meant to be our representatives, powerful enough to protect society against forces that would threaten peace and prosperity is unwilling (or unable) to stand up to the giant corporations.
Is there any way to fix this?
When does a small, benevolent business become a mega-corporation insensitive to humane concerns? Does it always happen? Is there some other tool that we can use to bring down those to grow beyond moral responsibility?
Perhaps information is our only remaining weapon. There have recently been the rapid growth of people-based pressure groups like Avaaz, GetUp, and many others, using the internet to mobilise people against wrongs.
Many years ago I found out about Nestle's callous murder of great numbers of babies in Africa and Bangladesh and I have not knowingly bought any of their products since then. Microsoft's nasty business practices caused me to move to Linux. If Woolworths do nothing about their leeching from the poorest members of society through high-risk poker machines then I shall no longer buy anything from them. I don't own any Apple products, but their unwillingness to use their power for good in their supply chain means I will never, ever buy from them. Nike's sales suffered when it was found that their footware is made in awful sweatshops.
If we can make social justice something to be valued more highly than things like fashion or convenience and convince people to vote with their dollars then we might be able to bring back some sanity to capitalism and save ourselves from ruin at the same time. But that only fixes half of the problem. And unfortunately we might not even be able to do that for much longer. Wave after wave of politicians who are owned by the media giants keep trying to pass laws to censor the internet. They only need to win once, and they will quickly silence the people-powered information networks.
Politicians and economists are fond of saying that most of the economy is powered by small business. That always made sense to me. I wonder then, why they invariably bow to interests of a very small number of ultra-wealthy interests. When we talk of the good of the market we tend to think of the millions of small to medium sized businesses. Giant businesses are usually seen as a threat to the health of the market because of the distorting pressure they can bring to bear. This is why monopolies are frowned upon. Lack of competition tends to be coupled with corruption.
As I see it, capitalism's achilles heel has always been its inexorable consolidation of power and money into fewer and fewer hands. This is countered by only three factors, as far as I can see.
1. Occasionally a giant will be toppled by smaller, more nimble businesses, often through shifts in technology too rapid for the giants to follow. This happened to IBM, which went from the world's biggest, most powerful computer company, to a bit-player. The fall was breathtakingly fast. The whale-oil industry was brought undone by the discovery of oil in the ground. As Amory Lovins likes to quip, the whales were saved by the petroleum companies.
2. Sometimes the government will step in for the public good and forcibly break up a monopoly, or stop the collusion of a group that price-fix to form a virtual monopoly, or prevent a sale that would deliver a monopoly or dangerously large part of the market to some buyer.
The failure of giants and their break-up by government are rare events. The government now bails out giant corporations such as banks when they would have otherwise failed, and creates laws to safeguard the outrageous profits of media companies so that they don't have to adapt to new technology. The government, elected to look after the public interest, neglect their reason for existing and increasingly serve the richest minority. Enormous companies are allowed to build to a size and power that dwarfs those that in the past were deemed too powerful to be safe for society. Some of these new giants have more power and money than most of the world's countries.
3. Another way that money and power can move against this dangerous current is tax. Unfortunately this route is being rapidly lost. A propaganda war is being waged upon society, arguing that tax is bad, that spreading costs through socialisation of common services is somehow inefficient, and that welfare damages its recipients. The brainwashing has become so effective that I've met people living at the poverty line who have been so taken in by it that they ferociously argue for things that would disadvantage themselves even further and make the richest few vastly more wealthy. Not long ago I saw an economist explaining, with a straight face, that the result of Japan's social safety net in giving them the longest lifespan in the world is a bad thing. He was insisting that they should do what the USA does, with its grossly inefficient and expensive health system, delivering lifespans shorter than Cuba's and the infant mortality of a third-world country.
So we have a problem. How can we reverse this dangerous concentration of wealth and power? Capitalism as it exists doesn't seem to have the ability to do it, and in fact appears to enhance it. The government, meant to be our representatives, powerful enough to protect society against forces that would threaten peace and prosperity is unwilling (or unable) to stand up to the giant corporations.
Is there any way to fix this?
When does a small, benevolent business become a mega-corporation insensitive to humane concerns? Does it always happen? Is there some other tool that we can use to bring down those to grow beyond moral responsibility?
Perhaps information is our only remaining weapon. There have recently been the rapid growth of people-based pressure groups like Avaaz, GetUp, and many others, using the internet to mobilise people against wrongs.
Many years ago I found out about Nestle's callous murder of great numbers of babies in Africa and Bangladesh and I have not knowingly bought any of their products since then. Microsoft's nasty business practices caused me to move to Linux. If Woolworths do nothing about their leeching from the poorest members of society through high-risk poker machines then I shall no longer buy anything from them. I don't own any Apple products, but their unwillingness to use their power for good in their supply chain means I will never, ever buy from them. Nike's sales suffered when it was found that their footware is made in awful sweatshops.
If we can make social justice something to be valued more highly than things like fashion or convenience and convince people to vote with their dollars then we might be able to bring back some sanity to capitalism and save ourselves from ruin at the same time. But that only fixes half of the problem. And unfortunately we might not even be able to do that for much longer. Wave after wave of politicians who are owned by the media giants keep trying to pass laws to censor the internet. They only need to win once, and they will quickly silence the people-powered information networks.