Image by Nick Youngson - source: Picpedia
Everybody has an opinion about "the economy", but what do we really know about it. We know it's important to have money, because bills have to be paid and mouths have to be fed. And we know that it's the economy that enables us to earn money; we have to work for an employer or we have to make a profit in an undertaking of our own. A profitable one of course. That's the other thing we know about the economy: it runs on profits. Other ways to say this is that it runs on growth, or on the accumulation of capital, and that capital is owned privately. Privately owned businesses produce goods and sell them at a profit, and from that profit pay the laborers and invest in the future of the business.
This is how we understand the economy, but it's not what economy is. This is capitalism, the only surviving economic ideology after the opposing ideology died in the late 1980s. Communism or socialism also is not what economy is. These are all ideologies, capitalism included. One ideology takes as it's core the community or society, with a central role for the government, and the other takes as it's core the individual with a minimal role for the government. Very roughly speaking. But none of them are economy.
I often find it enlightening and liberating to try to explain the world by myself for myself. Well as far as that's possible of course, because while explaining stuff to myself, I carry with me the knowledge I've gained from interacting with thousands of souls from past and present, through conversations, school, books, movies, music and so on; whatever explanation comes out of me about anything at all, is colored and given to me by uncountable others.
This is the first and overarching reality I take with me in any attempt at explaining human, social or cultural affairs. We're all the sum total of all our experiences in an environment created by a myriad of individuals who all in some way became part of us. And now, in 2018, we're as interconnected and interdependent as we've never been before. We all stand on the shoulders of giants and these giants are the combined efforts of millions of souls, not just the ones that rose to notoriety. Without taking anything away from the unique and sovereign individual each of us is, our interconnectedness and interdependence is an important reality to consider when attempting to explain or contemplate "the state of humankind".
It may seem arrogant to even think that one unqualified person like myself could have anything sensible, important or desirable to say about such complicated matters, but I feel we all should take some time to consider the larger questions in life, especially in times like these.
So what is economy. Without turning to a dictionary, Wikipedia or some famous writer or philosopher it's hard to come up with a good description of the word. I have thought about this a lot and what I've come up with is that economy is simply the answer to a question, a human need. The question is this: "how do we divide among ourselves that which we produce together from that which the planet gives to us?" That's it really. We live on a planet and we produce all we need to make a better life together and have come up with a system of rules and customs to decide who gets how much of what we produce.
And let me again stress the "togetherness" in all of this. What should be clear to all of us is that alone we are literally nothing, worth nothing. The individuality of our being, the individuality we all cherish so much in our self as well as in each other, is given to us for the most part. That doesn't devalue that individuality in the slightest, it makes it even more precious in my opinion, in my reality ;-) To illustrate how little you would have were you truly independent, imagine an island with everything the planet has to offer in sheer abundance.
And you have that island all to yourself. All the gold, diamond, water, food, living meat, irons, rare metals... everything you'd need to build yourself a nice villa with a car parked in front, a swimming pool, the works. You'd never get it. You'd die owning a wooden cabin, a vegetable garden and some spears made from wood and stone. Everything you own now that's more than that is because of billions of individuals who in their own way led us here where we are now. This is the non-economical reality of humanity's efforts.
If economy is simply supposed to be a system that decides who gets what share of the collective fruits of our labor, the question becomes if we do a good job at the moment. I'd say we don't. And it's the popular thing to blame the failing of the economy on the political part of the system that takes care of dividing the fruits of our labor. In almost all online discussions I hear or read, politics are blamed for the economically induced woes of many citizens worldwide, in the third world of course, but also more and more in modern western democracies.
For decades now the middle class in these democracies have been under siege. The working classes of these countries have seen their productivity rise through the years, have seen profits increase, seen the CEO's and other top managers' salaries and bonuses skyrocket, but have almost never seen their share of the increased growth. On the contrary. My father was able to take care of a family of four with a factory job when we just came to the Netherlands in 1971. We had a car, rented a nice house, went to school my sister and I, had a vacation abroad like Spain or Italy almost every year. From that one factory job.
Now, almost fifty years later things are quite different and the changes weren't positive. Technology has advanced, yes. Our lives are made easier in some aspects, yes. And we still collectively produce these goods and services that are supposed to make our lives better. Make our lives better. But economy has failed us. The working class is steadily transformed into a class of "the working poor". And all this time it has been the case that in almost all western democracies the governments have been serving the needs of businesses and corporations. The developments toward the liberation of capital and the serving of capitalist interests started some years before Reagan and Thatcher made popular the expression "government isn't the solution; government is the problem."
Middle Class RIP
Image by DonkeyHotey - source: Flickr
It should be clear to all of us that in an economy based on individual profits gained from individual labor and individually owned capital, not everyone in society will be able to make a living. Set aside any instinctual hatred you might harbor against those lazy leeches that want to do nothing and only pray upon someone else's fruits, and consider this sober fact. The elderly, the injured, the disabled, the kids and all those countless people who are in themselves valuable to society, but aren't able to monetize that value because it falls outside marketable items or services. Keep strongly in mind that most poor people, working or not, don't choose to be poor. Some of them do, most don't.
If you accept that the distribution of the wealth, increased by higher production, has been unfair, that the middle class has been paying for the income gains at the top, that working people have to work more for less pay, that production of goods is being shipped to low wage, low regulation countries, that young people have to start their professional careers by paying off an enormous debt because education has to pay itself to. When fifty years ago everything was so much more equal. We had capitalism then too you know. Only it was before we were made to believe that "government is the problem." If you accept all that, is government the real problem?
The decades following Reagan and Thatcher are all marked by the increase in economical and financial power at the expense of political power. This has lead to the globalization of capital, making it free to go on the hunt for increased profits in a global marketplace instead of a local or national marketplace. It has freed up the war-industry to wage war against a tactic, "terrorism" is a tactic, not a country or a people, and hence this war has been made a perpetual one. It's been 17 years now since the start of the renewed destruction of the middle east. And the western middle classes pay for these wars with no end in sight, not only with money, but also by sending their young ones to fight and die in these highly lucrative endeavors.
The politics you're rightly so angry about are the politics dictated by multinational mega corporations that were made in an ever freer marketplace for capital to flow from one hand to another, even at the other end of the world. When political power serves the needs of capital growth, increased income inequality is what you reap. We're not completely there yet, but all over in the western world citizens are acting out on the belief that "government is the problem," and increasingly vote for politicians that favor nationalism, closed borders and so on because they truly are convinced that politics has screwed over their lives. Much of these same people blame politics for their worsening financial status.
But if you take into account that politicians have given capital more and more freedom, that they've done nothing for the middle class and everything to make the economy grow while keeping wages down, is it really politics that's the problem? Haven't we been giving away our democratic power to politics and politicians that serve the economy first instead of the people that elected them? And aren't it the owners of the production facilities that are abandoning the working class for a cheaper, more profitable working class abroad? I mean is this really a time to blame politics for the problems that are so evidently caused by the world's largest financial players? I have a fun question for all of you: try and find out in how many governments worldwide ex Goldman Sachs managers have served and are serving. Read this for fun: 26 Goldman Sachs Alumni Who Run the World.
If economy is the system by which we decide who gets what share of our collective efforts, politics just can't be excluded. Not if the mechanics of the economic model alone breeds severe inequality and if we want to do justice to the facts I described earlier. The facts that indicate that there's not only an individually motivated sense of our worth to society or the economy. The human effort to produce goods from the earths resources is a highly collaborative one that's made us highly interdependent on a global scale. This reality of interconnectedness and interdependence is not represented anywhere in the economical model. Nor is there a provision of what to do with the reality that more and more jobs will be automated. What do we do when the model of production for individual material profits fails to do what we think it can do?
In my opinion it's not that government exists or that it has too much power. I think it's the opposite because we now deal with the legacy of successive governments that have given away more and more of it's power to regulate the economy to the owners of capital. Governments have betrayed the middle class they themselves so carefully nurtured in years long past, by fighting against the excesses and extreme inequality that capitalism by itself naturally produces. There is no invisible hand. Government used to be the democratically elected institute that protected our freedom from the oppression of economical powers. Who do you think fought for the 8 hour work day, labor rights, the abolishing of slavery and child labor? The industrialists themselves? No, that was us, from the bottom up fighting against the wants and needs of the industrialists. And we used to have politicians that would do that work for us.
But economical powers have installed political leaders that day in day out make us believe that "government is the problem". When in a democracy the government is supposed to work for us, that makes us the problem. We killed democracy ourselves by buying in to the lies sold to us by our smartest sales-persons. That they used the mouths of paid for politicians doesn't change that. It is still us that give them that power. And the solution is not to blame government but to reclaim government. "Taxes" has never been a dirty word in times when it worked for the middle class. In times when big business was still a regional or national affair politics and business alike worked at least in part for the benefit of the entire community, by maintaining a strong middle class that simply wouldn't exist if there wasn't some redistribution of capital income through taxation of the richest among us. Remember that island! No individual can rightly claim all they own is from their efforts alone. Not one. And none need to own a country.
But now that the richest among us have bought the democracy, they cleverly make us, the 90%, blame each other and government. We have given them the power to buy our government by voting in politicians that play their game. And now we vote for politicians that claim to understand our mistrust in government and that they will "drain the swamp", while also cashing in on the fear for strangers that will make it even harder to make a living because jobs are hard to get as it is. It's so sad when you realize that these same economical powers fight the wars that cause so many to flee their homelands and seek refuge in the west.
So now that the profit and growth based economy has gone global, and given that economical giants have been given more and more freedom by governments that did their bidding, do you think that government should just disappear and let free markets decide who gets what share of the collectively produced growth? Do you trust that everyone that deserves to live will be able to make a living in a world where every square inch of land is privately owned? Or do you believe government should be by the people and for the people and play a role in the distribution of the fruits of our labor? Should capitalism decide by itself or should democracy have a say?
I'll stop here. If you've made it this far, I am grateful. It's just that I see societies falling apart and divisions between a manufactured left and right become sharper. I see societies polarizing and nationalism being celebrated almost everywhere I look. And almost nowhere do I see the anger directed at the financial top, but at the politics they enact through the governments and politicians they paid for. We let them divide us in left and right camps when both serve the same economical powers and only disagree on culture war subjects. I wish that would stop, that we would see through all of it and reclaim, instead of blame government, and make it work for us, their employers.
The above is a repost of a rant I originally wrote on 15 September 2018.
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