“institutional bankruptcy, …renders …economies unable to allocate capital productively in the first place.”
Umair Haque comes to this conclusion in his post entitled, Chicken or Egg, DNA?
He seems to be one of the most enlightened economic thinkers “out there” today.
This is a most fundamental critique of the existing economic system. This statement points at the root of so much discontinuity, from the fact that many of us cannot find employment to the destruction of the remains of the natural world. If we had an economic system that could allocate capital productively, we would have an engine working towards aligning our efforts with actual needs. Instead, we have Ponziconomies and Zombieconomies acting like cancers on both human society and the underlying Ecoconomy on which it all depends.
Also, if “capital” and “productivity” were redefined so that we could eliminate the friction between the way these terms are currently understood and what they need to mean if they are not to remain as structural impediments to efforts we need to be making at a time when nothing seems to be working.
I’m not sure if the term “capital” can be brought into alignment. “Productivity” might be a little easier. Capital has meant a concentration of “surplus” value that could then be used to fuel further activity. The problem with this is in the idea of surplus. Through the entire history of capitalism it has always been forced to search out new realms, whether through colonialism or the “slaves in a barrel” we get out of fossil fuels to feed itself. Besides exploiting these sources of “energy,” it has searched out and destroyed the fabric of regional ecologies to extract “resources.” Serial destruction of human and natural systems to generate “surplus?” There seems to be a fundamental flaw here that may be intractable.
The infamous Signor Ponzi has given his name to the felonious concept of extracting “value” from the unsuspecting by generating an economic perpetual motion machine. Human greed and gullibility united in the deep wish for something for nothing leaving lots of nothing for most and all the something to a few. Is this all that capitalism has ever done? If we balance all the books, that may be what we find.
note: Here, and always, when I say “Capitalism” I include its doppelganger Communism. They all work from the same basic assumptions and just differ in how they want to cut the “pie.”
The ideal of the Ponzi scheme is that the perpetrator can “retire” to an “off-shore” haven and live the easy life. That may be at least theoretically possible when done on a small scale, but if the entire economic system of the “developed” world is organized this way and its social and physical costs resonate throughout the world leaving no havens, then perhaps there can’t even be any “theoretical winners” in this.
In a constrained world, especially one that has suffered from so much damage to its truly productive systems, how can we support the idea of surplus value? Perhaps this isn’t a bad thing either, especially when what passes for value in such a system is a series of commodities. Commodities, another capitalist invention, result from an abstraction of human value into the “products” of “streamlined” production. In effect, we get what the system can easily make instead of what would actually benefit us. Then an enormous effort is expended to “sell” us on its value. This seems wasteful. It only makes sense if we continue to accept that our Ponziconomy’s rewards were anything but a fiction.
We come to “productive.” If we accept that such an economy is a pyramid scheme that relies on ever expanding its sources of exploitation without ever paying back its obligations, then we can see the need to remove productivity from the circular definition it now has. If we can connect productivity with needs directly, we begin to enter a realm in which we can begin to sort out a way past all this destructive and wasteful activity.
This brings us to what we mean by value. Capitalism assumes a neutrality of value, “Hey! If it makes money? It must be valuable!” Out of this neutrality grows an attitude that we can abstract our actions from any connection with anything one might consider a true human value and still reap financial rewards. A better way to devolve engaged human actors into pathological alienated subjects would be hard to find!
In the lives of people engaged directly with their world, we wouldn’t need to entice the most capable people to do particular “work” by throwing capital at them. Such people would see for themselves what work most needed to be done – for the fulfillment of their own self-interest – and they would do it. People would aggregate for tasks beyond the scope of an individual and not simply to legalize irresponsibility as they do by joining into corporations today. The value of work would be seen as the possibility of sustaining life, not of escaping into some fantasy of the suspension of the human condition.
The Modern mind fills with bogeymen and becomes numbed with fear at what has been laid out here. With a rush to ascribe all sorts of red-herrings and straw-men. That’s too bad. That is potentially, and probably, tragically true as well. Others might want to see this as a call for some desirable social utopia. It’s not that either. All it is is an honest attempt to see through and past barriers to our establishing some connection with the reality of our situation. It is not a program, but an outline of a methodology that might lead to a better engagement with reality and possibly an opportunity to develop a less aggressively adversarial relationship, between people, and between people and the natural world on which we all depend.