Suddenly we won't determine executive payouts. Suddenly we will decide to take a tougher stance. Suddenly we worry if this shouldn't be retroactive. Suddenly we realise we're living in a real world.
All this money isn't flooding in to make a better world. All this money is flooding in to ensure the bad old world is put back together again.
As soon as possible.
I posted on this only the other day.
The acolytes of capitalism are just waiting to return.
So what can we do?
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2 thoughtful fixes:
One of the key problems with all of this issue is that it is highly complex. Everyone has heard of the big bad credit crunch, but no one in the general public (myself most definitely included) really understands it.
So we have media stoking up paranoia (it's an armageddon, bigger than The Great Depression etc) when it is not in the same category - it is the most serious financial crisis we've had in a while and it demonstrates the dangers which occur alongside the benefits of globalisations. But it's not the end of the world.
It should a period of reassessing the structures and institutions which are in place and redesigning them to work more efficiently and successfully - as the Economist has said, it should be acknowleging that there has been a hell of a lot of 'bad' capitalism which has negatively affected everyone and which needs to be rooted out. Ultimately, if the free market system is the one which world governments want to see, then they need to let some of the institutions who have made their money from it die from their mistakes. Bailing out the system and rescuing the executives from the effects of their incompetence ironically is against the entire free market ideology which the banks have thrived in.
I was most struck by a post from Andrew Regan recently which tried to show how it was important to separate out the term "capitalism" from the term "free markets". Socialism can depend on the free markets, on certain tools also employed by capitalism, without having necessarily to end up being tarred with the same brush. (We only have to consider the hybrid cooperative structures in Spain - the sociedades laborales - to realise this is possible.) It's not just that there's been a lot of bad capitalism out there (there has, the banks know their own and assume the other banks have done the same - which is why no one trusts anyone else enough to lend money freely any more), it's also that free markets have for too long been wrongly identified exclusively with capitalism. It's time we reclaimed them as our own.
As far as your last point is concerned, you're absolutely right. Except that it's nothing to do with free markets. There is nothing free about gigantic banks operating in some kind of global regulatory vacuum. As Tom suggests in his comment on a previous post, we need an international regulatory body - and we need it fast. And, in the light of recent events, we may in fact get it. But not to regulate what everyone has called free markets. Rather, to prevent private monopolies from messing up again.
There is still the challenge of course of how to create an effective public monopoly. And I'm not sure how this should be approached. But whatever we end up with, we now have a golden opportunity to try and make a better world.
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