“If the stock market is the apogee of Western civilisation, then we haven’t come very far.”
This essay provides a spiritual and moral perspective of the relationship between capital and economics. In this endeavour I find a certain degree of irony that, as an aging scholar of Marxism – as opposed to an old Marxist scholar - I should seek to invoke the name of that great internationalist to spearhead my critique of the well-fatted and sacred cow of globalisation.
In his early writings and collaborations with his friend Engels, Karl Marx recognised the affect economics had on the spirit of man. Indeed, the essence of Marxist ecclesiology posits the division of labour as being the metaphorical ‘fall of man’ - thereby alienating man from his spirit. In my view he best summarises this sense of estrangement in his critique of his fellow and contemporary philosopher, Ludwig Feuerbach:
"Just because individuals seek only their particular interest, which for them does not coincide with their common interest, the latter is asserted as an interest ‘alien’ [‘fremd’] to them, and ‘independent’ of them, as in its turn a particular and distinctive ‘general’ interest; or they themselves must remain within this discord, as in democracy. On the other hand, too, the practical struggle of these particular interests, which actually constantly run counter to the common and illusory common interests, necessitates practical intervention and restraint by the illusory ‘general’ interest in the form of the state." [Note. Original emphasis]
Marx was describing a sense of estrangement, when former absolutes and securities collapse and man is left adrift in life, in an alien and hostile world. In the tangible sense, he is alienated from life, society, the world and from his fellows.
In my view, the very notion of globalisation is synonymous with alienation. Take for a moment the idea of the ‘global village’. Surely an oxymoron if ever there was one. Village life by its very definition implies a close sense of community. Global life by its own definition implies a distant sense of community.
Although information and transport technologies ensure that we have a more immediate contact with the affairs of the world, this is not the same thing as being part of a global village. A more accurate term is the ‘global community’, if we really need to define ourselves as being part, of what used to be known simply, as the world.
Personally, although I might consider myself to be ‘a man of the world’ in a figurative sense, I would liked to known as being an appreciated resident of my small home town, and then as a citizen of Australia, rather than as a cipher in the global community.
Just as the Industrial Revolution drew agricultural workers into large factories and urban slums, giving cause to Marx’s apt description of foreignness (fremd) or estrangement, contemporary economics has forced the Western world to largely divest itself of its worker intensive and alienating manufacturing industries offshore. Out of sight, largely out of mind. In Western democracies such workers have the right to speak out and take some action as to their grievances; this is hardly the case in China or the exploitative factories of Bangladesh or India. With specific reference to China, Marx’s comment “… necessitates practical intervention and restraint by the illusory ‘general’ interest in the form of the state[.]" rings particularly true.
But the removal of unsightly, alienating, environmentally questionable factories from our shores has only removed the problem elsewhere and has done little to remove the idea of alienation from our lives.
Without extrapolating on the obvious, our new information based economy is, arguably, even more alienating than standing on a production line. Our brave new world affords us the opportunity to completely isolate ourselves from each other, let alone the world.
Again, the Marxist notion of the state as an instrument of class oppression is apposite. In the anarchic ‘global’ world of the Internet, the sub-culture of hacktivism perhaps best illustrates the notion of alienation as a currency taking hold. The global cyber collective ‘Anonymous’ is a classic example of disaffected youth who see no sin in hacking into the world’s deepest secrets, be they financial, personal or whatever.
In a recent message to Bulgaria, the group described themselves:
"Greetings Bulgaria. I guess you know who we are, but if you do not know – We are Anonymous. We are the largest force on the world. Force greater and mightier than all the governments of this earth. We are the people who created you. We are the people that you meet on the street everyday. We are those that you do not expect – by the seller in the stores to the restaurant cleaner.
"We are not an organization or club. We are much more than this – we are united. We are people from all over the world, gathered by the idea of justice and freedom. Anonymous are not just people on the Internet, they are everywhere."
Clearly Anonymous provides an umbrella for those seeking a common identity and sense of legitimacy – the key word being united.
But there are, I suggest, a real flaws in the assumption as to the inevitability of globalism, its desirability and its beneficence to mankind. I have always treated with healthy suspicion those armed with revealed truth, millenarians and screechers of the nanny state variety. Moreover, I have always considered the ‘one-worlders’ to be crackpots or conspiratorialists. Having travelled across much of it, I have been comfortable with the diversity of the world as it is.
Global dynamics have always been in a state of flux. Empires rise and fall; statesmen stride across their page of history and despots come and go. Peoples migrate, integrate and segregate; they invade and are invaded; nations conquer and are defeated. Some societies are economically successful some remain mendicant; some create great literary, artistic and scientific cultures and some disappear without trace. This has been the dynamic of history. It will continue to be so.
In this context I continue to be suspicious of the economic mantra of economic globalisation.
There can be no denying that modern technologies have brought to the international community a greater sense of economic interdependence. However, the so-called Great Economic Crisis of 2008-10 demonstrated the failures of being locked in too tightly to the global economy and the ongoing crises in the European Union amply demonstrate the fragility of economic interdependency.
It is ironic that globalisation should be punctuated by sometime violent expressions of regionalism. The tragedy that was the dissolution of Yugoslavia indicated the depth of local feeling. The civil and culturally sensitive Czechs and Slovaks determined to dissolve their union and the real prospect of the United Kingdom breaking up, with the Scots being offered a referendum as to their desire to remain within the union, gives lie to the desirability of globalism. Technology might have shrunk the world but the world seems inordinately happy in its own milieu.
Let us then turn to the underpinning assumption of globalism, namely idea of free trade and a market economy. Classic liberal economic theory, driven by self-interest, holds that the free market is the best mechanism to determine worth, as in value, of goods, services, manufacturers and so forth. Goods and services are only worth as much as people will pay for them. Impediments to the exchange of these good should be abolished thereby allowing access to them. All well and good, in theory.
In practice, it does not require much thought to recognise that there are innumerable ways of manipulating any market given the financial, product and human resources; fiscal intelligence and a competitive edge. An old adage is apposite, namely, money makes money.
Furthermore, the ‘idea’ of the stock market, the theoretical mechanism determining value, is as equally simplistic and deceptive as the ‘idea’ of the free market. The classic story line would have us believe that individuals invest their capital in their chosen publicly-listed business company in the hope and reasonable expectation that their investment will show solid returns over a period of time and, should the investor wish to change his investment, the stock market exists as the open and honest mechanism though which he can do so.
Without further labouring the point, the inadequacy of this view is readily apparent. Again money makes money, not all investors are so altruistic to wait for solid gains for solid investments. Stripped of all its livery, the stock market is a gambling house, pure and simple. Companies list with the stock exchange to raise public capital, some investors hope for long-term gain, others for short-term gain. Others just play the market. Some investors have huge resources to invest, others their life savings. All want one thing, to increase their capital. It is matter of pitching chances.
Whilst it is accepted that there is no such thing as a totally risk free investment, stock market manipulation is the acme of investment gambling.
The irony is that the classic theorists argue for less restriction, open competition and so forth, and yet the very mechanism by which their system stands and falls is supposedly regulated by innumerable checks and compliances. Even then it is famously open to swindle.
That individuals and corporations with the wherewithal can currency trade, shed and buy stocks and shares to the extent that entire economies are affected is not only economically reprehensible, it is morally wrong. Given that people act in self-interest – the fundament of classic liberal economic thinking – is it right that those with more clout and competitive and resource advantage should be able to manipulate the markets with no other thought in mind than profit?
Is the pursuit of profit the sum total of our civilisation? If the stock market is the apogee of Western civilisation, then we haven’t come very far.
I am not invoking the old Medieval notion of usuria and the concomitant prejudice of and imprecations against usury and the dealing in capital. What I do question however is the distinction between profit and excessive profit. There is an old Latin term which I consider apposite and deserving of closer attention, namely: ex aequo et bono - “according to what is fair and good”.
This stands in direct distinction to the grotesque mantra ‘greed is good’ given universal expression by Oliver Stone’s creature, Gordon Gekko, in the classic 1987 drama, Wall Street. This is, in many respects, the slogan for our times. The corporate and individual greed demonstrated by international business over the past decades needs no amplification.
It raises the valid question as to how much is enough? In the rarefied boardroom atmosphere of corporate Australia such a question would be thrown out with the disused percolated coffee; but to low income earners this question is easily stripped of its complexities. An $8 million salary is a grotesque joke played upon the unfortunates of society.
Taken out of their theoretical framework, the economic assumptions behind global capitalism are fundamentally faulty. Amongst the recently published and creditable critiques of globalisation, John Ralston Saul’s splendid The Collapse of Globalism stands out. His incisive critique makes a very telling point when he argues about units of measurement in the evaluation of economic success. One cannot indeed measure the success of a pre-industrial, agrarian society against modern units of economic measurement. But transfer the agricultural population into urban slums earning a dollar a day mass-producing widgets and the modern economist has an indicator of measurement with which to play. Whether the erstwhile farmers are materially better off is a moot and often tragic point.
It is a sublime arrogance to assume the superiority and inevitability of liberal economy and the mantra of free trade and ‘level playing fields’. This is a Western world economic construct. Why should the rest of the world adopt it?
The notion of a level playing field is as gimcrack as a sideshow alley ride. The same economic theorists that prattle on about reducing tariff levels gave the world the European Union, arguably the greatest economic and geopolitical confidence trick inflicted on witting peoples, and good old American pork barrelling protectionism.
The accepted liberal economic mantra of ‘free markets, free men and free trade’ should come under closer scrutiny to expose the hypocrisy that is represents. Despite its posturing, Europe has been the home of tariff protection, especially since the advent of the Babellian mess that is the European Union. Butter mountains, milk mountains, and subsidies for obscure Greek olive oil producers and subsidised agriculture in general. No, the neo-European ‘zollverein’ is hardly a striking success story liberal economics.
Conversely, it doesn’t require much observation to look outside the square of globalisation, pardoning the mixed metaphors, to see societies that have kept themselves insulated to some degree from the global strictures of recent international capital crises. Malaysia did extremely well during the 1990’s Asian Tiger crisis by repudiating the International Monetary Fund’s advice and developing its own market controls. Likewise did Singapore, and today Indonesia is developing its economy along its own special direction, much to the concern of traditional liberal economists.
The recent economic history of Communist China and oligopolist Russia effectively puts paid to the fallacy free markets and free men. In a lesser supporting cast are most of the so-called Asian Tiger economies, which are democratic – to a point.
In the latter category, the potent mix of Asian canny, command economics and an old-fashioned sense of racial superiority is playing the West at its own game and beating it. Why? Although the answers are manifold, try buying Singapore Airlines, Malaysian Telecoms and Chinese banks. These countries do not sell off their vital assets to the highest bidder.
Extrapolating further on the ‘idea’ of the inevitability of free markets, is to ask the obvious question, why? Adam Smith expounded upon a thesis long discussed by others, notably Thomas Hobbs, about man’s natural instinct being that of self-interest. This self-interest, argued Smith, would propel men towards self-improvement, and ultimately societal wealth. But as Hobbs famously observed, natural competition and self-interest also propels man into a social contract with others to safeguard his physical safety. Thereafter follows the societal quest for peace and stability and the development of the common weal.
The proponents of Smith cannot have it both ways. If history shows us that man prefers to live in a common weal than at perpetual war with one another, is it not natural that the interests of common weal that should take precedence over self-interest. The idea that greed is good is therefore flawed. It might well be the case that greed is natural, but the common weal dictates that greed should also be curbed.
Once the ‘idea’ of a common weal is accepted, it is therefore only a matter of degree as to the extent this commonality. Some societies, notably primitive hunter and gatherer groups live in small communities and everything is shared. At the other extreme exist autocratic states where power and wealth and consequently goods and services are concentrated in one or few hands.
And in between exist the liberal democratic societies of the western world. It should be remembered however that many of these have not been either liberal or democratic for very long. Germany until 1871 was a series of principalities and duchy’s; likewise was Italy until 1870; the countries of the Balkans have only enjoyed any sort of autonomy since the 1990s; Hungary and Austria were combined in an empire until 1919, Spain and Portugal have been under the thrall of autocracy until the 1970s. Russian flirted briefly with freedom in the 1990s and even the so-called champion of the ‘free-world, the United States of America has only been free for some two hundred years. Australia is a relative new player on the block in terms of the so-called free world.
There is no doubt that Western civilisation, in all its imperfections, has been the dominant economic factor in world affairs since the retreat of China five centuries ago. Over this period, the Portuguese, Spanish, Dutch, French, British, Italians, Germans and Americans introduced to the world a number of economic theories which include: trade; conquest and colonialism; mercantilism; slavery; imperialism; laissez-faire capitalism; communism; fascism and corporatism; socialism; the World Bank (Bretton Woods interventionism); the mixed economy; corporate capitalism; multi-nationalism; level playing fields and now globalism.
All of these ideas of economic development were argued at the time with the total conviction of their theoretical and moral correctness. Indeed each one existed for its allotted time-span until circumstances and, to cite Marx, its ‘material conditions’ changed. But, it should be noted, that each of these economic theories, with the notable exception of slavery that still exists, were Western constructs to suit Western interests.
Western interests have now changed, or perhaps more accurately, their economies have failed. To this end, the West is desperately endeavouring to impose yet another economic system upon a reluctant world, namely the de facto surrender of national economies to the authoritarian dictates of international capital in the name of the World Bank, the International Monetary Fund and so forth.
Much as this sounds like conspiracy theory rant, the recent (2011) totally undemocratic political engineered regime change in Italy and Greece by the EU apparatchiks of Brussels, and the completely mendicant status of Spain, Ireland and Portugal are excellent examples of the new European totalitarianism.
Wisely, sounder economies outside the Western economic milieu, although paying lip service to free market policies, steadily progress by developing their own culturally based economic models. The powerhouses of the future, China, India, Indonesia and Brazil to quote some of the obvious, have their own intellectual, cultural and economic traditions and conditions. All have had their own painful memories of Western exploitation and have learnt well from these lessons. Whether they play the West at its own game or change the rules one may be assured they will be delighted to see the West reduced to servile status.
Where Australia is to position itself in this future schema is a moot point. But in my view a good starting point would be to consign outdated free market capitalism, in the words of its prescient critic Karl Marx, to the dustbin of history.
I conclude by offering one final and very telling comment. The idea that free trade and economic interdependency promotes pacific international relationships need look no further back in history to the years immediately preceding the First World War. Globalisation and free trade brought the countries and empires of the Western world very close indeed – but the mantra of free trade did nothing to stop the catastrophe of 1914-18.
 Customs Union. Originally created by Prussia in 1818 for the various German states under Prussian auspices.
 Weal. (Old English). ‘Wela’ wealth. Prosperity; well-being; state or community. Thus contemporary ‘Commonwealth’.
08.11 | 06:21
The Australian community is in for a world of long overdue pain. It is wholly its own fault for which I have nil sympathy.
08.11 | 06:15
Thanks indeed for the comment. I do agree that we badly need to 'clean out the swamp'. Trump certainly stirred those fetid waters.
08.11 | 05:22
I agree with the general thrust of your comments but the Australian community believes the governments can deliver without pain and there will be a lot of pain up ahead.
07.11 | 11:17
Nice job on the essay John, but regardless of his positions, Dutton is too much a cretin of the past, he also looks like the walking dead. We don't need more career politicians, we need a Trump.