Integrated Man

Capitalist Papers 10: The future of Capitalism

Greater minds than mine have addressed the issue of Capitalism, its flaws and future, with greater insight and sophistication than I presume to bring to the subject in these 10 posts. But at the end of the day, or millenium, or whatever, the fate of Capitalism will be determined, not by elegant postulations, but by the simple conclusion of whether it has done more good for society than damage.  It don't make no nevermind how much chrome is on the car if the engine don't run.  At this time, I submit that there is no reason to believe that Capitalism is immune to the fate of Communism. 

But that is not destiny. If Capitalism is to survive in anything approaching its current form, it must evolve to a higher form of consciousness.

 

Cool Hand Barach

When your friends are your enemies, and your enemies are no worse than your friends, you're in a pretty secure place:  things can only get better.  So it seems to be with the Big O.  Both sides have painted him as a patsy. To a degree, he seems to encourage the portrayal. But I wonder if he's rope-a-doping the oppositions; the Republicans more than the liberal Democrats.

 

Capitalist Papers 8: Capitalistic Cannibalism: Self-Destruction by Self-Consumption

Capitalism is a self-destructive paradigm.  I'm not speaking of private enterprise, or a competitive business environment.  I'm speaking of the mutant form of these two economic dimensions that we refer to with unquestioning reverie as 'Capitalism'.

It is self-destructive because it has become addicted to a form of cannibalism that, having devoured its competition, turns on itself in a self-consuming act of gluttony, with the drug of profit stimulating the endorphins for its own destruction.

Three phases of Capitalistic Cannibalism appear to exist: competitive cannibalism; customer cannibalism (what I call "stage 1 death by metrics"); and corporal cannibalism (no, not 'corporate'; corporal -- the consumption of one's own body in a final desperate act of survival(aka: stage 2 or 'terminal' death by metrics)).

Capitalist Papers 7: CPR for the US Economy

"Business hates uncertainty", so observed Wilbur Ross on CNBC, 2010/08/31.  A true statement. One rendered specifically in explaining why so many capitalists are sitting on piles of cash while the U.S. economy is prostrate and employment stagnant. 

The irony of the statement is in its juxtaposition against the oft stated assertion by many US executives that their excessive salaries just compensation for their 'risk-taking', even though those risks are rarely taken with their personal capital.

This brings us to the conundrum of the US economy and the way forward. To be Japan or not to be Japan; that is one of the many questions being raised. Do we wait for the capitalist system that so magnificently got us to where we are today to lift us to the promised prosperity that we can no longer take for granted?  Or do we look to a demonized government that failed so miserably to protect the public's interest to jump-start the economic beast at the public's long term expense?

Climate, Energy, Economics and Policy Entropy

Copenhagen is concluded.

Hamlet's question has been answered with respect to Global Climate Change policy: not to be.

If Kyoto can justly be ridiculed as commitment without accomplishment, Copenhagen must be considered a step back from that.

I do not blame President Obama for this, as many are more than willing to do.  The failure is so large that no one leader or nation can fairly bear it alone.   The question is: where to from here?

Capitalist Papers 6 - The Price of Everything and the Value of Nothing

"The cynic knows the price of everything and the value of nothing", so spake Oscar Wilde. 

Today, it seems, even the cynics appear challenged to put a price on, for example,....real estate, securities of financial institutions, depleting energy resources, food stocks, pro athletes and nursing home attendants, medical care and music, news and reality t.v.  If price is the mechanism of rational allocation of resources in a competitive market economy, the collapse of various pricing mechanisms is yet another indicator of the cancer afflicting Capitalism.

Pull the Plug; Walk Away

Concerted Procrastination is an accepted and well worn decision-making practice among senior executives in all venues -- government, business, NPOs.  The theory is that, if you can wait long enough, difficult problems will resolve themselves when all options have been reduced to the worst one by default.  Then the 'decision' is inevitable, and often unarguable.

I,too, though not a senior executive by any means, have practiced it on occasion, most recently in relation to forming my personal opinion on the efficacy of the Government assisting the US auto industry to a soft landing.

Capitalist Papers 5 - Information Please -- Reconsidering the 'Efficient Market' Hypothesis

One of the myths of capitalism is the "Efficient Market" Hypothesis.  It confers upon The Market an all-knowing wisdom of the herd that divines at any point in time the best valuation of a security based on two fallacious assumptions:

-    that a broadly based market assumes a broadly based correct assessment of value, based on...

-    ...reliable information that is broadly available to all at the same time.

Capitalist Papers 4 - Eulogy for the Consumer - TEOTWAWKI

W got it half right in his photo op with the finance chiefs of the G7 on 10/11 when he said: "That which affects Wall Street affects Main Street as well."

The other side of that coin is: "That which affects Main Street affects Wall Street as well."  The Capitalist Catechism recognizes this in theory ("The customer comes first") but Capitalism's most ardent acolytes appear to have lost sight of this verity, ensconced in their gated communities or C-suites elevated above the street-level din.

The truth of these two statements can be found in the events leading up to the current crash in the price of oil.  Let's review:

Shock and Awe, The Sequel

Shock and Awe, Baby.  Shock and Awe.

It looks and feels a lot different when you're near the blast zone: your home, your job, your family.

I've been anticipating this moment since 1995, and yet now that it's here, I'm somewhat surprised by its timing and ferocity.  It's not like we couldn't see it coming.  We've been warned for years.

I cite 1995 as a point in time when we were staggering out of the financial wreckage of the Reagan years, and surveying the future.  My expectation was not of an immediate and universal implosion, but a long, steady slide into third world status, aided and abetted by serial failures in leadership.

Approximately one year ago, I attended a presentation of the Fiscal Wake-up Tour, conducted by David Walker, then Comptroller General of the Government Accountability Office (GAO), and a complement of economic policy wonks from institutions as diverse as The Heritage Foundation and the Brookings Institution.  They came to the University of Hartford to present a consensus view of our economic future if current policies and leadership did not change.  They painted a bleak picture, but one that was still some time in the future, though its seeds were already firmly planted and germinating.