I guess it’s difficult this week to not notice that the world’s banks are collapsing. And as usual they threaten to take us all with them.
There are many views of this current crisis, and most of them propounded by pastel shirt-wearing experts on news programs. And most of these views tend to be the same.
And then there is the view held by my favourite muck-stirrer, Mr George Monbiot. In fine fighting style, Mr. Monbiot explains just why this, the latest example of massive state intervention in so-called liberal and capitalist economies, should be seen for what it is – an attempt to prop up a broken system with other people’s money.
Recirculating US tax-payers money into the hands of the powerful and wealthy is not a new thing, as Mr. Monbiot points out. To quote a chunk of his article:
…the richest 10% of subsidised farmers took 66% of the payouts. Every few years, Congress or the administration promises to stop this swindle, then hands even more state money to agribusiness. The farm bill passed by Congress in May guarantees farmers a minimum of 90% of the income they’ve received over the past two years, which happen to be among the most profitable they’ve ever had. The middlemen do even better, especially the companies spreading starvation by turning maize into ethanol, which are guzzling billions of dollars’ worth of tax credits.
Slivinski shows how the federal government’s Advanced Technology Program, which was supposed to support the development of technologies that are “pre-competitive” or “high risk”, has instead been captured by big businesses flogging proven products. Since 1991, companies such as IBM, General Electric, Dow Chemical, Caterpillar, Ford, DuPont, General Motors, Chevron and Monsanto have extracted hundreds of millions from this programme. Big business is also underwritten by the Export-Import Bank: in 2006, for example, Boeing alone received $4.5bn in loan guarantees.
The US, the world’s leading proponent of “open markets” and “minimised state control” is, to put it simply, full of crap. Public money, in the form of “incentives” and “grants” and “subsidies”, greases the wheels and is used to prop up grossly inefficiently industries and companies. American farmers, like their cousins in Europe, probably haven’t tuned a real profit in decades but have more than enough political clout to keep the cash flowing in their direction.
To quote Mr. Monbiot once more: “There is not and has never been a free market in the US.”
Personally I have confidence that a transparent and open global economy is definitely the way to go. Globalise away, baby – incentives work, and greed is definitely an incentive like any other. Unfortunately the current global economy is protectionist, inefficient and dangerously liable to break down at any time, if it were not for vast amounts of tax payers cash.
So yes, global capitalism as preached by every world leader would work well enough except for the fact that:
- Nobody actually does it
- The people with the real clout don’t want us to do it, and never will
So I guess we’ll just have to shove our hands deep in our pockets and save those banks again. Or else start buying gold and shotguns.