Monday, July 13, 2015

The contradictions inherent in wanting to definancialize a capital based economic operating system


This article from Salon paints a quite dismal picture of where this country is heading now that "Financialization" holds sway in the lofty realms of investment. Investment for jobs, as such, no longer has the emphasis as holders of capital seek rents in various forms to obtain net gain. And its not only financial instruments that gain predominance in this trend. Even the super managers of established companies no longer look to wages to make their mark. They go now to the stock options at today's prices so that next year, or the one after that, they can use company profits to buy back stock and thus push the price up substantially for a sell off.

When you think about it, however, why would any, purely rational, holder of capital, even dare to think of jobs oriented investments here? Even with our stagnant wage growth labor costs here are far higher than a good number of places else where. And let us not forget that here there are also other regulation costs here; all these silly workers, and consumers, not wanting to get sick, hurt, or ripped off in various ways (go figure).

And then there is the trend line of the general cost/benefit ratios of human labor at all, as opposed to the application of the right hardware and software. If you then throw in all of the instability factors raging around the world, and the resultant lack of predictability... Well... What's a cold rationalist supposed to do?

The interesting thing in this for me is that the only response that the well intentioned folks who present us with these dark statistics is to suggest that financialization be regulated in some way. That is to say that the commodity of money be limited in how it can be rented.

Understandable as what motivates this response may be, one wonders at the host of difficulties its practical application would present. Even for a Progressive such as myself, setting up investment regulatory bureaucracies as would be required here is mind boggling. And unless you would be willing to regulate competition itself, as well as profit minimums and maximums, along with wage minimums and maximums, with even more layers of bureaucracy, you would be a one legged man in an ass kicking contest. And even if you were willing to regulate all of the above the biggest accomplishment would probably be to make government the biggest employer; perhaps the only employer in the long run.

If we accept that human skill is already an absurdity as a commodity, and that trying to regulate the other main commodity (which is essentially information) is a fools errand, why can we not also accept that the old, mechanistic, capital model of organizing production, and the distribution of material need, is no longer valid. That something new and original is required to best make use of an electrified information environment. It really isn't that big a leap. Not if you have anything near an open mind, and are actually willing to use it.

Wall Street's sinister disappearing act: How it still endangers America — while Washington looks the other way

Wall Street’s sinister disappearing act: How it still endangers America — while Washington looks the other way