TheMillerCircle.org

Occupy Wall Street Movement

If you visit the Occupy Wall Street website as of last night and today, you will see recognition that neoliberalism is the root cause of our economic problem. I think this is a good, timely identity to make, though it should send many scrambling to find out more about neoliberalism. That’s good too. In short, Neoliberalism is the system that Milton Friedman was instrumental in formulating as a kind of economic theory, but Ronald Reagan and Margaret Thatcher introduced the system into America and Britain as the dominant social and economic system, based on a globalized “free market” economy. It basically holds that the free market can solve all problems, that it is a perfect instrument. Poverty is not the result of bad market behavior,  it is caused when people decide not to work and take themselves out of the work force (because their earnings decline). The free global market can solve all problems–it adjusts to deal with supply and demand and, left completely on its own, can solve problems with benefits for all participants. Their claim is that everyone will prosper and the free market will also solve poverty, having claimed to raise millions of people above the poverty line. But the reality is that deregulation of markets gives neoliberals the ideal environment with which to enslave the global work force.

This form of capitalism is vicious and uncompromising towards labor and through the IMF, the World Trade Organization and the World Bank, has resulted in huge debts for loans to third-world countries and massive dismantling of social policies and the social safety net. But the important achievement for the Occupy Wall Street group is that they have identified a problem–an economic system in which our financial system no longer serves society, but instead society is supposed to serve the financial system. America has been financialized, an event that took place in the 1990s when profits from the financial sector exceeded those of manufacturing. Neoliberalism externalized the relationship between society and economics. Whereas the healthy relationship that had in the period after the depression and before the 1970s was one in which the financial service sector served the economy, we migreated under neoliberalism to where we are today, with our financial system completely free from serving society’s needs and “dis-embedded” within our culture. Our financial system needs to be “re-embedded” into our social structure and become one force that serves the interests of the entire society, not the interests of the few. In the process of making these demands and changes, we need to confront the issues of global climate change and recognize that unchecked growth in greenhouse gas emissions seriously compromises our future and the future of our children.

Yes, market reforms have to be part of the solution and we need to decide that risky financial investments such as those which the over-the-counter stock market is making are  risky and leaves our financial system at huge risks, especially now that Wall Street knows they are too big to fail. The privatization of wealth and the socialization of risk have encouraged Wall Street Investors to continue creating high risk “instruments” of investment. In the short run, these need to be under tighter regulatory control and in the long run, the re-embedding of our financial system needs to take place to insure that we can meet some of the serious problems we face that require immediate attention, such as greenhouse gases and our future on the planet. In my opinion that will require taking over the banks and financial investment firms and reorganizing them to work more effectively for society and the preservation of the environment.  Back in the 1960s and into the 1970s, the fortune 500 companies had made their peace with FDR’s New Deal. It was only when Ronald Reagan, backed by new wealth from self-made millionaires,  claimed to be opposed to taxation and wanted to keep more of  their money from  exposure to Federal taxation.  Thus government became the problem, not the solution to their interests and from there, things went completely downhill, but did so incrementally, such that few people noticed what was happening and few warning signs were put up along the way.

This is where we are today, in a financial collapse that rivals what existed during the Great Depression. It is clear that what we need is a new economy, one based on investment in our infrastructure. Does anyone know why China is doing so well and what mechanisms they used to rebound from the recession? Yes, massive investment in their infrastructure-like highways, high-speed trains, airports and transportation. They are the Keynesians of today and to them the future belongs, unless we begin to realize that what’s missing in our culture is low cost education, right through college, rebuilding our infrastructure, with improvements in highways, bridges, the introduction of high-speed rail, improvements in public transportation. These are things we can afford to do and in the process, by directing the excessive profits of the neoliberals, who otherwise endanger our  economic system, we can achieve a never-ending improvement in our infrastructure which includes addressing the problems of global climate change so that we grow more and more compatible with nature and our natural resources.

As an article that summarizes the OWS movement very well, I recommend David Graeber’s article in The Guardian. For many reasons, I generally find the Guardian superior to the NYT and, for a British Newspaper, there is plenty in The Guardian about America, testifying to the fact that there are probably many American readers who look to The Guardian for news and opinion. For late night people, because the NYT goes to bed early, The Guardian comes to your email box about the same time as the NYT, despite the 7 hour difference between Minnesota and England. So the way I think of it, the NYT  is indispensable for getting news–I am hooked on it, but on the other hand The Guardian has periodic, more pithy and penetrating articles that cover the American scene and often integrate it into a more global view. I now travel to Europe much more regularly because my scientific interests, as determined by scientific meetings, cannot be met by staying in the U.S. anymore. Recently I attended two different scientific meetings in Europe, one in Prague and the other in Amsterdam. Both were on a very high plane and have become the kind of meeting that one cannot avoid if one wants to stay current in your field. China will soon join this scientific resurgence and America will have to become increasingly aware of what’s going on in other countries. Perhaps science and technology can lead the way to encourage Americans to start learning more about the world outside of the U.S., though I am not holding my breath.

RFM