It's the Economists, Stupid!

The Huffington Post

Jane Smiley

It's the Economists, Stupid!
March 17, 2008
The lead article at Slate today is about how American corporate managers have become the laughingstock of the world because they can no longer manage "complex systems" as they were once famous for doing.
If you want to read it, you can go to the link, but really, I thought, what's so hard to understand? The economy we have, with all its volatility, is exactly the economy any sane person would have predicted after the wholesale decline of regulation, as both a reality and an idea, in the eighties and nineties. And who has kept up the drumbeat for deregulation, not only here but everywhere, if not those screwy, and tenured, free-market economists? Their whole job for the last thirty years has been to prop up the egomania and greed of corporate CEOs by making that greed and ego-mania look both positive and unavoidable. As a result, the gambling side of capitalism has driven every other side away, to a chorus of bleats from the left that, Gosh, something big and bad was bound to happen, and an accompanying chorus from the right that even saying such a thing was treason.
Let's review. At the end of the 1970s, it was decided by some people that they weren't getting rich enough fast enough, and that they were tragically hampered in their efforts by government regulations that dictated, for example, that foods called by some generally understood name, such as "milk" actually had to be milk--not a milk-like product, not a milk-containing product, but truly milk, from cows. We had "stagflation" I remember it well. It might have gone away, or the shock of oil prices at the time might have induced "entrepreneurs", as they called themselves, to invent something new, but they went whining to the Republicans and the Republicans installed that phoney, Ronald Reagan, who installed another bunch of phonies in various offices of the regulatory agencies, and those phonies said that businesses were perfectly capable of reglating themselves, which everyone knew was a crock, since they had never regulated themselves and were openly getting rid of regulations so that they wouldn't have to regulate themselves or be regulated by anyone. Yes, capitalism is a shell game and all salesmen have a little of the snake-oil in them, which is what makes it fun and profitable, but also makes it persistently unscrupulous. The apologists for the "Reagan Devolution" were "Free Market" economists, whose idea of a human being, based on their experience of themselves, was a perfectly rational and isolated male who always acts in his own selfish interest. In addition to themselves, they were, of course, describing people with sociopathic personality disorder. These economists did what was in their selfish best interests to do -- they promoted and excused all the aspects of human nature that Jesus himself had found abhorrent and they made the world we have today.
The managers of our businesses learned what they know from these guys in their business schools, and guess what, that's why they can't manage their way out of a paper bag, because they're unregulated! The purpose of regulations is three-fold. 1. They prevent the "failure of the commons", a concept that describes why unregulated markets become more and more criminal -- if the unscrupulous run things, then the scrupulous have to give up some of their scruples just to save themselves, and so the whole system gets more and more criminal. 2. They give customers assurance that the things they spend their money on are more or less reliable. and 3. They keep the system relatively simpler than it is when there are no regulations, so the system is easier to understand and manage. What was it they said about the subprime mess? Oh, yeah, neither the buyers or the sellers of sliced and diced mortgage-backed securities knew what they were buying or selling. And they were the experts!
I don't hate capitalism. Capitalism has enabled the printing of lots of good books that had been out of print for a long time and also the spread of redleaf lettuce and those delicious blue potatoes that I like so much. But unregulated Capitalism has done a wonderful job of certain other things, too -- consolidating the ruling class, increasing the class divide in our country and around the world, destabilizing lots of third-world governments, and accelerating the pollution of the natural world, climate change, and population growth, while worsening the physical health of almost everyone. It has also provided us with a lots of cheap entertainments and goods that we didn't know we needed (Bratz dolls, anyone?). But the failure of economists to understand human nature, especially the complexity of relationships and the interplay of self-interest and morality, has enabled them to fatally simplify our world and exalt such dopey ideas as "creative destruction". They have led the government down the dead-end path of thinking that the government serves the economy rather than vice versa.
When I read about rightwing jerks attacking Rev. Wright for telling the truth when they themselves have created the mess we are in (huge expensive war, nose-diving economy, rotting infrastructure, climate change dead ahead, Constitution in shambles, White House occupied by delusional idiot) I know we have entered, not the golden age that the shallow, ignorant economists predicted, but a true iron age of conflict, death, and destruction.
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