Beyond $

Is America the real villain? Is capitalism the real saviour?

Christopher Houghton Budd

In a strange intermingling of graphic design and dark history, the dollar sign can be read as 'September]]" and even seen as two lowers entwined by a serpent! Indeed, beyond the geopolitical and terrorist dimensions of the attack on the World Trade Center, one can have the sense that it was an attack on the power of finance, for which the US is often seen, incorrectly, as a synonym. What is this all about? Is Ameriea the villain of the piece, as many nowadays claim, or is there something beyond the US? And is capitalism still the way forward, as many argue, or do we need something different?

The Johannesburg summit was a sad event, its thousands of protesting voices amounting to nothing without the support of western governments. Saddest of all, the absence of one world leader in particular neutered any critique of policy or empathy for the poverty, disease and devastation now taking over so many regions of the world. Wider afield, Afghanistan still awaits the first of the billions of dollars promised in Osaka. These yawning gaps between governments and their citizens and between words and deeds invite the most damning of indictments of western moral life. It was such discrepancies that led the national liberation movements of the 201h century down Marxist, violent, or despotic paths. Not the quest for self-identity, but the refusal of the West to respect the emancipation of the earth's peoples. It was this, too, that bred Ayatollah Kohmeini's resentment and continues to provide the justification for Islamic fundamentalism. A main difference nowadays is that national liberation movements have been replaced by countless frustrated, indignant and downtrodden souls the world over. And still the discrepancies between word and deed continue, sending the worst of all possible signals to young people everywhere - that life is cheap, deeds are duplicitous, ideals are pointless, and that money takes precedence overall else.

Never has humanity been so subservient to money. The situation is leading to a dangerous schism within humanity, usually described in terms of have and have-nots. But it is equally valid to talk of the divide between those who accept and condone the rule of money and

those who would have it be our servant. In this situation, the US in particular is seen as the villain of the piece and capitalism the saviour. But what is the reality?

It is part of human history that the further west one goes the more money-based life becomes. But it is wrong to equate this with America as a people. It has more to do with worldwide geography. One could easily show that the further `east' or the further back in time one goes, the less overt money is, while the further `west' or the further forward one goes the more explicit it becomes. With the onward march of history, all relationships move from being implicit and embedded in wider value systems, which are ultimately external moral systems, to becoming explicit and monetised, such that moral life, if it is to be found at all, has to found within the human being and especially within our reaction to `pure finance'. Without this, finance appears as a moral-free zone when in fact it is the greatest of challenges: Can humanity find a common morality from within, one which is not externally imposed, yet can be universally identified with?


Modern history and our interpretations of events turn on this question, so we need to be especially careful when saying that America is the villain and capitalism the way forward.

Writing in Britain's Guardian newspaper - The Logic of Empire, 6 August 2002 - George Monbiot, for example, is condemnatory of the US government. Noting that under Bush, the US "has torn up more international treaties and disregarded more UN conventions than the rest of the world has done in twenty years," he sees current war-mongering as deriving from the US military-industrial complex, with its "constant need of conflict in order to justify its staggeringly expensive existence."

Monbiot is clear: "The conclusion of any objective analysis of global power [is] that the greatest threat to world peace is ... George Bush. The nation which in the past has been our finest friend is becoming, instead, our foremost enemy... the US [must therefore] accept its role as a nation whose interests must be balanced with those of all other nations."

Monbiot's logic of empire theme is reflected in William Greider's recent article in The Nation (The End of Empire, 23 September 2002). Here, too, is a powerful analysis of the phenomena that accompany the dangerous but dying days of empire. He warns that, for all its belligerence, the US, under both Bush and Clinton, is in "a debtor's weakening position [in which] sooner or later the creditors pull the plug," and that humanity is heading for "a humbling moment for American triumphalism."

Perceptively, Greider argues that "deep-running tides of history have been steadily undermining America's economic hegemony for decades... The post-war economic order succeeded brilliantly, on the whole, dispersing economic power more broadly among the leading industrial nations and causing those nations' economies to be more intertwined through globalising finance and production. Interdependence is not the problem, since it would provide a healthy foundation for maintaining a peaceable planet. The problem is that the US leadership acts as though the changes never happened. Instead of reformulating global governance to share power and burdens more broadly, a multipolar system that matches economic reality, America still acts as if it runs things - alone."

Greider's concern is straightforward: "How will Americans react when they discover that `U-S-A' is a lot less muscular than they were led to believe? Assuming they do not really yearn to become latter-day Roman legions, many people may be relieved to hear the truth. Stripped of imperial illusions, this country could concentrate on building a different, more promising society at home. But while we can hope that the transition ahead will be gradual and without national humiliation, it is more plausible that

America's brave new imperialists will plunge ahead blindly, until one day they encounter their own intense reckoning with the bookkeepers."


But is it the US that is the problem and is capitalism the way forward? It does not take much to see that the US is only the problem if one makes it synonymous with the love of money or, better put, the belief that money is the proof of right doing and that, more complicated still, its scarcity means humanity is being drawn ineluctably into a have / have not scenario, with rationing not an option except as provided for by that most dubious of concepts, `the price mechanism'.

The reality is otherwise, however. A strong distinction needs to be made between the policies of the Bush Administration and the US Treasury, for example, and American citizens as such. In the US, as in any other country, the will of the people and the actions governments take in their name are not one and the same. It is disingenuous to say the democratic electoral process, which enables a minority of electors to change the government only after it has done wrong, represents true democracy. In reality, it represents a serious discrepancy between the people and their government and a serious lag in timing, which in turn creates a serious gap between deed and moral view, so that people find themselves increasingly powerless in the face of events, even if they disown them.

Moreover, the citizens of the US are, like the citizens of many other countries, themselves in thrall to a higher power, a power which is not their government, but manifests as the short-termism of the financial markets. The pursuit of monetary profit in short time frames with maximum gain sheltered from risk - this is the driving force of modern economic life. It may seem to emanate from the US, but its origins are to be found more precisely in the theory of markets and competition, especially when applied to money. This, of course, is by no means a uniquely American phenomenon. It is what happens when our relationship to economic life becomes abstract, disconnected and money-mediated. In that sense, we are all Americans.


The self-certainty - some would say arrogance - that comes when hegemony nears its end is dangerous because it can prefer militarily-maintained prowess to partnership. At the same time, brittleness in

the realm of policy can lead to rethinking, which can be as dramatic as unexpected. Thus John McMurty, Professor of Philosophy at Canada's Guelph University, sees it "as an encouraging sign ... that Joseph Stiglitz (see-e2---- ) has been awarded the Nobel Prize in economics since he publicly spoke out against the IMF in the most lacerating critique of its Wall Street driven program that I've read. The Nobel Prize in Economics is an ersatz Nobel laurel set up by banking interests against the Nobel family's wishes. But it has, apparently, begun a strong turn towards sanity. After the acute philosopher-economist, Amartya Sen, was awarded the prize in 2001 to break a long string of market ideologues as recipients, the selection of Stiglitz stands as something of a sign of things to come."

What, however, will mark a real departure from the Washington Consensus or a real change in economic paradigm? Allan Gregg, in an article called Capitalists to the rescue (Macleans, 29 July 2002), believes the time has come for governments, emaciated by two decades of deferring to corporations, to reassert their role as spokespersons for `the public good'.

"Today, governments are primarily consumed with facilitating initiatives needed to spawn more private sector productivity, competitiveness and expansion. In the process, the public becomes convinced of government's irrelevance, as it seems to be little more than the handmaiden of business. [Moreover,] at the very time that public expectations of the efficacy of government declined, businesses felt they had no option but to maximise shareholder value and exploit expanding capital markets. The transnational corporations, however, saw their efficiencies of globalisation being undermined by conflicting, inconsistent regulatory regimes. Businesses needed, and got, a new regulatory climate and sympathetic global institutions. A weakened domestic state, offset by a codified set of transcontinental rules and agencies, has been an essential bedfellow"

Gregg is concerned that "by perpetuating the myth that the state is powerless in the face of global forces, [governments] may actually be eroding their capacity to engineer social change." He asks two questions: "First, do we really want to leave these challenges to market forces and the private sector? And second, if not, does the disgraced and enfeebled state we have come to know still have the energy, creativity and moral authority to resolve these thorny problems?"

His argument is that the traditional distinction between public and private sector roles should be reasserted, a realignment that "would give governments the legitimacy they need to galvanize consensus around emerging issues, while letting business focus on its strengths."

For many, the prospect of rebalancing an over-liberalised economic life is attractive, but it would reverse what neo-classical economists see as the great gains of the last twenty-five years that brought an end to the irrationality of managed economies and vociferous unions. It might be wise, therefore, not to expect such change in theory as well as practice to be given up without a fight. Moreover, while the idea that governments can balance market forces has obvious allure, as regards economic behaviour how real is the power of governments over against the logic of the market?


Under the heading Capitalism is best way to save the planet (The Times, 3 September 2002), a title that seems similar to Gregg's, Anatole Kaletsky speaks in similar vein, but with a very different nuance. Referring to environmental issues, he says "the idea that trying to control the human contribution to climate change could be an economic opportunity, and not just a sacrifice, has long been the missing element in the global debate" and that it leads to three main benefits. First, scientific and technological progress that could transform moribund industries such as car making and energy generation. Second, "geopolitical stabilisation ... by releasing the fundamentalist Islamic ... grip on the world's jugular through the oil price" (a remark that strangely ignores similar arguments that could be aimed at oil companies!), and third, "greater trade integration and the possibility of a moderate redistribution of income from rich countries to poor."

Such an approach results, in Kaletsky's view, because "many environmental organisations started to engage in a more constructive economic dialogue with businesses and governments instead of trying to turn the global warming issue into a weapon in a global war against capitalism and modern science."

He concludes, "modern science and market economies ... are by far the most powerful mechanisms ever developed for achieving human objectives. If the world needs to be saved, they are by far the best tools available to mankind."

Behind this conviction, however, lies an assumption that may leave some feeling uneasy. "The true scale of climate change and its effects in mankind's future will be unclear for many decades, probably until most of us are dead. Both as an economist and as a human being I have always believed in focusing on the present and immediate future, leaving the long-term to look after itself. The reason for doing this is not a contempt of future generations, but quite the contrary. Any attempt to look many decades ahead and then to inflict our flawed ideas on future generations, is an exercise in over-weaning arrogance. Moreover, the experience of the past two centuries suggests that the generations of the future will be infinitely cleverer than we are... It is not just lazy and selfish to leave the solution of many long-term problems to future generations; it is rational."

The faith or belief that human beings should defer to the future is crucial to the argument that market forces, not governments, should guide human behaviour. Governments are subject to electoral fashion; market forces have enduring objectivity.

Kaletsky, moreover, puts his faith in the mix of market forces and science, not markets and governments. This is a different story, and it is by no means certain that the mix of science and markets, unlike the mix of governments and markets, will address the deeper problem underlying the loss of US hegemony. This is not the rise of an alternative leading nation, but the displacement of the US by the financial markets- that is, by the hegemony of money. This is a problem that is neither uniquely American - neither in its genesis nor in its remedy-nor an accepted part of capitalism. It is, however, where our focus needs to go.


Just as inner city children might think milk comes from cartons, not from cows, so countless people the world over think money comes in definable quantities, that there is not enough of it, and that, therefore, we cannot all have some of it. In short, we are in thrall to the notion that money is a scarce commodity, not a reflection or measure of human relationships.

But we might as well say that inches or centimetres are in short supply and that we cannot continue building our houses because we have run out of measuring units.

What is this nonsense that results in a world in which, when relationships become monetised, life becomes impossible? It is not

the monetising of life that is the problem; few would like to chop logs, go hunt, and do any number of things that need to be done by others if we are to have leisure or the possibility of pursuing our particular interests. We should not underestimate our dependence on the division of labour, therefore. The problem is that when money becomes the mediator, as inevitably it has to, we can begin to entertain nonsensical thoughts about it. Precisely because it is an abstraction of all social life we can think it is a substitute for life itself.

It is this feature of money that we need to pay attention to. This is why in older times responsibility for money was embedded in powerful moral contexts such as usury laws. Holding America to account for the world's problems is too easy a sound bite. The challenge is for each and every one of us to question our relationship to money - both conceptual and practical. Do we think and act as if money were a reflection of social relationships or as a thing to be acquired? Probably the latter.

In the manner of their operation, today's financial markets - on which we all depend for pensions, insurance, savings and myriad other aspects of modern economic existence - say far more about the generality of human evolution than they do about the US. Their abstract nature is itself a reflection of our attitude to life and if we are to be critical, we need to be sure we have the next step in evolution in mind. Where, for example, are the pension funds that try technically to overcome their dependence on the financial markets and the arbitrary rules that often govern their performance? I know of only one, the PUK in Berne, Switzerland. Ironically, after much criticism by the Swiss authorities for a performance that was too low, when compared to other pension funds, but not too low in terms of federal requirements or, indeed, its own balance sheet, the PUK is now outperforming all others, whose fate is determined not so much by the skill of their managers or the wisdom underlying their policy decisions, but by the vagaries of the markets and blind faith in financial economics.


The way we understand money, especially the way we overcome its abstract nature is what is at issue. This takes us to the question of capitalism. But capitalism as such is not the issue. The problem is that capitalism arose when capital economy should have done. Capitalism is all about the power that comes with the ownership of capital; it is not about how capital relies for its fruitful use on being placed at the disposal of new impulses, fresh initiatives and above all the wealth of talent and potential that new generations bring.

To say that capitalism provides a way forward is understandable, but historically questionable. It is by no means certain that the power of capital ownership can continue to fructify the global economy. It can and will continue to divide the proceeds of economic activity disproportionately; that is a process that has by no means run its course. But this is not the central issue. Far more important than the question of who should own capital is the challenge to place it in the path of fresh initiative. More than that, of finding ways that new initiatives can

engender their own capital and then, of equal importance, avoid the trap of ownership that awaits them in turn!

If anything is to enter the world that shows the path beyond our current abstract condition, it will be something that enables us to see that capital, far from being something that comes from outside and from others as if possessed by them, is implicit in the deeds of free individuals and arises with greatest efficiency when these deeds are done in service to the needs of others. If we resist anything, it should be the forces that deny this experience. And if we champion anything it should be the forces that enable us to realise it.

— from e2, Sep/Oct 2002

[The above reflects the theme of Seven Steps to Justice, reviewed below, which proposes the ‘Binary Economics’ idea of universal share-ownership.

I find this idea anachronistic: if introduced when first proposed, in the first part of the last century, it might by now have had a dramatic effect for good, but now, when we no longer need or can tolerate continued ‘economic growth’, it conflicts with the aim of sustainability.

In fact, by viewing the economy as ‘two-dimensional’ -- labour vs capital -- leaving out land -- it fails in this respect, while being commendable for its commitment to social justice.

It is a welcome further contribution to the debate on the way forward. — BL]