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Capitalist Suicide Cult
We -- card-carrying members of a suicide cult called "capitalism" -- tell ourselves a fantastical story about the two decades between the late-1980s and the global financial crisis.
That story exalts deregulation, profit maximization and the blind pursuit of material wealth, creature comforts and individual self interest at the expense of everything else, including and especially the well-being of society.
We're paying the ultimate price for that pathological avarice now. Society's dying. The
Thank you much for your always clear eyed, candid commentary.
And thank you for sharing your work with those of us who are nearer to worthless.
Not being a financial wiz I subscribe for the content like this. It’s very much appreciated!
Yeah, by design (and by necessity) the editorial spotlight shifts depending on what’s going on. So, months like this one where you get a market tremor and then some big aftershocks, the majority of the coverage has to go to that. But over the course of any given year, it usually balances out and readers end up getting hundreds of articles on markets, hundreds on macro, hundreds on geopolitics and at least several dozen philosophical/theory-type pieces in-between. If you stick around for a while you’ll always get plenty of whatever it is that you like, whoever you happen to be.
And they’re all apprecciated and worth every penny!
!
Forty years or so ago, I was waiting to board a delayed flight from Bahrain to Kuwait, I fell into a very nice conversation with the regional rep of an American heavy equipment manufacturer. (I was a junior banker.) When our flight was called, I got up with the folks traveling in first class and he stayed put. His parting comment was along the lines that there’s something wrong with the system when the guys who finance the sale get treated better than the people who make the product. He was spot on.
The above is an argument for balance as much as it is about the evils of what enriches us. I posit that once a crisis has abated we should become socialists in the vein of designing a more sustainable economy. Regulated capitalism has brought us riches beyond measure why give up now and return to pre 1930’s unregulated capitalism?
I can point today at California and New York which by many measures is more economically powerful than most countries as examples of highly regulated economies that have thrived. The task of regulating capitalism is a ongoing effort that must be attended to by an all of society approach. We deserve that businesses are not profiting from the decimation of our quality of life or rapaciously plundering the most vulnerable. We also deserve to have a benign government that holds all life dear and endeavors to enhance the quality of life for all citizens, in short a truly sustainable government. To have less of a government is to suffer needlessly, and risks an unsustainable government. We also deserve an environment where we can become wealthy if we want and define wealthy on our own terms if we want.
However you are correct in comparison that many people are committing suicide on their own well being by engaging in a cult of Capitalism. Happiness does not have to be pursued, it is all around us for the taking. Especially so in such a rich country as ourselves. However there are those who wish us to pray at the alter of suffering through pursuing a false prophet. In the vein of your article the false prophet is measured by bank accounts not by what we give back. In that measure your writings have the potential give back much more than the effort you evidently put into it, for you are one life affecting the lives of many. I may never give as much back or I might exceed your giving back, but that measure does not make the man. That a person tries to give back is truly the mark of a well lived life.
Deregulation and free trade can be good for all, but if and only if a society has a robust safety net and a budget for social goods to spread around the gains. Absent that, you have social darwinism, and a winner take all dystopia. Part of the social goods budget needs to provide development funds for struggling regions/cities/rural areas and historicallyvdisadvantaged groups.
Regulation was needed in many cases over ther years because of our capitalist structure. I always cite the memory of travelling up into nothern Maine when I was a kid. When we drove through the towns with one or more paper mills the stench of something like acetic acid along with yellow waters and white foam still linger in my memory bank.
But, there was NO WAY that any mill owner back then could make an individual effort to raise costs introducing less polluting production equipment. That would be commericail and career suicide. It took EVIL regulation to “coax” paper producers to switch over in mass. .
Derek. Interesting take. As you point out, there is little profit in being good so most people and most companies don’t engage in such suicidal activities like using their resources for good. Milton Friedman wrote a seminal article postulating that the business of business is making money, not using any of it for good works. I used to be an avid fan of the NPR program, “Car Talk.” One day a caller suggested that the two engineer brothers were irresponsible because they never recommended high mileage, environmentally responsible cars. Without hesitation one of the brothers said he wanted to see everyone going around in irresponsible gas guzzlers so we would use up our gas quicker and have to go in a better direction. So we might as well commit suicide the way we are so once again we can return to being the “huddled masses” we were for three hundred years or so. BTW, a quarter of all the solid waste in landfills is some form of paper and once it’s buried it doesn’t degrade. Paper making itself is the third largest polluter on earth; and that is after they tried to “clean up.”
I suggest above, but do not explicitly state, that deregulation is really a way to impoverish ourselves rather than enrich ourselves. Just looking at the post OSHA and EPA economy provides modest indication that indeed almost counter-intuitively regulation promotes economic expansion rather than depressing it.
I worked my career in highly hazardous regulated industries including: combustion, steam, power, mining, oil, gas, chemicals and nuclear weapons. This broad based career gave me a unique perspective about safety and environmental stewardship as applied in a broad spectrum of situations. I have not studied nor have seen studies as to the economic impact of regulations on society as a whole. However I do suspect the enhancement of career duration greatly impacts our ability to grow as an economy. It is in engineer’s later years that the most innovative work comes to fore according to patent application records which favor patent production of older engineers over younger engineers. I also believe not polluting young minds thereby promoting enhanced capability throughout life rather than the diminished capability easily documented to be caused by various pollutants most notably lead and mercury creates better productivity of the working class. The simplistic calculations used by EPA and OSHA in workplace safety that is to tally up medical costs ignores these productivity enhancers, and is therefore analytically conservative in the true sense of the word. Even capital markets are affected positively by long life, show me a great investor and I will likely be able to show you some grey hairs. That we can achieve these society economic enhancers on the back of preventing industrial explosions, hazardous exposures and other injuries is simply a good deal, if not the very reason the economy has done so well.
Why is it that someone who calls themselves conservative would throw these observations out the window when crafting policy? The cult of de-regulation rejects any analysis which attempts to quantify even a part of the effects of industrial pollution, that to me is not conservative. It is a misuse of the word conservative.
Since the 1930’s our economy has expanded amazingly and created the world’s richest economy. Prior to the 1920’s we enjoyed unregulated capitalism and an also ran economy. It is possible to attribute wealth other than regulations and social policy to the economic expansion but to me the coincidence is more than curious especially when one considered productivity. It is easily possible to attribute at least a portion of this expansion to our social and regulatory policy. I am not aware of any serious study of the impact of regulations on the economy of our country, but I suspect it overwhelms most other effects.
I am only partly addressing regulations above and acknowledge that a comment box response is less than scratching the surface. To properly address regulatory and social policy impacts to our economy would probably take data filling multiple tomes like the tome entitled Capital written by Piketty.
If you are a conservative type of thinker why gamble our economy by following a few philosophical statements to roll us back to a regime when the economy was not as strong rather than demanding a good data analysis to guide the way?
The cult of conservatism has evolved into a cult of not doing serious analysis of any type and gambling on our future based on a few short sentences. That is not is conservative approach, it is a radical approach to managing our government and economy. When will we start calling conservatives radicals like their policy proposals are?
Wow.
wow, indeed.
Harris-Walz campaign has started this conceptual pivot (calling Republican economic policy radical) and it is presently resonating in the public zeitgeist. Time will tell if it is merely a singular campaign dynamic or if it grains greater traction throughout society and other institutionalized perspectives.
There is no Republican policy anymore, the RNC was taken over by Trump family and is now in the service of the family. This is a concentration of power that is not likely to abate once the Trump family is discarded in the bin. To have one functional political party is not long term sustainable. I therefore would prefer to see a variety of parties.
Frankly due to changes in recent years republican policy bears little resemblance to that when i was first learning about politics. It seems to me the rank and file more resembles Klan partisanship than any other consistent policy. It seems to me most are unaware of what they pine for represents.
Today the only consistent think about Republican policies seems to be that laws are for sale to the highest bidder. I would prefer to be disabused of this observation.
Is this a story about capitalism though or the Fed? Because the QE Era is just as much about regulating only good to great outcomes for assets (and their owners) which really isn’t what capitalism is about.
It is the expected outcome. When one works past mere concept of capitalism and applies the concept to the thought experiment of expected outcomes from the practical application of Supply-side (Robber Baron) economics we would expect a mechanism to preserve wealth/assets to manifest.
We’re (most of us, anyway) not capitalists even if we think we are, to quote a classic Heisenberg piece. Does that exonerate us, or are we just kool-aid drinkers?
H, can you re-post that essay?
@Derek, I agree WOW!
April Fools! No, wait it is just August.
I really appreciate your commentary on subjects such as this. To me everything is related and it’s all broken; capitalism, politics, governments, society in general. We have problems with homelessness, housing costs, drug addiction, education, the list goes on and on. The changes over the past 20 years are unbelievable and accelerating.
H-Man, 18T of household debt in 2024 and 12T in 2014. Doesn’t that tell the story?
Preach! I would have said Preach brother, but that would not have been appropriate. Thank you for all that you do, although your anonymity is palpable, being in this industry I so despise!
Since CEO compensation became linked to underlying stock prices, capitalism has been on life support. There are simply no remaining incentives to manage a business for the greater societal good. I like Kamala’s idea to change the way stock options are taxed…and that, along with dusting off existing anti-trust legislation, may make a difference.
First of all, this is mainly an American problem. Upgrading it to a Western Civilization problem is very American.
Second, being upset about inequality is very propagandistic. Inequality is not the problem. Being poor is. There is nothing wrong with the rich getting richer faster, than the poor getting richer, as long as the poor get richer.
I do not want to argue that this is the case (probably is: the poor have a much better life now than any number of years ago). I want to argue that noone should be whining about how much Musk’s Tesla shares are worth, as it is competely irrelevant for the poor. Unless you put it under their nose every day and keep blaming the rich for their poorness. Very much like Trump is blaming immigrants.
Third, as said BofA puts it: of course Wall Street exploded compared to the American GDP, as much more of its profit comes from abroad.
Fourth, finding life unfullfilling is definitely not a metric on its own. Compare it to history. And regress it by how much “whining about life being unfullfilling” has become popular. A merit even.
Your comments are gibberish.
I think not.
How is the fact that Tesla shareprice went from 10 to 200 (the main source of growing inequality) hurting people at the bottom?
Tesla’s stock price is the main source of inequality in the world? Zsolt, I don’t think you know what you’re talking about to be completely honest, I think the discussion I’m trying to have here is a lot bigger than the one you’re trying to have and I think the situation’s complicated by a slight language barrier. As such, I’m not going to respond to you any further. It strikes me that there might be an intellectual inequality here. But, as you suggest, that’s fine. There’s nothing wrong with me being a lot smarter than you as long as you’re getting smarter at the margins.
Fantastic read. Thank you.