What’s 10,000 more or less among job creators?
Ever since about 1750 the English world first (beginning in northern England) and soon the rest of the world actively supported the creation of social systems which depended on the accumulation and servicing of capital. This system in turn brought about the organization of economic life into highly specialized tasks, preferably simple and repetitive enough so that wage laborers could become nothing but interchangeable inputs into the system. The first step (dehumanizing labor which through its essential specialization greatly increased the available supply of potential laborers and thus reduced their cost, i.e., the wages) was outlined in Adam Smith’s The Wealth of Nations, the first edition of which appeared in the same year to which we Americans trace our “freedom,” 1776.
The first step was so successful that it allowed the grafting on of increasingly more sophisticated mechanisms. Particularly innovative were the means by which capital may be accumulated. Of course the accumulation of capital is an activity entirely separate, and in most ways exactly opposite, to laboring for wages. The system, for one thing, depends on the accumulation of capital by the depression of wages. (In fact the depression of wages is one way that capital is accumulated.)
With larger and larger accumulations of capital it was possible to engage more and more defenders of the entire system, whether they be lawyers, legislators, army commanders, religious leaders, union busters, Pinkerton detectives, and so forth. By the 19th century governments, fueled by some of the excess capital accumulated by the accumulators, Europe had begun not only to promote this system, but to actively wipe out any system that did not conform to it. And so every other form of economic organization from the Potlatch in the Pacific Northwest, to hunters and gatherers in the Sahel, to barter systems in southern Asia, to state regulated industries and trade in China and Japan were opposed, forcible if necessary, and their practitioners either assimilated or pushed onto reservations or tracts of undesirable land. By the 1970s even a democratically elected moderate social welfare program in Chile had to be taken down by U.S. supported assassination and sanctioned torture so that the “miracle” of modern capitalism could be foisted on that land. Of course the entire twentieth century was an epic struggle by Western capitalism against two giant modern systems, similarly industrialized and similarly rigged against certain kinds of laborers—fascism and communism. That capitalism “prevailed” does not mean that it did not pick up some of the techniques of the other systems for disciplining wayward citizens.
Modern high finance capitalism, which admits of no regulation of the accumulation of capital, is not only the dominant social organization of our time, it has become our civic faith. The perfection of its techniques has made it so pervasive that we can conceive of no other way of life. It has enshrined itself to such an extent that volunteerism, social responsibility, good citizenship, sharing society’s burdens are quaint relics of times gone by, as regularly practiced today as is other relics, like the feudal method of land transfer, feoffment with livery of seisin. And our leaders constantly extol the important of the collectors of capital and their beneficence to the rest of us. They are hailed as the creators of “jobs,” so that we may know on whom our precarious existence depends. The financial system is treated much like the Aztec priests treated the sun—something that must be propitiated in order that it may continue to provide its essential services to us. The Aztec priests sacrificed people to the sun god. We do similar things for the financial system god.
The incessant deification of capital has cost plenty over the past couple decades. Tax rates have been slashed on capital at the expense of labor. Capital has pitted state against state to reduce its share of the states’ operational cost. Jobs have been exported. Politicians have been supported who cut spending on education, health care, the environment, arts and other quality-of-life programs. Policies have been pursued that raise unemployment rate (in the guise of controlling inflation and protecting the dollar) so that capital can have an oversupply of the labor input.
Where does the benefit of all this go? You don’t need the statistics of Piketty to know the answer to that. You need only look around. You can see the wealth of this country, indeed the world, being sucked up to the pockets of the elite, closest servants of capital. Of course they have to spread it around to capital’s gate-keepers: politicians, lobbyists, lawyers, advertisers, “pundits,” devoted think tanks and special universities. But all of this is chump change. This spreading of small sums to the hanges-on is done so that the ability to accumulate capital is unimpeded by anything, no matter how common sense.
Of course the fact that modern high finance capitalism “prevailed” to such an extent is not a testament to its perfection. Giant sauropods and their slightly smaller predators once “prevailed” and for a longer time than capitalism is likely to. But even they succumbed to their overspecialization or some event they were not designed to endure. Likewise capitalism in its modern guise from time to time lurches from disaster to disaster some worse than others. And who pays? Well, one thing that the system has perfected is the absolute immunity of those high priests of this religion, the ones who decide what sacrifices others have to make. This is so even when their own actions amounted to systematic fraud and willful disregard to the dangers their reckless profit-maximizing presented. Take one example: American International Group, Inc. (AIG) underwrote policies against the risk of default in certain mortgage pools. The amount it underwrote was many more times than the assets of the corporation. And yet when the defaults occurred rendering the company insolvent, the U.S. government stepped in, permitted the company to continue to employ the very people in the financial product division which caused the insolvency, but also permitted the malefactors to receive massive bonuses on the theory that overcompensating them was necessary because only they could understand the mess they had created. Take another example: Goldman Sachs Group, Inc. promoted to its customers positions in residential mortgage securities, while at the same time for its own account it took the opposite position. This sort of double-dealing is ordinarily considered to be securities fraud. Did anyone go to prison? Of course not. Too big to jail. There is even one party in this country that opposes restoring the financial regulations removed by the Clinton and George W. Bush administrations because they believe the “market” imposes sufficient discipline. In light of the events of 2008, this position is as insane as advocating permitting felons and the mentally ill to purchase military hardware at gun shows or on the internet without any background checks or paperwork of any kind. (Wait that’s a bad analogy. The same party supports both things.)
So how does this market discipline work? The BBC today reports on a study which concluded that the Great Recession engineered by the High Priests of High Finance beginning in 2008 resulted in approximately 10,000 suicides. The combination of unemployment, repossessions and debt was the catalyst for a 6.5% increase in the suicide rate in 2009 over that in 2007. The increase lasted through 2011. Somehow the discipline of the financial market seems to have fallen on those who neither committed the crimes nor had any ability to repair the damage. So how does the market punish the people who were actually responsible to ensure that the dreaded condition of “moral hazard” not descend on Wall Street and tempt the High Priests to again take unconscionable risks?
Well, it’s simple. With 10,000 people out of the labor market. The cost of these inputs will slight increase. That should show our economic oligarchs to be more careful the next time.