©PBeckmann September 2009
Here is a first-hand report from an American reporter, who experienced the European welfare system. Maybe "socialized healthcare" isn't so bad after all. Read more.
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With more of life lived online, spending on things that don't exist seems more normal. Read more.
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Since Adam Smith, economic teachings have promoted the idea that free markets, when left alone, are the best system to distribute limited resources. This refers to goods and labor. How can it then be explained that in the countries with the most economic freedom the inequality of wealth and income is continuously increasing?
The problem is a little mentioned condition for free markets to work: every market participant is supposed to have full and equal access to all necessary information. However, as can easily be shown, this is rarely the case. Take the individual selling his used car. She knows everything that has gone wrong with her car over the years, but has little motivation to share this information with the potential buyer who might pay more for the car than he would have, had he known the car's full history.
To understand the full scope of this issue, apply the used car example to the stock market, where you and me are the innocent buyers facing self-interested investment professionals.
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Adam Smith's famous story of "the butcher, the baker, the candlestick maker" portrays human self interest or greed as beneficial for the advancement of human society. If everyone acts in his or her self interest, we all are better off in the end, he argues. However, Smith also writes that the system of self interest as the main economic motivator should be abandoned in favor of a more cooperative system once society has achieved a reasonable standard of living. Let's remember that Smith developed his theories during the Industrial Revolution.
Smith would have thought twice about promoting his theories had he only known where self interest has lead capitalist societies during the past years culminating in the crash of 2007.
His colleague Karl Marx, born almost a century later, had already a clearer picture about the results of rampant greed and self interest. Read more.* * *
In all the talk about economic growth we seem to have lost sight of the original purpose of the economy: markets and its institutions were invented to serve society and not to be served by society. Thus growth is not an inherent good but needs to be evaluated on a case by case basis. A much more desirable goal of our markets could be to provide for the most happiness of society. Read how Butan replaced the Gross national Product (GNP) with the Gross National Happiness (GNH). Or check out Norway's truly conservative fiscal policy which declares that spending today's surpluses means robbing from our children.
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In the past 50 years, our economic system was designed to create phantom wealth and unfathamable paychecks for a selected few, while the majority of the US. population saw their wages suppressed and at thesame time was tempted to buy stuff they didn't need with money they didn't have taking on debt they couldn't repay.
Presidents from the right ("W") to the middle (Obama) are unable to change these dynamics bowing to the unrelenting pressure of Wall Street. Solely grassroots political movements are able to demand an economic system that begins to serve society (and not vice versa). Here are a few avant-garde thinkers/ poets/ economists with their message for a new economy: