July 9, 2009
Point of view: Should capitalism be saved?
By Florence Gold
“From Zurich and Washington to Frankfurt, London, and Tokyo, all the kings’ horses and all the kings’ men, bankers, economists, policy analysts, and government leaders are trying to put capitalism back together again.” So wrote Dr. John Sonbonmatsu, a professor of philosophy, at Worcester Polytechnic Institute in Massachusetts. And, he continued, “It would be difficult to exaggerate either the profundity of the contemporary crisis or the importance of developing a viable alternative to the existing order.”
Few critics of the current financial debacle are as honest, as frank or as courageous in confronting the shifting foundations of a world which seems to be in the process of dissolution. What is really needed? What should we be doing? Is minor, superficial tinkering, simply pretending that a little more money thrown to the banks, a little more supervision by the Feds will put us together again? Or is it necessary to admit that the hard work of real, profound change is necessary?
The end of capitalism has been predicted many times in the past century, perhaps too many times, and admittedly solutions, when tried, have been costly, varied and unsuccessful. What are our choices? The contemporary crisis is certainly one of major significance. Let us be honest, we are experiencing a depression not a recession. I refuse to engage the sophistry of calling it just another recession, one that given time, we can easily overcome.
Last September, the U.S. treasury injected “half a trillion dollars into the monetary system in its attempt to lift us out of the deep, financial well into which we had sunk. Ben Bernanke, the current chairman of the Federal reserve, informed members of Congress that our financial system had come close to collapse. Prompt action by the treasury and the Fed had prevented “disaster and full scale panic.”
Shortly thereafter, the French president, Nicholas Sarkozy, told reporters that the world economy was “on the edge of an abyss.” At the same time, governments of other industrialized, capitalist nations were also engaged in a struggle to keep financial and banking systems afloat. Germany has just put up $679 billion to stabilize its own government while Great Britain has spent about 1/5 of its national GDP. The U.S. at the same time had assumed obligations for or spent $7.8 trillion to attempt to save itself, (about half of this country’s annual GDP).
President Obama warned of catastrophe if Congress failed to approve his $700 billion economic package. And Timothy Geithner, the Secretary of the Treasury, announced his plan to commit the U.S. to an additional $2.1 trillion to stabilize our own ailing system. Until spring 2009, leading industrialized states in Europe, North America, and Asia have either spent or committed themselves to amounts totaling over $10 trillion.
Contrast this amount with the entire Marshall Plan expenditure to rebuild Europe after World War II. According to the United Nations, $195 billion could have eradicated most poverty-related deaths in the third world, including deaths from malnutrition, malaria and AIDS. We are speaking about a current sum which is 50 times greater than would have been required to save tens of millions from terrible suffering and premature loss of life. And it is important to remember that the ten trillion dollars which we are investing are being thrown to the world’s richest banks, private financial institutions and investors, rather than securing the economies and the infrastructure of the third world.
In an effort to research and explore the global wave of financial destruction to our battered economies and the disruption of human life because of loss of jobs, homes, health, and standards of living as well as the evidence of crushing emotional despair, I came across a periodical whose title “Tikkun” means “to mend, repair, and transform the world.” Its courage and integrity are remarkable, its ability to expose the tragedy of a world which may be on the point of collapse, indisputable. It questions our values of greed and our efforts to achieve huge profits above all else and asks not only whether or not we can repair our world, but whether it merits salvation without major change.
It asks openly and simply, “should capitalism be saved?” Do we put our shoulders to the proverbial wheel and attempt to resuscitate a withering social order or do we, as individuals, as nations, as a world, gather whatever strength and passion we can muster, admit that we need a total turn-around and embark on a voyage of discovery?
It has been said that Wall Street is our most powerful and most selfish lobby. We are suffering a shattering, financial earthquake and yet, despite the daily news of increasing unemployment, poverty and despair, there are signs that Wall Street is returning to its old habits again. Goldman Sachs is handing out bonuses larger than the lifetime income of small towns in the middle of America. Greed is once more the order of the day.
The old order is again demonstrating its careless avariciousness and strength. It expects to roll over any signs of protest.
Falling wages and hence falling incomes are signs of a sick economy and the problems of excessive debt become more forceful, more frightening, more difficult to solve.
We must gather our strength to say that change, a word used too freely of late, is not merely a word to be used on campaign posters, but is vigorous and demonstrable. And that we the people can create transformations, can create new worlds. As I stated earlier in this essay a viable democracy must become a reality. Otherwise, our children and grandchildren will be battling not only environmental disaster, but political collapse.