I used to think that liberals were a bunch of whining losers who couldn't hack it in the real world. That those business guys in suits on Wall Street deserve what they make. And that they know what they are doing. And that government regulation sucks, and big government sucks. And that total free markets are awesome. And communism sucks. And that capitalism is totally superior because Hey... Invisible Hand!
I grew up being taught that communism is evil, and that it is so beautiful on paper, but misses key elements of human nature that result in it being impossible to implement. That it contained within it the "seeds of its own destruction", if you will permit me the pleasure.
Communism itself may not be evil, but there is some evil lurking there in Marx and Engels terroristic recommendations as to how to subjugate the moneyed classes. And it is based upon a false pretense: that people will naturally work for the common good once they see how beautiful this plan is. The reality is that there is no incentive for a clever manager to build a business, if he is guaranteed the same poor lifestyle as the guy sweeping the street. So it turns out that you have to make that guy build that organization, or else. And that's authoritarianism, which is the handmaiden of communism.
I'm starting to overcome some of my training. Now we're seeing some seeds of destruction in capitalism. These are NOT the seeds to which Marx was referring, at least not completely. He was talking about capitalism building a massive army of disgruntled workers as a by-product of production.
Lately I have wondered if unbridled capitalism doesn't just look good on paper as well. Invisible Hand, a man or woman's pursuit of self-interest will benefit his or her community. That looks good, and it sounds about right. But it breaks down when one realizes that "community" is not well-defined. Unfortunately, it looks like Smith's "community" has unlimited wealth potential, i.e. everybody will make more money, and the money comes from a magic tree that never runs out.
Our community has finite resources. It's possible for a while for all boats to rise. But the meteoric rise of some causes the overall water level to drop. Invisible Hand does not appear to take greed into account at all. We are seeing the results of a few corporate individuals (I mean actual corporations) who have grown beyond the ability of their environment to sustain them. We see this in nature all the time. How many parasitic or viral diseases eventually cause the death of their hosts? A lot of them.
But it's not really the capitalistic system that is totally at fault. The vast, vast majority of entrepreneurs don't build businesses so they can drive Lamborghinis. They build businesses because they love it, and it is what they do. They do it like ants build tunnels, because they're supposed to. The key is that they are building something.
What about the guys that don't make anything? The ones that just "own", like the Michael Douglas character? What they do is about greed. Flying a chopper from Wall Street to the exclusive Hollywood Golf Club in Jersey to squeeze in 18 before it gets dark. That's nuts. What is the value of these people beyond their intrinsic value as human beings? I'm not saying they have none, I'm asking "What is the value amount of these people's offering?"
How do you have a banking industry that is allowed to make as much as they can, but not try to do criminal things? The greedy are also achievers and doers. You can't cap earnings, these doers will not work in a place that will accept a cap on what they are allowed to make. It's the principal of the matter to them. These are the Masters Of The Universe.
I'm starting to think that Banking as the central aspect of an economy is a really, really poorly thought-out idea, if it was thought-out at all.
What do you do with these banks? How do you prevent this in the future? Are you forced to spin off a new entity with half of your total assets every time you reach a certain market capitalization if you are a bank or investment firm?
Capitalism is closer to the Holy Grail of economics than communism, but there are some issues that we need to extrapolate on and solve in order to fix a broken system where the reckless (probably not criminal, if you can believe it) and greedy actions of a few result in damage that affects so many.