SOCIAL UNREST -INEQUALITY & A BROKEN SOCIAL CONTRACT
Capitalism is Dying 05-12-14 Paul Farrell - MarketWatch
Quiz. One question. Your answer will tell who you are, deep within, your moral conscience. And why America has lost its moral compass, but doesn’t know it’s lost, nor why. And that’s an economy killer.
Yes, just one answer tells all. Ask yourself, who said: “The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our morals.”
No, it’s not who you think. But your answer will reveal why America lost its moral compass. And why capitalism is dying.
Was it some extreme leftist? Karl Marx? Pope Francis? Obama? Maybe a hard-right conservative criticizing progressives: Ayn Rand? Paul Ryan? Billionaire Koch Bros.? An academic: Thomas Piketty, Jared Diamond. Economist Joseph Stiglitz? Nouriel Roubini? Maybe an entertainer: Bono, Springsteen, Jay-Z?
But before you continue, take a look deep into your soul. You are the cause, the problem, the missing piece.
Seriously, consider this possibility: If you don’t know why America’s moral conscience is declining, if you disagree, if you’re just guessing ... then from a purely, psychological neuroscience, behavioral economics perspective, your answer is irrational, a blind gut reaction coming from deep inside, anchored in old ideas, in preconceived biases, political ideologies, religious beliefs and mental constructs that you did not even chose but rather were unconsciously planted on your brain by outside forces, without your even being aware it was happening, or making any conscious rational decision.
So ask again: Who said that America’s obsession with admiring and worshiping the rich and the powerful, while dismissing the poor is the reason for our moral corruption?
It wasn’t Pope Francis. But close. The pope actually put it like this: “The worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose ... While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few.”
We’re now obsessed with money, power
Outsiders often see what we refuse to see, what we deny. Francis looked into our collective soul, saw how capitalism is destroying our moral compass, why America is dying. He saw “a new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules ... has a thirst for power and possessions that knows no limits ... tends to devour everything which stands in the way of increased profits ... whatever is fragile, like the environment, is defenseless before the interests of a deified market.”
No, the pope isn’t the answer to your quiz question, won’t reveal the secret reason America lost its moral compass, a loss killing the great American Dream ... from within.
Another possible guess: Thomas Piketty? Does the answer come from his new book, “Capital in the Twentieth-First Century?” Actually is an obvious answer. Why? In today’s accelerated news cycle, Americans are being overwhelmed by the left-right media wars for reader eyeballs. Lately we’ve been overdosed with Piketty-mania. He’s the world’s newest, biggest celeb rock-star economist to come along since Karl Marx and Adam Smith. And a bit wonky.
Yes, Piketty made a neo-Marxist attack on capitalism, an attack that has conservatives everywhere in total panic mode. So here’s everything you need to know about Piketty’s attack on capitalism and its inherent tendency to widen the world’s inequality gap:
“When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first,” said Piketty, “capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.”
Answer: What’s killing our American morals, the American Dream?
So go back to the quiz question: If neither Piketty nor Pope Francis, nor someone on the extreme left or hard-right said it ... then who said: “The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”
Answer: Adam Smith, the father, creator, patron saint of American capitalism. Yes, Adam Smith, in his “The Theory of Moral Sentiments.” (Yes folks, if you looked closely you noticed we really did substitute the word “morals” for “moral sentiments” in our original Adam Smith quote above. That was necessary. It might have made it a bit too easy, more obvious. But maybe not; chances are most investors haven’t read either of Adam Smith’s classic let alone Piketty’s.)
Moreover, conservatives hate having their patriot saint turn on them. While progressives lack the guts to attack.
But the answer is Adam Smith. He predicted the self-destruction coming, the worship of materialism, the neglect of the poor. Yes, over two centuries ago Adam Smith, the patriot saint of capitalism, warned Americans capitalists would eventually lose their moral compass, sabotage their American Dream and self-destruct the economy.
Even Roubini agrees, capitalism has a built-in self-destruct time bomb
If you did make the mistake of guessing it was Piketty rather than Marx, Pope Francis or some progressive, that’s understandable. True, it’s an obvious giveaway that you’re a conservative and didn’t have time to read all 696 pages of Piketty’s “Capital.” And in the process were distracted by the intense, overwhelming Piketty media-mania, instead just took a shortcut, reading all the shorter reviews by trusted right-wing bloggers, news anchors and editorialists.
Anyway, thanks to intense hard-right attacks on Piketty, Marx is definitely back in mainstream economics again. Probably for a long time. Even rock-star economist Nouriel Roubini is on record admitting that “Karl Marx had it right. At some point, capitalism can destroy itself. You cannot keep on shifting income from labor to capital without having an excess capacity and a lack of aggregate demand. That’s what has happened. We thought that markets worked. They’re not working. The individual can be rational. The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else’s income and consumption. That’s why it’s a self-destructive process.” Why capitalism is killing America.
Unfortunately, this awareness that Adam Smith’s ideal of capitalism is being ignored by today’s conservatives is proof why Piketty’s forecast for this century is certain to come true.
In short, the trend is guaranteed to get worse, not better. America, democracy, capitalism and the global economy are heading for disastrous collapse. An elite group of just 85 of the wealthiest billionaires already have more wealth than the 3.5 billion poorest half of the world population.
And since Piketty’s trend forecast is accelerating, those 85 billionaires will get richer. Also, remember the recent Credit Suisse Global Wealth Report: Its prediction that by 2100 the world will have 11 trillionaire families. Yes folks, American capitalism has lost its moral compass ... and is dying.