Today, the world faces multiple interacting crises, most of which now approach catastrophic proportions. With every new research report on climate disruption, species extinction, ecological destruction, or various population, economic, or political disturbances, it becomes clear that many are at or approaching a tipping point toward chaos.
Political authorities remain unable even to formulate, no less take effective countermeasures. Idealistic if inadequate targets set for pleasant outcomes become meaningless gestures. Meanwhile, kleptocratic oligarchy grows stronger.
Economic pundits – who mostly follow the lead of the financial elites that profit from driving the endless-growth economy toward the brink of collapse – offer feverish pitches to “stay the course.” The super-rich force their lackeys in Congress to pass extreme tax cuts for themselves, which benefit the millionaire/billionaire senators too. The national debt soars as a result and it appears that “nothing can be done” to stave off national, no less global disaster.
But wait, there’s more, so much more. As the plutocrats drive the nation toward bankruptcy, chaos, and collapse, giant corporations remain awash in both cash, much held overseas, and cheap debt as they exploit low-interest rates to finance their operations and excessive executive pay.
At the same time, “Recent research suggests that “60%–90% of daily equity trading is now performed by algorithmic trading, up from 25% in 2004.” These trades skim profits from slight moves in equity pricing over nanoseconds. They drive market moves more than human trading while making their rich institutional executives even richer. Is that what a stock market is for? Well, yes, if you are a rich institutional trader.
Markets are Not Magic
All markets are social phenomena, the complex sum of many transactions. They emerge and develop in the interaction of humans who seek to gain from their trading. Well, that’s fine and dandy. Modern developments, however, make it clear that no “invisible hand” guides trading algorithms to produce the best of all possible financial worlds for all, or even for many.
The promoters of free markets have always insisted that they are necessary to achieve the best economic outcome for all in society. How has that been working out for you? Markets are, in fact, social creations, designed to serve the interests of their members, not the rest of us. Today, oligarchy is replacing democracy as wealth concentrates and drives politics.
Now, here is where we get in trouble with the devotees of Ayn Rand who run the country as well as the markets. Rand’s pseudo-philosophy of “objectivism” assumes that government has no legitimate role in serving the general welfare of the citizenry of the nation states. Well, I beg to differ. Members of the financial elite use the “market forces” they control to line their own pockets at our expense. It’s the biggest scam ever.
Governing in the Public Interest
A major role of government should be precisely to protect the public from the excesses of capital markets and the speculative extractive projects it finances around the world. The federal government is supposed to regulate elements of the economy as needed in the public interest. Absent such supervision, the consequences of the “creative destruction” of the most powerful institutions of the industrial era have now reached catastrophic proportion. The people must now act in our own defense.
Consider the fact that if Congress were to impose a transaction tax of just a few pennies on each trade on the financial markets, the effect on profits would be negligible. Yet, due to the volume of transactions, a seriously large stream of revenue would flow to the U.S. Treasury. So, yes, we can afford to take definitive action to mitigate climate catastrophe, achieve social, economic, and climate justice, and, well, maybe even survive as a species. That will happen only when the U.S. federal government breaks free of its plutocratic overlords and begins to serve the Public Interest.
Robert MacNeil Christie, Author 