One thing that the populist right and the woke left agree on is that the untrammeled “free market” is an untamed beast that makes things worse.
At American Greatness Edward Ring complains about “financialization,” quoting sociologist Greta Krippner:
A pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production.
He’s concerned about the opportunities for manipulation in the government-mandated “carbon trading” economy. Hey, if you are going to have a lot of debt you are going to need collateral, and the financial wizards have plenty of good ideas — until they turn out to be bad ideas. He brings up the example of the mortgage industry
when creative traders bought mortgage loans, bundled them up, and sold equity that was secured by these collections of mortgage debt. Amazing contrivances followed: credit default swaps, collateralized debt obligations, and, as the scheme grew beyond any bounds of prudence, subprime mortgages.
Well yes, only I’d say the problem there was government encouraging stupidity and under-collateralization. In the case of the trading of carbon credits, the problem is not the financialization but the stupidity of the climate change crisis. In the case of mortgages, the problem was the government’s interest in pushing Fanny/Freddie subprime mortgages on the pension industry, which wasn’t supposed to buy low-rated debt.
And anyway, the whole question of debt is simple: don’t allow borrowers to borrow more than about 50 percent of the value of a property!
Then there is far right Vox Day linking to an IMF piece by economics professor Angus Deaton who admits
Like most of my age cohort, I long regarded unions as a nuisance that interfered with economic (and often personal) efficiency and welcomed their slow demise.
I am much more skeptical of the benefits of free trade to American workers…
I used to subscribe to the near consensus among economists that immigration to the US was a good thing, with great benefits to the migrants and little or no cost to domestic low-skilled workers.
Now, he’s not so sure.
Fortunately, I am so wise that I can advise all these folks what to do. I deal with the whole thing at a 30,000 ft level in my Three Worlds concept.
There is Life World, the Lebenswelt of informal social interaction, face-to-face between humans, and powered partly by rational consciousness, partly Tradition! and partly DNA and unconscious archetypes.
There is Market World, the half-human half-abstract world of making and buying and selling and borrowing and lending and investing that humans have learned in the city.
Finally, there is War World, the world of politics, of government, of battles, of institutionalized religion, of administration, of regulation, of censorship, of socialism.
We humans need to balance these three worlds, every day, in order to avoid crashing and burning.
So, the War World of government should cool its jets on the debt and deficit front and the encouragement of debt among its people. Debt is cool for governments, because they can always print more money. But not for ordinary people, who get blindsided by changes in government credit policy. But when there is a crisis, then government can step in and smooth the transition.
Market World has brought unimaginable prosperity to the world, but it is ruthless in putting buggy-whip makers out of business. Humans live in Life World, and the point of Life World is to help us against the elements, and defend us from the next Conan the Barbarian.
We wise ones can help talk about the institutions that can help us rather than hurt us. Let’s review Angus Deaton’s issues.
Unions: yes, but. Unions can help the ordinary worker, but also throw sand in the gears by rigidifying big corporations so that they die rather than adapt. And they can corrupt politicians.
Free trade: yes, but. Ultimately all trade must be free, and businessmen want to buy low and sell high. Cheap labor in China and Vietnam, Yay! But we also need to soften the swings in manufacturing. China and India used to be off the map, because socialism / communism. Today they are the places to go for cheap labor. OK, but gently. And no corrupt polititicans need apply
Immigration: yes but. Not if immigration amounts to invasion. And no grants to immigration promoting NGOs.
The problem is, of course, that once you task the government with protecting workers from bosses, or enacting trade barriers to protect jobs, and restricting immigration, then the politics of helping your friends and dishing your enemies comes in, and that ain’t good. And don’t forget 10 percent for the Big Guy.
We could solve the problem if we stopped beating each other to a pulp on Social Media and think about the necessity of balancing the Three Worlds — War World, Market World; and Life World — to make a better planet.