We are long overdue for a national town hall meeting on Goldman Sachs — with or without Goldman executives. Wealthy Wall Street elites take for granted a dragon-like right to trample the vast working public. Their right claim is based upon the notion that capitalism gives the massively monied the privilege of shaping financial laws. Injustice to these people means not getting their own way at the expense of nonaligned others. A national town hall is needed to challenge, overcome and replace these distortions of capitalism.
While it is to a nation’s advantage for capital management to be in competent hands, capital management and the highly disproportionate acquisition of capital need not be synonymous. The critical question is whether the financial rewards and opportunities acquired by those who manage money are exploitative and unjust. Should Wall Street’s money managers be awarded massive premiums for their work? Does the power to exploit the laws somehow generate a privileged deservedness for wealth?
Representative democracy is endangered when power flows to persons with compromised character. Since money is power, is it justifiable to allow massive wealth to be acquired by individuals who take advantage of market weaknesses or regulatory vulnerabilities? It makes no sense to battle for “free markets” or for “regulatory reform” when both approaches in their current forms create dysfunctional wealth gain for elites. What is needed is a new approach to capitalism that resets the playing field and rewards laudable contribution instead of devious power.
A wisely constructed financial architecture ought to build wealth for society’s most meritorious citizens, not its most rapacious members. Likewise, constructive reform should narrow the wealth gap by reducing the structural bias that favors the speculatively advantaged. Our U.S. Constitution was designed to facilitate honorable liberty and justice for all. Unfortunately, the exploitative liberty of a few has become the survival nightmare of the many. Any ideology that puts an abstract freedom (i.e., like the freedom to gain limitless wealth through speculation) ahead of real world justice is a corrupt ideology and unworthy of a humanitarian age.
Is it any wonder that Western Civilization’s premier religious reformer said, ‘If any man loves the world, the love of the Father is not in him.’ Individuals who love an exploitative financial architecture don’t adore the Universal Sovereign and certainly don’t express his love. Their god is the idolatrous god called Mammon.
Politics eventually decides where to draw the lines between the extremes of anarchy and oppressively regimented order. While politics is empowered and constrained by many considerations, culture plays a major role in determining what is politically feasible. When culture degenerates — especially when it becomes hedonistic, irrational and self-indulgent — politics fails to generate good solutions for institutional design. This point was understood long ago regarding free markets, since market rules and norms reflect cultural assumptions and defects.
Representative democracy will not adequately address society’s wealth questions while the majority of voters hold to cultural delusions. It is short-sighted to argue that free markets are “good” or “bad,” since markets reflect underlying cultural suppositions — the aggregation of people’s values, wisdom or foolhardiness. The wiser people are, the greater the warrant for “semi-free” markets. The less capable people are in knowing how to sustain economic justice, the greater the likelihood of invasive laws. Regulation is no cure for cultural defects, for regulation supplies levers for government subsidized exploitation. Thus, with our current cultural defects, regulatory overhaul will cure some problems at the cost of generating new ones, producing impenetrable subsidies for some businesses at the expense of the general good. Without the creative destruction of market checks and balances, government programs will become unfair, inefficient and even oppressive.
Markets are like football games: The game works best on a level playing field with constructive ground rules and the superintendence of a few honest refs who allow the market of muscle and skill to primarily determine the outcome. Referees can smother the game as can biased calls and an excess of rules. But try to play the game without rules and boundaries — unproductive anarchy follows. Likewise, there is no such thing as a game of commerce without rules.
Wise rules create some predictability and operational uniformity, thus facilitating efficiencies, refinements and sustainable technological advances. Foolish rules and excessive regulations undercut the ability of markets to drive out inefficiencies, discipline competitors, and require best practices for profitability or business survival. Implicit in all of this is the assumption that market participants understand and value their own best interests, their community obligations, and the long-term well-being of human civilization and the planet.
Any rational, healthy culture would not respond to an overspending problem by ramping up the persistence of overspending. A rational culture cuts wasteful entitlements, improves business efficiencies, enhances productivity, creates disincentives for consumptive sectors, and invests in replacing unsustainable infrastructure with sustainable technology. This kind of rationality leads to natural wage increases for workers, gradually building demand that can endure without debt subsidy.
If wealth is to be distributed fairly and justly in a market economy, honor, wisdom and self-restraint must permeate the culture. The market is the aggregation of individual choices, weighted by buying power and influence. In a sound culture people are good stewards of their time, abilities and resources. Likewise, they are circumspect in their consumption and investment. The scrupled mind does not wish to support greedy practices or societal hazards. Hence, the healthy market’s ambient check upon malfeasance and foolishness is powerful. Granted, government holds the essential responsibility of creating constructive ground rules — the core idea in constitutionalism. But nothing matches the productive efficiency of a culturally sound market.
Prudent reform would implement checks on federal deficits, governmental entitlement spending, health care expenditures and military endeavors. One approach is to set limits as percentages of GDP, sustaining the place of private enterprise in the total economy. The continuous growth of government hazards the voting objectivity of every part of the electorate that depends upon government enterprise for its business opportunities or revenue stream. Another necessary reform is the constitutionally based reorientation of the money supply to prevent central bankers from putting their own fraternity first. Importantly, the fruits of speculation should be responsibly taxed and directed toward the benefit of the public domain. There can be no truly just and sustainable economic and political future until money is made to serve merit rather than greed.