Friday, March 27, 2009

I can't remember when I wrote it, but it was back in the early days of ThoughtStorms.

The crucial tests will be NOT the total amount of wealth in the US economy, but some measure of it's distribution and use. A small minority of super-wealthy owners of businesses which employ workers elsewhere in the world is not the next big thing. In fact, you shouldn't mistake ownership for the next big thing. If people start pointing at ownership as an example of the next growth sector for the US, then they've given up all pretense that this is anything other than a straight fight between capital and labour, and they just hope to sucker you into thinking you're part of the owning class.

I was writing about the tendency of people to say : "don't worry about jobs being lost to technology or off-shoring, we'll be on to the next big thing"

Now I believe that there will be a next-big thing. And the U.S. and Europe will be off to it. Of course I do. But I did think that there was a danger that the capitalist class would try to sell us the idea that "onwership" or trading on the stock market etc. would be the replacement. And I diagnosed this as a capitalist scam.

I was reminded of this, reading today's hot story : Simon Johnson's The Quiet Coup. Here's the interesting observation.

[The] American financial industry gained political power by amassing a kind of cultural capital — a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

1 comment:

John Powers said...

Josh Marshall at TPM observed:

"...Jim Rohr, chairman and chief executive of Pittsburgh's PNC Financial Services Group, has just noted that the financial services industry is the 'biggest industry we have in the United States.' I take it that some of that metric may be tied to just how one defines and delimits what constitutes an 'industry'. But this points up a basic structural problem. The point of the financial services 'industry' is to efficiently allocate capital throughout the economy or to put it a bit more cheekily to actual 'industries'

I like his more "cheeky" way of putting it.

I'm happy to see that Johnson's piece is getting so much attention because more people are looking at the issue of the cultural capital, and perhaps many conclude it's illegitimate. But then, yikes, the coup represents facts on the ground.