Capitalism: some shortcomings

Some years ago it seemed unthinkable that Greenspan – a long-standing Federal Reserve chairman; a kind of archangel of the global financial system – would ever favour the nationalization of some banks. Who could have predicted then, that the late Milton Friedman (a kind of high-priest of monetarism), Nobel Prize in economics in 76, would be remembered for having recommended a helicopter drop of money as a remedy for crises like that of 2008.

So, after browsing for ages through the Financial Times, WSJ, Bloomberg etc. without any practical purpose in sight, a summary of the shortcomings of the system, as perceived from here, is finally presented:

It is not true that interests of corporations always fulfil interests of the population. For example, take the pharmaceutical industry: its interest is, of course, that there are more patients and not that the population is entirely healthy. Or take the case of the agricultural pesticide industry, which welcomes the risk of more plagues. Or even the military industry, which does not thrive without wars. People don’t need diseases, pests or wars, as those companies do. At the starting point, therefore, the interests of people diverge from the interests of some corporations. Those companies can hardly be restrained by political action because there is plenty of money for corruption.

The State cannot be regarded as incompetent. On the one hand, capitalism disparages the State and labels it as incompetent to produce anything; on the other hand, capitalism urges this very same State to perform extremely complex tasks: to win wars, legislate, judge, preserve the value of money and prevent crime. That is, the State - unable to produce for the market- is the same State supposed to carry out much more difficult tasks; is fit to win wars, maintain the currency, limit crime... This double-standard assessment of the State seems particularly weird, when seen from here.

It becomes impossible to distinguish public from private when some big companies are the case. Then, theft becomes undistinguishable from legitimate action: no legal text can circumscribe this kind of robbery. First, there are some natural monopolies: water supply, for instance. Probably there will never be several pipes, of competing companies, throughout the city. All the benefits of competition are lost in those cases. A natural monopoly given to a private administration still needs the state to supervise it all. A natural monopoly in private hands interacts with state regulatory agencies in so many ways, that private and public can hardly be distinguished. Second, there are big companies that need the backing of their countries’ governments, so that they can cope with foreign competition. Oil industry is the case, when sheer size will determine who rules the market. Halliburton, for instance, well known to Dick Cheney, vice-president at the time, was invited by the government of the United States to rebuild Iraq, just as if it were a state-owned company. Third, there are those “too big to fail” companies, immune from risk, unsinkable because government aid will always be a lesser evil. The worst example is perhaps the tax-payers money used to keep the financial system afloat. But GM too, had 60% of its stakes bought by the USA government (the Canadian government then bought 12,5%).

Capitalism fails just when there is plenty; profits tend towards zero when production meets the demand. So, that being the case, that is, when everybody is happy, corporations need to start fabricating “necessities”. Not that people really need anything else, but the industries do. Those artificial “necessities”, invented by the market, are doubly bad: they transform people into consumers and transform natural resources into garbage, just to keep the system running.

Globalizando as Ruminações.

Seguindo o exemplo da Globo, que fala muito sobre si mesma, agora o Blog Ruminações também faz isso, um pouco.

As estatísticas que o Google fornece aos autores dos seus blogs, mostram dois fatos interessantes:

Primeiro, houve cerca de 500 pessoas que acessaram o artigo “Pontos fracos do capitalismo”, postado em fevereiro de 2010. Foi o mais lido;

Segundo, quase 20% dos leitores do blog acessam dos EUA. Vários lêem de Portugal e do Japão; e há leitores da Alemanha, Rússia, Reino Unido, Bélgica, Chile e Croácia.

Assim é que foi repetido, agora em inglês, esse artigo mais lido, sobre as falhas do capitalismo, para ver o que acontece.