One of the opportunities available to the Opposition is to distinguish their position, on the role of government in the development of the economy, from the incumbent PPP. We, citizens, would then be presented with a reason for choosing between them, apart from race, which should be a non-starter since neither of them can any longer be elected solely on that basis. Do we continue with the neo-liberal “night-watchman” state we accepted with the IMF’s Washington Consensus in 1989? Or do we accept the latter’s changed position of the present, where they took heed of the collapse of the model in 2008, and proposed the more interventional state model from the Far Eastern example of Japan, S. Korea et al?
With the coming of oil revenues, this is a key question that must be answered, so we do not keep on confusing Adam Smith’s “invisible hand” that would guide the market to deliver the “goods” that society needs, with “no hands”. With self-interest — if not greed — as a human constant, this has contributed greatly to the debilitations that some, unfortunately, see as inevitable by-products of “capitalism”.
But we cannot ignore the reality that, somehow, our methods of socialisation keep on throwing up individuals who are only driven by their id and greed. As one early US commentator, Madison, noted not long after Smith, in an analogous context (politics): “If men were angels, we would not need governments.” In addition to the demons of the id, we recognise that none of the institutions that we design around our values will ever work perfectly (hence imperfect socialisations, to begin with), so we create macro-institutions to deal with these exigencies. And so, from early in the day in matters economic, markets have been regulated so as to mitigate the inevitable excesses precipitated by greed, “imperfect markets”, or for “infant industry” protection etc,.
Those who insist that Adam Smith’s “invisible hand” means “no hand” in the much-abused term, “free markets” speak from both sides of their mouths. Take, for instance, the creation and issuance of money, which is regarded as the sine qua non for the creation of markets in the modern sense of the term. This has been regulated, by definition, from the earliest days either by the institutions that issued them in the first place – or later, by governments. One can’t very well have everyone creating money and expect markets to function. The problem is that those who ritually invoke the ethereal “free market” do so only when the regulation in question hinders their efforts to make excess profits over what other regulations allow them to make in the first place.
Take banking. Government regulations the world over allow banks to create money out of thin air by a multiple over and above the amount that is deposited. Thus, they make money coming and going – once by paying lower interest to depositors than borrowers (double-digit figures in Guyana!), and then by lending the excess money created through the magic of regulation. Yet these bankers in the developed economies complained when they were prohibited from investing depositors’ money in speculative vehicles, and then had the regulations repealed. After making trillions of dollars of profits – which the bank operators pocketed – when their greed-fuelled speculative bubbles inevitably collapsed, they were defined as “too big to fail”, and were bailed out at the taxpayers’ expense. In a perfect demonstration of the workings of the id-greed imperative, bankers expect profits to be privatized, but losses socialised.
Karl Marx’s early critique of Capitalism was remarkable for its prescience in highlighting several of its inherent contradictions, but the attempts to institutionalise his insights failed miserably in our own lifetime. Marx ironically confused epistemology (the theory of knowledge) with ontology (what actually is), and was too idealistic about a man and his greed. To paraphrase Churchill’s aphorism about democracy, capitalism is evidently the worst type of economic system – except for all others that have been tried and failed.
We cannot give up on socialising ourselves into becoming more sensitive and responsive to the overall societal good – if for nothing else that society is simply a collection of us, the individuals. But in the meantime, our governments have to get back to regulating and making appropriate market interventions to deliver the good life for all, now that we finally have the wherewithal. Democratic socialism, anyone?