If, I was (bear with me here), some sort of an intellectual, as it were, the point of this post might be taken to be a classic example of Adam Rothsteinism.
Luckily (for who?) I'm not, so I can post this argument for nationalization of the economy by simultaneously bashing moralistic humanism without feeling like I'm beating the dead horse of that one book that I'm known for writing.
I didn't write any such book, nor do I have any 'line', nor any students. I just have this sardonic blog, and a lot of vitriol against liberal capitalism.
To the point: a common thread of concern among liberal (that is, American political liberals, not libertarian-leaning) economists in the wake of the... you know, problems, is evaluating the "moral corruption" that allowed these events to occur.
The argument, if one can call it that, goes something like this:
"Were the flaws in the system the result of markets corrupting our morals? I think we relied too much on markets to regulate behavior, i.e. as a means of enforcing morality on agents operating within market systems, and we paid too little attention to the need for oversight. But the flaws in the system that created the bad incentives were not, for the most part, the result of moral shortcomings, they resulted from human shortcomings, unintentional mistakes in the design of the system that come from our "psychological limits"."
In other words, it's not so much an argument as a rhetorical question with an afterthought concerning a need for "oversight". (Please note: this is not a slight against Mark Thoma, the author of these words, so much as it is against the line of thinking. His blog and comments on the economy are profoundly enlightening for a student wading through the issues of macro-economics. I say this because he does seem to be very knowledgeable and keen on the issues; my point of contention is with a symptomatic point of argument that seem pervasive in all of humanist thought, from the best minds to the worst.)
The problem, as I see it, is that in dealing with humanity, there is irrefutable desire to attribute morality as the last bastion of any system involving... well, involving humans. We have the system proper, we have checks and balances, we have peer review, we have oversight; but at long last, the metahuman element which drives all of these mechanisms, and which will no doubt save our souls, is good old morality. Because humans don't do wrong knowingly.
Without, of course, remembering that a market is a forum precisely designed for one party to extract value from another party. So any market party wouldn't dare use systems of checks and balances to put one over on another, wouldn't manipulate oversight to benefit themselves, and wouldn't even drop to the level of swearing on the bible to uphold morality, only to sell this promise to the highest bidder? All because "humans like to do what's right?"
Hand over the keys, humanity. You've had enough. When confronted with folks breaking these very rules which we believe are intrinsic to being, our only response is to say, "Whoa, let's tighten the rules a bit." Yeah, and I've only had, like, four beers.
I am not proposing to take the humans out of the system (computers, while perhaps being ultimately correct, often don't come to much better conclusions than we do). I am proposing to take a reliance on morality out of the system.
By linking the market systems to monopolistic control circuits, we don't have to rely on humanity "knowing what's best". What is a monopolistic control circuit? Nationalization. You'd never think to hear me arguing for bureaucracy (or at least I wouldn't think to), but that is exactly what we need. Thermostats are surprisingly efficient, simple physical mechanisms. Why shouldn't flows of capital be under similar control? Of course, it would not be centralized--we know what happens if one person ends up controlling the heat for the whole house, or if that one circuit breaks. A strategic, networked system of flow control is precisely what would work. Like, for example, the Federal Reserve system. Or, any of the regulated market bourses like the NYSE or CME. These work amazingly well, compared to what it was like before they existed. Why not extend this principle to GAAP (generally accepted accounting procedures) or personal investment?
Secrecy is where morality has a chance to leak. It's where bubbles are allowed to form. The reliance on morality that allows for any sort of secrecy is where people are allowed to become insanely rich; it is the realm of confidence. If you have confidence in morality, even if this is directed into oversight, then you are just setting yourself up to have that confidence abused. Morality is the ability to think that someone will do right by you simply because; because they are just like you, another human just out there trying to make some money on the market. Any con man will tell you that getting the victim to feel akin to you is the way to make it work. Put the numbers on the table, don't trust that they're in someone's pocket.
Now, don't go spreading this around, because this information is special, only for you. We don't want everyone getting in on this 'critique of morality' thing, just me and you. We can make a fortune on it--trust me.
Predictions for 2012
5 years ago