Thursday, February 25, 2010

Can we handle the truth?

from interfluidity…by Steve Randy Waldman

Both globally and within most nations, the patterns of consumption required to sustain existing social arrangements are inconsistent with the distribution of the fruits of production. Social and economic stability, therefore, depend upon redistribution for which there is no overt legal framework or political consensus. To square this circle, the financial and government sectors have evolved means of hiding redistribution in complex, continually improvised arrangements. Unsurprisingly, massive wealth distributions arranged in this way leave much to be desired, in terms of straight corruption (the financial and government sectors redistribute a lot of wealth to themselves), justice (e.g. wealth is redistributed to those who happen to speculate early in bubbles), and sustainability (the illusion of value behind the claims of those from whom wealth is taken may prove fragile, but “loss realizations” are socially disruptive if they are not carefully paced and allocated).

Neither financial nor political reform can succeed unless we overcome the social and economic contradictions we have relied upon the financial sector to literally paper over. Off-balance-sheet liabilities that hide the impairment of savers’ claims, whether in subprime mortgage-backed securities or sovereign entitlement programs are not aberrations. They are essential tools in the arsenal of social stability, the economic equivalent of military “black-ops”, things that must be done but must always be denied in order to protect the American (and European, and Chinese) way of life. Unless we define overt arrangements that overcome the contradictions between the organization of production and socially desirable patterns of consumption, each scandal and reform will necessarily be followed by some new technique or trick that delivers, however unjustly or corruptly, the wealth transfers upon which our societies depend. Our choices are to overtly align the fruits of production with patterns of consumption, to continue to employ accounting fictions and magic to pretend away the contradictions, or to undergo some form of collapse.

3 comments:

  1. Consumption, and production is a ponzi scheme.
    It is a material world that hides behind greed, and deceit.
    This will not stop until there is a total collapse. Humans are now programmed for more, and more.
    Living with in ones means, also pertains to what the planet can, or can not, replenish.

    ReplyDelete
  2. I've read this 4 times, and I'm still struggling with it-- can s/one come up with a metaphor or a summary? (Maybe my brain's just tired :D)

    ReplyDelete
  3. the house of cards is still collapsing; its not so much production & consumption that are the ponzi schemes, but its the bloated financial system they are dependent on thats collapsing around us, and there is no easy fix...the bubbles have imploded, leaving us with a mountain of corrupted debt, and we're not dealing with it; instead, theyve been trying to paper it over, make it increasingly obscure & reblow the bubble...catch the word magic in the last sentence; its a link...

    this might have been a better post, maybe ill dig out the pdf and post it later: http://www.voxeu.org/index.php?q=node/4659

    ReplyDelete