In 2016, an election year, Americans look out upon an unfolding crisis of capitalism. It has roots in the changing way in which the real world works, and the static way in which fundamentalists perceive it to work. They guard their cherished vision by keeping it impervious, politically, to needful revisions.
How will the next crisis play out? Well, in many ways it will look like the last unresolved crisis—the Great Recession—but with some important new flourishes. Some will be corporate inversions and earnings strippings. Still others will distill from a host of pseudo-capitalist schemes. All will be carried forward by power brokers within the U.S. financial system.
The coming crisis will have faces similar to Scott Tucker’s. He is a businessman turned race car driver and alleged fraudster. According to the Wall Street Journal, prosecutors say he overcharged payday loan recipients. These are folks at the bottom of the wealth pyramid who have been defrauded out of hundreds of millions of dollars in undisclosed fees. Federal prosecutors say Tucker used $100 million of these ill-gotten gains for luxury purchases and to finance his professional racing team.
This podcast series explores in-depth, rip-offs such as these. Perpetrators in some cases are once and former capitalists, now seguing into new roles as pseudo-capitalists. How do perpetrators get away with it, even within plain sight of the law?
They thrive because of fundamentalism’s blindness to the way in which the economic world actually works, combined with political obfuscation. Because of unplugged loopholes, more perpetrators are gaming the rules society has put into place to constrain self-interest. Capitalism works when the pursuit of self-interest dovetails with the common good. When it does not, then fundamentalist rhetoric turns misleading and destructive.
Princeton professor Angus Deaton, the 2015 Nobel Laureate in economics, expresses grave concerns about where we are heading. The enormous accumulation of riches, Deaton observed to The Wall Street Journal, may not reflect society’s values about the activities in which many entrepreneurs are engaged. It is not clear, also, society wants its brightest to be doing what they are doing, rather than innovating or curing cancer, Deaton observes.
A personal illustration makes a similar point. Over wine and nibbles with a tech entrepreneur, the conversation turned reflective, then jaw-dropping. He described his innovative strategy to run mobile ads on cell phones, which at the time was a new frontier.
Then, he pondered aloud, was he contributing anything of value in exchange for the wealth that might lie ahead? Was he making society better in any tangible way, such as a farmer does? Or was he merely at the right place, at the right time, with the right skills? Was he exploiting a so-called rabbit hole in capitalism, so to speak, that would allow him, shortly, to sell and reap fabulous wealth beyond anything the farmer might imagine?
More on this later. For now, check out Capitalism in Crisis .Org