Greed and accumulation of immense unimaginable wealth tends to create selfish monsters out of everyone of us.
I must confess that the recent financial turmoil (it is hard to imagine that it has only been about one month!) has created within me a great deal of uncertainty and malaise, as to my take and perspective on the free market system.
I have always been wary and circumspect as to its unbridled schematics to allow anyone with any intelligence, energy or ideas, the absolute freedom to make money at whatever costs or with whichever means.
In my profession alone, I have seen just how the lust and lure of filthy lucre has shaped unethical and unjustifiable management of certain patients. That even the noblest medical profession—one most trusted by the public (in almost all surveys carried out to date)—is not immune to ethical breaches due to moral hazard and venal considerations, has tarnished its much vaunted prestige and honour!
Doctors these days, appear just as likely as everyone else to hanker for the good things in life, even towards aspiring to luxurious extremes and then avariciously pursuing these aims to maintain their upscaled lifestyles... Sadly, when we look askance at other professions, and especially at some politicians, these excesses seem pale in comparison!
Nevertheless, it is seldom decried these days, because being wealthy is no longer considered as despicable or even 'faintly disreputable'. Instead, immense wealth is admired and aspired to by millions if not billions of people worldwide, in a new vista on how we look at this God-receding, secular world...
When I was recently reading Marcia Angell's book on The Truth about the Drug Companies, one paragraph in the early pages (pg6) struck me. Dr Angell, a long-time former editor-in-chief of the prestigious New England Journal of Medicine, wrote that the post-Reagan era saw a relentless rise of wealth worshiping:
Ironically, we have in embracing the free-market system shifted more than our perspective, we have become morally-laxed as to how wealth and society should interact with one another. Many liberal thinking economists are openly neo-Darwinian in their mantra of tacitly or complicitly espousing the freedom to choose, to compete freely without regulations or governmental control, to acquire wealth as the end-all and the be-all—i.e. survival of the financially fittest!
"(W)ith the (pro-business) shift, the public attitude toward great wealth changed. Before then, there was something faintly disreputable about really big fortunes. You could choose to do good, but most people who had any choice in the matter thought it difficult to do both.
"That belief was particularly strong among scientists and other intellectuals. They could choose to live a comfortable but not luxurious life in academia, hoping to do exciting cutting-edge research, or they could ‘sell out’ to industry and do less important but more remunerative work…
"It became not only reputable to be wealthy, but something close to virtuous. There were ‘winners’ and there were ‘losers,’ and the winners were rich and deserved to be."
Lassez faire style of unfettered free market and mass consumerism trumps other models of socioeconomic exercises—leaving in its wake, the burnt-out carcasses of failed former soviet republics, and the triumphalist American-style model, so gratuitously imitated by aspirant wannabees...
It is not surprising that free-market capitalism has trumped socialism, when even command economies like China switched tactics to encourage free-market practices, under the Dengist exhortation that "it does not matter whether it's a white or black cat, as long as it catches the rat!" (For the Chinese, this means that whichever way of acquiring wealth or making money is acceptable, even to be admired...)
The entire world has placed its immense trust in a system that appears to be inexhaustible and limitless in its proclivity to grow and multiply global wealth exponentially! It is true that most peoples of the world have benefited, that many have had a greater chance for better, less brutish, possibly more fulfilling lives. There have also been some degree of trickle-down effect that has decreased the absolute numbers of abjectly poor people, worldwide.
But it has also created a gaping chasm of the immensely rich versus the very poor. The wealth distribution disparity has widened even more these last few years—the so-called Gini index seemingly greater than ever before in most if not all countries.
Conversely, for the entrepreneurial rich and the bankered privileged handful, there has been greater and greater capacity and complexity in multiplying their chances or access to even more schemes or instruments of wealth creation.
Thomas Friedman, prize-winning author of The World is Flat has this to say of the current economic meltdown:
"You have to go back to the beginning of the problem. After the fall of the Berlin Wall, virtually every economy in the world moved to a capitalist system, which eventually made the world awash with money looking for investments.It now transpires that over the past 2 decades or so (some say especially after the 1997 market crash in Asia), in a dizzying spiral of creativity, more and more financial instruments have been fabricated and fashioned to leverage and arbitrage the uncertainty or less-than-exact art of lending and borrowing, or the erratic and herd-like movements of funds ...
"It didn’t take long for financial engineers to figure out how to move home mortgages and commercial loans from a transaction between you and your local bank — or between your company and a syndicate of banks — to something much more diffused and fragmented.
"While your bank may have initiated the mortgage or the corporate loan, it was quickly sold to an aggregator who turned these different loans into bonds and then sold them all over the world in small pieces to banks and money market and pension funds." ~Thomas Friedman, in The Post-Binge World, NY Times, 11 October, 2008
Hedging the gargantuan bets (estimated average leverage of >30 times for every dollar!) of complex financial interactions (CDOs, collateralized debt obligations; CDSs, credit default swaps) became high-stakes Casino-style gambles which appear to have now redounded on its perpetrators, and on the global markets!
It has been said that years ago, Mr. Warren Buffett, (billionaire investor-extraordinaire, Wizard/Oracle of Omaha, and arguably the richest man on earth today) had called such leveraging derivatives “weapons of financial mass destruction”.
Then, nobody seriously thought to heed or even to contradict him, as Wall Street and its newest crops of financial wizards kept piling up the momentum to push the frontiers of the free-market system to its ultimate if seemingly illimitable conclusions...
In its mad scramble for unimaginable wealth creation, brilliant savant mathematics/physics, and economics graduate students had been engaged to spur and fabricate the giddy epiphanies of mind-dazzling models of supernova-like possibilities, whetted by the inexhaustible appetites of ultra-liberal free-market espousing Nobel-winning professors.
"Somehow the genius quants — the best and brightest geeks Wall Street firms could buy — fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and — poof! — created $62 trillion in imaginary wealth." ~Richard Dooling, The Rise of the Machines, NY Times 11, October, 2008
Somehow, they argue there must be means of engendering newer and more creative ways to multiplying our global wealth, since every possible schematic scenario thus far, had given rise to exponential growths of nearly everything that mankind had hitherto impacted or even touched!
The last 2 decades of globalisation had lent greater credence and currency towards such explosive possibilities. At least until September 2008...
Not too long ago, Malthusian projections regarding population growth would have placed the fear of God in us puny humans who worry that perhaps we'd soon be facing famines due to outgrowing our ability to feed ourselves!
Malthus' growth charts, while quite inexact by today's standards, had shown skyrocketing patterns of curves way beyond our imagination then and perhaps even now. Today, the humungous global market expansion has made it appear that the Malthusian model is forgettably flawed. Thus, fears as to its realisation had receded from almost everyone's consciousness...
Latterly, even with the urgent (An Inconvenient Truth) rhetoric from Al Gore on our global warming crisis, we seemed to have tired quite quickly as to its relevance in our humdrum lives.
So even when extreme climatic swings (force 4 & 5 hurricanes, tsunamis, cyclones, tornadoes, flooding, forest fires, melting glaciers, etc.) seem to have exceeded their norms, we appear nonchalantly dismissive, stoic and irreverent.
We have become immune to our excesses, pushing such morbid thoughts and awareness to the far reaches of our conscience and consciousness—these are just too hard and too depressing to contemplate. Perhaps the time is not yet ripe for us to seriously address these doomsaying concerns. We're just too caught up with our continuing need to pile up our economic toys and gains...
So, whither the world and its tail-spinning economies? Volatile and uncertain markets, commodities, oil and currencies, appear to be the norm for the foreseeable future. Money markets and governments grapple with whatever means to re-instill some semblance of calm, stability and order, which seemed to have deserted not just the ordinary lay-person but more so, the shell-shocked traders and financiers of the world.
More pain and shocks are in store, but there is hope that when the dust finally settles, mankind would have learnt its greatest lesson of hubris for a long time, and that order and some form of regulatory oversight is a must in taming and reining in man's innate propensity to indulge and over-gratify in every possible excesses and greed!
Nigel Lawson, Britain's Chancellor of the Exchequer during Tharcher's time, reminded us that "the price of a free economy is an ineradicable cycle of boom and bust... of alternating moods of optimism and pessimism," in a Times magazine's Back to Reality article (October 13, 2008, pg23).
In another article, The End of an Era (Times magazine, October 13, 2008, pg30), Michael Elliott quoted British philosopher John Gray as stating that '"the era of American global leadership is over" and that neoliberals had "underestimated the revolutionary nature of global capitalism," with its power to upend the familiar landscape and turn it into a churning place of impermanence.'
To paraphrase many others, it is time to reassess our love affair with the dizzying heights of Greenspan's 'irrational exuberance', and learn to live within our means, and that this is the ultimate moral lesson that will resonate with every world citizen...
Perhaps it's time to revisit our liberal arts tradition, to understand that life is cyclical, with its endlessly recurring themes of human suffering, aspirations, joys, triumphs, arrogance, comeuppance and hubris. We have to believe and learn from history, if not to repeat or forestall its agonising consequences, at least to ameliorate its excruciating pain...
It is worth contemplating on the following words of much published author Harold Bloom, Professor of English and Liberal studies at New York's Columbia University:
"(S)ociety has played out its last stake; it is checkmated. Young men have no hope. Adults stand like day laborers, idle on the streets. None calleth us to labor. The old wear no crown of warm life on their gray hairs. The present generation is bankrupt of principles and hope, as of property.
"I see man is not what man should be. He is the treadle of a wheel. He is a tassel at the apron string of society. He is a money chest. He is the servant of his belly. This is the causal bankruptcy, this is the cruel oppression, that the ideal should serve the actual, that the head should serve the feet.
"Then first, I am forced to inquire if the ideal might not also be tried. Is it to be taken for granted that it is impracticable? Behold the boasted world has come to nothing. Prudence itself is at her wits’ end." ~ Harold Bloom, in NY Times, Out of Panic—Self-Reliance, 12 October, 2008
A shorter version of this article has been published in malaysiakini on Nov 6, 2008 as Capitalism: Gambling and Running on empty