Friday, May 22, 2009

Taibbi scratches the surface

Matt Taibbi correctly recognizes that AIG executive Joe Cassano did not by himself cause the global recession.
The problem isn’t a few technical glitches in the system that allowed the Cassanos of the world to drive Mack Trucks of leverage through a loophole or two. The problem is, at its roots, a profound collapse of morals on Wall Street that would have found its way to financial destruction using any available set of instruments and laws.
But to blame a crisis on a "collapse of morals" is to betray a superstitious philosophical idealism, especially as Taibbi explicitly places compliance to these morals beyond the bounds of "any available set of instruments and laws."

Where did these morals come from? Where did they go? Taibbi is engaging in purely magical thinking.
These Wall Street players are enormously compensated, which supposedly means that society highly values their work and is willing to pay them a premium to do it. Having been given that kind of responsibility and trust, these assholes should not then force us to police them as tightly as we police those who we expect to steal from us, like third-rate car salesmen, telemarketers, hookers and three-card monty dealers [Taibbi inexplicably neglects to mention journalists]. [boldface added]
Taibbi has apparently not learned the fundamental lesson of bourgeois democracy: The more responsibility and power one has, the less he is to be trusted, and the more he is to be policed. It is pure Republican-level batshit craziness to expect anyone in a position of power to selflessly act in the best interests of others, to his own detriment, purely out of the goodness of his heart. Not just mistaken, not just stupid, but actually insane.

People — especially the executives of large financial corporations — aren't stupid: they act rationally to maximize their personal gain under the prevailing economic, political and social circumstances. Which is precisely what Cassano actually did.

For almost forty years, the capitalist class has been actively undermining precisely those "instruments and laws," such as the Glass-Steagal act, that prevented this sort of crisis. Key to the undermining of these instruments and laws has been the corruption of journalism... actually one of the easiest tactics in the overall strategy.

Taibbi is a little bit correct: the problem goes beyond mere instruments and laws, at least under bourgeois democracy. The problem is in the deep structure of capitalist economic relations, economic relations that not just encourage but compel individuals to do whatever it takes to achieve unlimited wealth. No matter how wealthy you are, there's another capitalist just as wealthy, looking for the smallest opportunity to eat your lunch. Under such a structure, how could a Cassano not have arisen?


  1. People — especially the executives of large financial corporations — aren't stupid: they act rationally to maximize their personal gain under the prevailing economic, political and social circumstances.

    Absolutely. In a communist society, how would the natural human impulse to maximize personal gain be harnessed for the common good?

  2. I don't know for sure. No socialist attempt has yet been successful in doing so on a large scale.

    The key is not necessarily to "harness" the desire for individual gain, but rather control its excesses, to make sure that personal gain is mutual.

    There are two theoretical ideas, ideas that also have not yet been tried. The first is economic abundance. If we can make enough stuff, then the struggle for individual survival will cease to dominate people's thinking. Remember that typical capitalist crises are caused by surpluses. Even enormous natural disasters cause only relatively minor economic problems. Just making sure everyone always has enough to eat, a decent place to live, electricity, clean water, sanitation and medical care will drastically reduce the scope for unlimited greed.

    The second is making sure that the masses of people have real political power. Historically, communist governments have been just as afraid of the masses as the most elitist bourgeois governments, including our own.


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