A protestor demonstrates in support of the New York Occupy Wall Street protests in front of the Federal Reserve Bank of Chicago in the city’
l by Shelton A. Gunaratne
(November 29, Washington DC, Sri Lanka Guardian) Republicans and their Tea Party troglodytes tend to believe that capitalism is an unchanging phenomenon. Therefore, they yearn to seek solutions to America’s contemporary problems in the U.S. Constitution and associated conventions adopted and practiced in the late 18th century. Oblivious to America’s vastly changed demographics, they are hell bent on clutching on to their materialistic privileges and wealth that both industrial and technological capitalism bestowed upon them. They fail to see that immigration from the rest of the world has transformed the culture of the country, and that culture will play a pivotal role in choosing the replacement for capitalism.
Writing in 1776, Adam Smith, the father of economics, expressed the view that divine intervention was behind the “invisible hand” that operated the free market, which gave maximum happiness for everyone at the point where the buyer’s desire for the lowest price intersected with the seller’s desire for the highest profit. Because the “invisible hand” reflected the will of God, the free-market mechanism would solve all economic problems. The Tea Party people appear to follow Smith’s view that everyone in the world would be happier if the state ceased to interfere with the free-market mechanism. They say that capitalism does not require a Federal Reserve Bank or central banks in the world. However, they don’t see eye-to-eye with the way that Karl Marx described capitalism in the first volume of Das Kapital published in 1867. Marx provided a differentia specifica for capitalism: People sell their laboring-power to a buyer, not to satisfy the personal needs of the buyer, but to augment the buyer’s capital.
The Occupy Wall Street (OWS) protestors have activated a worldwide movement to show the negative results of the distribution of wealth and income both in the United States and the world. Economists define wealth in terms of marketable assets, such as real estate, stocks, and bonds, leaving aside consumer durables like cars and household items. Income is what people earn from work, but also from dividends, interest, and any rents or royalties that are paid to them on properties they own.
In the United States, as of 2007, the top 1 percent of households (the upper class) owned 34.6 percent of all privately held wealth, and the next 19 percent (the managerial, professional, and small business stratum) had 50.5 percent, which means that just 20 percent of the people owned a remarkable 85 percent, leaving only 15 percent of the wealth for the bottom 80 percent (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1 percent of households had an even greater share: 42.7 percent.
In the world, the top 10 percent of the world’s adults control about 85 percent of global household wealth—defined very broadly as all assets (not just financial assets), minus debts. That compares with a figure of 69.8 percent for the top 10 percent for the United States. The only industrialized democracy with a higher concentration of wealth in the top 10 percent than the United States is Switzerland at 71.3 percent. Many believe that ruthless capitalism and wealth/income distortion are dependent co-arising factors; and that this unsatisfactory situation (dukkha) will not disappear until the demise of capitalism.
The United States remains mired in what is by far its worst economic slump since the Great Depression notwithstanding repeated attempts at monetary and fiscal stimulus since the onset of the last recession in 2008. Gunadasa Amarasekera, renowned author and intellectual, asserts that the imperial powers that forced capitalism on the world seem to be losing their capacity to control the poor countries and force them to do their bidding. Also, we can no longer consider Marxism a viable alternative to capitalism.
The answer, according to Amarasekera, could lie in a nation’s cultural inheritance inasmuch as the economic system and culture are interdependent. Therefore, cultural factors that evolved in the West (e.g., secularism, democracy, political party system, the Westminster parliamentary system, laissez faire economics, etc.) are incompatible with non-Western cultures.
Just Third Way
Because neither capitalism nor socialism has succeeded in eliminating economic injustices and inequalities, the nations of the world are likely to embrace cultural variants of a multi-dimensional world system that would avoid the worst characteristics of both systems. The Center for Economic and Social Justice (CESJ) in Washington, D.C., asserted in 2005 that the “Just Third Way” would be a composite of the following:
1. All have access to both economic and political power (rather than letting a wealthy elite or a governing elite grab such power).
2. Systematic de-concentration of capital ownership (from the clutch of a wealthy elite or a governing elite) so that everyone has direct access to it.
3. Adequate and secure capital incomes directly accessible to everyone—not only to a wealthy elite or a governing elite.
4. Recognition of everyone’s sovereignty within institutions embodying principles of social justice (instead of focusing on individualism or collectivism).
5. Institutionalization of justice (instead of greed or envy).
6. An economic system guided by a moral philosophy—rather than a materialist ideology—that recognizes everyone’s dignity and sovereignty to be a worker and capital owner in a society where spiritual values and respect for all creation transcend material values.
7. Adoption of the concepts of Kelsonian binary economics, which makes a distinction between human (“labor”) and non-human (“capital”) contributions as two interdependent factors each of which directly produces wealth and creates economic value thereby deviating from the labor-centric focus of both the classical and Marxist approaches.
8. Win-win, synergistic, post-scarcity orientation resulting from improved technology (compared with the win-lose orientation of capitalism, and lose-lose orientation of socialism).
9. Justice and efficiency go hand-in-hand (whereas capitalism sacrifices justice for efficiency, and socialism sacrifices efficiency for a collectivist “justice”).
10. Ownership system assures that everyone is a direct capital owner.
11. Equality of opportunity to own and to work (whereas under capitalism, no equality of opportunity to own exists; and under socialism what exists is a forced duty to work as determined by governing elite).
12. Universalization of the right to private property and protection of rights of property to the extent that they do not harm others (whereas capitalism protects the private property rights of the few who own productive wealth; and socialism assigns control over the means of production to a political elite).
13. Economic role and power of the state is limited to preventing abuses and monopolies and removing barriers to universal participation in direct capital ownership (whereas in capitalism, the state has to do the redistribution of income and wealth because it takes a “hands off” policy on the monopolization and control of the means of production; and in socialism, the state wherein economic power is centralized regulates income redistribution).
14. Free and open markets determine prices, wages and profits, which are shared by the many owners. (Capitalism promotes mercantilism by protecting prices and wages from global competition; and in socialism, state controls prices and wages.)
15. Financial institutions make credit available so as to ensure universalized access to capital credit. (In contrast, under capitalism, consumer credit may be available to many, while capital credit is limited to a few. State controls all credit under socialism.)
16. The goal of direct ownership for all determines the policies associated with granting pure credit, future savings, and capital credit insurance needed to finance growth. (In both capitalism and socialism, the elite few in control use past savings to finance future ownership.)
17. Technology is owned and controlled by private sector entities that are accountable to its many shareholders and stakeholders. (Under capitalism, an elite in the private sector controls technology under government oversight; and under socialism, this task falls on a non-accountable governing elite.)
18. “Social safety net” for poor: Directly connects poor individuals and families to growth dividends, supplemented by personal charity, institutional charity, and government transfers.
19. Anticipatory approach to sustainable growth and development internalizes externalities, assigning environmental costs to polluters and passing costs on to consumers; offers means of financing most advanced “green” technologies; economically empowers people directly through private property to protect themselves against environmental hazards; and plans for future generations.
20. Purpose of education is to teach people how to become life-long learners and virtuous human beings, with the capacity to adapt to change, to become masters of technology and builders of civilization through their “leisure work”, and to pursue the highest spiritual values.
This JTW (http://www.americanrevolutionaryparty.us/comparison3rdway.htm), which I identify as multicultural eclecticism, deserves to be the focus of public discussion over the 2012 presidential campaign. Because we know that culture, politics and economics (as well as everything else in the universe) are interdependent, interconnected and interactive, we can associate the weakening of capitalism as an inevitable step to accommodate change. Contemporary developments indicate that the world has reached the stage of transition toward a new world order of multicultural eclecticism—a synthesis of the capitalist-socialist nexus reflecting the philosophic reasoning in Aristotle’s golden mean, Confucius’ doctrine of the mean, and Buddha’s middle way.
The challenge of this new world order is the creation of a competitive economy while advancing the overriding imperative of a just society within the context of different cultures. E. F. Schumacher’s notion of “small is beautiful” (1973), Anthony Giddens’ thoughts on the Third Way (1998), Amarasekera’s views on Jathika Chintanaya or national consciousness (1980s), among others, should help the development of a theory of multicultural eclecticism.
Several center countries (such as Australia, Canada, UK and USA) and periphery countries (such as Argentina, Brazil and Colombia) have already tried out some principles outlined in the JTW philosophy. A coherent multicultural theory to back up this philosophy is overdue.