Moral Economics

The financial crisis in the world, (and “crisis” is a soft term; many call it a “collapse” or an “explosion”), has stimulated renewed thought about what is wrong with not only our financial system, but with the entire system of so-called free-market capitalism that has dominated our planet since the fall of Russian communism, and for centuries before. Works like the essays and talks of Kamran Mofid, the recent book by Curtis White (The Barbaric Heart: Faith, Money, and the Crisis of Nature, 2009), and the ongoing series of projects by Michael Albert of Z-Net (Participatory Economics) and Joel Kovel (Eco-Socialism), are some of the many initiatives in this direction. Here I’d like to focus on just two—the writings of Curtis White and Kamran Mofid—because they seem to dovetail into a common diagnosis of what’s wrong, and a common cure: a new infusion of morality, via spiritual and/or aesthetic means, into our economic and social life.

What this suggests is what many have analyzed as being at the heart of the aforementioned collapse: a complete lack of moral or ethical constraints in the hearts and minds of those, mainly bankers and traders on Wall Street, who knowingly engaged in practices that nearly brought down the entire system. With no concern for anything beyond their own enrichment, such people and institutions made a mockery of the so-called “invisible hand” of the free market that was supposed to regulate economic behavior (the failure of government agencies to pass and enforce regulation can be seen as yet another sign of this moral failure.). Hence the search for a new moral basis for human activity, one that would go beyond the idea that has reigned in the recent past—that humans are rational actors simply and exclusively motivated by the desire for money to obtain the goods that alone signify well-being and security. Aside from the fact that real security is impossible in a constantly changing world, the problem raised by both White and Mofid is that humans are far more than economic beings; they are equally, if not moreso, relational, moral and aesthetic beings. Any system, like capitalism, that ignores or denies these aspects of humanity—the reason for the denial being that taking morality or beauty into account would put capitalists at a disadvantage in the race for profits—is falsifying human life and leading humans and all other beings to disaster. As White puts it: “What is potentially fatal about our current situation is that in it an economic system has become the entirety of the social system.” And clearly, the crisis in the ecology of the planet, the degradation of land, oceans, and the atmosphere itself, much of it due to industrial practices in the service of capitalism, greatly increases the conviction that something in the system is seriously out of whack.

To begin with Mofid (www.globalisationforthecommongood.info/), his approach is basically to critique capitalism’s disregard for individuals, for cultures and civilizations that differ from those of the advanced industrial nations and their promotion of the neoliberal agenda of privatization, deregulation, low taxation, and free trade. Both a trained economist and a minister, he calls for a new kind of “ethical capitalism.” By this he means one that would have to answer questions such as: What (other than rampant consumerism and endless growth) is the source of happiness and well-being? What does it mean to be a human being living on a spaceship with finite resources? How can the global financial system become more responsive and just? How can the world make the global trade system more equitable and sustainable? How can society overcome poverty and scarcity with limited global resources? What religious or spiritual variables should be considered in economic/business ethics and economic behavior? The basic idea is that through training, both at the university and lower educational levels, humans must be educated to see that, first, the idea of a value-free economics is false. The morality that should undergird economics, and everything else, is the Golden Rule: Do unto others (including non-human others) as you would have them do to you. With humanity respected as the center of creation, the goal of any economy would then be to sustainably improve human well-being and quality of life, always taking account of the fact that real biophysical limits exist to the expansion of the market economy. With this in mind, Mofid argues that the earth needs something like the central reserve banks to look after “shares of the Earth’s ecological capacity, not just interest rates and the money supply.” An economy founded on and regulated by such principles, Mofid argues, would recognize the rights of all humans and all species to their place in the biosphere. In this effort, scientists morally committed to protecting the global commons would receive priority for research funds. The question, of course, reduces to a simple one: could such measures make possible an ethical, profitable, efficient and sustainable capitalism?

Where Mofid seems driven by a vision that capitalism might be morally brought under control, Curtis White, while also considering this question, moves well beyond it. As an environmentalist (he is first and foremost a professor of English in Illinois), White argues that the environmental movement, in its search for “sustainable” fixes to the capitalist system, is actually mitigating and even excusing the worst excesses of capitalism. It is operating under the illusion (the lies it tells itself) that it can reach an “accommodation with that form of market economics that we call capitalism.” White, in virtually every chapter, undermines and refutes that illusion. Capitalism, he says, has its own ethical core, and to deviate from it would make it no longer capitalism. Much of his critique demonstrates what that ethical core of capitalism—animated by the “Barbarian Heart” of his title—really is. Though each one of us has an element of this within us, modern capitalism embodies it most nakedly as “the willingness to pursue self-interest through violence with the hope of plunder while being steadfastly indifferent to the consequences of its activities for others, and, especially, for the natural world…” Herein lie the core values of a system we all recognize, and whose truth was demonstrated to us most vividly in the last few years: self-interest, violence and plunder, and indifference to the consequences of its actions to life and the planet itself. White presents us with telling examples of this: Goldman Sachs persuading AIG to sell it credit default swaps (insurance on its wild, sub-prime bets), knowing full well that a collapse was coming and that in the coming collapse, these debts owed by AIG would bring it and possibly the whole financial system down; the 2007 decision of British Petroleum to reverse its announced “green” policy by agreeing to develop 54,000 square miles of virgin Canadian forest to extract oil from tar sands, knowing full well that the CO2 released (100 million tons annually) would keep Canada from meeting its Kyoto targets, and knowing also that ground water pollution would be so extensive that tailing ponds to hold it would cover 20 square miles; the huge dead zone in the Gulf of Mexico, created by pesticide runoff from corn farms draining into the Mississippi River, thus creating a downstream graveyard of crabs, shrimp, fish and all the once-rich marine life of the Gulf. White then points out how such decisions relate to capitalism’s reigning creed: profit is not simply an option, it is a non-negotiable demand; and what modern capitalism has excelled at in its compulsive and compulsory race for profits is the distancing of the violence this involves: “ the genius of capitalism’s unique form of barbarity is that the effects of its pillaging are usually at a distance.” What farmer in Illinois, that is, when he plants his corn in April, considers the resultant “crab holocaust” in the Gulf of Mexico? What corporation cares about the pollution or worker deaths arising from its operations in China or Mexico or Haiti?

White, then, sees no future in trying to modify or ameliorate the damage done by capitalism; it is genetically, fatally flawed. For even on its own terms, capitalism—which loves to call itself “free-market capitalism”—violates its own free-market principles, and misrepresents its own founders like Adam Smith. Smith, White reminds us, wrote in large part to urge that capitalism’s excesses needed to be controlled; it was for this reason that he urged that corporations compete with each other, i.e., so that they might be diverted from directing their violence and pillage at workers and consumers, and for the State to control capitalism’s monopolistic tendencies. More telling is White’s argument that, though conservatives love to extol the virtues of free markets and personal responsibility, both turn out to be myths. The capitalist world is one in which no one takes responsibility for anything: your mortgage is too big for your income? your car is unsafe at any speed? too bad. Caveat emptor. As for “free” markets, White points out that the real truth is that everyone fears them: “a pension plan is a strategic retreat from the Market God, a look to the time when one is free from its “capriciousness and cruelty.” As for corporations, “the very point of a corporation is to achieve some degree of price control and not be exposed to the famous invisible, dead hand of the pitiless market.” Though White doesn’t mention corporations like Halliburton or Boeing or any of the pirates who lobby for military contracts so as to be free from bidding mistakes (read ‘cost overruns,’ as in the current doubling of the cost of the F-35 Fighter, built by Lockheed Martin), their allergy to and avoidance of their beloved free market has long been legendary.

White also takes on “externalities,” capitalism’s term for those consequences of its operations that it refuses to take responsibility for. But it is not simply the well-known externalities of the rape of the natural world, the removal of whole mountaintops to mine coal, the pollution of ground water and the choking of oceans with islands of plastic White attends to. For him, poverty and war are also capitalism’s “externalities”:

“Poverty is not a fact of nature, it too is an externality. It is and always has been a product of economic systems, and that has been so since the earliest slave economics of the ancient world, the feudal peasant economies of the Middle Ages, the colonial economies of the eighteenth and nineteenth centuries, and the wage-based economies of the last two centuries….It [capitalism] is maintaining poverty as a necessity of its own economic structures. As David Ricardo, the pioneering economist, said in 1920, “There is no way of keeping profits up but by keeping wages down.” Similarly, war is not a decision made by political leaders purely out of a desire to protect the lives of citizens. It is an economic necessity for those who feel that—in the case of Iraq—not to have war would result in the loss of control over natural resources, markets, production capacity, and ultimately profits.”

And of course, though their hero Adam Smith argued that the State’s proper function was to regulate corporations so that their tendencies to maximize profits through monopolies and wage slavery could be controlled, White points out that in our modern capitalist democracy, corporations and their lobbying armies “seek to undercut legitimate state function as Smith presented it by essentially buying up the state by, specifically, making politicians dependent on corporate campaign contributions.” The recent Supreme Court decision can only make this “buying up of the state” many times worse.

The result is that pleading with corporations to help save the redwoods or reduce carbon emissions is like spitting into the wind. What environmentalists should be working toward, in White’s view, is a complete reversal of the system, including the ethic that has made money the measure of all things: “Money under capitalism represents a fundamental inversion of value. Instead of money representing things, things come to represent so much money.” What environmentalists, all of us, should be working towards is an inversion of the money inversion: trying to create a culture in which things—valuable things, beautiful things, natural things—are more important than money.

Here is where White’s prescription comes in—though it should be said that he is not as sanguine as this might make him sound. He admits that all of us, not just capitalists, are endowed with a Barbaric Heart. The solution, then, lies in the human heart, in reversing the “spiritual impoverishment” that has reigned during the last 200 years of industrial capitalism. Rather than allowing ourselves to be treated like “automatons” (the industrial production line, not to mention the modern office cubicle, does just this), the economic “beast” must be confronted/replaced with something like beauty, or spirit, the dignity of “things”. As White puts it, “environmentalism should look to create a common language of Care (a reverence for and commitment to the astonishing fact of Being) through which it could begin to create alternative principles by which we might live.” And here, as noted above, White’s prescriptions, though more radical and pessimistic, begin to jibe with those of Kamran Mofid noted above. Such principles of life would answer questions like: “What does it mean to be a human being? What is my relation to other human beings? What is my relation to Being as such, the ongoing miracle that there is something rather than nothing?” This cannot be done easily. It will require insistence and refusal—“refusal to be mere creatures, mere functions of a system we cannot in good conscience defend.” In this, one hears echoes of another radical who, in December of 1964, stood in Sproul Plaza in Berkeley California, and said something similar:

“There is a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part; you can't even passively take part, and you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all!”

Though Curtis White is not Mario Savio, and the 1960s have long since passed into legend, his message is similar. The workings of the capitalist machine, workings that it cannot change, have become odious, with the humans operating under the system allowing themselves to be shaped in its image, ethically, morally, spiritually. Such a distortion of humanity can only be done when humans lie to themselves. For White, that is the key: the lying and self-deception must stop. That is what he dedicates his book to—the end of lying—by the government and its business cronies, by the environmental movement, and by all of us individually and collectively. The first move in that larger, and, it must be said, daunting project, must be the end of self-deception—both about our complicity, and about what is at stake if we allow the beast to go unchallenged.

Lawrence DiStasi

Israel's Latest Insult

As almost everyone must know, the latest episode in the saga of Israeli contempt for the United States (literally, the hand that feeds this beast), exploded recently when Israel announced, at the very moment when Vice President Joe Biden was in Israel trying to pave the way for newly-announced peace negotiations, that it was building 1600 new dwellings in the area of East Jerusalem historically occupied by Palestinians. These will be illegal (International intergovernmental organizations such as the Conference of the High Contracting Parties to the Fourth Geneva Convention, every major organ of the United Nations, and the European Union have declared that the settlements are a violation of international law. see wikipedia) dwellings for Israeli settlers—the most rabidly anti-Palestinian, violent members of the Israeli nation. The announcement clearly took Biden by surprise, and he responded with appropriate umbrage. So, in subsequent days, did the State Department, announcing that Secretary of State Clinton had upbraided Israeli Prime Minister Netanyahu (himself the most right-wing head of state Israel has had in a long time) for the “insult” to American peace-making attempts. More tellingly, perhaps, the American military, in the persons of Admiral Mike Mullen and General David Petraeus pointed out the same thing to Israel that Biden had: Israel’s actions, by further inflaming anti-American hatred among Muslims, endanger American troops in the Middle East. One might add that they also endanger American lives in general, both at home, and abroad.

None of this seems to matter, of course, to the zealots now in power in Israel, and their supporters in the United States. The pro-Israel lobby has been ringing the phones off the hook complaining about President Obama’s “anti-Israel policies” and even his hatred of Israel and love for the Palestinians. This in the face of Obama’s having bent over backwards to curry favor with AIPAC during his presidential run, and for his recurrent announcements of the inseparable bonds joining the two nations. But for the pro-Israel lobby, nothing an American president does is ever good enough. It is not enough that for 60 years American presidents have been virtual handmaidens to Israel’s aggression against Palestinians; have pretended not to notice that Israel, alone among Middle Eastern nations, has developed nuclear weapons and now has a stockpile of more than 200 of the most advanced of them; and have supplied Israel with billions upon billions in military aid, to the point where it is now the 5th most powerful military on the planet—this with a tiny population of 5 million or so. Nor is it enough that American administrations have blocked all sanctions against Israel’s war crimes via its veto in the United Nations Security Council, and have propagandized almost as feverishly as Israel itself to characterize Palestinians and Arabs/Muslims in general as terrorists. No, it will apparently never be enough until every last Palestinian is hounded and terrorized and starved sufficiently to abandon the entire territory which Israel claims as its own—all of historic Palestine, which Israeli Zionists call Eretz Israel: greater Israel. That is the plan, and the United States of America is expected to go along with it, help implement it, no matter the danger to its own national interest and the safety of its citizens. To not do so is to be accused of being “anti-Semitic” by the pro-Israel lobby: AIPAC, the ADL (anti-defamation league), AIPAC-loyal Democrats in Congress, the propagandists on Commentary Magazine and in the general media, and on and on.

One example of this was the reaction of U.S. Representative Shelley Berkley (D-Nev.) to the State Department’s criticism of Netanyahu; she called it an “irresponsible overreaction.” This was about the same as the Anti-Defamation League’s criticism, which called it a “gross overreaction” (could it be that the two worked out their language together?). No doubt more colorful and extreme language will be forthcoming. So will more extreme pressure on both Democrats in the Congress (a huge percentage of their funding comes from American Jews), and the Obama administration. Whether it will be able to weather the storm, maintain its perfectly legitimate stance, and/or pressure Israel to pull back from its illegal and inflammatory settlement activity, is an open question. But as Chris Hedges wrote recently on TruthDig, the current flap has inspired a perhaps more dangerous dilemma: it has put Liberal Jews on the Spot. Hedges means not only liberal Jews in the United States, but those in Israel as well—people like A.B. Yehoshua, David Grossman, and the novelist Amos Oz. These are the people who have traditionally “anguished” over Israeli crimes, but taken a kind of strange pride in their anguish. As Norman Finkelstein described it in Hedges’ article, their stance said, “Isn’t it beautiful, the Israeli soul, how it is anguished over what it has done?” But the report of the classic Jewish liberal, Judge Richard Goldstone, whose Goldstone report on the Israeli invasion of Gaza noted the disproportionate military force used against Hamas militants and the failure to take adequate precautions to protect the civilian population, has blown the cover of these liberals. If a man who calls himself a Zionist, a man whose daughter moved to Israel, a man who sits on the board of governors of Hebrew University in Jersusalem and who has an honorary degree from that university—if such a man can condemn the Gaza invasion in such terms, and even indict Israel for its continuing occupation, its blockade, its torture of Palestinians, its willful decimation of their economy, and its erection of the so-called “security wall” creating an apartheid state—then Jewish liberals can no longer take refuge in their traditional anguish. As Finkelstein says:

“Goldstone did not perform the role of the Jewish liberal, which is to be anguished, but no consequences. And all of a sudden Israeli liberal Jews are discovering, hey, there are consequences for committing war crimes….’you have to go to the criminal court.’” (from Chris Hedges, Israeli Crackdown Puts Liberal Jews on the Spot, TruthDig, 3/15/2010).

In short, if liberal means belief in the rule of law, then the Goldstone Report makes clear that “it is impossible to reconcile liberal convictions with Israel’s conduct.” Of course, many groups both within Israel and in the United States have known this for a long time. Many of my heroes in the American Jewish community, people like Noam Chomsky, Barbara Lubin, Norman Finkelstein, Dennis Bernstein and Nora Barrows Friedman of KPFA’s Flashpoints, and many many others, have for years researched and publicized and condemned Israeli brutality toward Palestinians. Many groups and individuals inside Israel itself have done the same thing, risking their positions and lives to condemn their own government’s policies: peace groups like B’Tselem, the New Israel Fund, and the Association for Civil Rights in Israel, as well as countless scholars like Uri Avnery, and young people—the so-called refuseniks—who refuse compulsory military service. The Israeli government has, to be sure, noted all this, and has recently undertaken a crackdown on all such groups, including NGOs trying to help the Palestinians survive. Whether it will succeed in silencing all dissent and aid within the country is not yet resolved.

What the two initiatives suggest, however, is that the right-wing zealots in Israel are gaining ground, and seem to be willing to risk alienating even the United States in their push to ethnically cleanse the territory they see as theirs by biblical right. Any effort by outside parties, such as the Obama administration, to seek peace—even so minimal and fraudulent a peace as the “peace process” has sought over the years—clearly thwarts this long-term goal. The only question that remains is the simple and obvious one: how long will the U.S. government tolerate the preferencing of this so-called ally over all other national interests, including the safety of its own citizens? How long will campaign contributions from wealthy American Jews so distort the political process that it puts the entire nation at risk? How long will government officials who take the oath of office to defend and protect this nation violate that oath by ignoring, and even amplifying obvious threats to its well-being and the well-being of its citizens? Does Obama have the courage to take this on, to threaten the cutoff of all aid if the insult is not rectified, if Israeli violations of international and humanitarian law are not stopped? The next few months should be very instructive in this regard.

Lawrence DiStasi