Thursday, 26 May 2011
THE STATE AND CAPITALISM
Role of the state:
The existing international political economy operating under various trends in monetary, fiscal, trade and economic policy in general is that the nation-state is an agent of capital and as such its function is to maintain the privileged social order that benefits at the expense of the majority of the population. From Adam Smith and David Ricardo the theory of a free market economy is predicated on the nation-state surrendering 'national' sovereignty to the international division of labor where the strongest competitors would have the advantage. Naturally, under such a system the state is promoting international capitalism that is far more powerful than the state. Unlike feudal regimes that enjoyed political and economic power, the state and thus the political class as it has evolved in the early 21st century is weaker than the interests that control the economy. That the political economy has become equated with 'democracy' is a great tribute to the vast institutional structure that the state and private sector have established to convince the majority of the people that therein rests the legitimacy of the social contract.
Public and Private Sector Scandals:
A nation-state is not a private corporation and to make the comparison in a Libertarian manner is to deliberately obfuscate the obviousness of the nation-state's role in society v. that of a private corporation. Scandals involving corporations invariably involve the private interest of specific players, invariably officers of the corporation defrauding the company (investors) or third parties at the expense of the stockholder and/or third parties, and in the process breaking the law. That the legal structure is designed to sustain and further the interests of the propertied class is itself undemocratic if not scandalous and indicative that bourgeois government is nothing less than the servant of capital at the expense of the rest of the population. In short, the societal order is itself a scandal on a mega scale, so why would the public be surprised at specific scandals of both the public and private sectors intended to further the elites that the system serves?
Who pays for the damages that the private corporation creates for itself? In some cases the stockholders and customers of the corporation, in others, as was the case in the 2008-2011 global recession where the state bailed out finance capitalism, the taxpayers pay to keep the decadent and inherently unequal system afloat. Scandals involving nation-states are carried out for the benefit of individual politicians, bureaucrats, and/or third parties in the private sector, all with the intent to defraud the taxpayers for the benefit of individuals in the public or private sector. Who pays for scandals in the public sector? The general taxpayer.
The issue of 'who pays' has been in the public debate in the last four years throughout the world and it is one that continues. Who pays for the global recession, or more specifically for Lehman Brothers, Goldman Sachs, AIG, etc.? Is it the taxpayers equated with the nation that pay because there is 'collective responsibility' only when it comes to paying the costs of capitalism in its contracting cycles, or is it those who committed the crimes and benefited from them? But what if the system itself is criminal? The Irish people protesting against austerity have asked this question, the American people faced with unemployment and loss of their homes have asked this question.
It is in the interest of apologists/propagandists of capitalism to shift the debate from the privileged political and financial elites that enjoy the power and commit the crimes to the nation as a whole as responsible for the crimes of the political and financial elites. But is the issue one of 'national responsibility' for the costs of political and corporate scandals or for cyclical economic crises? Why should a retiree on fixed income or a worker in Cleveland pay for the bailout of the American corporate system that is manipulated constantly and backed by the state to benefit the financial elites? The vast majority of the people, workers and middle class are part of the nation-state, but they have done nothing wrong. That government places the burden on them for a decadent corporate welfare system is proof the nation-state operates with a democratic facade when in essence it is exercising authoritarian economic and social policies.