The Destabilizing Consequences Of Globalization

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

It is not possible to coherently discuss the "New Normal" economy without discussing financialization--the substitution of credit expansion and speculation for productive investments in the real economy--and its sibling: globalization.

Globalization is the result of the neoliberal push to lower regulatory barriers to trade and credit in overseas markets. The basic idea is that global trade lowers costs and offers more opportunities for capital to earn profits. This expansion of credit in developing markets creates more employment opportunities for people previously bypassed by the global economy.

Though free trade is often touted as intrinsically positive for both buyers and sellers, in reality trade is rarely free, in the sense of equally powerful participants choosing to trade for mutual benefit. Rather, “free trade” is the public relations banner for the globalization of credit and markets that benefit the powerful and wealthy, not the impoverished.

Financialization and mobile capital exacerbate global imbalances of power and wealth.

Trade is generally thought of as goods being shipped from one nation to another to take advantage of what 18th century economist David Ricardo termed comparative advantage: nations would benefit by exporting whatever they produced efficiently and importing what they did not produce efficiently.

While Ricardo’s concept of free trade is intuitively appealing because it is win-win for importer and exporter, it doesn’t describe the consequences of financialization and the mobility of capital. In a world dominated by mobile capital, mobile capital is the comparative advantage.

The mobility of capital radically alters the simplistic 18th century view of free trade.

What do we mean by mobile capital? Capital--cash, credit and the intangible capital of expertise--moves freely around the globe seeking the highest possible return. Globalization is the ultimate expression of capital’s prime directive: expand profits by seeking the highest available return on capital invested anywhere on the planet.

In today's world, trade cannot be coherently measured as goods moving between nations, as capital from the importing nation often owns the productive assets in the exporting nation. If Apple owns a factory (or joint venture) in China and collects virtually all the profits from the iGadgets produced there, this reality cannot be captured by the simple trade model described by Ricardo.

Trying to account for trade in the 18th century manner of goods shipped between nations is nonsensical when components come from a number of nations and profits flow not to the nation of origin but to the owners of capital.

Based on the antiquated model of trade between nations, the Apple iGadget creates a $200 trade deficit between the U.S. and China when it lands on an American dock. But this doesn’t account for the fact that components for the device were manufactured in five different nations, or that the majority of the value of the device is in the intellectual capital: the software, the interface and the design.

Once these factors are considered, it’s been calculated that as little as $10 of the value of every Apple product actually ends up in the Chinese economy. Virtually all the profit flows to Apple in Cupertino, California, not to joint venture partners in China or the workers who assembled the components in China.

Expanding profits by moving production to locales with lower labor costs is known as labor arbitrage. Arbitrage is the process of exploiting the difference in prices of labor, currencies, goods, services, assets, interest rates or credit.

In today's globalized version of "free trade," mobile capital can arbitrage the varying costs of labor, currencies, interest rates, taxes, environmental regulations and political favors by shifting capital between nations.

In the global economy, trade is not conducted between equals; those with access to the unlimited credit of financialization can outbid domestic capital for assets, labor and political favors.

The mobility and scale of capital give it outsized influence in small, credit-starved local markets.

Mobile capital, with its essentially unlimited line of credit, can overwhelm the local political system, buying favors and cutting deals to limit costs and competition. Local elites are soon co-opted, and people starved for cash income are easily recruited as labor.

Local assets--priced for the local economy where credit and cash are both limited--are snapped up on the cheap by global capital, and sold for immense profits.

Credit--scarce in traditional self-sufficient economies--offers maximum leverage to global capital, which can borrow money in distant markets at low costs and use the cash to outbid local buyers to snap up local resources that are still cheap compared to the resources in other globalized markets.

The influx of credit also fuels a destabilizing explosion of credit-based consumption in the local economy, causing people with little experience with credit to become over-indebted.

As the over-indebted default, their land and other possessions are confiscated by offshore lenders, further impoverishing the local populace and enriching global capital.

Where is the "free trade" in a world in which the comparative advantage is held by mobile capital? And what gives mobile capital its essentially unlimited leverage?

Central banks, which issue nearly-free money to banks which funnel the cash to corporations and financiers, who can then roam the world snapping up assets and arbitraging global imbalances with low-interest money.

There's nothing remotely "free" about trade based on capital flows generated by central bank liquidity.

This mobility of capital is an enormous benefit to the owners of the capital, but it creates extraordinary instability for those who are not mobile. When mobile capital encounters anything that reduces profits--higher taxes and rising labor costs, competition or restrictive regulations--it closes factories and fires workers in that locale and shifts to another locale with greater opportunities for high returns.

The workers left behind have limited means to replace the lost wages, and the local state often has few resources to repair any damage left by the exploitation of resources. The advantage of mobility is reserved for capital, and to the relatively limited cohort of workers who can immigrate to other nations to find work.

This illustrates two key characteristics of financialized globalization: perpetual instability and a never-ending cycle of boom and bust as capital sparks rapid development in one locale and then moves elsewhere once profits decline.

The scale of global capital is difficult to grasp; trillions of central bank-issued dollars, euros, yen and renminbi are sloshing around the global economy, seeking low-risk profits.

Capital has no loyalty to anything but its own expansion, and the damage it leaves in its wake is of no concern to the owners of capital.

There are even less visible consequences to the globalization of markets, capital and labor. Once goods and services are priced globally, local supply and demand no longer set the local price. As a result, measuring inflation and deflation locally is meaningless in a globalized economy.

This globalization of price--for goods, services, credit and currencies--continually creates imbalances that fuel a perpetual instability that gradually impoverishes every sector other than global capital, which being mobile, can exploit the imbalances for its own profit.

Who benefits over the longer term from the permanent instability and boom-and-bust cycles of this arrangement? Only those close to the credit spigots of central banks.

This essay was drawn from my new book, Why Our Status Quo Failed and Is Beyond Reform, which Gordon T. Long and I discuss in a new 34-minute YouTube program.

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buzzsaw99's picture

tell it to bezos' EL GOO-WAPO!

Stuck on Zero's picture

Globalization is not in any sense opening markets around the world. Globalism is about concentrating all economic power into the hands of a select few world leaders.

KnuckleDragger-X's picture

Proclaiming a global economy isn't the same thing as having one. The trade treaty's have nothing to do with free and open trade, it's about stacking the deck in the elites favor. We're going to run out of airspeed and altitude at the same time, and we all get to be up close witnesses to the fireball.......

0b1knob's picture

< Globalism creates imbalances.

< Globalism destroys imbalances.

 

 

"When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity..."   Snow Crash Neal Stephenson

Katos's picture

PREDATORY CAPITALISM! THESE ANIMALS CONSUME THE POOR AND LEAVES THEIR BONES TO DRY IN THE DESERT HEAT. THE FACT THAT THEIR LOYALTY IS ONLY TO THEM THEMSELVES,  MAKES THEM THE NASTIEST KILLERS ON THE PLANET. 

Radical Marijuana's picture

Ah, Joe Cool, the paradoxical problems due to using the biggest bullies' bullshit languages in order to think and communicate!

English is the biggest bullies' bullshit language par excellence. For instance, it got rid of the use of "thou." There is no longer an intimate form of "you." Instead of being able to distinguish friends and family from strangers, everyone is referred to using the same language. Furthermore, that development has now been entrenched for so many generations that the vast majority of English speakers never imagine any alternative.

It is intriguing to consider the different tangents that languages develop along. The swear words that a language uses are examples of the biased ways that people who think and communicate through those languages take for granted.

For instance, in French Canadian, the language of the Québecois, their most passionate swear words are derived from objects in the Roman Catholic mass. Meanwhile, their use of "tu" is now more common than the use of "vous." Since the French Canadians were forced into the British Empire, their resistance to that drove their language to develop very differently than the dominate English.

I go into that digression in order to put into perspective the "globalization" and "privatization" go hand in hand, while both are justified through professional hypocrites using the biggest bullies' bullshit languages.

Civilization was always based upon being able to back up lies with violence. Long ago, as power was more important than power, the physical violence was more important than the dishonesty. However, as information became more important than power, the lies became more important than the violence that backed those lies up, although, of course, the resulting FRAUDS still needed the underlying FORCE.

A particular case is the history of the island continent of Australia. The British Empire became the greatest empire, and so, the British Navy the biggest group of pirates. They sailed around Australia, and claimed to "own" it, and backed those claims up with coercions. Therefore, the about 200 different cultures that were previously living in Australia, and had been for tens of thousands of years, were genocidally wiped out, and then, the survivors assimilated. By those means, the natural resources of Australia were integrated into the systems of globalized privatization.

Indeed, human beings and civilization have always lived as entropic pumps of environmental energy flows, which necessarily operated according the methods of organized crime, as combined money/murder systems. In that context, there is nothing "new" about runaway "financialization." Progress in physical science has enabled the exponential growth of sociopolitical systems based upon being able to back up lies with violence for thousands of years. The only "new" things are due to the exponential growth of ENFORCING FRAUDS becoming exponentially more FRAUDULENT, becomes more blatantly flabbergasting each time that doubles.

The article by Hugh-Smith is superficially correct:

Who benefits over the longer term from the permanent instability and boom-and-bust cycles of this arrangement? Only those close to the credit spigots of central banks.

Central banks exist due to the history of globalized privatization, such that public governments ENFORCE FRAUDS by private banks. Those who are closer to the sources of the ability to make the public "money" supplies out of nothing as debts benefit the most from those ENFORCED FRAUDS. Those further away from the sources of that "money" suffer the most from those FRAUDS being symbolic robberies of the many by the few.

However, in my view it is one of the consistent, unstated, themes of the writing of Hugh-Smith that he tends to not engage in deeper levels of analysis of how and why human beings and civilization operate as entropic pumps of environmental energy flows, which necessarily match the methods of organized crime. Moreover, of course, he does not come remotely close to going through more radical intellectual scientific revolutions requiring profound paradigm shifts in the ways that those problems are perceived.

Although globalized privatization is actually based upon ENFORCING FRAUDS, those doing that, as well as the controlled opposition groups surrounding them, are the best available professional hypocrites, who publicly use their language to describe everything they are doing in the most absurdly backward ways possible compared to what they are really doing, but nevertheless, they continue to be socially successful through doing that BECAUSE THEIR FRAUDS ARE ENFORCED.

Therefore, we are more and more faced with the paradox of final failure from too much success. Over the longer term, the short to medium term increments of social successes based upon THAT becoming exponentially more FRAUDULENT. Over the longer term, the excessive successfulness based upon controlling civilization through the methods of organized crime become runaway criminal insanities. As civilization manifests in ways which enable progress in physical science to provide advancing technologies, those are applied to drive the fundamentally FRAUDULENT globalized privatization to become more and more psychotic! 

Such paradoxes, that governments are the biggest forms of organized crime, controlled by the best organized gangsters, the banksters, have no good ways to be explained through using the English language. Everything the banksters controlled governments do is expressed through the language of DUALITIES, false fundamental dichotomies, and the related impossible ideals, while almost everyone takes that bullshit world view almost totally for granted, and can barely think or communicate in any better ways that still using the dominate natural languages and philosophy of science. That then enabled the entrenched systems to continue to become more and more UNBALANCED, because of the degree to which those who are ruled over suffering from the consequences of ruling classes' ENFORCING FRAUDS are not able to think more critically of what is really happening, and so, respond to that more realistically. The social successfulness of the established systems of ENFORCING FRAUDS driving globalized privatization are deeply related to the long history of WAR ON CONSCIOUSNESS, that the ruling classes have waged against those they ruled over, such that the biggest bullies' bullshit languages almost totally dominate the ways that people think and communicate.

Human beings and civilization are hyper-complicated results of the interactions between the language of the DNA code, and the language of the neural networks. Those enabled the development of combined evolution of natural selection interacting with artificial selection. The main manifestations of the artificial selection systems have become the ways that public governments ENFORCE FRAUDS by private banks.

Those ENFORCED FRAUDS are the foundation of the globalized privatization of the planet, in ways which are becoming more FRAUDULENT at about an exponential rate! Since all of that is being done through sociopolitical systems operated by the best professional hypocrites, using the biggest bullies' bullshit languages, it is extremely difficult to avoid intensely paradoxical statements such as "Fuck Globalism!"

P.S.

Here is a link to a recent article, which endeavours to compare the increasingly complicated understanding of the DNA code, with the also increasingly complicated understanding of the neural networks:

Epiconomics 101: Our Fiscal Genome

 

The Destabilizing Consequences Of Globalization are primarily due to the SOURCE of that Globalization, which is the development of Neolithic Civilization as systems of slavery, based upon being able to ENFORCE FRAUDS, automatically becoming more and more FRAUDULENT overall. Not only is there almost nothing but the core of organized crime, which is bankster controlled governments, but also, that is surrounded by almost nothing which is publicly significant but layers of controlled opposition groups, which stay inside the biggest bullies' bullshit languages, because those are the tools which they must use to think with, and communicate through.

All human beings and civilization must live as entropic pumps of environmental energy flows, however, the ways those developed were that the history of successful warfare based upon being able to back up deceits with destruction morphed to become financial success based upon ENFORCING FRAUDS. Those have become exponentially more FRAUDULENT, which prompts those aware of that to say: "Fuck Globalism!"

However, it was always natural selection pressures that drove the development of artificial selection systems. Thus, there are deeper and deeper levels of analysis possible with respect to how the currently existing systems developed. For instance, here is what an anthropologist has to say about "debt," which is vital to the history of globalized financialization:

"If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt — above all, because it immediately makes it seem that it’s the victim who’s doing something wrong."

— David Graerber

The only things which actually exist are the dynamic equilibria between different systems of more or less organized lies operating robberies. Only that which actually exists can actually evolve. Therefore, the only realistic resolutions to the problems presented by runaway globalization based upon ENFORCING FRAUDS would be to develop different equilibria between different systems of lies operating robberies.

For instance, in the case of Australia, the human beings who had been living there for tens of thousands of years were always also living as entropic pumps of environmental energy flows, who were then genocidally wiped out, and some survivors assimilated into much more technologically advanced systems of entropic pumping of environmental energy flows. The systems of staking claims, and backing those up with coercions, that developed in the Middle East for thousands of years, then developed through European history, were able to sail around the world, and finally come to a place like Australia, where those systems could claim they "owned" Australia, because they were able to back up those claims with coercions.

The big corporations that grew up around the big banks, as integrated systems of legalized lies, backed by legalized violence, could then develop the natural resources of Australia, through the ways that there was globalized privatization, whose backbone was the ways that public governments ENFORCED FRAUDS by private banks. That illustrates the overall context in which Hugh-Smith presents superficially correct analysis of those systems becoming exponentially more FRAUDULENT, in ways which are becoming exponentially more problematic, when the overall debts have to keep on doubling down, despite that generating numbers which have become debt insanities.

While I somewhat sympathize with the sentiment regarding that being "Fuck Globalism," such a feeling, expressed in such a way, is staying inside the biggest bullies' bullshit language. Overall, that is what most of the content published on Zero Hedge tends to do. Indeed, at the present time it is exceedingly difficult to try to use the English language to present better analysis of the problems with respect to the political economy, since English is the biggest bullies' language par excellence.

exomike's picture

UckFay Englishway is the proper translation.

Countrybunkererd's picture

Agreed.  Things will not change until the dollars purchasing the goods in these feedback loops stops flowing.

People show up in droves to spend every dollar they have and then some and care less about the guy working every day of the month but one 12 hours a day for nearly nothing.  I hate banksters, but the masses are to blame for their own misery until they purposefully demand change and hang the banksters as a result.  I don't see it happening considering how much the masses are addicted to the i-gadgets and widgets they buy intent on enslaving themselves.

 

Ghordius's picture

excellent article, CHS

"In today's globalized version of "free trade," mobile capital can arbitrage the varying costs of labor, currencies, interest rates, taxes, environmental regulations and political favors by shifting capital between nations. In the global economy, trade is not conducted between equals; those with access to the unlimited credit of financialization can outbid domestic capital for assets, labor and political favors. The mobility and scale of capital give it outsized influence in small, credit-starved local markets."

that's globalization. note, it can crush anything... small. and so... the reason why "the EU" and the reason why "the EUR" (two "co-ops" of sovereigns pooling resources to cope with that)

or why TTIP would be poisonous for both Americans and Europeans. (now, if you want to be distracted from globalization... there is "globalism")

Urban Roman's picture

To sum up, it is the dynamic tension between the ability of the big to crush the small, and the tendency for corruption to rot the big from within.

So unite, little guys!!1!!11!

Dre4dwolf's picture

What good are profits if you dont know what to do with them?

Apple is sitting on so much cash.

It has no idea what to do with any of it.

Its exploited desperate poor people in third world nations for decades.........its gotten rich.........and now it doesnt know what to do with all the money.

Sounds a lot like a Tony Montana style melt-down is imminent for apple, the world may belong to apple but at the end of the day it may find itself dead floating in a pool of its own blood, urine, and cocaine.

If apple was smart it would put that capital to work.

Maybe buy land in destroyed American cities like Detroit or Chicago, Maybe go Walt Disney on their ass and pave the entire place over and build a Utopia that people have to pay to live in? an APPLE TOWN? With apple TVS , Apple Parking meters, Apple billboards, Apple Highways, Apple cars, Apple Trains, Apple bicycles etc... the city of "tomorrow".

The company has no vision or leadership anymore....

Do something with the damn money....

two hoots's picture

Why?  Do they tell you how to spend yours?  Do you want them too?

 

And,  keep it away from the government as it will only enable them to become more powerful, wasteful and corrupt. 

  

 

Theonewhoknows's picture

It is interesting what you saying - because all the money companies are funnelling their funds into buy-backs. They don't invest in R&D, there are no new products, market disruptions are done only by central banks now not innovators and corporations like FB producing literally nothing are set as an example. I'm waiting for Janet pontificating NIRP as a solution 

PresidentCamacho's picture

You exploit H1B and the university system for " R&D" that is why it's a corporate write off to give money to university for research... of course you get teh results you want from an independent academic when you are effectivly paying their salary.

 

SgtShaftoe's picture

Globalization forces optimized systems.  Optimized systems don't have redundancies or slack.  When systems that don't have slack have problems, things break.  When food and energy are running on a global market in an optimized way, critical services break like food delivery. 

Implied Violins's picture

Unfortunately, globalists see that as a feature, not a drawback.

Theonewhoknows's picture

If it would be done by the market - then yes you would be right, but it's done by governments promoting and cheerleading this sort of job outsourcing, FDIs etc. This is not efficient! Now you see all this malinvestment coming down like a house of cards. Especially that the gains from globalisation were not used to better situation back 'home'. They were used to increase welfare state and raise taxes on the poor while letting bubbles to balloon.

two hoots's picture

 

We must finance our debt and like payday loans to the needy and ignorant we do the same to countries, especially third world.  Why? We are the good guys.   (And unscrupulous individuals and “certain Foundations” always benefit from the spoils.)

Good article.

 

Chuckster's picture

So....it once was different?

CuttingEdge's picture

Bearing in mind where the wealth created invariably ends up, isn't Globalization just a euphemistic term for Corporate Fascism?

LawsofPhysics's picture

Global Corporatism/Fascism yes indeed, a.k.a. Global Weimar.

nakki's picture

Centralized Confiscation through Consolidation and Counterfeiting.

Its what central banks do.

pndr4495's picture

Mullins was the first to dig into the way the game is played. His mantle was taken up later by G. Edward Griffin.  http://www.apfn.org/apfn/reserve.htm   

brodix's picture

All in the name of efficiency. Eventually you can do everything with nothing. Sort of like one black hole is more efficient than two, so when they combine, there is an enormous blast of all that surplus energy radiating out across the universe.

south40_dreams's picture

NAFTA needs to be canceled immediately. It's probably too late but we can try

Chupacabra-322's picture

Globalism is a failed Neo Fascist / CON attempt of a managed Global Economy via the CFR and other Global Criminal Oligarch Cabal Banskter Intelligence Crime Syndicates.

A Milton Friedmen "Chicago School of Economics" Totalitarian Authoritarian Global Fascsit Surveilance Police State FAIL.

You figure they would have learned from the Chile experiment.

financialrealist's picture

another f'ing infomercial...

anachronism's picture

Back  up 25 years ago: Sir James Goldsmith (The Richard Branson of his day) campaigned vigorously against the forces of globalism. He wrote a book "The Trap" in which he debunks all the lies and "junk economic theories" used to promote it. Even more telling, he laid out the adverse consequences of globalism exactly as it has unfolded over the course of time.

He was interviewd on the Charley Rose show over two days of programming (check YouTube). He was called before a Congressional Committee as well (also YouTube). He was disparaged widely by "economists" (and ridiculed by Laura Tyson - Clinton'e top economist) who refused to consider the data which Goldsmith used to support his arguments, as well as the logic he applied to them.

Either the 90% of the people with PhDs in Economics -who promote and defend globalism- are complete idiots, or they are purposeful liars. The same goes for all the politicians and "banksters" who have done and are doing the same.

Before Donald Trump, there was Ross Perot, Pat Buchanan, and Gerry Brown who ridiculed the globalist economic theories which promised a better life for "everyone" (that mattered).

In 2010, Andrew Groves -co-founder of Intel- wrote an article which was published in Bloomberg (but which was ignored by all the media -even by Bloomberg itself), in which he detailed the longterm damage brought on by globalism to our fundamental way of life here in America. Grove called for universal tariffs and a halt to H1B visas. He ended his paper with the comment: "If that leads to trade wars, bring it on!"

HopefulCynical's picture

Either the 90% of the people with PhDs in Economics -who promote and defend globalism- are complete idiots, or they are purposeful liars. The same goes for all the politicians and "banksters" who have done and are doing the same.

They are purposeful liars, parasitic psychopaths and a blight upon humanity.

LawsofPhysics's picture

Globalism has morphed into a oligarchal game of trying to rule the fucking planet...

this is the fundamental problem, global trade of real  goods and services is great. global paper/digital manipulation is BULLSHIT.

SillyWabbits's picture

The major problem with “globalization” is that people who believe in the financialization of the world economy; also believe there is a uniform world culture.

Which is not so strange, because, the other side of globalization is that as it wipes out established economic systems it wipes out the accompanying culture.

So, the question is: what is the goal; economic or societal?

HopefulCynical's picture

So, the question is: what is the goal; economic or societal?

The answer is YES. This is how. This is why.

financialrealist's picture

globalization and centralized economic power is impossible when you impoverish the very citizenry that you need for the required trade systems to function properly.  

LawsofPhysics's picture

Your feudal lords disagree as the feudal system lasted a very long time as was still very much capable of international trade.

Hedge accordingly.

Grandad Grumps's picture

For some reason the globalists insist on building a house of cards ... where there is so much interdependency that if you remove one card/element the enture structure falls down.

They have to know that distributed power and independence has the greatest chance for survival ... so why, one might ask do they do the opposite?

HopefulCynical's picture

They are parasitic psychopaths with insatiable powerlust and delusions of Deity. In short, they can't help themselves.

withglee's picture

Though free trade is often touted as intrinsically positive for both buyers and sellers, in reality trade is rarely free, in the sense of equally powerful participants choosing to trade for mutual benefit. Rather, “free trade” is the public relations banner for the globalization of credit and markets that benefit the powerful and wealthy, not the impoverished.

So, was the migration of unskilled labor from the south up to Detroit to manufacture cars ... was that free trade or not?

So, was the migration of furniture manufacturers in Grand Rapids and the migration of textile manufacturers in New England to the south ... was that free trade or not?

So is the migration of acceptable technical talent from China and India into the USA software development process ... is that free trade or not?

So was the migration of auto workers from Detroit to do oil field work for Houston companies ... was that free trade or not?

So is the migration of manufacturing from the USA to Japan, China, Indonesia, Mexico, India ... is that free trade or not?

Do you really think it takes 2,000 pages to define the word "free"?

Water seeks its own level. So does labor. Trade a agreements and labor unions are just "daming" mechanisms and artificial channeling mechanism  ... which ultimately fail.

ClydeCrashcup's picture

But is digging holes for one hour of MOE really free trade?  What if I want Larry or Curly in exchange for my hole instead, what then?

joego1's picture

If you allow capitalists free rein then labor costs eventually become close to zero i.e. robots or slaves. I like the idea of free local markets that actually benefit real people. It's obvious that capitalism and especially global capitalism lead to excesses. The worst case is global crony capitalism i.e. The Clintons.

HopefulCynical's picture

Crony "capitalism" =/= actual capitalism.

Faeriedust's picture

In theory, this should be absolutely correct.  But in practice -- having lived in both rural communities and the worldwide community of the military, I gotta say, that while I love the country -- really, really, love it -- those "local markets" pretty much suck.  Everything in a small local market is overpriced, and the quality is mediocre and poorer.  Selection is either ghastly or absent.  Individual craftsmen or crony networks operate monopolies over essential services as diverse as medical care and plumbing.  Accessing such monopoly services can be contingent on joining the right church or conforming to some Puritan's concept of fashion standards.  And finding a decently intellectual level of conversation?  Forget it; you're lucky if anyone in town can read the actual articles in the Inquirer as well as the headlines.

I love the country.  I love the clean air, the trees, the animals, the ability to sleep at night without some asshole playing his idea of "music" at high volume until 2 a.m. two feet away from my bedroom window.  But examine your concepts of the benefits of limited local economies carefully.  In theory they are good things.  But in practice . . . that's what the medieval period was all about -- nobody except Nobles being able to access any goods that weren't produced within a day's walk of home.

rejected's picture

"Do you really think it takes 2,000 pages to define the word "free"?"

Look at what the US government did to it's 20 page constitution. Tens of thousands of pages describing why they aren't required to adhere to it.

For them to take over the economies of multiple governments with only 2000 pages is pretty good.