Alex,
Certainly those most successful and benefited by the system are not likely to see the same flaws as many of us do, but that is understandable.
Some of these problems go to the heart of what it means to be human. Our intellectual process is firstly reductionist and secondly contextual, so there is a strong inclination to distill out essential qualities, such as quantified value, long before we understand the context from which they were extracted and which gives them purpose and meaning.
For instance, money functions as a contract, with one side an asset and the other a debt, but we treat it as a commodity to mine/manufacture and store.
When society was small, economics was reciprocal, as it was more effective to share, than hoard gains. As they grew, methods of accounting became necessary and that’s the function of money, basically a voucher system.
Yet we individually experience it as quantified hope and try to save and store it, which draws it from circulation, especially when this involved burying coins. So more would have to be added, in order to keep the system functioning, without actual production to back it up. Which served to obscure the functioning of the communal contract and make it seem like personal property.
Yet underlaying this history, it remains what it is; a contract. So in order to save the asset side, we need to create the debt to back it.
You mentioned the problem of capitalism, that labor and capital can both become underemployed. Consider that the Federal budget went into deficit with the New Deal and never went back to surplus. Obviously Roosevelt wasn’t just putting unemployed labor back to work, but unemployed capital, as well. Then with the war, this deficit spending went to fund the military and that remains its baby.
Yes, there is lots of social spending, but that only patches a disfunctional society, not cure the cause. When Reagan tried gutting welfare in 86, one of the primary opponents was Archer Daniels Midland, the food conglomerate. As that was money that ended up in their pockets. The people being a pass-through.
How would Wall Street function without government borrowing of now a trillion dollars a year? Would they just buy more Apple stock? Blow the derivatives market up that much more?
Presumably government debt is the safest form of investment, but it gets spent in any way that doesn’t actually turn a profit, from supporting the unemployed to blowing up the occasional irritating third world country.
The fallacy goes back to that notion of money as a store of personal wealth, not a contract with the entire community. When banking arose and convinced people to store money with them, rather than burying it, they used the encouragement of paying interest, so not only are we trained to think of it as property, but one we should be paid to have. Yet that requires debt.
Think how much mortgages, student loans, credit card debt are all bundled and sold to investors. Not to mention corporate debt.
How do we peel this onion?
Econ 101 tells us money is both medium of exchange and store of value, not to mention price setting mechanism. Consider that in the body, blood is the medium and fat is the store, or for cars, roads are the medium and parking lots are the store. We certainly wouldn’t confuse a dynamic medium with a stable store in those situations, so why do it with money?
I mentioned the history above, but it obviously goes to some fundamental intellectual, physical and social issues as well. Basically how do we put that distilled value back into the social context which gives it purpose and meaning in the first place? As a contract, it makes a valuable medium of exchange, that enables complex societies to exist. Yet its functionality is in its fungibility. We own it like we own the section of road we are using. If everyone had to have their own roads, the earth would be paved over. Not only shouldn’t we store fat in the circulation system, we don’t need a lot of excess blood either.
Just as a hypothetical, what if government were to threaten to tax out what it currently borrows? After all the screeching, fainting and pearl clutching subsides, people would start finding more tangible methods of saving value.
We all save for many of the same reasons, children, housing, health, retirement, etc. If these could be invested in as community assets, than everyone trying to save for them individually, with their bank accounts as their economic umbilical cord, economics would return to its reciprocal function and we would have healthier societies and the environments they require.
No, this is not feasible in the current paradigm, but the current paradigm is cracking apart. What is waiting within, to hatch?
