Ian Boyne
The Cash Plus phenomenon where short-term investor interests are likely to clash violently with citizen interests is not limited to Jamaica. Nor is the phenomenon where the big banks are under pressure from the upstarts limited to Jamaica.
It is part of a development which former U.S. Secretary of Labour and Professor Robert Reich calls "supercapitalism" in a book of the same title, which just rolled off the press. In this fascinating, 273-page book, Reich, who has been awarded for his pioneering work in economic and social thought, shows how people have gained as investors and consumers and lost as citizens. In other words, we are in an era of capitalism devoid of conscience, social responsibility and driven by the logic of shareholder value and price competitiveness.
It is not that the modern capitalists are greedier than their predecessors. It is just that the technologies, ethos and inner dynamics of 21st-century capitalism demand a type of competitiveness which relegates social issues to the periphery. "The last several decades have involved a shift of power away from us in our capacities as citizens and toward us as consumers," is Reich's basic thesis which he develops with admirable intellectual and empirical clarity. He is referring to what is happening in America, but he could well be talking about Jamaica, as we are mere mimic men for the Americans.
Crash
As investors, Cash Plus and Olint members, along with those in other unregulated schemes, are doing well, boosting their pensions, making consumer purchases, expanding family incomes etc. But the potential threat to the nation if there is any crash; the disincentive to production (why hassle with workers and bureaucracy when you can get 150 per cent profit a year from not working?) and the possibility that these schemes could be a net drain on the economy are totally irrelevant to the consideration of the average investor in these schemes.
Speaking specifically about America, Reich says since the 1970s consumers and investors have more choices and better deals, "but the institutions that have negotiated to spread the wealth and protect what citizens valued in common began to disappear". In an earlier era of capitalism, there was a concern for equity, fairness and ensuring that the vulnerable was facilitated and that public goods were protected. A study conducted by professors at Tufts University, led by Jeffrey Berry, looked at Congress in 1963, 1979 and 1991-all years of Democratic majority incidentally. The study confirms that Congress has been giving declining attention to issues of equity. In 1963, the Congress passed six out of 10 bills designed to reduce economic inequality. In 1991 it passed two out of seven.
The concern now is for efficiency over equity, profits over people. "Yet, the executives of Wal-Mart or any other large company are not brutally insensitive or ruthlessly greedy. They are doing what they're supposed to do, according to the current rules of the game - giving their customers good deals and thereby maximising the returns to their investors. Just like any players in any game, they are doing whatever is necessary to win."
Corporate executives are not engaged in any diabolical plots, Reich opines. "The negative social consequences are the logical consequence of intensifying competition to give consumers and investors better and better deals. These deals may require moving jobs abroad where they can be done at lower wages, substituting computers and software for people or resisting unions.
Sex and violence
"Or they may come at the expense of the Earth's atmosphere. Good deals may depend on filling the air with gunk, filling the airwaves with sex and violence or filling our stomachs with junk food. The deals may involve trampling human rights abroad or putting young children to work in southeast Asia. As long as the deals are legal and as long as they satisfy consumers and investors, corporations and their executives will pursue them."
Reich says bemoaning this phenomenon is pointless unless as citizens we decide to temper our consumer and investor interests for the larger good and unless the state intervenes to change the rules. Supercapitalism, therefore, needs regulation. The neo-liberal, laissez-faire capitalists should read this book from this seasoned intellectual and public official.
Reich mentions Yahoo's dastardly 2005 decision to surrender to the Chinese dictators the names of Chinese dissidents who had used Yahoo email thinking their addresses would shield their anonymity.
Market presence
One of them, a journalist, was sentenced by the dictators for 10 years for sharing with foreigners a message his newspaper had received from the Chinese authorities urging it not to overplay the 15th anniversary of the Tiananmen Square disturbances. Another person whom Yahoo helped track down was sentenced to eight years and others for other years-long sentences. Yahoo was more interested in maintaining its market presence in that vast market than in morality or democracy, which America proclaims.
"Unless barred by legislation in the United States, Yahoo will continue to do whatever the Chinese Government demands of it because the competitive stakes are too high and the potential profits too great to do otherwise," says Reich.
Then not to be outdone, Google created for the Chinese a censored version of its search engine removing words as "human rights" and "democracy".
Then hear this fatuous, self-serving and gallingly hypocritical justification by Google's Chief Executive Eric Schmidt: "I think it is arrogant for us to walk into a country where we are just beginning operations and tell that country how to run itself!" So democracy is good for the Americans and Europeans, but not good enough for Chinese people!
Yet, note this just before this Google refused to cooperate with the American authorities in turning over names of people involved in child pornography. Google went to court to fight for its privacy rights. It was prepared to fight the American Government - and public decency - because America is a democratic country and would not endanger their profits, but they could not afford to endanger their profits with the Chinese tyrants. They are just about making money for their shareholders. Supercapitalism is what it is called.
Says Reich: "If the U.S. Government wanted to make Chinese human rights a priority, it could pass a law tomorrow barring American companies from helping the Chinese Government hobble free speech of its citizens - just as it barred trade with South Africa and still bans commerce with countries like Cuba and Burma." The Chinese market is more lucrative than Cuba's, and Burma's or North Korea's.
Corporate statesmen
And this raises the matter of the power of lobbyists in Washington, which Reich devotes some significant attention to. The result of this lobbying has been to "drown our voices and values as citizens". Says Reich, "The old institutions through which citizen values have been expressed - industrywide labour unions, local citizen-based groups, 'corporate statesmen'. responding to all stakeholders and regulatory agencies - have been largely blown away by the gusts of supercapitalism."
It is not just a matter of reforming campaign finance. Reich is incisive in seeing the larger problem. "The fundamental problem does not involve blatant bribes and kickbacks. Rather, it is the intrusion of supercapitalism into every facet of democracy - the dominance of corporate lobbyists and public relations professionals over the entire political process; the corporate money that engulfs the system on a day-to-day basis, making it impossible for citizen voices to be heard".
The former U.S. Labour Secretary writes poignantly that "unless we are committed narcissists, our concerns are not limited to our own jobs, wages and benefits. We're also members of communities, participants in the life of our neighbourhoods, members of a democracy, patriots. Standard economic models have little to say about any of these altruistic sentiments". Reich says Americans care about companies polluting the air, trampling human rights abroad, pandering to our baser sexual instincts and corrupting our moral sentiments
Lower payrolls
But he says graphically, "Where do we suppose the great deals come from? In part, they come from lower payrolls from workers who have to settle for lower wages and benefits. They come from companies that shed their loyalties to particular communities and morph into global supply chains, paying pennies to 12-year-olds in Indonesia. They come from companies all over the world who wreak havoc upon the environment and from companies that pump out violence and porn or nutritionless foods and beverages."
He goes on: "When we find great deals on cars, refrigerators, or almost any other manufactured item, it's often because the Americans who moulded, fit or clamped or bolted these things have either accepted cuts in pay or benefits or lost their jobs altogether. Their pay dropped or their job vanished along the road of supercapitalism."
Robert Reich details the casualties along the road of supercapitalism. I highly recommend his book for holiday reading - though there won't be much to cheer about. But perhaps it might prepare you for the New Year, for supercapitalism has arrived in Jamaica.
Ian Boyne is a veteran journalist who may be reached at ianboyne1@yahoo.com
