INDUSTRY AND FINANCE

Capitalism is a trick word. Just like the word humanism. I had many discussions with American Christian Evangelicals, hopelessly trying to convince them that humanism is not an invention of Satan, and that, in fact, Christianity at its best is humanistic, and that some of the best and smartest Christian thinkers called themselves humanists, etc., etc. All to no avail… (Regarding this, see my entries Humanism As Philosophy and Religion And Culture.)

Capitalism is in that same category, because the word has come to represent two different realities, two very different psychologies, which can be “ethically” identified as good capitalism and bad capitalism. Ironically, the apologists of bad capitalism are always defending themselves from attacks by raising good capitalism as their shield, and far too often get away with it, by using the same word capitalism to apply to both.

“Good capitalism” versus “bad capitalism” are best represented by the parallel of industry versus finance. I have already approached this matter from several angles. Here is one more finishing touch to it.

The purpose of this entry is to expose the trick behind the indiscriminate use of the word capitalism, denoting two things that ought not to be mixed up. The good old kind of capitalism was product-oriented, that is, the industrialist cared about the product itself, cared about the customer, thus establishing a bond between the producer and the consumer, to the ultimate benefit of all society. Such good-capitalist psychology was permeating capitalist economy, and even the banking industry, conspicuously removed from the productive chain, maintained a solid, reliable function, as best represented by the Swiss banking establishment. Mind you, classic banking industry cannot be meaningfully tagged as representative of financial capitalism, as its psychology is firmly linked to the psychology of productive capitalism, and the two cannot be disattached.

Financial capitalism, as we are experiencing it today, is a totally different psychology. The product no longer constitutes its obsession, but rather a nuisance, a distraction. The customer’s main function is to serve as a supplier of money, but even that function is not essential. In the ultimate scheme of things, the customer is to be marginalized and even to be completely squeezed out of the money-making formula. Indeed the alpha and omega of financial capitalism is money: it starts as money and ends up as more money, and the trick is how to cut out the middleman, which, in this case, is the industrialist with his product and the consumer of that product. As we see, productive capitalism thus becomes an impediment to financial capitalism, a foe, rather than a friend. For this reason, the money-making capitalist is interested in destroying the product-making capitalist in his own country, if he can find easier and cheaper ways of making money. A good example will suffice. From 1974 (that is the year of President Nixon’s resignation: a truly watershed moment in American history) to the present time, American jobs in the steel industry have plunged from 521, 000 to 84,000, while during the same period the world steel production has increased by nearly 50%, and People’s Republic of China has emerged as the world’s leading producer of this strategic commodity… Call me old-fashioned, but to me the steel industry remains the key indicator of a nation’s industrial strength and of her general economic health…

America, being the citadel of modern capitalism, has demonstrated to the world where capitalism as such is going, if allowed ideological legitimation. American capitalism today is a global financial empire spreading around paper money born out of financial speculations and/or irresponsibly printed, but this predominance comes at a heavy price. Finance has triumphed over industry. Classic industriously productive businesses are either leaving the country altogether or living out their last days, while the going capitalist mantra glorifies this phenomenon, insinuating that the financial capitalist is a vastly superior species to the industrialist of times woebegone.

Here is of course the essence of financial America’s brainchild: Globalism, and all that it entails. But where does it go from here?

The initial successes of the American financial dominance were primarily caused by the global rule of the dollar, particularly the petrodollar. But now that the dollar’s precarious present and uncertain future have sent it on the retreat, and many key countries have been considering mixed baskets of currencies, some of them excluding the dollar altogether, the very premise of an American financial hegemony appears to be in shambles too, particularly, in the wake of the ongoing global economic crisis which has been unequivocally blamed on America’s financial adventurism.

Perhaps, in a few more years down the road it will become clear to everybody that finance is no substitute for industry? Perhaps, this realization will finally set this last vestige of the ideology of greed on the road to socialism, or at least to a very different kind of strictly regulated capitalism, which is just another word for socialism, and the ideology of greed itself will be relegated where it belongs, to the trash heap of history?

…I am afraid, I ought to have sent that last paragraph to the section on wishful thinking…