Power and Duties of Capital

For economists, the solution to all complex problems is the same; leave it to the market. They mean freedom for capitalist markets, where money is measure of value, and owner of capital has the right to use it as he wishes, including the right to use it only for accumulating even more capital rather than investing it in society.

The global financial crisis in 2008 revealed structural weaknesses in economies. Irrational exuberance in deregulated financial markets in the US and Britain had disrupted economies. A Growth Report in 2009 said that liberal market theories explain how to make economic growth faster. They don’t explain how to make growth inclusive. The models assume that macro growth lifts all boats, and wealth will trickle down as it accumulates. However, ‘trickle-down’ doesn’t happen automatically. Wealth had been flowing upwards since the 1990s with the ideology of ‘leave it to the market and get government out of the way’ pervaded policies from the 1980s.

Market is an ancient idea. People traded many things in markets centuries before the advent of modern stock markets and financial trading.

21st-century economics doesn’t have a theory of how to improve inclusion along with growth. In capitalist economies, everything can be bought for money and converted into the buyer’s property to use as he wants. Land, mineral resources and forests become commodities in financial markets. Their owners can use them to extract the maximum economic value and sell their assets to others whenever they want.

In the concept of labour market, Human beings are not commodities. They get dignity from the dignity given to the work they do. Humans can be bought and sold for money is slave markets. Labour is a commodity in contract labour markets. Its price is negotiated between workers and employers who need them to work to make profits.

Every citizen is a potential customer in markets. However, every consumer is a human, who needs enough in his or her wallet to buy the stuff that is available when markets are opened to imports. If citizens don’t have decent jobs to earn enough, internal markets will not grow.

Modern economists do not acknowledge how societies and real economies function. By the last century’s end, free market fundamentalism became an ideology. With the shame attached to socialism, free market capitalism and unfettered trade became economics.

Behind the invisible hand is the power of capital. Rights of capital and its freedom roam the world make more profits trump the rights of humans moving across borders and searching for safer lives.

The time has come for a new economics to put humanity back into capitalism.

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