Lambert here: Among other things, an interesting discussion of public purpose and the role of the state.
By Costas Lapavitsas, Professor of Economics at the School of Oriental and African Studies, University of London. Originally published at Triple Crisis.
The interview below is from a series on The Real News Network’s Reality Asserts Itself, with Paul Jay. Jay interviews Costas Lapavitsas, professor of economics at the School of Asian and Oriental Studies, University of London, and author of the book Profiting Without Producing: How Finance Exploits Us All (Verso). Lapavitsas recently did an interview with Triple Crisis blog and Dollars & Sense magazine, serialized here (part 1, part 2, part 3, part 4).
PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I’m Paul Jay in Baltimore. And welcome back to Reality Asserts Itself.
We’ve been talking about the financialization of the economy, and we have also talked about the financialization of politics, in the sense that a lot of money buys a lot of politicians. And that has a lot to do with what American politics and a lot of other countries’ politics is all about these days.
But what can we do about it? So in this segment, we’re going to talk about what can people demand from the current elites, who seem to control most things, but also what would we do if there was a government in power whose actual agenda was simply the well-being of the majority of its people and not the well-being of the majority of the finance sector.
So now joining us is Costas–.
Joining us now in the studio is Costas Lapavitsas.
Thanks for joining us again, Costas.
And one more time, Costas is a professor of economics at the School of Oriental and African Studies at the University of London. And his most recent book is Profiting without Producing: How Finance Exploits Us All.
So, Costas, start with some short-term demands, although I don’t want to spend too much time on that, in the sense that so far the system and the political elites seem quite resilient to short-term demands. I think it’s time people need to start imagining what they would do if they actually had some power. But in terms of short-term demands, what–if you take the United States, where we are, what might people be demanding?
COSTAS LAPAVITSAS: It’s very difficult to separate, as you say, short-term and medium-term demands, because whatever–.
JAY: Okay. You know what? Then let me phrase the question differently. I agree with you. We don’t have time to get into it. Let me just cut to the chase.
Thanks for joining us.
So what is a model that people could realistically imagine could confront finance? What policies, set of policies? I mean, let’s take this example: if people were to elect at a city level, a state level, a federal level governments whose–actually their only agenda was the well-being of the majority of its people, how do you confront this finance sector?
LAPAVITSAS: I mean, the first thing to say here is that it isn’t just confronting the finance sector. It’s about reversing financialization. And financialization is, as we’ve discussed many times now, a deeply rooted thing. It isn’t just the sector of finance that we need to do something about. It’s actually a broad range of economic activities that we need to intervene in in order to reverse financialization.
Or, to put it differently, it isn’t simply a case of regulating finance. It isn’t simply a matter of regulation. What we’re living through isn’t the product of deregulation, simply, and if we only had the introduction of new regulations, everything would be okay, as I’ve indicated many times, actually the deeply rooted transformation going on here, operating across the economy. Therefore–.
JAY: Yeah, just to add to that, it was in the environment of regulations that finance became so powerful it was able to burst all the regulations.
LAPAVITSAS: That’s exactly right. In fact, the process there, I would argue, is a process in which the agents of the economy, as it were, the non-financial enterprises and the financial enterprises and so on, begin to transform themselves. Things happen there [incompr.] discuss these things previously. As they change themselves and begin to do different things, they become more capable of bypassing regulation and of demanding the abolition of regulation. That’s basically what happens. And then, as the interests of the economic agents become more and more powerful, they could well succeed in abolishing regulation. And then you have a financialization on steroids, basically. Then you have an explosion of financialization.
But the process then is far more complex than simply imagining that, oh, there was a change of attitude for some non-specified reason, then as a result of that we ended up with financialization.
JAY: So if regulation’s not key, although I know you think it is–it’s not that it’s worthless, but it’s not transformative.
LAPAVITSAS: Yes. We need regulation. We need regulation with teeth for sure. There’s no question about it. The point there is that this isn’t enough. And if I were to ask–if I were asked to put it in a single word, I would also say that we need to consider ownership, of course, not just regulation. Ownership matters very much, ownership of finance, but also ownership of other sectors of the economy, because ownership allows (A) private owners to bypass regulation, (B) allows public owners of whatever assets they might be to do some things about the economy that regulation doesn’t allow.
In addition to that, I would argue it isn’t just a matter of ownership or of regulation; it’s also a matter of provision, mechanisms of provision, of basic goods and services that households need. This isn’t just a matter of ownership, of the ways to produce and the ways to do finance; it’s also of how we organize social life more generally and allow people access to basic goods and services, which is, as we’ve discussed, a fundamental to financialization.
So if you asked me, then, for a broad picture, I can give you nothing other than a broad picture, because I don’t know the situation in Baltimore or another similar city in the United States.
I would say that to reverse financialization, we need to think first of all of what we’re going to do at the level of the productive enterprise in the first place. We need productive enterprises that actually focus on production rather than on financial profits, that actually take a long-term perspective, that invest to create productive capacity and to create jobs and to provide employment for people, and we need to think of productive capacity that detaches itself from finance, doesn’t have financial motives and financial profit-making in mind, and organizes investment on a systematic basis, as I’ve indicated. That’s the first thing we need to do.
JAY: I’ll give you an example from Baltimore. I mean, it’s very–a lot of people have talked about reviving what used to be a very industrialized city, Baltimore. How do you revive the industry of Baltimore? Many people have suggested it should be a green revival of the industry of Baltimore. But there’s way more profitable ways for private finance to make money. So it’s not in their interest to do it. You would need public financing to do it.
LAPAVITSAS: Quite clearly. And all the mechanisms that I’ve mentioned that we need for the productive sector involve public involvement. I wasn’t–when I say that we need to do things about investment, we need to reorganize production, we need to move it away from the financial profit-making activities in which it’s been engaging, we need public mechanisms through which this can happen, public intervention in investment, public intervention in particular areas of production. We need public mechanisms across the world.
How we have them, it’s a matter for debate. It’s a matter–that’s exactly what society needs to be debating. I don’t have a blueprint. Nobody else does.
JAY: But one thing I think you would have to do is instead of cities and states going to this very same finance sector we’re already talking about. It also brings in the issue of taxation, because instead of borrowing the money from finance, you can also tax them.
LAPAVITSAS: Let’s come now to–that’s exactly right. That’s it. So let’s come to finance now. Where would you get the financing for this transformation of the productive sector that we need? ‘Cause clearly the United States needs a wave of investment, clearly it needs good jobs to be created for the American people, and clearly it needs real incomes to begin to rise, because real incomes have been stagnant. So financialization will not be countermanded, will not be reversed without these real things being put in place through public intervention, through public policies.
Where would the finance come from? Finance can come from a variety of sources. Tax is also very important because tax also comes into the issue of redistribution and greater equality, which the United States definitely needs. But obviously finance, the realm of finance and the financial sector is very, very important.
Now, what do we need? There, obviously, we need regulation in finance, but we need public institutions of finance, we need public intervention, we need public mechanisms, and we need publicly owned financial institutions to be put in place that would actually have a public mandate and that would begin to think of themselves and of what they do in the economy not like the private financiers do, which is let’s make a quick buck and let’s get out of it before the sky caves in, but think of themselves as public institutions that are there to provide the financial means that the real economy needs to put itself on a different footing. And yeah, that’s–.
JAY: And it’s not so far-fetched. In 2008, in the bailouts, they already kind of nationalized the banks. The problem is they nationalize it to beef them up to hand it right back to the private owners again.
LAPAVITSAS: That’s exactly right. So nationalization alone, it’s not what we’re talking about–nationalization, actually, we’ve seen time and again–and it can happen within the context of financialization, whereby the state intervenes yet again to rescue the system, nationalizes, but it doesn’t really treat these institutions as agents that actually come to belong to the state and they have to be used in a publicly spirited way. It just sees it as a temporary measure to put them to rights and then return them to the private ownership, which somehow knows best what to do about it, whereas it ruined them in the first place.
So nationalization isn’t really what we’re talking about. We’re talking about public financial institutions with a public mandate and run in a new public spirit, communally based, associational, and with a different understanding of themselves and how they operate and what they ought to do in society, and institutions that are focusing on supporting investment and on providing credit to ordinary people with some aspects of public utility attached to it. That’s the kind of thing we’re talking about. That’s the kind of finance we need for the future, because, I repeat, private finance, in the context of financialization, has failed and failed gloriously. There’s no two ways about it. They only reason why it survived is the state. In other words, it’s public banking. Right? So that’s the second part of this broad program, if you like.
The third part is to do, of course, with households, because we’ve discussed households and how key they’ve been to financialization, and the problem starts with low wages, which we mentioned, but also the way in which public provision of needs and goods and things that they need has been replaced by private provision. Well, the answer is clear. I mean, if you’re going to reverse financialization, you need to do something about redistribution.
JAY: Here it’s been mostly private all along. This is more a European thing to think about public being replaced with private. It’s been mostly private in the United States.
LAPAVITSAS: But in key areas, it’s also been public. There has been public–.
JAY: Public utilities. You could say water, electricity in certain cities.
LAPAVITSAS: But also public–there’s been a public dimension to pensions. There’s been a public dimension to education that has been undermined. So it varies from country to country. But even in housing, the large financial institutions that have been involved in the housing business have been publicly owned, but in recent years, although they remain publicly owned, they’ve begun to operate like private enterprises, begun to imitate–.
JAY: And in recent years, I mean, Fannie and Freddie actually became quasi private, and [crosstalk] was a hybrid [crosstalk] private, yeah.
LAPAVITSAS: That’s what I mean. Yeah. So although the replacement of public with private isn’t the same in this country as it is elsewhere, actually it’s not the same in any country. But as a general trend we do observe it.
So the argument I would put is that we need new mechanisms, first of all to do something about wages. We need to raise real income. And then we need to look at provision and we need to look at how households meet their basic needs. And we need new mechanisms of public provision. We need public mechanisms for housing.
JAY: What’s an example of that? What does that look like?
LAPAVITSAS: We need systems, public systems of building housing, public systems of accessing funds for housing–.
JAY: Like, the whole thing of publicly owned low-income housing has almost disappeared.
LAPAVITSAS: That’s it. We need systems, we need a wave of housebuilding, of decent, good-quality housebuilding across many parts of the developed world to begin to solve the housing problem. If I look at Britain, for instance, about which I know most, if you look at the southeast, London and so on, housing problem there has become impossible. It’s–you can’t get a house, you can’t afford a house to live in in a vast area of the southeast around London because of how financialization has worked around the housing market. I don’t quite know exactly how it works in the U.S., although I follow it, but I’ve got no doubt that public mechanisms of housing provision for the poor and so on should and could become stronger.
JAY: I mean, part of, I think, your thesis from reading the book is if you wanted to–I mean, as a model to create an alternative to the power of finance, but also to start to break down the political power of the finance sector, there doesn’t seem to be any way to combat other than a public sector alternative, ’cause you can’t, as I said earlier, like, even in theory you can talk regulation, but you can’t even pass the most measly regulations.
LAPAVITSAS: Yeah. But that’s exactly it. If you intervene in publicly minded and publicly based ways that use ownership as well in the realm of the productive enterprises, in the realm of banks, in the realm of the household, in these [incompr.] you’ve got essentially a program that basically says, I re-strengthen the public sector, I emphasize the social and the collective, and I reduce the influence and the power of the private and individual. In other words, this is a program that is inherently anti-capitalist. And I would argue that you cannot combat financialization, you cannot reverse it, unless you’ve got a clear anti-capitalist direction in mind.
JAY: Because one of the criticisms of this, if you’re talking public ownership, you’re talking government ownership–and you’ve made the point earlier it was the state that made the high-risk adventures possible of the financial institutions. And someone’s going to say, I’m sure one of our viewers is going to say, well, now you’re talking about making the state even more powerful, ’cause you’re going to give them all this–the wrong banks and things like this.
LAPAVITSAS: It’s a very good point. And therefore we need a debate on what exactly the public means. I keep stressing public. I didn’t say the state. And I do it advisedly. It’s not ’cause I don’t–because all this, without actually intervening in the realm of the state, is highly debatable. And you can see it in Europe very clearly and you can see it in the case of Greece and elsewhere. Where a program of radical change such as this is actually in the cards and likely, can you deliver it with the current state, the current mechanism of state, without intervening [incompr.] No.
JAY: ‘Cause I think there is some legitimate basis for, like, the libertarian critique of the state, ’cause people, one, are alienated from the state. It doesn’t serve most people, and on the whole, the state does serve big finance. And so there’s this wariness that if you start building more institutions under the realm of this state, all you’re doing is strengthening the big corporations, really, ’cause they’re going to find some way to use it, one way or the other.
LAPAVITSAS: I’m not a statist, and I didn’t say the state. I keep talking about the public, the public sector. We need public mechanisms. Now, and in fact, I would go even beyond that and say we actually need communal and associational methods of putting the public in place, not necessarily the central state, but locally based communal and associational methods. We need to rethink much of this.
JAY: So it could be done at the level of a city, it could be at the level of–
LAPAVITSAS: That’s right, and through–.
JAY: –the city backing credit unions. It could be state-owned banks, not federally owned.
LAPAVITSAS: That’s it. We need to think, we need to think of these mechanisms afresh. But obviously we also need an aggregate approach. This problem cannot be resolved only at the state level or city level. And there, I repeat, we need to think of public methods, not necessarily nationalization, not necessarily this current state taking over, all this stuff.
JAY: Yeah, ’cause the argument will be: concentration of ownership leads to concentration of power. But as we know from, for example, the Soviet Union, I mean, that can become just as problematic under the banner of public ownership.
LAPAVITSAS: Of course. Who wants–I mean, we know that we don’t want a society in which we’ve got one agent aiming to produce the last button in the economy. And that’s clearly not what we’re about and that’s not what is being discussed here.
JAY: And it’s partly, I think, far more possible to do this now than, for example, in the 1930s, where you could have a whole complexity of ownership of financial institutions–and others, but start with finance–at a city, of all kinds of levels, co-ops, a very complicated system that doesn’t concentrate too much power in one place. But digitization, you know, computerization, it actually makes it possible now to make sense of all that, where, you know, 30, 40 years ago maybe it wouldn’t have been possible.
LAPAVITSAS: That’s exactly right. And I will–and, again, let me remove it in a slightly different context. In the 1930s, people who believed in that kind of socialism and that kind of state intervention actually didn’t want finance. What they wanted–and you can run an economy this way, if you think about it–what they wanted was one agent that will organize production, collect all surplus funds. And this agent would then distribute the surplus funds to other areas of the economy, depending on decisions and needs and so on. You might call this agent a state bank, but that’s not really a banking system. That’s just a bookkeeping exercise. Right? You collect the surpluses and you pass them on. And that’s what they wanted. In other words, they abolished finance, effectively.
Well, what I’m arguing here is that there is room and scope to rethink public intervention [incompr.] with the financial system in place, because it gives you flexibility, and it gives you the ability to meet local need, and it gives you a way to respond to local demand, which is lively and targeted and not clumsy and clunky. And that’s why you might want a financial system in an entirely restructured economy. But this should still be a publicly based financial system.
JAY: And in your book, you say one step towards this might be something like a Tobin tax, where you start to tax financial transactions. You have a paragraph in the book where you say, this isn’t a transformative thing in itself, but it might be a step towards something transformative.
LAPAVITSAS: I, obviously, am not against a tax of this type. Who can be against a tax of this type? It makes sense because it would reduce the spinning over of loanable money, capital, that allows banks to make profits. I’m not against it, although people who wish to reform and restructure the financial system have invested rather too much capital in it and they think that this tax could actually magically change the world and provide large amounts of income that would allow a progressive government to do other things. It’s wildly exaggerated, in my view. But nonetheless, this is an important part of any package that seeks to redress the imbalances of contemporary finance. So, yes, I would be in favor of it and it would be an important element in rethinking the international dimension.
JAY: And in the shortest term, it’s not impossible to imagine the beginnings of this at the level of a city and a state or at a city and a province. I mean, I can imagine even in Baltimore taking the city, working with credit unions, maybe even some small, local, independent banks, of which there are a couple in Maryland that aren’t owned by the biggest banks, and started to stitch together the beginnings of an alternative finance system. And you’d need to do it at the level of the state of Maryland. I’m not sure what a city could do, but even there, maybe.
LAPAVITSAS: I think clarity of objectives is the important thing here, and understanding what is feasible and what is not within the parameters of where you are. If the objectives are let’s think seriously about the productive sector, first of all, and help it, in a sense, de-financialize and begin to focus on what it ought to be focusing–jobs, production, and so on, on a social, on a public basis–if the objective is, let’s do something about the financial system and start reorganizing on a public basis, to move it away from what it’s been, and if the objective is, let’s start providing the household with the thing it needs on a public basis, and let’s start thinking about wages and so on, if that’s the objective, then there are steps that can definitely be taken at the level of the city, of a city, at the level of state, at the level of the federal government, or whatever the overall state. Clearly you cannot resolve everything at the level of the city, but to say that you can do nothing at that level is obviously not true to me.
JAY: And from a practical, political point of view, at least in the United States, that’s–I don’t see how you can do anything other than at the level of a city to start with, because the national politics is so paralyzed that you can’t even imagine it right now.
LAPAVITSAS: I’ve got no expertise and no knowledge of–I can’t speak with any authority on this issue, but what you’re saying makes sense to me from what I observe and from what I read about the U.S. And it also has to do–I mean, that seems to me to fit what I know and understand about American life, basically, and how American society works and what makes it tick at the level of the neighborhood and the level of the individual household. So I would say, yes, there are plenty of things that any kind of progressively minded body of people and political activists and so on at the level of a city wish to do. The argument that you can do nothing at that level is just not right.
JAY: So what we’re going to be doing is we’re going to be doing investigative journalism, town hall debates, and a lot of work over the next few months and years trying to develop what would a realistic alternative look like, both in finance and in other kinds of social policy.
So it’s a good beginning, this discussion. Thanks very much, Costas.
LAPAVITSAS: It’s a pleasure to discuss these things with you, Paul.
JAY: And thank you for joining us on Reality Asserts Itself on The Real News Network.
“It could be state-owned banks, not federally owned.”
I don’t think so. ALEC (American Legislative Exchange Council) has most of the states firmly in the grip of anti-regulatory corporate power. Maybe at the county or even municipal level, but then banks are still chartered by the states.
The instant finance enters the equation anything and everything becomes way more expensive. Because we finance most of what we consume we end up over a life time paying more to the banking/finance system than the actual price of all we consume. That combined with the fact that the money we use to buy all of what we consume and then pay has all been loaned into existence by that same banking/finance system. They own us all. We work for them.
The additional money society has paid to the banking/finance system over the last 100 years could have bought the most robust social support system with the highest standard of living for every person on the planet easily. Instead that money pulled out of thin air went to allowing a tiny percent of the population to live like gods on earth. This has been facilitated by the fact that we buy the lie that if we don’t threaten everyone with the “No Money=You DIe” paradigm no one would do anything. Even though the countries with the most robust social support systems are doing better than those without. Over 30,000 people die every day in order to support this lie and no it is not necessary for that to happen in order to keep population balanced. It is a fact that countries with robust social support systems have lower birth rates, happier and healthier populations, and are still highly productive.
I couldn’t agree more with the points you make. Unfortunately, I’m not convinced that a “robust social support system” alone will solve our overshoot predicament. I live next to a partially or fully subsidized housing project and I know from listening to the occupants that any extra money would be spent on Seattle Seahawks paraphernalia. (Not any different from the middle class spending money on a new stainless steel grill. We have to develop better people at every level without postmodern claptrap. Understanding different levels of development is a start and although I gain perspective from integral theory, I am open to other methods and theories.
It is obvious that we have to go local. Additionally, any shelter that is provided should require productive — not reproductive — responsibilities.
Were it not for the interference of the interviewer, I would have been able to say that this is the most successful attempt to discuss solutions that I have seen coming at the end of a very good exposition of what the problem is.
I try to imagine what Lapavitsas might have said, if he had only been allowed to speak without interruption. I haven’t found these ideas in Lapavitsas’s book yet in a way that I think he was about to explain them in the interview.
Ironically, it may have been Paul Jay’s direction that got him to the threshold while it was Paul Jay’s direction that prevented him from getting over the threshold.
In this interview Costas Lapavitsas showed many times over that he is a far deeper thinker than Paul Jay can imagine at this point. Paul Jay was constantly trying to redirect the answers so that they would fit into what Paul Jay could imagine. Costas Lapavitsas kept trying to raise Paul Jay’s horizons, mainly to no avail.
Lapavitsas tried over and over again to redirect Jay’s thinking away from government control to what he called public control. Because Paul Jay could not get his mind around what Lapavitsas was trying to tell him, Jay kept interrupting at every point where Lapavitsas was about to explain more of what he meant by public control.
The Real News Network needs to give Paul Jay a bit of a rest. Perhaps bringing in another interviewer to complete the series, and let Lapavitsas dive deeper into saying what he is trying to say.
It is time for Paul Jay to get his ego out of these interviews. He needs to let deep thinkers explain their deep thoughts. Rather than constantly trying to refocus the interview into Jay’s narrow perspective, he needs to work harder to bring out the ideas the invterviewee is trying to explain.
Yowza. Reminded me of some Charlie Rose interviews. I wonder if Rose’s crew edits out all the annoyed looks and the “please let me finish” of his oft-interrupted guests.
This is true of Rose because he is, basically, an official of the State–not the official State but the Deep State. He reflects the assumptions, questions and POV of the more sophisticated member of the Deep State so we should look at Rose in that way. He is about as official as you can get.
Paul Jay is trying to focus the show for his audience that consist, mainly in the American left which is quite narrow in outlook–he does the best he can to make these interviews digestible to his audience. A deeper anti-capitalist critique is not really possible at present among most people on the left.
Paul Jay’s contribution seems to be to suggest that “public,” at least in the US, has become a toxic term because to the populace it has become synonymous with “government” or “the state” and that the populace has, by now, good cause to distrust the government or the state.
Not least because it has become increasingly apparent that the government we have, especially the US federal government—and the relations it forms with other governments—functions as a front organization for the interests of the private sector, as this Jacobin article from today’s links suggests:
To the extent that Lapavitsas actually really means the populace itself needs to create new institutions, that don’t (necessarily) involve or aren’t run by and controlled by states, then perhaps he undermines his own points by using the term “public,” (at least in the US).
I’m not convinced from this video that this is what he means—he says he’s “not a st@tist,” while his examples of “public” in the US are education and some unspecified element in US pensions—but if it is, then perhaps he needs new words for new things.
Honestly, I don’t think he knows what he means. He’s invoking liberal truisms, and unless one fills those truisms up with the more concrete practices, institutions, and policies they reference, they have no meaning.
“we need to think of productive capacity that detaches itself from finance, doesn’t have financial motives and financial profit-making in mind, and organizes investment on a systematic basis, as I’ve indicated. That’s the first thing we need to do.”
“we need public mechanisms, and we need publicly owned financial institutions to be put in place that would actually have a public mandate and that would begin to think of themselves and of what they do in the economy not like the private financiers do, which is let’s make a quick buck and let’s get out of it before the sky caves in, but think of themselves as public institutions that are there to provide the financial means that the real economy needs to put itself on a different footing”
It seems clear that the stock market isn’t up to this task. Both the Fed or states could provide better long term funding and have the ability to empower labor.
Our financial woes are a direct result of a monetary scheme in which money is created by private banks and lent into the economy at interest. To find our way out of the labyrinth, we need to retrace our steps and exit on the road by which we came. The power to create the nation’s money and credit needs to be vested in the people themselves, as it was in the early American colonies. Possible roads to that result include:
1) Nationalizing the Federal Reserve, making it an agency of the Treasury authorized to issue Federal Reserve Notes for direct congressional use.
2) Mandating that the privately-owned Federal reserve buy US securities (or debt), rebate the interest to the federal government, and roll over the loans. Interest-free loans rolled over indefinitely are the functionally equivalent of debt-free government Greenbacks.
3) Thawing the credit freeze at the state level by forming state-owned banks, on the model of the Bank of North Dakota. State assets could be used as capital, and state revenues could be used as a deposit base. These funds could then be leveraged into loans, supplying a cheap and readily available source of credit for the local economy.
4) Nationalizing bankrupt banks considered “too big to fail” not just partially or temporarily but permanently, making them public services like libraries and courts. Nationalizing just one major bank having branches around the country could be sufficient to establish a public banking system nationwide.
These would be the better roads to Oz, but whether the Emerald City can be reached before a bankrupt populace falls into anarchy and a police state is imposed remains to be seen. Will Dorothy’s house come crashing down on the Witch? Will she pull the silver slippers from the Witch’s feet and step into their magical power? Or will she keep running after humbug Wizards who are under the Witch’s spell themselves? Stay tuned.” ‘Web of Debt’ Ellen Brown
You listed rational things that could be done. But, because they are rational and actually would result in empowering the public they cannot be done. Our system doesn’t work in a way where any rational solution to any problem can ever used. Everything at all levels of government is infected with corruption and that corruption is society-wide at all levels. Why? Because our problem is not economic or political but cultural–our cultural values do not include the idea that public space, public need, or public well-being are valid goals. The goals are private wealth and that the natural order of things is that there are a few winners and many losers and losers should suffer as much as possible to spur them on to “win.” This is the current ideology of American culture shared by the majority of the American people–yes, Americans do claim in opinion polls to be for the greater good, mom and apple pie but the act in very different ways. They believe in a system that guarantees health-care to all and could be single payer but resent having to subsidize health-care for the “lazy” poor thus vote Republican.
I believe that communal finance is the greatest fear of our owners. Until We the People come to own our financial system we will not be free. Private ownership of finance has made a small cadre extremely rich and they have used that wealth to sponsor policies and policy-makers that protect their interest. I neither maintain an account at a private-sector bank, nor do I owe a bank a dime. I had hoped that as the Occupy movement gathered steam a broad cross-section of Americans would remove their money from the private finance system. As I have watched finance actually grow following the suppression of Occupy and the bank-oriented efforts of our central banks, I fear the opportunity has been lost. Simpy put, Occupy was woefully undirected, which made it easier for the campaign to be suppressed. Occupy should have adopted Lapavitsas’ concepts and aggressively challenge the elites’ hold on wealth and political power. Instead, we got Citizens United, further unleashing that power. Perhaps we will be more focused after the next crash.
Occupy served its purpose: opened some eyes, gave us perhaps the most important meme of this era (99%), advocated long term peaceful collaborative opposition, and induced the state to expose its propensity to violent rage when confronted with actual threats to its corruption. The last item being a factor that some generations have not really seen and many had forgotten.
Sure, Occupy was eventually crushed and petered out, but I do think it served it purpose of clear delineation in peoples’ minds of who has the power and who government serves, that even though many folks have gone back to sleep, is more or less permanently etched in their consciousness.
“Occupy should have adopted Lapavitsas’ concepts and aggressively challenge the elites’ hold on wealth and political power.”
I didn’t listen to all of those “dollars and sense” interviews so take this with a grain of salt, but from this video I honesty do not see where Lapavistas offered anything like that.
For that matter, Occupy did have a public banking group composed of well informed people and it did get a hearing in DC swamp politics on at least one occasion. Possibly of the “yeah, yeah we hear you” variety, but it did happen. I don’t remember the details.
Haven’t read yet, but that intro includes a big typo – the university is the School of Oriental and African Studies, not the School of Asian and Oriental Studies.
Thanks. I found it on, er, the Internet.
According to the vision of Lapavitasas:
Regulation is not enough.
The issue of ownership must be raised.
The organization of social life must be rethought.
Production enterprises must focus on production not financial products.
There must be public involvement.
There must be public intervention.
There must be public mechanisms.
There must be a public mandate.
The must be a new public spirit, community based, associational, with a different understanding of themselves.
He emphasizes the social and collective and calls for a reduction in the influence and the power of the private and individual.
But Lapavitasas does not get into a discussion of the concrete issues involved in the creation of this new public spirit?
What if these “new” steps toward the social and the collective and a new public spirit initially demands more individualism not less?
What if a new public spirit cannot be launched without a more concentrated focus on our observed selves and habits?
What if the revolutionary politics of the twentieth century failed on just this point—the attempt to force by political-technical measures large groups of people into creating the new man and woman?
Intriguing statement–can you expand on that?
Since I was part of the cadre of late-sixties revolutionaries for a period of my life I know that the discussions we had involved the necessity for major personal change on our part and the part of others. In fact, out of these discussions radical feminism resulted and actually broke up our little collective. After that the movement floundered because it was hard to cut across sexual, racial and class lines. Achieving a sort of common purpose failed because there was just too much to do. Our basic analysis of society back then was fairly accurate but we were too immature to go beyond where we were and so the “new-left” floundered and gradually died off.
Our problem is cultural. If we worship money then we will get a financial economy–it’s that simple. But how do we live without money as our central concern? It is forced on us–it is harder today to live off the grid than it was when I was young. It is harder today to clear your debts and start anew–your permanent record is so huge you can never really start again.
I think the emphasis on community (not government) emphasizes for me the need for the anarchist process–I don’t believe anarchism is about creating a final state–it is a process that is aimed to de-mystify the State and replace it with the synergy of real community–real emotional connection between people. That is where we ought to focus if we are on the left. The State, even at a local level, is too corrupt to get anywhere–the vested interests will stop at nothing including violence to get what they want.
Your comment reminded me that on my list of things to do is to view this video of the “Second Thoughts” conference on the New Left organized by (former leftist and reactionary) David Horowitz in 1987. Perhaps it would be of interest to you as well:
I have often agreed with you over the last year or so that our fundamental problem is indeed cultural.
But to me this raises some extremely difficult but also extremely important issues which are rarely discussed.
My evaluation of the 60s was that the attempts at personal change did not go deep enough. But simply to make this statement raises important epistemological/ontological/cultural/ political issues which the Left tends to ignore because it actually believes its economic determinism and naïve empiricism adequately gasps reality.
Does the underlying order of society (its cultural foundation) consist primarily in the internalization of collectively shared rules and regulations concerning social behavior and conflict resolution?
Did the type of personal reflection that went on in the 1960s(outside of some portions of the women’s movement) ever make an attempt to not only articulate but also then critically examine(by attempting to internally distance ourselves) from these same rules/habits of being–which supposedly created our identity and are supposedly at the foundation of our being?
Is this type of deeper personal reflection always an individual decision–an inner act of withdrawal/ or attempted separation from cultural internalization? Is this type of internal secession an illusion or can we actually critique our individual cultural identities?
Can we only individually choose to become political artists–to master our craft?
In my opinion, some deep-seated negative cultural habits were discovered in the 1960s but the process of successful modification of these habits was never realized on any significant scale–virtue was never really learned and partially because of this failure we have our contemporary cultural/political/economic nightmare.
There is so much more to all of this Banger, I hope you keep pressing this issue because it is foundationally important.
You pose some formidable questions. In a way I’d like to riff on them but I won’t–it’s late and I have to go to bed soon. But here’s one of the things I’ve been thinking about and this thing is almost frightening to think about–we are stuck in the 60s because we have not resolved the issues rooted in that period. Until we do we are going to drown in the massive denial and hypocrisy that we are living with today. This war on truth that has been the reality of both right, left and center in this country really would have driven me to despair if I didn’t have a fairly intense spiritual life.
How and in what form we can talk about the deeper cultural issues, I don’t know–but we must or there is no way anything can change however much we might want it or however much we try to organize something.
Financialization is simply the latest something for nothing scam. The interesting thing is that just about everything else that happens in the ‘civilized world’ is pretty much the same deal.
Until stealing becomes de-institutionalized, expect less.
Well said. It seems like we really don’t have any ideas on how to even describe the crime spree, let alone stop it.
Lapavitsas goes most of the way there, pointing out the broad nature of the problem and how it’s not just about regulation. But then he doesn’t say how he would reorganize production, either in general philosophy or specific logistics.
Because of course, the issue with “financialization” isn’t that there is a lack of financing for productive projects. Rather, the issue is that the government favors other kinds of projects. The London and DC/Baltimore areas are two of the biggest examples of this on the planet. Of the top 25 counties by median household income in the US, 11 are in Virginia and Maryland.
Banger : “” If we worship money then we will get a financial economy “”
” We ” do not worship money so much as ” we ” worship wealthy people . If ” we ” did worship money more than we worship the wealthy then we would not be in our dire straits which are due to letting the wealthy determine what our financial blessings will be — because we worship them more than money ( until we do not ).