Here's the schedule of our classes for the next 13 weeks:
1. Introduction, Project Planning, The Current Crisis
2. History and Future of Social Change
3. Communication
4. Traditional Economics & the Emerging Synthesis
5. Complexity Economics and Systems Theory
6. Corporations
7. Government, Law, & Policy
8. The Role of Growth in the Current System
9. Post-Growth: Implications & Strategies
10. Culture & Consumerism
11. Human Nature and Creating a Better World
12. Tying things together: A vision of a Better World
13. Where do we go from here
The articles that we are reading for class on Monday are from the New York Times last week, "The End of the Financial World" and "How to Repair a Broken Financial World" by hedge fund manager David Einhorn and investment writer Michael Lewis.
The End of The Financial World as We Knew It
Lewis and Einhorn describe how the most recent Madoff scandal is characteristic of the lack of checks and balances within our financial system. The mistrust of American capitalism that has proliferated in the months since the collapse of major American financial services firms goes beyond localized instances of greed to a lack of confidence in the structural underpinnings of our current form of capitalism. Thus, the current financial crisis and the resulting recession/depression is an example of the importance of the questions we are asking in this class. In this case, the structural features of capitalism are tearing itself apart but the same structural features are having an ongoing deleterious effect on the earth's biosphere and climate.
One problem is that the institutions and regulations meant to be a check and balance on the system were co-opted by that system. In particular, how to protect the system from greed, when greed is in an individuals local best interests? Over time local self interest can chip away at a larger social interest. Sort of like a tragedy of the commons but of social capital rather than natural resources.
Apparently there is an old joke in Washington, there's no institutions that liberals can set up that republican's can't corrupt. Perhaps it could be generalized: the self-interested can co-opt any institution the altruistic set up. So where does that leave us?
In the end, Lewis and Einhorn propose a number of technical solutions - good ones to be sure. But I'm not sure they address enough of the underlying structure to represent an enduring solution. Trying to understand the structures of modern capitalism, the academic economics that reinforces them, and identifying possible alternatives or solutions is the goal of our class.
Transformational change is often most possible at moments of crisis. As Milton Friedman, wrote:
“Now, you never have real changes unless you have a time of crisis. And when you have a time of crisis what happens depends on what ideas are floating around, and what ideas have been developed, and thought through, and are made effective. And I believe the role that people like myself have played in the transformation of public opinion has been by persistently presenting a different point of view, a point of view which stresses the importance of private markets, of individual freedom, and the distorting effect of governmental policy. That may not persuade anybody, in one sense, but it provides an alternative when the time comes that you have a crisis and people realize that you have to change.”Now, I'm afraid we may be a bit too late to effect this current economic crisis. But if The Bridge at the End of World is anything to go by, the coming decades will likely see a series of crises that eventually force us to re-evaluate capitalism for human and environmental sustainability. Creating that "alternative" and having it ready at the moment of some future crisis should be our, ultimate, ongoing, goal...
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