Tuesday, 29 July 2008

Two thoughts about capitalism

As I mentioned earlier I am reading as much as I can about Argentina, currently focusing on finding out more about the Kirchners,triggered mainly by what seemed like some negative comments in some of the blogs I've been reading. While digging around I came across this interview that Time did with Cristina Fernandez de Kirchner in September 2007, before she was elected. It has some interesting quotes in it, and two in particular caught my attention and gave me pause for thought.

You can't be a capitalist only when there are investment profits but then a socialist when you experience losses.

and

We're not averse to capitalism. But if they used to say, "Workers of the world unite!" then we also say today, "Capitalists of the world, assume your social responsibility!"

I'm intrigued by both of these ideas. The former mainly because I it reminds me of the UK government bailing out failing mortgage lender Northern Rock earlier in the year and the recent US governments intervention in it's own mortgage crisis through support for Fannie Mae and Freddie Mac. Of course I understood the need for the government to ensure that mortgage lenders are able to continue operating for the broader security of the country's economy, but what does frustrate me is the notion of privatised profit and nationalised debt.

The whole system is geared towards increased profits for private enterprise while exposing the nation and in extreme cases, the world (including the overwhelming majority who aren't lucky enough to own shares) to the substantial risks involved in such large scale enterprises. When a company grows so large, it's fate is tied up with the fate of the nation as a whole and it cannot be allowed to sink. essentially creating a protectionist and interventionist society where the profits are privatised and the liability sits with the public. It'll come as no surprise that I find this situation deplorable.

The second quote struck a chord simply because I'm always entertained when people expect capitalists to deliver anything other than profit. Working in the media sector I am often confronted with this idea manifest throughout the culture industry. Capitalists exist to make
money through private enterprise. Perhaps I'm naive but presumably an optimised capitalist endeavour would only exhibit socially responsible behavior when there is profit in the enterprise. This leads to government policy aimed at forcing improved social responsibility within the private sector. Social responsibility within private enterprise (such as minimum wage, environmental concern and safe working conditions for staff) are not products of capitalism and never will be.

Anyway, I'm ranting again... I'll stop now and be back soon with more...

10 comments:

Federico said...

Ive read some of your comments and im sory to burst your bubble, but the Kirchners are hardly responsable social leaders or anything like that.

First of all, dont wase your time with Cristina, she is just a puppet. Her husband, Nestor, is the head of the government, he is her political leader and she responds only to him.

Far from having a left wing ideology, the Kirchner are just oportunist in the best tradition of argentine politics. They make their fortune in the 70s by executing mortages (yes, the same thing you denounce in your post). Kicking people out of their houses doesnt sound like left wing solidarity if you ask me.
In the 90s, Nestor was the governor of Santa Cruz, a god forgotten province in patagonia, rich in oil and with few population. He was quite a friend of president Menem (they are both peronist), and was a rabid defender and colaborator of the privatization of YPF, the states oil company.
After the economic and political chaos of 2001, Nestor became president by chance. He was put there by former presindet Duhalde, and won only with 22 %.
The thing is, right after the collapse
there was a commonly accepted explanation that blamed everything that happend to the 90s policies based on the washington concensous. Nestor Kirchner just bandwagoned to this speach, dipite him being a major player in those years, and which is what you hear now out of cristinas mouths.

ANyway, i could go on about the presidential couple, but i just wanted to give you a short verson of their history.

Also, if you realy want to understand argentine politics better i recomnend you start reading about peronism, wich is quite hard to understand for foreigners (and locals to).

saludos.

Andrew Owen said...

It is great to hear your views. As I think mentioned I was getting a bit concerned that my understanding was somewhat tainted and one sided. I'm going to keep on reading to try find out more but thank you for the time you've taken.

You're right, I think I need to understand more about Peronsim and will make that my mission to do in the next few weeks!

The thing that I am finding exciting, more than the actual political implementations, is the fact that Argentina is still very much able to have discussions, leaders and the like that relate to broad ideological differences. In the UK there is so little difference between the policies of those in power and those who want to be in power that the actual moral and ideological debate is missing.

In this post, I was merely contemplating two of the quotes I'd read. I don't doubt there is a lot more to the Kirchner story than that.

Federico said...

I guess we cant help but to criticize our homes, what you say is bad for the UK i wish for Argentina.

I study political science and i love debates, discussions and overall political life. Despite the damage done to the country, i admit the past four months have being very exiting. Nevertheless, what you call "discussions" i call backwardness. We are still discussing, to the point of total inaction, things most of the world (including our neighbors) have already resolved. They are moving forward, while we continue to move backwards, talking all the time about the 50s, the 70s...

I realize that the UK and the US political parties having little difference between each other, but thats probably because your societies have build consensus about certain issues. This can sometimes be not such a good thing as you point out, but i assure you is much worst for a society not being able to resolve their most basic differences, to build consensous and to think in the long term.
Argentina lives constantly on the moment, we cant predict what will happend in the next week, much less in the next decade. It sure is exciting, but it gets old when you have to start from scratch ever ten years..just stick arround...

Saludos.

depresso said...

Argentina definitely needs more socialist jerks from abroad. Because socialism is what works and capitalism is always a failure. [/sarcasm]

Andrew Owen said...

Hey "depresso", not sure what I did to warrant being called a jerk. Constructive or discursive comments are welcome, sadly yours was neither. Thanks for taking the time though.

Federico, thanks again for your views. That is a very interesting perspective. I'd not thought about the endless nostalgia for a so called "golden" era and how it is possible to become paralysed by it.

In the original post I was trying to communicate a reservation I had about Kirchner's seemingly comfortable position combining capitalism and socialism. Having taken a look at some definitions about Peronism it seems that her position is not so original.

I understand what you're saying about the constant flip-flop between ideologies can also be debilitating. I'm not sure what the answer is but in the UK I would welcome some more high profile debate about alternative solutions to some of the nation's problems. But at the same time I have to admit I do benefit from and enjoy the advantages of living in a relatively stable and prosperous country.

Oi! This makes me head hurt!

Christopher said...

Federico is right in everything he has written. I'd like to hear his views on "savage capitalism" - a term often used here to describe what is viewed by some Argentines as irresponsible capitalism in the US. I find it a bit ironic as there is very little consumer protection here and a less than honest business climate driven by the need to survive in what can be a brutal economy. In a sense this is "savage capitalism". What do you think, Feferico?

Federico said...

Savage capitalism is used here to describe mostly the "free market" policies of the 90s. I use quotes beacuse most of the 90s economic policies dont really classify as free market. Yet from an ideological point of of view, this was the mainstream, a small state, privatized services and all that.
This was bad, but like most things here, not so much for the ideas but for the way it was implemented with incredible amounts of corruption and inefficience. The 90s where indeed frivolous years where millions of people where condemned to poverty while our ruling classes try to convince us we where in the first world.

That said, the similarities of the 90 with this decade is outstanding, dispite what the current government says. Basically the government have, again, commited the mistake of falling in love with an "economic model". If the 90s, the model was a convertivility 1 dollar = 1 peso, now its 1 dollar = 3 pesos. And in both cases to maintain this we need money, money we dont have, because nobody ever even thinks about productivity, and so we are force to ask for money abroad, in the 90s it was the IMF, now is Chavez with even bigger interest rates.

Also like in the 90s, corruption is out of control, even more now i would say. Kirchner has something even Menem didnt have, total impunity and control. Like Menem he/she rules by decreet, but he/she also has the "superpowers" voted during the crisis.

Argentinias problem has have allways been more psicological and cultural than ideological, thats why is so hard for foreigners to understand and make a propper analisys of the country.

Wether is with a governmet of right wing speach or left wing speach, Argentina has allways been a savage place.

Sorry for the length of the post.

Andrew Owen said...

Federico,

Please don't apologise for the length of your post, I'm finding this discussion fascinating. I'm considering a spin off forum site to enable further conversations of this nature. What do you think?

Andrew

Christopher said...

Federico I completely agree with you, especially your comment that productivity is not an issue here. You didn't quite answer, though, my comment regarding savage capitalism here under the Ks. Inadequate consumer protection, an unpredictable economy, desperation to get money and survive, widespread corruption....These create savage conditions. while Argentines often refer to the "savage capitalism" of the Menem era, they also refer to what they see as savage capitalism in the US and possibly other places. My point is that savage capitalism exists right here. I believe you agree. If 1-1 was a "fiction" the new 3-1 is the same with a lot of bad consequences for most people.

Robert Evans said...

First of all, I wish you luck with your move to Buenos Aires. I hope you enjoy the place as much as I have.

I would, however, cation you to do your homework with regard to the economic policies of Socialism vs. that of Competitive Capitalism. One of these methods of organizing resources has lifter millions out of poverty the other... not so much.

I've always found it odd that people who want government out the bedroom are so willing to allow it into the boardroom.

I'll take freedom, please.

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