Magpie Economics

LEADING ECONOMICS WRITER FOR THE Guardian newspaper, Aditya Chakrabortty, likes to talk about “magpie economics” – the kind of financial and economic discipline that takes into account, history, politics, philosophy, and social good.  His problem has become that he has run out of examples.  One of his sober conclusions puts it this way:

How do elites remain in charge? If the tale of the economists is any guide, by clearing out the opposition and then blocking their ears to reality. The result is the one we're all paying for.”

And indeed we are paying.  There is justification in placing blame on the corporate giants, the meddling CEOs, unregulated globalization, and the financial barons, but at some point we have to come to terms with the reality that if you desire to take as many riches as you can out of the world without giving any of it back, then democracy is just the ticket for you. It many fashions, modern democracy has paved the way for a rigorous inequality.There have always been the economic elites in the past, but linked to their wealth was the concept of seeing themselves as part of the larger society.  But now many of our elite class no longer show interest in national communities anymore but are, in fact, far more interested in interacting with the globally “chosen” who move themselves around the globe almost as easily as they wire their money.It is helpful to acknowledge that Canada and its varied communities owe huge portions of the their success to generations of wealthy individuals and families who nevertheless felt the obligation to support the development of the middle-class as a way of enriching and mobilizing the entire country.  Nowadays they’re hard to spot, almost as if to them Canada has become a way station for accumulating wealth and not a real physical place where people live and hope to work.  As the famous Canadian sage, George Grant, observed as early as the 1960s:  “They did not care about Canada.  No small country can depend for its existence on the loyalty of its capitalists.”  We are now getting a heavy dose of just exactly what he meant.  We now know the rest of the story.And yet something new is brewing and magpie economics just might be waging a comeback.  There is an emerging awareness, even among Canadian business leaders, that elites have failed to live up to their obligations in even the most basic responsibilities of citizens.Part of it is the escalating criticism leveled against capitalism itself worldwide.  It is increasingly viewed as an ATM for the fabulously rich as opposed to the great generator of wealth for the rest.But there is more.  I recently had lunch with a well-known member of the Canadian business elite who feels that the capitalist advantage has been slanted towards the elite for long enough that it’s becoming clear that the damage being created to the nation as a whole is beginning to offset any real financial gains.  He’s right, and the public is increasingly catching on to it.  The system of modern capitalism itself is being increasingly blamed as a major cause for our environmental, social, and, yes, economic problems.  London, Ontario, the city in which I live, has suffered more than its share of economic fallout, enough that it consistently targets unfeeling and irresponsible companies as the primary culprit.  But we are not alone – across the country the legitimacy of the modern business model has reached its lowest point since the Great Depression of the 1930s.Yet, despite such low esteem, the political class continues to tinker around the edges with economic reform in a fashion that sullies politicians and capitalists alike.  There is no future in this accommodation.  While political designs seek to cater to the ever-declining voting masses, companies continue to view value creation only as it relates to their shareholders and executives and which takes little account of customers or the very communities in which they operate.And the tale only gets worse.  In a very real way, the present economic model functions upon natural resource waste, environmental degradation, community distress, and the expanding divide between the economic classes.  Another byproduct of the economy’s increasing inability to stave off our most pressing problems has been the citizen conclusion that none of the elites – financial, media, political – has the wherewithal to tackle our collective problems head-on.Yet it might just be that important streams of capitalism itself are now lending themselves to more proactive responses designed to reverse its present decline.  If wealth is only for the wealthy, then the great link between democracy (value) and capitalism (wealth) has been irrevocably severed.Some financial and corporate leaders are making moves are determined to keep that from happening and in the next few posts we’ll look at how they’re going about it – and not a moment too soon.  As author Edward Abbey put it no long ago: “Growth for the sake of growth is the ideology of the cancer cell.”