Umair Haque / Bubblegeneration

Sunday, August 15, 2010

The Morality of the Market and Rebooting Capitalism

“This is a type of abandonment, through disinterest,” said Hiroshi Takahashi, a professor at the International University of Health and Welfare in Tokyo. “Now we see the reality of aging in a more urbanized society where communal bonds are deteriorating.”

Link.

What a telling, incisive quote. The morality of the market says: you're only "worth" as much as your (the net present value of your) marginal productivity. If you're no longer productive, a good indentured servant to the .01% of the population that's "super-rich", a toiling serf tossed a few bits of bread by the plutocrats - well, then the market no longer cares about you. So "abandonment through disinterest" is a pretty good way to describe the great crisis of nihilism at the heart of industrial age capitalism.

And it starkly highlights just why capitalism as know it needs a great reboot, a fundamentally new contract with people and societies. Because, of course, it's exactly that threat of abandonment that's led Japan's youth, in a hyperrational response, to abandon yesterday's institutions right back, shunning work en masse. Abandonment is met with abandonment: it's an arms race, in which everyone ultimately loses, as long-run productivity dries up, trust vanishes, innovation withers, investment fails, risk spirals out of control, and capital is consistently, chronically misallocated.

Today, the economy is a broken machine: one that extracts value, steps on tomorrow, transfers wealth. But what it must become is a tool to ignite the spark of an enduring prosperity.

-- umair // 11:07 AM // 0 comments

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