Wednesday, October 15, 2008

Blogging against Poverty

Last year we were blogging for the environment. This year it is against poverty. I would still take as my starting point my post of last year.

There I concentrated on the perverse incentives that were built into our economic system which needed to be corrected in order to protect the environment in the long term.

This year we have seen that similar perverse incentives are built into our financial system and are likely to lead to increased poverty for many all over the world. And these incentives have left a hoard of "top layer" financiers walking away with the family jewels while others sink into poverty, or deeper into poverty.

In the longer term, the distiction between the policies required to ensure the elimination, or minimisation, of poverty, the protection of the environment, and the pursuit of happiness all merge. The world is a seamless garment.

JFK hinted at this in his acceptance speech and the world forgot. As long as "I'm alright Jack" nobody wants to, or has the courage, to tackle the downside.

The net effect is a complete loss of confidence in the current economic and political system. Citizen loyalty is taken for granted and abused until it is too late and it is finally realised that this loyalty is an essential element in the system.

The motto of Dublin City Council (Corporation) has long echoed this sentiment: Obedientia civium urbis felicitas; which roughly translates as "the joy of a city is the obedience of its citizens". You could take this cynically, but at your peril. All systems of governance ultimately depend on the endorsement of a majority of those subject to them.

This implies that the system should be fair to all (or most) and not allow plunder by a few opportunists. This has been lost sight of, not only at national, but at world level.

A recent example would be the USA when the Iron Curtain fell. A form of capitalism was then exported from the USA to the USSR, for which it was unprepared, and vast numbers of citizens suffered while resources were looted by the oligarchs.

A more immediate example would be the current financial system meltdown, where a few of the pirates managed to abandon ship with the loot, while the rest of the crew stared into a watery grave.

There is now an unanswerable case for more democratic control of world systems, greater transparency and more rigorous regulation.

It's back to the often despised "social market economy".


Elizabeth said...

"It's back to the often despised "social market economy"."

(Despised by whom? The USA?)
And without forcing you to write as much again -- could you please explain "social market economy" for Joe Soap. I take it it's the 'free market' with safeguards supposedly built-in for the general good of all sections of the society.

Póló said...

Not just the USA. Remember Maggie.

Yes, your explanation conveys the message. The market, but in it's place.

The market can be very efficient way or allocating resources but it should not be allowed dictate social values. They should be set at political level (local, national or global) and the market used to allocate resources within accepted parameters.

This is somewhere between the recent spate of rampant unregulated capitalism, where both USA and USSR oligarchs made off with the loot, and the failed system of central planning, which was misunderstood as "socialism" by both right wingers and commies alike.

I first came across the term "social market economy" in the context of German recovery in Erhard's day.

I guess I may have overcompressed my post but it could have just grown and obscured the essential point I was trying to make.

As an aside, I have always been impressed by Hans Andersens story of the Emperor's New Clothes, which Santy sent me in 1950 and Exaupery's Little Prince, which I came across in school.

Transparency is a much neglected virtue and, like liberty, it demands eternal vigilance.

Anonymous said...

Great post. Nice new colours. Little Prince imagery is cool too, small world huh?

Interconnectedness has never been more obvious. There is a new awareness and race of beings emerging. Maybe if we could link peoples pain... we'd be less likely to hurt someone out of sight..

irldexter :)