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Capitalist Fundamentalism

A critique of the modern religion:
why worship of the "All-Mighty Dollar" and his profits
will not bring salvation to us all.


The purpose of this page is to draw together a few threads of thought and observation which show that Capitalism per se is NOT inherently good but rather, as the default tendency of economic systems in the scientific era, can be humanised if enough care and attention is paid to the creation and maintenance of social capital. This can only be achieved through the application of compassion, democracy, ethics and scientific method.

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 Laissez faire capitalism is a form of religion

 The unethical nature of fundamentalist capitalism

 Surplus value, intrinsic value and social capital

 Banks create money   but not social capital

 

  Summary 

  Work in progress  
 
 Footnotes including Efficacious prayer                 

 

Laissez faire capitalism is a form of religion

By laissez faire capitalism I mean the sort of so-called "Free Enterprise" that is touted as a panacea for all of humanity's ills, where the magical efficacy of markets uncontrolled by governments will allow the creation and fair, efficient distribution of all goods and services to all who deserve to receive them. Proponents of this ideology insist that governments should be as small as possible or non existent.
I am not setting up a straw man here, there really are people who seriously propose that large numbers of human beings can live together without government.

Some of them are wild, wooly, and probably poor, anarchists who claim to believe that private property is sinful. These people do not present a great danger to anyone except themselves, unless they go truly nuts and try to blow up the government in which case collateral damage might conceivably occur to you and me.

Others are followers of Ayn Rand, and her ilk, who espouse a philosophy in which government is bad by definition, private property is absolutely sacred, and only individuals like them are "real" people because they are truly free. These egotists think that we who believe in the existence of social capital as well as the possibility of good government are slave-minded weaklings fit only to be trampled into the paving of their pathways to glory.

 

 The unethical nature of fundamentalist capitalism Navigate page

The deification of dollars and capital has lead to the acceptance of lying as a pervasive background to virtually all broad scale public communication and discourse.
This is true of commercial advertising [for which the word "propaganda" is better suited], and the pronouncements of politicians and public servants. It is also true of a major proportion of all the information and entertainment media content.
The ideology assumes and asserts self interest to be the primary rational focus of human thought and commercial activity to be the most important form of social transaction. These ideas are rationalisations for succumbing to the temptations arising from being rich and powerful. They purport to be expressions of some kind of "natural" order of nature but are in reality self serving justifications of the unethical behaviour needed to gain and maintain riches, power and influence far in excess of that necessary or good for any individual.
Outright lying or at very least the withholding of true facts is deemed to be allowable and necessary where competitors might be doing this which of course guarantees that all "hard" players will do so. Failure by very many enterprises to adopt proper practises for ensuring workers' health and safety and environmental protection are one manifestation of this. Another is the reluctance or systematic, covert refusal to adopt proper auditing procedures.
   

Some examples

Commercial advertising
  The norm in commercial advertising is that we are never told the full truth about a product, we are only given at best a bunch of half truths praising the product's good points and no factual warnings about potential adverse effects. With few exceptions if we want to find out the truth about a product we have to work hard to get true information about quality, true performance, side effects and long term environmental consequences.
The archetypal example of this of course is tobacco where the multinational manufacturers and distributors of cigarettes deliberately and cynically withheld for decades vital information concerning both the addictiveness of nicotine and the evidence linking tobacco consumption with lung cancer.  Not only that but the tobacco companies have engaged in systematic campaigns of denial with the spreading of disinformation for the express purpose of confusing potential victims so that they will ignore warnings issued by government health officials and thus stay addicted. Everything the tobacco companies have done over the past several decades has been aimed at maximising their profits, come what may, and disguising the fact that they are drug pushers - pure and simple.
 
 
Pronouncements of politicians and public servants
  It has become the norm that politicians make promises at election times which they have no intentions of keeping. This has led to a pervasive cynicism in Australian society about politicians in general and a diminished respect for the institutions of our democracy.
Information media - "The News"
  A free press is a key adjunct to democracy. Without a free press and other news media, unfettered by political religious and ethnic dictatorship, it is well nigh impossible for ordinary people to gain enough information to make informed decisions about the deeds and policy offerings of powermongers. For this reason we have to put up with much journalistic mediocrity and misinformation because the owners of private print and electronic news media are driven more by profit margins than a desire to inform and educate. Thus it is that, in so many cases, truth is not allowed to get in the way of a 'good' that is sensational story.
Entertainment media - Magazines
  There are many examples available here but one particularly obnoxious yet pervasive practice is the falsification of pictures of women. In the glossy women's magazines pictures of women, particularly in adverts, are touched up to remove skin blemishes such as pimples, rashes and wrinkles and to make bodies look thinner. The only time women's photos are not touched up is when the journalists want to show their subjects in a bad light. This falsification is bad enough but the deception goes far deeper because the women who appear in magazines, movies and on TV are not ordinary women anyway. They have usually been selected out from crowds of competing hopefuls. Celebrity actors, models, news readers and game show hostesses may well be talented people but they did not get where they are just through talent and the development of skills, they also had to be 'beautiful' according a very narrow set of feature standards centred on sexual attractiveness.
This process of selection, which is driven by profit margins from advertising revenue, causes our television and movie screens to portray to us a very narrow range of physiological and personality types which are endowed with essentially supernatural status. We are all affected by what we see on the Big and Small Screens - the moving images we focus on have after all been the subject of enormous amounts of time and effort designed precisely to make us notice them and believe them to be important - and we all tend to accept what we see as 'normal' and normative, unless we make conscious efforts not to be so affected.
One result is that women - teenage girls in particular - are drawn to compare themselves with these celebrities and to attempt to be like them in appearance. This creates many problems for young women who are not naturally endowed to be within the very narrow boundaries of 'beauty' thus defined and it can have effects just as bad on those who do fit the image because attachment to the unreal image becomes part of their self concept. This false portrayal of beauty and what is normal is very powerful and acts as a toxic pollution in our culture. It is certainly a major contributing factor in the insidences of anorexia nervosa, bulimia and other behavioural disorders relating to self image. This is not a small issue given that, for example, anorexia nervosa has a mortality rate which may be as high as 10%. [10]
 
Interest charged on loans made to third world countries.
The ordinary people of these countries never had any say in the creation of the original loan contracts, nor had the chance to vote or otherwise make an informed choice concerning those who signed the contracts which the banks now enforce on the impoverished people of those countries. In general terms it is a horrifying truth that Western [includes Japanese] banks take many times more in interest from these victims than is ever provided in aid by Western governments and non government sources.
 
 Money spent on weapons, and punitive military expeditions rather than on combating diseases like malaria
 
 The failures of audit and self regulation.
In Australia we have had the failures of many large companies over the years due very much to bad management - of course - but due also to chronically insufficient auditing.
  • The final failure of ANSET airlines in 2001 followed a long period of mismanagement and clearly inadequate auditing resulting in enormous losses to business creditors and the loss of expensive ticket prepayments by thousands of travellers.
  • The failure of the HIH insurance company due to mismanagement and woeful auditing has resulted in massive increases in insurance premiums for virtually everyone in the country. It has caused many fold increases in premiums for public liability insurance for all businesses and non profit community organisations with the result that very many community organisations can now no longer function. The long term effects of this on Australian culture and social cohesion will be very bad.
  • The failure of .... the Medical Indemnity insurer, again due to mismanagement and bad auditing, has resulted in the cessation of midwifery in many private hospitals, the radical restriction of treatments offered in private clinics, and necessitated the underwriting by federal and state governments of doctors' indemnity against malpractice law suits.
In USA there have been the spectacular failures of ENRON in 2001, and [to date] WorldCom and Xerox in 2002.

 It is us, ordinary working people, who pay for these disasters. Through our taxes, through increased insurance premiums and through the lost value of direct share investments or through the loss in value of our superannuation funds which invested in these companies, we are covering the shortfalls.

For example my parents in law were part of a family company which ran a clothing store in a WA country town. The failure of Alan Bond's Bond Corp and associated companies basically destroyed the employees' superannuation scheme for that family company. Alan Bond probably thinks he was hard done-by having to spend just a few years in jail, but news reports seem to indicate that he did not suffer greatly and now he is back outside living the life of Riley whereas all the people who lost their savings through his actions have been dealt a cruel blow which will blight their old age.

Every time a company Chief Executive Officer or manager receives a 'bonus' of cash, shares or options that does not reflect the creation of value but is simply a reward for making the books look good, that is a removal of financial wealth from all the other shareholders and probably entails a destruction of social capital through increased impost on the work and living conditions of the workers.

Withholding of research data and results leading to false claims about benefits of drug products.
Unpublished studies on the effects of anti-depressant drugs on children suggest some are both ineffective and potentially harmful, according to a new review of research. The unpublished data contradict published results, fuelling the debate on how pharmaceutical companies reveal trial data This revelation is from a news article in New Scientist Magazine on-line NewScientist.com news service 23 April 2004   
Tim Kendall, deputy director of the Royal College of Psychiatrists' Research Unit in London, UK, and colleagues conducted the review. "After recent revelations that drug companies have suppressed unfavorable data on their drugs, Kendall and his colleagues contacted pharmaceutical companies requesting unpublished studies that might bear on the guidelines. None of the companies complied, so Kendall contacted a government agency which provided six unpublished studies on three anti-depressants known as selective serotonin reuptake inhibitors (SSRIs).
 "Kendall and his team added those results to a review of five published studies on the effects of various SSRIs on children.
'When we got the unpublished data and put it in with the published data, something happened. Instead of being safe and effective, the risk-benefit reversed,' Kendall told New Scientist." More excerpts from this article below
 
 

 Surplus Value, Intrinsic Value and Social Capital  Navigate page

Capitalist work organisations and financial institutions purport to be efficient means for the production and distribution of goods and services but, as often as not, actually function as systems primarily aimed at stripping surplus value off those who created it so as to amass power and wealth in the hands of a few. We do not have to see the rich and powerful as inherently bad but we must recognise that riches and power carry temptations almost impossible to ignore and those who achieve positions of power, whilst obviously having the ability to get there, do not necessarily have the ability to act wisely and use the vast wealth created by others for the good of all. The ideology in fact says that they don't need to think to much about the good of all because the market mechanism sorts out all the loose ends, so they should only concentrate on making more money for themselves and buying or otherwise currying favour with those who can do something for them.

Where the ideology of laissez-faire capitalism and economic rationalism guides the operations of companies and government agencies, money profit becomes the criterion of goodness and all other values are made subservient. The intrinsic value of human beings as embodiment and expression of the creative potential of the universe is undermined if not totally ignored. The result is that people are seen only as consumers. Lip service is paid to people's need's and aspirations and little or no effort is made to engage with customers, clients and community organisation unless a direct connection with profit making is perceived.

 

 Banks create money Navigate page

Banks create money, they do not create the value that money should represent. The value which must underlie money is created through human labour. Banks create new money through the creation of loan contracts which bring into existence totally new credit able to be used as money by the borrower because it is recognised as such by other banks. The originating bank debits the amount as an income earning asset to itself. If the bank is prudent it demands, as part of the contract, a right to seize equivalent value of the borrower's property if the borrower defaults on the loan. [From observation of what has transpired around the world in the twentieth century however one could be forgiven for inferring that banks really only do this with small borrowers .] The borrower has to pay back the loan and all the interest incurred with real money, ie that derived from selling of her labour or profit from the carrying on of a business. Meanwhile, the credit created out of thin air as the original loan has spread through the economic world in the form of payments for materials, wages, stocks and shares, and also lodging for periods as bank deposits earning interest and forming the basis for creation of further new loans by the banks which hold those deposits. The last mentioned feature constitutes what is called a multiplier effect such that in an expanding economy, money created as loans can reproduce itself several times over.

For this system to work there has to be a climate of trust and reasonable expectation that most loans will be repaid in full and on time or early. In other words there has to be a whole social milieu within which this sort of transaction can have meaning and productive power.

Another way to put this is that banks rely on a vast pool of social capital for the support, the social stability and in particular the trust which enables them to create a loan contract. The banks do not create this social capital and with the coming of the new century in fact we see that banks seem even less inclined to support the common people who do create the social value.

The social capital that all large capitalist organisations rely on is created through the labour of parents and teachers, but particularly mothers, who work at modeling correct conduct and in explaining the world to youngsters who would otherwise have no idea how to act in a civilised manner. It is created also by those who work in their community - which of course can include the work place, school, or place of recreation - giving their labour for free or next to nothing in support of those in need, and in activities which teach social skills and build relationships between people.

 

 Summary Navigate page

 One aspect of what I am saying is that modern capitalism and the 'American Way' - what we could call Mercantile Modernism - is founded on the idea that Money is what Counts and Money is the Measure of All Things. This philosophy is deeply flawed however, because life is what counts.  In reality the main game is survival and the quality of human existence for all of us.

When we look at the world this way we can see that money can only ever be an accounting system, a way of keeping track of exchange and labour value. If we look long and deeply at the world and peoples around us we can see that the well being of all of us is inextricably entangled.

We all depend absolutely on the ecological world around us: we need the other species and they need room to exist and they need us to cease polluting the air, land and sea before it is too late. We have to hold ourselves accountable, for example, for the myriad synthetic molecules we have introduced into the boisphere. We are also responsible for the tremendously increased rate of spreading of plant and animal species [often called 'weeds'] into new habitats, at the same time as the habitats of many species are disappearing from the planet.
We all depend on social stability for our health and well being

 

 

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 Notes  ...  

 10

Figure supplied by Staff of Eating Disorders Unit of Princess Margaret Hospital for Children, Perth, Western Australia
 

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 20  

The true religion of 'The West' is capitalism. Maybe I am reading too much into this but how about this - there is a Trinity:
Capital is God the Father
Money, in the form of Holy Dollar Bill, is the Son, and
Market, the unseen hand, is the Holy Spirit.
 
Banks, which give birth to Money through what amounts to creation out of nothing - in a form of immaculate conception - fulfill the role of Mary "Mother of God". Banks are induced to do this by the presence of Capital.
[Just see what happens if you or I try to screw with a bank though! ]
 
Now, please, repeat [and repeat] after me:
"In the name of Capital, Money and Market - Amen!
Hail Banks, mother of Money,
Blessed art thou amongst companies!"

 

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 30

 

Suicidal thoughts

Of the five serotonin reuptake inhibitors [SSRIs] reviewed - fluoxetine, paroxetine, sertraline, citalopram, and venlafaxine, only fluoxetine (Prozac) offers more benefits than risks in children. Unpublished studies of venlafaxine, for example, suggested the drug increased suicide-related events such as suicidal thoughts or attempts by 14 times compared with placebo.
"This data confirms what we found in adults with mild to moderate depression: SSRIs are no better than placebo, and there is no point in using something that increases the risk of suicide," says Kendall. "The key point is, can we trust the published evidence now?"
An editorial in The Lancet, which published Kendall's study, suggests the answer is no. Research on SSRIs in children is marked by "confusion, manipulation, and institutional failure", it states.
Analyses of published data - which governments rely on to set regulations - are "made entirely redundant if [the] results are so easily manipulated by those with potentially massive financial gains".
The editorial reports that GlaxoSmithKline sold almost $5 billion worth of its SSRI paroxetine (known as Seroxat or Paxil) in 2003. In June 2003, paroxetene was shown to increase suicidal thoughts and behaviour in children by as much as three-fold over placebo.
And in March, a GlaxoSmithKline memo on the drug's effect on children surfaced that read: "It would be unacceptable to include a statement that efficacy had not been demonstrated, as this would undermine the profile of paroxetine."

Off licence

In 2003, the UK government's Committee on Safety of Medicines banned the use of all SSRIs except fluoxetine in children. But the government estimates that half of the 40,000 children and adolescents in the UK taking anti-depressants are using other SSRIs "off licence".
"Clearly, if so many children are being prescribed SSRIs, then all data must be made available to properly address the balance of risks and benefits," says Kendall's co-author Craig Whittington of University College London.
Richard Ley, a spokesman for the Association for the British Pharmaceutical Industry, says it has set up a new website for drug companies to voluntarily report the results of clinical trials done in the UK.
And he says a UK law should take effect in May that forces drug companies to provide some information on drug trials to government regulatory agencies - though not to the public at large.
"We're very keen to extend the information that's available - within reason," Ley told New Scientist. "It costs about £500 million pounds to develop a single new medicine, and it takes 10 to 12 years. You cannot afford to give all the information you have away free."
 Journal reference: The Lancet (vol 363, p 1341)
 

 

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