Monday, November 2, 2009

Extremist Capitalism and Chipmunk Economics

Goldman Sachs recently reported profits of $3.1 billion for the third quarter of 2009. The bonus pool being set aside for this year will amount to, approximately, $16 billion.

When converted into ZAR, the figures are mind-boggling. And while mere mortal South Africans do not (usually)deal with such fantastical numbers within corporate South Africa, the issue of big bonuses (and greed) is not unique to the US or Europe.

Zwelinzima Vavi, general secretary of Cosatu, recently slammed the South African business community for white-collar crime, as well as ridiculously high salary levels and bonus payments.

While I very seldom agree with Cosatu, or ANY member of its leadership, I do see capitalist greed as not only problematic, but self-destructive too. The greed, and ‘survival of the fittest’ concept, is getting more extreme, especially as economic and political uncertainty grows. I support capitalism and the freedom to pursue one’s commercial interests. But I fear Extremist Capitalism and the pursuit of greed and accumulation.

US President Obama likes referring to the “top 1%” who own and control the US economy. Economies that are owned and controlled by a small minority are pretty typical of all societies, cultures and states. It is not unique to the greedy West and it exists in the corrupt developing world too. But while we live in the free world, and live within a free economy, we need to recognize the pitfalls of our system. And these pitfalls exist in the form of greed, exploitation and accumulation.

Cosatu, and the 99% of South Africans who are feel economically disempowered, will continue to fight Capitalism, as long as it continues to present itself in the form of Extremist Capitalism.

Extremist Capitalism is not only driven by greed, and the desire to survive. It is also driven by a need to accumulate. And that need to accumulate overrides our desire to live lifestyles that suit our families, our communities and ourselves.

George Soros committed $50mil to the recently launched Institute for New Economic Thinking. Anatole Kaletsky of The Times in London, writes that economics is a profession “whose creativity has been stifled by the intellectual monopoly of orthodox academic funding bodies”. The new institute aims to challenge this orthodoxy and its accepted economic theories and models.

I support such a move

And while traditional economic take scientific mathematical models, as well as human behavior into account, the Western world’s desire to accumulate, is driven by, what I call, Chipmunk Economics. Chipmunk Economics is all about accumulation.

At times, the accumulation is for the ‘just-in-case’ scenario. Just in case we need that thing in future; just in case we can’t find it next time; just in case the economy slows down; just in case there is political upheaval.

At times, the accumulation is for accumulation’s sake.

And both types of accumulation are completely rational. Both are accepted as normal. Both are justified

But are we human beings or are we chipmunks?

Do we earn money to support the lifestyles we want to live, or do we earn money to accumulate things?

• How many holiday homes can one family visit at one time?

• How many cars can one executive drive at one time?

• How many i-pods can one person listen to at one time?

• How many video-gaming systems can our children play with at one time?

Are we spending time growing our business ventures, or at car dealerships, buying yet another car? Are we spending time with our families, or are we on the phone with our property managers because the geyser burst (yet again) at our holiday home in Plett?

Is our rational, normal and justified desire to accumulate REALLY supporting the lifestyles we want to live?

I support a free, rational economy as a means to developing our country

I support the making of money in order to provide for our families and to ensure some sort of financial security

But I fear that Extremist Capitalism, based on greed, will lead to demise of our society.

And I fear that Chipmunk Economics, based on accumulation, will lead to the demise of our inner selves

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