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An epoch of excess?

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Mark Easton | 17:31 UK time, Tuesday, 24 March 2009

tom_wolfe226pa.jpgTwo years ago, on an upbeat floor of the New York Stock Exchange, American writer and journalist Tom Wolfe was asked what he made of it all. He paused and said: "We may be witnessing the end of capitalism as we know it."

He has subsequently said that he didn't expect anyone to take him seriously, but there are some who now regard him as a prophet of gloom.

Those who predict that, economically speaking, "the end of the world is nigh" are no longer dismissed as misguided oddballs. Indeed, there seems to be some consensus that we have now witnessed "the end of capitalism as we know it".

Conservative leader David Cameron said in a speech today: "when they look at capitalism today too many people see markets without morality, and that's what's got to change". He added that "we need capitalism with a conscience".

Former Labour Minister Alan Milburn, also in a speech today, echoed the sentiment. "Unfettered markets didn't deliver. Regulation didn't work. And greed produced gluttony which in turn has given the world a deep and painful bout of indigestion."

Wolfe's "Master of the Universe", the multi-millionaire Wall Street trader Sherman McCoy in Bonfire of the Vanities, now epitomises the source of global economic strife.

It is striking that Mr Milburn, the champion of Blairite market-driven public services, should feel the need to defend capitalist structures.

"Those licking their lips at the prospect of an end to market capitalism - as distinct from an end to this particular form of unbridled financial markets - are gorging on a beast that still has life in it", he said this afternoon.

David Cameron argues the same point. "People don't want to abandon markets, they want us to reform markets so they work properly," he said this morning.

Is it a tweak to an engine that is misfiring slightly, or has the big end gone? Do people believe the machine needs retuning... or redesigning?

Reading Gordon Brown's thoughts on the global crisis last week, I was reminded of Tony Blair's memorable phrase after 9/11: "the kaleidoscope has been shaken, the pieces are in flux". In his foreword to the Public Services White paper, Mr Brown wrote:

Times of profound change are often the catalyst for fundamental revaluations in how we think and act. The present financial crisis is changing the way governments serve the public: forcing us to reflect anew on the role of the state in a truly global age.


Al-Qaeda attempted to weaken Western capitalism with terror. But in the end, it was far more threatened by its own greed and, as both Messrs Cameron and Brown put it, its lack of morals.

The prime minister puts it this way: "Both state and market must be underpinned by the ethics of opportunity and responsibility, and thus the question is not whether markets tame government or vice versa: the question is how we tame both with an ethic of fairness and duty."

meltdown226.jpgNext month, at the G20 meeting in London's Docklands, we are told that "known activists" are "plotting a series of demonstrations". Anarchists and environmentalists are "re-emerging and forming new alliances", according to Cdr Bob Broadhurst at Scotland Yard.

But how different is the rhetoric of "G20 Meltdown" from that of mainstream politicians?

"Capitalism has been heating up our world for years, melting the icecaps, burning up the rainforests, pushing the planet to tipping point", the protesters claim. "Now we're going to put the heat on them.

"Their tax-dodging, bonus-guzzling, pension-pinching, unregulated free market world's in meltdown, and those fools think we're going to bail them out. They've gotta be joking!"

This argument can no longer be dismissed as a fringe manifesto from the usual suspects. What Alan Milburn describes as an "epoch of excess" is to be discussed by the Archbishop of Canterbury among others at a Guardian debate next Monday. The flyer says that the expert panel will discuss whether "a devotion to the free-market model has weakened community ties, created a moral vacuum and left us more vulnerable to the recession".

The former speech writer for Ronald Reagan and George H.W. Bush, Peggy Noonan, has been reflecting on public reaction to the downturn in the United States. Last week in her column in the Wall Street Journal, she wrote this:

People sense something slipping away, a world receding, not only an economic one but a world of old structures, old ways and assumptions.


And the previous month she was even more portentous:

This isn't like the stock market crash of 1987 or the collapse of the dot-com bubble in 2001. People are not feeling passing anger or disappointment, they're feeling truly frightened.
The reasons:
This isn't stock market heebie-jeebies, it's systemic collapse. It's not just here, it's global.
It's not only economic, but political. It wasn't only mortgage companies that acted up and acted out, so did our government, all the governments of the West, spending what they didn't have, for a decade at least.


Forty years ago, Joni Mitchell's anthem for the Woodstock festival described how "we've got to get ourselves back to the garden".

There was a powerful sense of society restructuring itself around the participants - a feeling that the "kaleidoscope has been shaken".

As I read of a Woodstock revival this year, apparently "free and totally green" in contrast to the consumerist events of 1994 and 1999, I recall another few lines from Mitchell's song:

I feel to be a cog in something turning
Well maybe it is just the time of year
Or maybe it's the time of man.

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  • 1. At 7:55pm on 24 Mar 2009, John Ellis wrote:

    I suppose in a lot of ways if these markets do collapse and capitalism goes the way of the dodo, which if we are honest looks more likely with governments trying to support the rich and super rich owners of the worlds wealth it is only going to be a matter of time before the general populace of the world says enough is enough. what then in the grand scheme of things changing the people in power wont work because they all work on the same failing model of size of wealth and growth.

    maybe all this as these lines you finished with Mark

    "I feel to be a cog in something turning
    Well maybe it is just the time of year
    Or maybe it's the time of man."

    is already written and were just seeing the volatile shudders of an age gone by. Some believe The Mayan calendar comes to an end on Sunday, December 23, 2012.

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  • 2. At 9:01pm on 24 Mar 2009, GirlThursday wrote:

    I like your reference to the Joni Mitchell song. I often wonder whether she was referencing that last line in Voltaire's Candide (the titular hero himself a battered survivor from a 'best of all possible worlds') "That's true enough, but we must go and work in the garden."

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  • 3. At 10:36pm on 24 Mar 2009, kindfluffysteve wrote:

    Hello,

    are we witnessing the end to capitalism?

    I think we will see neoliberalism consigned to the dustbin of history but it will not happen overnight. Instead what we are likely to see is year after year, and then into the decades a sustained drift to the left in this country and in others.

    in many nations when the left was in power in the late 1970's high energy prices caused economic shocks and for people to blame incorrectly the government in charge - in britain and many others, that was the left at the time.

    Now this time, the blame applies correctly to our neoliberal governments. They will be blamed and politics will drift away from them. It took 30 years in britain for the left to regain validity in national conciousness - and that was for economic problems not of the lefts actual making - this time it is going to be more profound.. it wont be an overnight revolution, but will be a drift.

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  • 4. At 10:58pm on 24 Mar 2009, G Singh wrote:

    Unfortunately man is a product of evolution that says survival of the fittest through natural selection. Having got to the top of the evolutionary tree we have nowhere else to go. There is no more surviving to do. We cannot adapt through natural selection! The time frame for this which normally runs over tens of thousands of years is not long enough to handle the rapid changes in a technological world that we have created for ourselves.

    The only way forward would be to to embrace a social model based on Scandanavian society, open borders, banish third world debt, get rid of the class based society in the west, give power to the United Nations to police the world's trouble spots, remove religion from government, dismantle nuclear power, the list goes on!

    Will it happen? No! So in one word - we are - DOOMED! It may not happen on the 23 dec 2012 but is going to happen sooner or later. The great human experiment is over! Earth was created 24 hours ago, humans appeared 4 minutes ago and in the last fraction of a second we have ruined it and in the next nanosecond humans won't be around to see the effects of our greed and disregard for our Earth and all the life on it!

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  • 5. At 11:03pm on 24 Mar 2009, bravenewflabby wrote:

    The problems that I have with our economic system are not directly related to morality, they are related to pragmatism. Ultimately what matters to our standard of living are real physical things: sunlight, minerals, metals, oil, labour-hours, land, etc. If you want `the markets' to optimise the use of these resources, they need to (a) consider the finiteness of these resources in some way, (b) need to pass information around freely (i.e., not use marketing), (c) in an optimal market there should be no major `winners' and `losers' in a deal - if there are, then arbitrage principles are not applying, (d) they need to value all things that are important (e.g. non-patentable but important research, the education ot two year olds), (e) they need to be careful about division of labour - while competition motivates productivity, too much leads to poor division of labour, (f) they need to prevent price-fixing and monopolies etc....

    Markets just can't deal with these things properly without external controls. If you want them to do that, you have to introduce legislation, taxation, subsidies, etc. What pharmaceutical companies would develop drugs without patent legilsation? What would investor confidence be like without legislation against insider dealing? What would happen to `money' if there wasn't trust in the government (see e.g. Zimbabwe)? All these things show that legislation and government interference is essential for markets to work even partially. So the idea of a `small government' and a `free market' is just not practically viable. Communism may have been worse, but just because communism was awful does mean that capitalism is great.

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  • 6. At 11:06pm on 24 Mar 2009, Joan Olivares wrote:

    If capitalism collapses its due to all of the corrupt scams they've perpetrated on the public for so long. Selling diamonds for guns in Bosnia, releasing anthrax laced letters to profit from the antidote, laundering money through AIG....and all the other scams ad nauseum. The public is slowly waking up to the government's bag of tricks. What they're really saying is that other's have learned to play their game better than they have and now they want to change the game.

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  • 7. At 11:14pm on 24 Mar 2009, Doctor Dim wrote:

    Yes, I think Mr Reagens and Mr Bush's speech write is correct in saying that this is a systemic collapse. I am writing a book on this: System Malfunction (whenever I can find the time). Hoping to learn a few lessons.

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  • 8. At 11:24pm on 24 Mar 2009, john wrote:

    Joni Mitchell's song also referred to ' Bombers turning to butterflies across our land' . Could these disastrously illegal wars we are now embarked upon with such a cost in lives and materials be due to greed ?. You bet - sadly the instigators will be holding on to their pensions....

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  • 9. At 11:58pm on 24 Mar 2009, TeeTempest wrote:

    It is interesting to read David Cameron's current views on capitalism, or are they the views of his speech writer? Unfortunately I do not believe that any of the present politicians want the system to change, after all, they have been and are doing very nicely from it.

    The capitalist system in its extreme form is ruthless and uncivilized, it has to be regulated, in effect socialized, in order that it becomes somewhat acceptable.

    Without any doubt, the pursuit of profit, instead of civilization, continues to do a great deal of damage to society and the sooner this system changes the better.

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  • 10. At 00:22am on 25 Mar 2009, ravenmorpheus wrote:

    Is capitalism dead?

    I hope so because it only works if you're at the top, and you only get to the top, in the majority of cases, if you have money to begin with - money breeds money.

    Problem is that we don't know what will replace capitalism?

    Communism doesn't work, because as usual the idea is abused by those in power.

    And anything else goes the same way.

    Perhaps we will end up with a Roddenberry-esque future?...

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  • 11. At 02:31am on 25 Mar 2009, stilllitterarty wrote:

    The bankerrs have had their squeeze on the oversized labour tutts that started out as cupcakes with wunderbar leftwaffle, wishing to make suckers out of the citzenry.

    Now that silly con valley banking has run dry the plaaastic SirGeons realies that they have made a big premilked labour boobybird out of their best custommer

    One more boob and they can hang outside a pawn shop as a warning to the next generation of fools .

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  • 12. At 07:03am on 25 Mar 2009, ishkandar wrote:

    Please note that the quote is "We may be witnessing the end of capitalism *as we know it*."

    *NOT* the end of capitalism per se !! He was speaking of the American-style, heartless and soulless, robber-baron capitalism as exemplified in the movie "Wall Street" and so readily adopted in Europe, East, as well as West !!

    Ask the Asians and Latin Americans if this is the end of capitalism and the answer will be a resounding *NO* !! Now is their turn in the sun even as it sets on Western capitalism !! The kind of capitalism as Tom Wolfe and those others on that Wall Street floor "know it" !!

    End of capitalism ?? No way, Jose !!

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  • 13. At 08:26am on 25 Mar 2009, TandF1 wrote:

    I'm uneasy about capitalism but what do we replace it with? Communism, Facism, Imperialsim, Feudalism? It's fine to talk of "new economies" and "alternative social contracts" but what do these things mean in practice? Somethings may seem like obvious truths but when we're dealing with whole societies (by their nature more complex than theories allow for), the only way to be certain if a politcal or economic system works is by trying it. And what replaces capitalism (if anything does) may not be any better. It may even be worse. That may seem hard to believe but we've had worse sytems in the past and we could have worse ones in the future. Be careful waht you wish for - you may just get it.

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  • 14. At 12:41pm on 25 Mar 2009, meltonmark wrote:

    Capitalism it not dead. It will never die. It is inherent in human nature. It does need a serious overhaul though. How to do so..?

    We need a new democratic model, something along the lines of internet voting. I would propose a system where parliamentary candidates are listed as individuals, not as party members. Against each candidate's name there might a checklist of which policies (s)he supports, even something as simple as 1-5 type rating. Voters could then vote for the candidate who best fits their own policy preferences [Death Penalty, Immigration, etc]. Elected candidates would not belong to any party, but to a Peoples' Parliament. This PP would be responsible for evaluating new concepts, establishing investigatory panels, and formulating eventual Acts. These Acts would then be included in the next round of candidate voting.
    One could even subdivide this into Local Parliaments which could handle matters of a local nature in the same way. These LPs could then oversee the permanent Municipal/Borough Councils to ensure the voters' responses were carried out.
    The Westminster model is hopelessly outdated. It is cumbersome, and is too Party orientated. Most people are educated enough, or at least savvi enough, to be neither 'Left' nor 'Right'. The challenges facing the World, and the UK in our/my context, are too complex for a simple Left Wing or Right Wing one size fits all. We need MPs who are directly elected by the people and who owe allegiance to no one but their electorate. They could even be rewarded with reference to how closely they adhered to the policy votes.

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  • 15. At 1:13pm on 25 Mar 2009, LippyLippo wrote:

    The old capitalist system was really predicated on a few 'Western' countries (UK, EC, USA, Japan and Australia) having about 90% of the wealth of the planet and the rest sharing the remaining 10%. Westerners owned cars, nice houses, and had nice, safe cushy jobs in nice offices and factories. We got old and carried on living with our pensions. The rest of the world either starved to death or eked out a subsistence living by manufacturing goods or supplying raw materials to the West. This has been the case since the Industrial Revolution. Imperial Western powers raided the non-Western lands and hived off all the wealth. Then the media age came and communications were improved. Great! But all we succeeded in doing was to show the poorer countries exactly how we were living, and it became plainly obvious that we were living high on the hog at their expense. Arab countries wanted a share of our good lives. Then SE Asia. Now, crucially, China and India have woken up and started to demand the same. All the time, us stupid, cosy Westerners have been selling off our industries to China and India, revelling in the cheap goods and labour, little realising that every pound we give them makes us weaker and them stronger.

    Thatcher sowed the seeds of our industrial destruction by turning us all into shopkeepers, estate agents and bankers. Blair finished the job. Now that those industries are suffering we suddenly see that an economy predicated on selling financial 'products' and retailing imported goods was sheer folly. Globalisation sounds wonderful but all it really means is that the wealth of the world is spread ever more thinly. The rich won't see a change. The rest of the world might get a tiny bit richer, but not enough. But us Westerners will really suffer. We will see our standard of living dramatically eroded. If the wealth of the world was spread out evenly, we'd all have about £1500 a year to live on, if we're lucky. Then what would be the point of making cars, house, computers, luxury goods? No-one would be able to afford anything other than basic food staples. Capitalism HAS to survive, it's just a question of who is at the top of the pile. Will it continue to be us Westerners, or will it be China and India? They will have to take what we've got, and we will have to defend it. Unless of course we're stupid enough to just give it to them! Like Europe or hate it, we're going to need our buddies in the EC / USA to keep what we've got, or run the risk of losing it all.

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  • 16. At 3:49pm on 25 Mar 2009, NEWNHB wrote:

    The end of capitalism? What total nonsense spouted by those in academia with non concept that their non wealth producing job has to be paid for and that "someone" (but not them)has to work, have a wealth incentive to work, to pay those taxes to keep them writing books.

    Capitalism is a long term game - you and me sit in luxury unheard of 200 years ago - luxury a capitalist system has brought us. And you want to throw this away? In favour of what? Other systems with the mirage of being "fair"? Not a single tried alternative has ever been more sucessful than that we have now. Every other system eventually callapsed becuase in the long term if couldn't offer the progress a market ecomopmy offers. The focus today should be on reducing shocks when they happen - and bank & company failures are rightfully a feature of the system working not of it failing - and make the market work for us even better.

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  • 17. At 01:05am on 26 Mar 2009, Chris Arnfield wrote:

    Anyone unfortunate enough to have lived through the Thatcher years and not live in the Sout East will easily trace most of our problems to her period of office.
    The sale of socail housing without replacement started the rise of property prices on an unrealistic hyperbole.
    It was NOT done for any other reason than to try and break up imagined Labour strongholds in council estates.
    The destruction of our industrial base for no other reason than a spiteful revenge on unions.
    The irretrievable destuction of our coalfields for the same reason.
    Our reliance on a free, unregulated market.
    As property beacme more scarce and consequently more expensive, first time buyers started to find they were unable to afford mortgages without gerrymandering the multiplier to get the desired amount.
    Prices soared for those already in ownership.
    Those with proerty now found that they had more equity, so what did they do? They borrowed against it.
    the birth of `buy to let` mortgages took even more homes off the market, and further pushed up prices. This meant that eventually, first time buyers were disenfranchised.
    The market collapsed.
    Our so called financial revolution was fuelled by debt. Debt by those with property, whose greed showed no limit in its remorseless search for even more.
    Rents for private proerty became untenable, now tennants are able to haggle over the price!
    The solution was simple had it not been for bigoted dogma by Thatcher. Build social, affordable housing to replace that being sold off.
    The very unrealistic escalation of property prices sealed our fate from the very start. It was like pyramid selling, where saturation point is eventually reached, and the whole project collapses.
    The loan and mortgage markets reflected the increasing panic to lend to more and more risky applicants as the edifice teetered.
    Buy to let mortgages should be outlawed. Build more social and affordable housing.
    Property needs to be back at the level it was when an individual could afford to buy within their own salary, with a multiple of 2.5-3 times salary.
    Greed and debt were the twin spectres that brought the worlds financial giants to their knees, and we have Thatcher to thank for its origins.

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  • 18. At 09:42am on 26 Mar 2009, jon112uk wrote:

    People have been predicting the end of 'capitalism' for years.

    I can remember the 'survivalist' movement in the US in the 70s - buy a years food, head for the hills, the system's about to fall.

    Then they told us the oil would run out by 1985.

    Then they told us an ice age was coming.

    Then (the same people) told us the global heating would end the world.

    Now it's toxic debt.

    If they predict it often enough, inevitably someone will be right eventually. The clever trick will be identifying which of the predictions of doom is the right one.

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  • 19. At 09:38am on 11 Feb 2010, IknowImright wrote:

    Resurrecting this because I don't know where else to post.

    The reported £6m spend on the Parliamentary Standards body is absolutely outrageous, almost as much a scandal as the MPs expenses issues. With a reported 80 staff that's more than 1 staff to every 10 MPs - and what has this body actually achieved? Nothing that I can recall - except of course presiding over the laxest system of public sector expenses claims in the UK!

    Whichever party wins the election should take an axe to it immediately. I work for the NHS in a Trust with almost 2000 people. Our entire finance and payroll staff function comes to about 20 people - and deals with significantly more than just 'standards'.

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