Going Global

The death of laissez faire is being proclaimed left right and centre. Government spending and Keynesian economics are coming to the fore and free market ideology is taking a hit.

Keynesian economics is often seen as the middle ground between Marxism and laissez faire as put forward by Adam Smith. The cause of the resurrection of the economy after the Great Depression, British economist John Maynard Keynes  is widely regarded as the biggest influence on modern economic policy and thought, with his mixture of freemarket idealism with government regulation and spending.

But was the current failure in the world economy the direct result of the failure of the free market itself or more specifically the failure of the baking industry? One may argue that the banking industry in itself was de-regulated and that is what caused the crisis in the first place and therefore laissez faire is to blame.

But consider the theories of Milton Friedman, who said that regulating the banks and the money supply alone in a free market economy will provide the adjustment needed to avoid any major pitfalls. In this particular crisis, money supply went out of control and so much artificial wealth was created, essentially a tower of rocks built on a base of clouds, that things had to eventually collapse.

Greed, many say, is the underlying cause of it. Sure, if people weren't greedy they wouldnt have taken those housing loans thay couldnt pay, but what about an industry that wasnt prudent in its lending? how could individuals have anticipated the crash of housing markets and the fall in the values of their homes?

And another thing, capitalism is essentially defined as being the same as a free market economy. But that is in essense, an incorrect assumption. Capitalism has come to be associated with all that is detrimental in human nature; greed, growing gaps in income, opression, poverty etc. But these are characteristics that will undoubtedly prevail in any type of economy be it socialist, royalist or communist because they are the causes of evil; individual greed and a lack of concern for ones fellows.

And that cannot be fixed by any new ideology.

Whoever said that democracy was the fairest way to rule a country i think has been proven wrong again and again and again so many times over that we really need re-look at the whole concept of it and see if we really have stumbled upon the best base for governance known by man.

First of all, look at all the corruption and failures that stem from democratic states. Look at all the people killed under the guises of various little conflicts here and there. Holocausts attract the most attention while other deaths that occur in the mere thousands go un-avenged.

America just got a little more lenient on Cuba. They lifted a few travel restrictions and allowed Cuban - Americans to send more money home. This was opposed by two Cuban American Senators who later 'changed their votes after receiving assurances from the Obama administration that the changes did not amount to a major reversal of the 47-year-old US trade embargo on Cuba.' According to the BBC report

President Obama who is in support of the bill has however said 'that like previous American presidents, he will only consider a full lifting of the embargo once Cuba's communist government makes significant moves such as the holding (of) democratic elections.'

I mean isn't that just characteristic of the United States trying impose is beliefs and influence across the world? Cuba seems to have worked fine as a country so far. And the fact that they are not 'democratic' per se does not seem to have affected the quality of life in Cuba in a detrimental way.

As a matter of fact, the Cuban people as a whole are probably made much better off as a result of the Revolution and equality seems to have improved a great deal.

Anyway, democracy as we know it today is but a mere illusion. People think they have the 'right' and 'power' to vote in any one of their choice but what they do not realize is that that 'choice' is severely restricted and manipulated by huge infrastructures like party systems, rules and regulations for running for office, massive barriers to entry that prevent anyone from running for office etc.

For e.g. even over here in SL. you can’t really run for office unless you have some sort of power/influence etc. So an ordinary Joe or Siripala who wants to be heard and is genuinely convinced that he can help the country and make life better for people will never rise to power because the very people whose help he needs to even dream of an influential position in government will have conflicting interests to him and will want to preserve the status quo (which he may want to rearrange.)

So democracy is an illusion, it is just oppression with another name. And in this day and age, democracy does not really have to be what it is..We can use technology in so many other ways to make it better, if only a bit of interest was shown by those in power. But since obviously that will mean a push towards the decentralization of that same power, they obviously wouldn’t do it. But more on that later.

From Desperate Taxes For Desperate Times from the Democracy in America blog: THE states are facing their greatest revenue crunches since 1939, and they're run by legislators who—understandably—don't want to lose re-election by raising taxes on everyone. Thus, they're getting creative.

Assemblyman Tom Ammiano, a freshman from San Francisco, made a proposal intended to increase revenue, and, no doubt, appetite: legalizing and taxing marijuana, a major—if technically illegal—crop in the state. "We’re all jonesing now for money," Mr Ammiano said. "And there’s this enormous industry out there."

In general, sin taxes are the most regressive—and popular—taxes that legislatures can enact. A marijuana tax would be less regressive than a cigarette tax, given the demographics of each drug's smokers. In some quarters it would be extremely popular. And the money it would cost to collect the tax would be a pittance compared to the money saved by police no longer making marijuana arrests. So is this enough of a crisis to give it a try?

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Hmmm.. a commenter later goes to point out that in the longer term, health hazards of pot (yes it is almost as equally hazardous as cigarettes) will nullify any short term gain, especially given that this may boost consumption. Plus he raises a very interesting point that got me almost to laugh out loud, but wasn't really all that funny; Big Marijuana.

If weed is legalized, prety soon it will be capitalized, compartmentalized, segmented and marketed. All the fun will be lost and Runaway Jury 2 would be suing Big M.

How about it's effects in Sri Lanka then? obviously if it is capitalized worldwide we would be washed up in a wave of big companies if we legalized it over here, but what if it wasn't legalized in the US and we decided to do so as a measure to bring in some revenue to the government and make some people more happier than they already are? But it wont work;

First of all, pot smoking is frowned upon in Sri Lankan society rather more than in Western societies so support will not be there.

Also, a regime that focusses on 'mathata thitha' as one of its main marketing angles will never pass it through.

But what if we ignore these things and assumed it was passed it through anyway? would we reap any economic benefits?

Pot smoking will be legalized and massive corruption in the drug trade will stop

Local pot industry will boom due to lack of international entrants and small scale farmers will profit. Expertise will be home grown and we will be well poised to take advantage of a global pot industry, if it ever does materialize and we'd be able to add marijuana as a fourth major export crop.

Heavy taxes may be imposed to bring in additional revenue for 'nation building' without stunting industry growth

Tourism would benefit
Living conditions will improve and growth will increase.

People will chill out even more than they already do probably and perhaps this will have a detrimental effect on other industries, they don't call it a drug for nothing. Added to that the apparent health hazards. Although i think it's hardly got much on the hazards of Kassippu consumption.

At the world Economic Forum, David Cameron called for 'capitalism with a conscience' but can capitalism ever have a conscience?


Capitalism is built on a single motive; the motive for profit. The only thing that controls the spiraling greed from driving the world to dust is the market. The market acts as a restrictor of capitalism, basically countering various capitalist forces with other capitalist forces, allowing them to cancel each other out. But capitalism being capitalism, in any meeting of the forces, one force will walk away better off. One person will walk away with a profit, and become stronger as a result. so the world as a whole, through that transaction has taken one more step down the road to monopoly.

The market consists of people, who are capitalists also. They work for the big capitalists and they feed off them trying to gain as much as possible for themselves. They demand ethics, yet they will forget those same ethics and argue against provisioning for them when they are demanded by a different group of people. And it is all decided in the end depending on who has the greater market power.

If the people demanding ethical behavior have more power, then the market will have no option but to provide provision for those ethical concerns. The green revolution is a good example. Plagued by fears of massive tidal waves and 'destruction to the planet' more people everyday are demanding firms to be more environmentally ethical or friendly or whatever you like to call it.

But then we have to look at the fact and understand that the underlying fear of global warming is not the destruction of the planet per se, but the destruction of the human race itself. The planets been through shit before, I’m sure it'll be fine in a few million years after every single human being is wiped out.

So capitalism has catered to the people's (or the market's) conscience. We are worried about killing ourselves, and feel guilty about it so we change demand patterns in the market, and manage to slowly restrict the bad influence of the big corporate on the environment. How great is that?

So while capitalism itself having a conscience is quite impossible, because each of us in our capitalist persona do not seem to have an inkling of one (just talk to someone working in CTC of Glaxo) the collective conscience caused by an overriding threat to all of us seems to be able to make some change.

Which, when it comes down to the nitty gritty, tells us that it is not exactly capitalism that drove the world into the worst recession we've seen since the 1930's, its greed and downright unscrupulousness and all of us, as a species, are probably guilty of it. Cos there's no use blaming Lehman Brother's if you're not going to turn down a 2 million dollar bonus working for them.

Some say the 1930's depression ended with the world war, we hope for something shorter, cheaper and more humane - some economist at Davos