David Brin's "off-axis" political suggestions
Suggestion Three: Save Capitalism with Radical Transparency
By David Brin, Ph.D.
[image from Bloomberg Businessweek]
Our present economic calamity has many roots. Here are just a few:
The surge of U.S. "sub-prime" mortgages, spurred by both easy credit and bankers who forgot their basic business: responsible lending.
Lax regulation of financial "innovators" -- starting in the City of London -- who turned "investment products" into a huge pyramid scheme of grotesquely leveraged wagers and counter-wagers, only tenuously connected to the real world... leading envious financiers elsewhere to lobby for a chance to join the fun.
A U.S. leadership caste that frittered away the reserves we would need to save against harder times, because of a dogmatic belief -- despite relentless disproof -- that deficits lead to balanced budgets and that a lavishly subsidized aristocracy will naturally invest and manage well.
A sixty year worldwide assumption that the American consumer can forever propel economic growth, while saving nothing at all.
A world system that's supposedly based on open markets, filled with knowledgeable producers, consumers and policy makers who make rational decisions -- but where, in fact, nobody even knows how much money there is, where it is, or even who owns much of the planet's wealth.
The last of these factors may be the least discussed, but it goes to our core assumptions about capitalism. Even the libertarian, Nobel-winning economist F. Hayek said that markets without information-openness will be lethally compromised. The poor worker and middle class investor and company manager can only strike their best deals if they know what's going on. And when that fails to happen, capitalism loses any moral basis, whatsoever.
In order for either governmental or capitalist solutions to work, the clouds of needless secrecy simply have to part. Opposing this is not a matter of "left" or "right" but of dangerous hypocrisy. It is mendacious (though human) to proclaim fealty to markets while shrouding what others need to know in order to play the same game.
Of course, you would expect this stance from the author of The Transparent Society. So let's be clear that I'm not attacking intellectual property or the basic confidentiality that businesses need to operate.
Still, consider: Right now the world's governments are under pressure to create a new structure of regulations and regulators -- a "new Bretton Woods" -- to supervise international finance. Perhaps even a nascent World SEC or World Fed. This is only the latest step in a trend -- a creeping ratchet toward backdoor Planetary Government -- that may be necessary for a tightly interlocked 21st century world... but the process certainly merits a lot more open and skeptical discussion than it is getting. Left unexamined, it may lead to the worst possible combination -- deteriorated national sovereignty and competence, plus a bureaucratic "world government" that is both overweening and unaccountable.
Above all, those who object to such planetwide regulation must offer an alternative. And there is only one that would empower markets to police themselves. Especially now that the "trust us" CEO clade has proved utterly untrustworthy.
We need far greater levels of transparency.
Might this extend to a consensus decision to find out, at long last, who actually owns what, all over the globe? Or to trace corporate management so that responsibility (the "buck") actually stops at real people? Or for America to call in its paper currency for responsible replacement, as every other nation has done? Or to list, in detail, who has benefited most during the gilded first decade of the Twenty-First Century... the Naughtie Oughties?
These will be denounced as radical ideas, of course. But note: there is nothing inherently socialistic or confiscatory about any of them. Or indeed, any move toward simple transparency. In fact, the resulting boon in recovered tax revenues -- from evaders alone -- might allow tax rates on legitimate individuals and enterprises to fall. A win-win of staggering magnitude.
Any American administration that is serious about the future must make transparency -- even somewhat radical transparency -- a paramount goal.
Followup: Transparency International does tremendously important work, helping shine sunlight on malignant corruption all over the world. By some estimates, graft may slice away a quarter of potential economic progress -- and much more in parts of the developing world. TI publishes an annual Perceptions of Corruption Index that highlights which countries are perceived by outsiders as getting -- or desperately needing -- clean government... and where they don't.
This year's list covers 180 countries and autonomous territories, with the country considered "cleanest" ranking first, and the country perceived as most corrupt placing 180th. It finds Denmark, New Zealand, and Sweden in a three-way tie for the cleanest reputations, with Singapore just behind. Somalia beats Iraq and Burma for the worst. The United States ties with Japan and Belgium for an unremarkable 18th place, just below Ireland and the United Kingdom and just above St. Lucia, Barbados, and Chile.
A scan of this list should convince any reader that the whole world would benefit if this matter got top priority. Let there be no doubt that it will be difficult. Just witness the chaos in Mexico, where a brave administration is attempting to wean its bureaucrats and police and other public servants off a generations-old tradition of mordita graft and omerto silence. And this is just a taste of what might happen, if the world's true money interests were ever to act on their fear of light shining upon them.
It is going to be really hard. But it is the one thing that might ensure civilization through the middle of the 21st Century.
[image from metro active]