Damn those Liberal big-government regulators! Or so say our latter day Reaganites who never saw a regulation they didn’t hate. Regulation, schmegulation!
Is it possible to restore any reasonable discourse about the role of government regulation—regulation in the interest of the public sphere? For those who would consider that the public sphere and the common interests of the people in general is merely a lovely fable, the answer is no. For such Conservatives, Republicans and Free Marketers, there is no need for a public sphere of common interests and concerted action. Regulation of business, industry and finance is unfreedom to the neo-Reaganites. Regulation is repression, a suffocating restriction on initiative, productivity and efficiency.
On the contrary,freedom(from regulation)so loosely conceived is really license, license to do anything to maximize profit by cutting costs—at any cost. What the elimination of regulation means to such profiteers is this: what the public doesn’t know won’t hurt them. No regulators, then no transparency in production. Then anything goes! Contaminated foods, unqualified mortgage loans, unsafe automobiles, etc.! An unregulated financial sector has given us Bernie Madoff, financial instruments that few understand and that have nothing to do wtih real productive economy. If there are no watchdogs doing the relevant inspections, and thus no regulation of standards of production and processing, for example: of credit and insurance; of pharmaceutical claims for drugs; of manufacturers claims for toy safety for children, then no one is the wiser. The public is exposed to unhealthy food, unsafe products, misrepresentation of quality and quantity of goods and services, etc., etc. In the fanancial sector socially irresponsible money uses money only to make money. Sacrificing the quality of life and social conscience becomes the cost of doing business and finally becomes normalized.
Everyday mythologies would then rationalize the disastrous consequences with excuses such as “nothing is perfect.” “Sometimes it (food contamination, etc.) just happens.” These and innumerable other variations on the “this is the best of all possible worlds” logic would prevail. Scientific and ethical standards of health and hygiene, public interest and the common good would be scoffed at and laughed out of town.
Private interests in business and industry unabashedly suggests we privatize the inspectors and regulators. Such audacity is nothing but the continuing attempt to wipe out the necessity and reality of the public sphere. Even more so this is an attempt to wipe out memory of the public sphere.
But in the interest of public welfare and the good of the whole, regulation in general is an attempt to bring a moral order to society. Regulation is the effort to restore an ethical standard to the production of social goods which the perversion of the profit motive has destroyed. Business, industry and finance have proven historically that they cannot police and regulate themselves. The public—unfortunately more and more synonymous with the poor—pays the price of and for the ‘free marketers’ unlimited profit and accumulation thereof. Unfortunately the public most be protected from the irresponsibility of all too many privatized concerns who do not care how their carelessness affects consumers and the country
Regulation and inspection of the “free marketers” is the social conscience enforcing the public good. There is no such thing as self-regulating markets. That is a euphemism for unregulated selfish self-interest. De-regulation has unleashed an anarchy of self-defeating economic chaos. The ‘free-marketer’ wishes to distort the meaning of regulation insisting that it implies virtual constitutive activity on the part of government in relation to business. But regulation is not constitutive control of productive activity. It simply insures the self-reflective dimension in which narrow self-interests are forced to take responsibility for how their actions affect the integrity of the whole.
The cost of doing business should not be paid for by compromising the quality of life in America. Regulation from without would not be required if we could trust private enterprise to practice self-control from within. Unfortunately business, industry and finance have proven over and over again that essentially and as a whole they cannot be trusted to do so from the standpoint of the general interest in the public good.
So, for example, Barney Frank’s recent suggestion that the mortgage brokers be required by law to retain some responsibility for the quality of the loans they make is inevitable and good in our world. Without such external regulatory motivation the brokers, as a case in point, have proven they have no internal motivation to regulate the qualifying of customers as a matter of conscience and common business sense.
Short of a radical reconstitution of ethical community and the ability to act also as well in the interest of others while we help ourselves, regulation of social goods privately produced is here to stay.
Professor Van Winkle wakes, and finds the world has apparently gone to hell. Welcome back, Larry.
ReplyDeleteCouple of thoughts:
-- There is nothing wrong with money being put to work to make money. It's called investing. It's called financing. It's called the capital that allows manufacturers to manufacture, farmers to farm, retailers to retail (did I just make up a verb?).
-- I defy you to name a business that operates at any level above someone's basement that is not subject to some form of regulation. Environmental, financial, legal. There is no such thing as deregulation. There is plenty of example of re-regulation (airlines, finance, communication, utilities), but deregulation? Hardly.
-- Have loopholes become more prevalent? Yep. Have they become bigger? Enough to drive a truck through, I'm afraid.
-- And that's troubling. Legislators and regulators love to tinker. No regulation, no matter how effective, is safe when a legislator or regulator gets a grand idea. Add in the work of lobbyists, and you have pefectly fine regulation that is changed for no apparent reason other than that particular legislator or regulator didn't think of it. The lobbyist whispers "Put you stamp on it. We'll help." And shazaam! You have re-regulation that is called de-regulation.
-- There is a big role for government to play in the commerce of the people. Our problem isn't that government has abdicted that role, it's that it can't leave well enough alone. It can't recognize (or be happy with) success. And it can't get out of its own way.
-- At the same time, too many people have abdicted their role to be wise consumers. Don't think, just buy. The government is watching, so how bad can it be? A wise business exec for AT&T, back in the 1930s, said something like "all business begin with public permission and exists with public approval." The public seems to have forgotten that.
-- And, for some reason, we looooove to buy crap, even when we know it's crap. Everything from inferior cars to fast food to mortgages we can't afford.
Unfortunately professor, you can't completely regulate greed, just as you can't completely regulate ignorance.
Cheers Pirate,
ReplyDeleteI’m happy you are my first response after a long absence. But I haven’t been asleep. Firstly, I have been trying to understand the crisis/crash/debacle/Great Recession. I guess I didn’t take enough economics courses in college and too many philosophy courses in graduate school. Secondly, I’ve been busy preparing to become a new father. My wife and I are due to have twin boys within the next 2 months. Wish me luck. They are my first.
So….
I’m not complaining about investing as such, but isn’t there a real qualitative difference between investing in the “real economy” and some of the new ‘tools’ such as derivatives, etc. which nobody seems to do a very good job of explaining to average joes such as myself. Isn’t much of this new speculation one too many steps removed from building the economy and aimed only at “deriving” profits without having any concerted interest in insuring stability and continuity of production. And even if such ‘derivation’ of profit is a legitimate form of accumulation of capital isn’t it still being done at the expense of American industry, probably to intentionally dismantle what remains of it, the unions and high wages.
And isn’t the so-called financialization of America (cf. Kevin Phillip's book, Bad Money) turning the American economy into a bank and not a real economy. Consequently the employability of most workers, skilled or otherwise is limited unless they choose to move to India or China to work. I’m not even saying that that’s wrong or bad. It’s just that any pretense to re-build a political economy on a new deal model is doomed to fail in a globalized mode of production. So in fact aren’t the American people being duped into believing in a restoration of a post-WWII self-sufficiency that is never ever going to happen?
If I understand your take on the dialectic of regulation/de-regulation/re-regulation, I don’t think I disagree. I just can’t stand the abstract, lunatic rhetoric (not you!) that seems to call for some kind of pure “de-regulation” and the re-institution of an idyllic free market that never existed and never will exist. Probably this is just for mass consumption by the terminally ideological no-nothing right wing base. But is there not, I think you would agree, as much planning/regulation that goes on at the level of trans-national capital as there is between government and industry within America?
I also hate the likes of Bobby Jindall abstractly and in an inflammatory manner opposing the “work of the American people” to the interference in such business by “big government.” Such pseudo-discourse is obscurantist, obstructionist, dis-informational and, to me, simply monstrously stupid. God help the Republican part and/or the Conservation movement if idiots like Jindall are the best they have to offer a new generation. His post-Obama address a couple weeks ago was insulting, embarrassing, opportunist and vulgar.
As far as regulating greed, I think you’re obviously right. You can’t. But that doesn’t mean we have to condone it as the fountainhead of motivation and inspiration in business and culture, especially culture. Possibly it can’t be regulated but possibly it can be schooled out of existence as such. It’s surely not the manifestation of social health and vigor but the perversion of the taste and aspiration for a qualitative abundance of goods and services. You rightly bemoan the fact that we love to buy crap. But that predilection for crap is a function of a culture of greed and a debilitating social psychopathology of “more and bigger is better.” So there is not a business or governmental solution to the perversions of greed but I like to believe there is a cultural and educational if not spiritual solution that America may still be capable of. Also, although there may be no way to regulate greed and ignorance, there may be a possible ‘politics’ that refuses to succumb to the dictates of greed and ignorance. It would surely be a revolutionary politics of culture and community but of course it has not been formulated. When I complete my magnum opus on such a politics I’ll let you know. But don’t hold your breath. I’ll be changing a lot of diapers for the next couple years!
Twins, eh? Apparently you weren't sleeping. As the parent of four, I can tell you that sleep will be in short supply for some time to come.
ReplyDeleteI remember when our first was born. A wise, gentle man that I worked with pulled me aside, shook my hand and said, "From this moment on, your life will never be the same." I am long past the diaper days, but with each passing year I realize how right he has been.
I will leave the point-counterpoint on greed, politics and such for another time. At this point, I will just wish you and Mrs. Professor the very best as the twins arrive.
As far as your magnum opus -- you might be surprised. I do some of best work when I'm sleep deprived.