Sunday, December 22, 2013

Sunday Afternoon Links

Assorted content for your Sunday reading.

- Joseph Stiglitz discusses the link between perpetually-increasing inequality and the loss of social trust:
Unfortunately, however, trust is becoming yet another casualty of our country’s staggering inequality: As the gap between Americans widens, the bonds that hold society together weaken. So, too, as more and more people lose faith in a system that seems inexorably stacked against them, and the 1 percent ascend to ever more distant heights, this vital element of our institutions and our way of life is eroding.

The undervaluing of trust has its roots in our most popular economic traditions. Adam Smith argued forcefully that we would do better to trust in the pursuit of self-interest than in the good intentions of those who pursue the general interest. If everyone looked out for just himself, we would reach an equilibrium that was not just comfortable but also productive, in which the economy was fully efficient. To the morally uninspired, it’s an appealing idea: selfishness as the ultimate form of selflessness. (Elsewhere, in particular in his “Theory of Moral Sentiments,” Smith took a much more balanced view, though most of his latter-day adherents have not followed suit.)

But events — and economic research — over the past 30 years have shown not only that we cannot rely on self-interest, but also that no economy, not even a modern, market-based economy like America’s, can function well without a modicum of trust — and that unmitigated selfishness inevitably diminishes trust.
Trust between individuals is usually reciprocal. But if I think that you are cheating me, it is more likely that I will retaliate, and try to cheat you. (These notions have been well developed in a branch of economics called the “theory of repeated games.”) When Americans see a tax system that taxes the wealthiest at a fraction of what they pay, they feel that they are fools to play along. All the more so when the wealthiest are able to move profits off shore. The fact that this can be done without breaking the law simply shows Americans that the financial and legal systems are designed by and for the rich.

As the trust deficit persists, a deeper rot takes hold: Attitudes and norms begin to change. When no one is trustworthy, it will be only fools who trust. The concept of fairness itself is eroded. A study published last year by the National Academy of Sciences suggests that the upper classes are more likely to engage in what has traditionally been considered unethical behavior. Perhaps this is the only way for some to reconcile their worldview with their outlandish financial success, often achieved through actions that reveal a kind of moral deprivation.

It’s hard to know just how far we’ve gone down the path toward complete trust disintegration, but the evidence is not encouraging.

Economic inequality, political inequality, and an inequality-promoting legal system all mutually reinforce one another. We get a legal system that provides privileges to the rich and powerful. Occasionally, individual egregious behavior is punished (Bernard L. Madoff comes to mind); but none of those who headed our mighty banks are held accountable.

As always, it is the poor and the unconnected who suffer most from this, and who are the most repeatedly deceived.
- Meanwhile, David Hutton discusses the Cons' crackdown on whistleblowers and anybody else who tries to bring inconvenient truths to light. And Glen McGregor's look at the Cons' latest fund-raising pitch tells us what kind of action they're looking to punish with incessant fund-raising appeals:
The Citizen received these fundraising pitches after submitting an email address to a Conservative Party website that encouraged users to send Happy Mother’s Day greeting to Harper’s wife, Laureen.
- Grant Robertson and Kim Mackrael write that the regulatory system which we should be able to trust to ensure Canadians' safety instead did nothing in response to questions about the safety of shipping oil by rail. And ThinkProgress surveys 45 fossil fuel-related disasters from 2013 which didn't receive the coverage they deserved.

- Finally, Max Fawcett writes about the absurdity of Alberta's royalty regime which allows. And it shouldn't escape notice that Saskatchewan's resource management is even more slanted toward converting public resources into private payouts - with the public paying up to 120% of the cost of resource extractors' operations.

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