Tuesday, November 18, 2008

Paradise regained?

One of the mechanisms by which capitalism as a system has perpetuated itself is that, during relatively good times, the wealthy were more generous to their minions, and then, during relatively bad times, those minions had savings that helped them endure a tougher economic climate. A Marxist matrix insists that capitalism has its own internal logic, and the capitalists will always be driven to a relentless maximization of their profits, but the historical fact is that many capitalists felt a deep human need to share their prosperity (for example, Henry Ford the First), and in many ways capitalism served more to amplify the humanity of the powerful rather than squelch the humanity of the poor.

The permeation of the computer and computerized accounting systems moved the position of Chief Financial Officer from a record-keeping role to a proscriptive role, and once the finances of the corporation were firmly dictated by the "numbers", it was logically impossible for the executives presiding over success to spread the wealth around among their employees, as was their natural human tendency. As a result of the "numbers" we had enormously dispirited workers who were short the enterprise risk of a company, without receiving any time decay in the form of bonuses.

Now, we are heading into a recession after the bulk of economic growth was shifted into a smaller class of people, and many are starting the downturn with more ravaged finances than they ended the last downturn. This has introduced a systemic instability into the political consensus around raw capitalism, untempered by human traits during the last period of growth. But how do you get the genie back in the bottle? How do you create a social system that rewards innovation without rewarding relentless and unimaginative obsession with the reward itself?

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