Fairness is envisaged as an extremely broad concept. It includes universal human rights and equal opportunities for all, with social balance and some limitations on inequalities and the means of their achievement, all applied within and between communities and nation states. It also relates to fairness between generations. We are making a total mess of everything, and unless we change radically, we will bequeath a planet earth to future generations which is simply not sustainable. We don’t need to. There is an alternative, as we are continuously being reminded. But so far we have done very little about it.
We need to remake the real economy and escape destruction by what Roosevelt so long ago identified as organised money. The real economy is what employs most people, making and innovating the products and services of everyday life and their continuous improvement. It is distinguished from the financial economy which came into being mainly to support developing the real economy by enabling the necessary finance for investment. But, latterly, the financial economy has become predatory on the real, focused on extracting value in order to maximise shareholder take (MST).
That distinction between the real and the financial is not widely recognised, and it is completely ignored by orthodox measures such as GDP. The modern state and its regulatory authorities need to make the distinction and regulate each appropriately so as to achieve progression with fairness.
The real economy comprises three quite different layers: the social-infrastructural layer, the progressive-competitive layer and technological-revolutionary layer. Each layer requires quite different forms of support and regulation so that overall, progression without destruction might be achieved, with fairness for all.
Roosevelt identified organised money when he introduced the second round of the New Deal which ended the decade of austerity which followed the 1929 Wall Street crash. He identified its various constituents as ‘business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism and war profiteering.’ He warned that ‘Government by organised money is just as dangerous as Government by organised mob.’
Over the past four decades, organised money has been reborn as the self-perpetuating established driving force behind governments in Anglo-America and beyond. Its various constituents have been the prime beneficiaries from the application of the 21st century version of neoclassical microeconomics. That free market, profit maximising model was born in the 19th century and didn’t change much till the 1980s when Friedman and colleagues refocused it on MST.
The simple truth is we don’t need a theory of how things work when the reality is there before us to observe and understand. And we certainly don’t need a 19th century economic theory which has been shown, so many times, to be utterly false. Understanding how the real world works is much more important. That understanding reveals the various constituents of organised money, including government itself, to be initiating and approving the most fundamental crimes against humanity ever conceived.
‘Remaking the Real Economy: Escaping Destruction by Organised Money’ (to be published Policy Press, 2020) identifies actions necessary to rebuilding the social-infrastructural layer, re-establishing the progressive- competitive layer and refocusing the technological-revolutionary layer to achieve a fully sustainable planet earth.
The practicalities of such an agenda will require a host of corrective measures which will be dependent on the effective regulation and restraint of organised money and the complete displacement of neoclassical economics.
That can be achieved either with the realisation and support of constituents of organised money, or, by some more aggressive action by other constituents. It may not be easy. But if the necessary actions are not achieved, then it will be difficult for our generation ever to look our daughters and grand-daughters in the eye and assure them of our true love and support.