By William K. Black
I have written two prior columns about Tyler Cowen’s praise of the faux “hyper-meritocracy.” Cowen assumes that productivity determines personal wealth and is measured by wealth. He celebrates financial managers as the exemplars of this hyper-meritocracy. In my first column I explained that it should have given Cowen pause that his meritocratic vanguard caused the greatest loss of wealth to society and that so many financial CEOs not only destroyed societal wealth, but also became wealthy through accounting control fraud. I explained how the bank CEOs that led the accounting control frauds also created the Gresham’s dynamics that suborned other professions (e.g., appraisers, loan brokers, and auditors) that cause bad ethics to drive good ethics out of the professions. Cowen could not have picked a less meritocratic group as his heroes than the financial CEOs running the systemically dangerous institutions (SDIs).
By Michael Hoexter
[Part 1] [Part 2]
Why It’s Delusional: The Critical Dependencies of Capitalism
The mythical market and view of an autonomous, self-managing capitalism is contradicted by the multiple real critical dependencies of our economy. These critical dependencies, i.e. necessary relationships with other non-capitalist systems/entities, are integral to capitalism rather than optional features. Dependencies between these social and natural systems are the object of any meaningful economic policy or, for that matter, any government policy with economic effects. They are “critical” because they are non-optional and therefore not a matter of individuals deciding that for ideological reasons they “don’t like” one or the other of them and we can therefore jettison them, while maintaining something that is recognizably capitalism. If people in society were to seek to change the economic system to some other system, either by conscious effort or by historical accident, it then may be the case that one or the other of the dependencies listed below may no longer be “critical”. However no mainstream political actors in this drama are claiming that they are making a break with capitalism; in fact, to the contrary, right-wing Republicans claim to be its sole political defenders.