Here's an extraordinary op-ed piece by Philip Bond, a young British conservative who advocates that the Tories take up localism as a response to the crisis of the Debtor Nation. Excerpt:
The causes of our present indebtedness go back much further than Brown and Blair. On a global level, they originated in the abolition of capital controls by Thatcher, Reagan and Clinton. The casino opened its doors in the 1980s, not with the election of New Labour in 1997. As financial globalisation took off, it created securitised mortgage debt and allowed it to multiply and infect the whole financial system.As such we allowed a tax-evading, off-balance sheet, offshore economy to speculate with the savings and assets of an onshore, on-balance sheet, tax-paying public. What is worse it that having lost our savings this industry now expects us - through tax bailouts - to pay again. Similarly on a national or local level Conservatives need to recognise why so many people have turned to credit. For too many, wages were too low, there was simply no other way to make ends meet.
For the real story of the last 30 years of neo-liberalism is not rising prosperity for all, but rather the utter destruction of the wealth and savings of the bottom half of the population.
Bond advocates a financial system that prioritizes investments in local economies, not speculation, as a truly conservative response to the implosion of free-market economics divorced from Judaeo-Christian moral restraints. I'm interested to know what you readers who are more economically inclined have to say about Bond's proposal.
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When one part of the Internet fails, the rest of the system routes around it. When one part of the electric grid fails, it can cause the next part to fail, and the next, and the next. We end up with a blackout on the Eastern seaboard. For localism to succeed as a system, it needs to be structured such that each piece is independent of the whole yet networked. We can't force localism because we can't remove the world. We can't deny that we're interconnected with the world, any more than politicians can deny supply and demand.
We have failed examples of localism currently in existence. We cannot buy health insurance across state lines. Some states have cheaper medical care, others have more expensive. In Massachusetts, we cannot buy out of state insurance. MA insurance rates are higher and the government heavily regulates the industry. Public schools are probably the ultimate example. There are completely failed school districts and people are unable to change them. Every year we increase federal and state control to break local tyranny, yet these schools are still resisting change.
The problem with all of these is a lack of competition. There are several ways to compete your way out of local control. One is to open a nationalize the system, think Wal-Mart coming to town and dislocating the local business. Another is to allow competition at the government or individual level. If we had school vouchers, there'd be more small, local schools. Government is always created larger districts for economic efficiency.
And let's not forget, if we add up Federal and State taxes, and pile on regulations and tranformative programs such as Medicare, which essentially dictates pricing throughout the entire healthcare industry, we are probably seeing upwards of 50% or more of our economy directed at levels higher than local government. If money goes back into the pockets of citizens, more will stay at the local level. If more regulations are decided at the local level—think of all the environmental and safety regulations a factory must pass to be built—the more small businesses will develop.
The problem with being against "speculation" is that in the Real World it transfers decisions about the allocation of capital from speculators to... bureaucrats.
People who want to "control" speculation always see themselves as the ones in control. It doesn't happen that way. If there is one thing you can be absolutely sure of, it's that control won't be exercised by the Town Meeting or equivalent.
Capitalism is a relentlessly destructive system; it undermines all stability, all structure beyond the individual and all relationships not based on contract. Whether or not you think this is a good thing depends on what alternatives are real and which mere fantasy.
I'm not sure about the value of localism yet -- I am still thinking it through. Part of my tension is fact that in some parts of the world localism equals being stuck in poverty. Access to world markets is key to lifting people out.
Now, about the Judeo-Christian ethic and economics. Yes, yes, a thousand times, yes. A free market economy in a utilitarian, secularized culture is a very dangerous thing. If I remember correctly, Adam Smith himself made a strong argument that the free market (properly understood) was only workable if people were deeply formed by tradition morality and Judeo-Christian religious sentiments.
"The lower classes are terribly overpaid" - yes, damn that Abraham Lincoln!
"Adam Smith himself made a strong argument that the free market (properly understood) was only workable if people were deeply formed by tradition morality and Judeo-Christian religious sentiments."
True enough. It seems to me that too much emphasis has been put on "The Wealth of Nations" at the expense of "The Theory of Moral Sentiments." The two are supposed to go together.
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