IANAE (I Am Not An Economist). I vaguely recall taking economics in college. I think. But things are lookin' pretty bad out there. I hear even fervent supporters of the "free market" clamoring for more/new regulation of our financial markets. But one thing they will never acknowledge is the fact that their pushes for
deregulation are what led us here.
Now, I'm all for making money. I have a good job, I pay taxes, pay (most) of my bills. I understand the need to exchange currency for goods. I'm not anti-money, or anti-capitalism. But it seems to me that there is a fundamental problem that the free-marketeers are overlooking: humans are selfish, maybe even greedy. We've evolved that way.
Survival of the fittest.
May the best man win. It's what kept us alive when survival was a tooth-and-nails experience. However we, as thinking, rational people, manage to balance this innate desire with some common sense and compassion.
Also, most of us are living in a world where we will
never have access to the kind of money (and power, I think that falls under this same concept) that Wall Street tycoons, big corporate CEO's, certain religious leaders and high-level government muckety-mucks deal with on a daily basis. Because of this, our desires tend to take a back seat to necessities, like paying the mortgage/rent, car payments, buying food and fuel. We live in a much smaller world where the impacts of our actions have a much more noticeable affect on our immediate family and friends. If you cheat your friends or your community out of money, or commit crimes against them, there is a much more direct and immediate response against you. So our desires for more money and possessions, at this level, generally lead to us working harder, getting education, trying to move up the corporate ladder and so forth. The results of this are generally beneficial to us and those around us. There are exceptions, of course, and those of us in more dire circumstances find a lot more pressure to engage in activities that circumvent the improvement process; crime, get-rich-quick schemes, lottery tickets, etc. But on the whole we manage to make do and hopefully improve our lives. All well and good.
But I think that when you reach a certain level of wealth/power, those negative impacts become further and further removed from you. Rather than engaging in commerce with a specific individual, you're dealing with an abstract "corporation". You're dealing with "constituents" rather than neighbors. You begin dealing in numbers so staggering that the relative impact of losing a few grand gets smaller and smaller, so you lose sight and comprehension of that impact to someone not in your position.
I must admit to falling into this trap myself. I can remember a time, not all that long ago, 10 years or so, when my wife and I would literally scrounge pennies and loose change from the sofa to be able to go to Taco Bell (remember $0.39 tacos?). Time passes, careers progress, and I have found myself sweeping up those same pennies and dropping them in the dustbin without thinking. Humans have a remarkable ability to forget pain, which can be a good thing; otherwise women would never have more than one baby ;-) But it also allows us to forget how to relate to others in more difficult circumstances than we are. And if you've never experienced more difficult circumstances yourself, it becomes that more more difficult to relate. I've never been homeless, never been
truly hungry. I've never had my family massacred or been forced to flee my home.
But that's where another human trait comes in handy. We have the ability to empathize with others. We are capable of consuming information, processing it, and using it to extrapolate what it must be like to be in an other person's situation. This means that is possible to understand the impacts of our decisions on others who aren't at the same place in the world that we are. And the further you are removed from that situation, the more difficult that process becomes. Which is why we need to work harder at it.
So, my point, after all this rambling, is that we need to provide safeguards against the known proclivities of people and part of that, I believe, is reasonable regulation of the financial markets. That way, even if those people who are so far removed from our reality that they fail to or cannot fathom why them making money at the risk or expense of others is wrong, they might still avoid doing it for a greedy and selfish reason: to avoid going to prison.
Labels: finances, human nature, opinion, politics
