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Another gloomy item about our financial system appeared today at Reuters. (Seriously, Reuters. It’s like “doubt about casino capitalism: it’s not just for hippies any more.”)

The basic outlines are pretty much just confirmation of one’s general post-crisis pessimism, i.e. not enough has been fixed to really make the system more stable, and almost no one in politics is trying very hard to genuinely fix things, because the traders and swappers and other parasites make a lot of money from the way things are and aren’t shy about using that money to buy influence. A companion piece to an item I summarized earlier this year, in a lot of ways.

And it strikes me, amidst the feelings of woe and despair, that perhaps this is a good occasion to go on record explaining the nuances of another of those complicated, mealymouthed “yes-and-no” liberal positions, in this case regarding market capitalism. Maybe I can clear up a misunderstanding or two. (I wish.)

Basically, I think there’s a lot of misunderstanding, some but perhaps not all of it elective, about the difference between “important” and “beneficial” when it comes to Wall Street and capitalist financiers generally.

I have the sense that too many people hear criticisms of these actors and, like this guy, conclude that “capitalism is under assault” and immediately launch into arguments for why capitalism is great and why investors, traders, bankers et al. are essential to capitalism. And I just want to say guys, guys, whoa, you’re missing the point, here.

Very few of us liberals, progressives, Occupiers or other critics of capitalism-as-exemplified-by-Wall-Street really want to abolish capitalism. Any more than we want to revive Stalinist Communism. The world is a lot more complicated than just a binary choice between the two, as even a cursory understanding of the socioeconomic systems of any three or more societies will make fucking obvious.

Though, obvious or not, I think this is an important point to make, if of course a difficult one in a short-and-simple culture.

Look, self-appointed “defenders of capitalism,” most of us critics are pretty bourgeoie these days, even many of those who are currently in the midst of hard times. And most of us recognize the role that market capitalism has played in allowing so many of us to be bourgeoie. We know a thing or two about history, after all. Do you?

We generally freely acknowledge the importance of trade and investment and competitive market forces, especially here in America where we not only love our shiny consumer electronics but have a culture in which the startup entrepreneur is downright hip and cool. And we’re cognizant of the role which banks, investors, finance, in other words, “Wall Street” plays in making such things go.

But as I suggested at the beginning of all this, there’s a difference between “important” and “beneficial,” just as there’s a difference between theory and practice. We lefties (well, the informed among us) fully understand the benefits of market capitalism, of competition, of monetary incentive, etc. And we understand the importance to such a system of a financial sector.

This does not mean that every financial sector is at all times operating to the net benefit of society, or even to the benefit of capitalism itself.

Yes, in other words, we understand your argument that a productive financial sector is important to a vibrant, productive economy; the fact that a being a good thing is important to the operation of b which is a good thing does not mean that a necessarily is a good thing, however. The fact that a healthy financial sector has a big role to play in a healthy economy is, actually, why we’re uneasy about a distinctly corrupt and unstable-looking financial sector.

“This is our concern, Dude.”

Can I make this much simpler? Again, one last time, yes, even many of us liberals appreciate the importance of banks, investing, finance, etc., etc. to any vision for a healthy, prosperous society. We have a specialized world and there is a need for specialists to make decisions about where large amounts of money are invested, and the nature and customs of those specialists is important as is the system in which they work because it has considerable influence over where and how our society’s resources are directed. From this can arise the progress of tomorrow.

But like any people and system created by people, Wall Street too can become corrupt and misguided and ultimately dangerous rather than beneficial, and that’s an important concern precisely because a sound Wall Street is, just as the reactionaries insist, important. Really important. Very few people contest that; it’s in fact essential to even issuing warnings like this one:

If America can reform its banking sector, it has a fighting chance at a prosperous future. If it doesn’t, it doesn’t… without the institutional reinvention of finance, America simply won’t be able to create the future, because it will keep investing in yesterday’s already overleveraged, zero-social-return ‘ponziconomy.’

We’d prefer to create the future, and at present we’re still putting our money into the “ponziconomy.” We’d like to change this. This is a call to action for reform of Wall Street, not its shuttering. Really.

Hopefully we’re all clear on this, now.

I would like to make one or two observations about poverty, prompted by some specific recent arguments, but general in their character and application.

First, though, I suppose I should acknowledge that I myself am not poor. I’m certainly not wealthy, at least within American society, where I’m not even median-income. But I’m not really one of “the poor.” And I haven’t made extensive studies of the issue for academic publication either.

On the other hand, I have known some very lean times; I’ve probably been about as poor as it’s possible for a college-educated American without a terminal disease or a gambling addiction or some other real financial disaster to be. Not that this should be a necessary qualification within a “reality-based community” wherein, presumably, sound ideas are sound regardless of who proposes them. Within “practical reality,” however, a lecture about poverty coming from the upper tax-brackets probably risks being drowned out by reflexive protests about the  inappropriateness, or insensitivity, of the source’s perceived condescension.

I think that I should at least be safe from that, though.

So anyway, the points I would like to make have been on my mind occasionally for years, but recently returned to my attention when I read this Chronicle item about how “a central piece of [California's] plan to reduce greenhouse gases is now under fire by an unlikely source: environmentalists in the state.” (more…)

This is the title of a book I have out from the library right now. I haven’t started it, yet, but the title alone has made a deep impression on me.

The unfolding disaster in Japan, which is dismaying both on its own and because it seems like just the latest in a string of catastrophes and defeats of recent years, has really weighed on my mind since Friday. Seeing evidence, today, that my early instincts that “this doesn’t add up, this must have done far more damage than the early numbers suggest” were right is obviously no satisfaction for me. It really produces no reaction at all, aside from leaving me feeling a bit sick.

I like to think that Japan, as one of the richest and most advanced nations on Earth, can at least help itself as well as any society, but… that’s still a lot of hurt which is going to need a lot of help.

And yet, other things continue to happen. And that phrase, “let the great world spin,” keeps prodding me. So I’m going to go ahead and round up a number of items from recent days, and then go do some work, clean the bathroom, etc., etc.

Let the great world spin.

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