As individuals, we are subservient to Growth.
Governments are subservient to Growth.
Markets, in the form of commerce in the physical economy, are subservient to Growth.
Who cares that much, really, about Growth?
The Markets, in the sense of the Capital Markets. In a US-centric way, the Wall Street system. Finance as securitization for speculation. The practice of breaking large scale financing agreements down into smaller, equal shares that can be bought and sold at market-clearing prices in markets for maintaining a market-clearing price in speculation on expected future movements in those market-clearing prices.
Growth in these markets for speculation on prices for shares is critical, because growth delivers liquidity, and liquidity is what makes these markets profitable.
The people who care this much about Growth are the people making money off Growth.
Neoliberalism is how they talk us into letting them get away with it.
Neoliberalism is a philosophy of the economy built on three articles of faith:
The Invisible Hand
The Growth Imperative
Government vs. Markets Duality
The Invisible Hand is an assertion that all decisions in society are made by us, as individuals, each making our own choices, in our own self-interest, as we each perceive our own self-interest to be.
In defense of this assertion, self-interest is not selfishness. Not necessarily. Some people are selfish, of course, and take for themselves without consideration for the impacts of their taking on others, or even on their own future possibilities. Most of us, however, act in what is sometimes euphemistically called our “enlightened self-interest”. We mostly want to be caring and considerate. And when our commitment to caring and consideration gets strained, our social connections reinforce us. Because, fundamentally, most of us really do care.
In this theory, markets are like ballot boxes. Markets don’t judge. They just collect the votes.
Nice theory.
Except for a couple of points.
In these magic markets of mythically inclusive freedom and fairness, people don’t vote, as equals. Money does. People vote with money. And people who have more money have more votes. These markets are ruled by The Golden Rule: he who has the gold, makes the rules. This is true in the commercial markets of the physical economy, and also in the financial markets for speculation on prices for shares in securitized financing agreements. So you know who really believes all the decisions by society should be made through the markets? Rich people, who have all the money, and therefor make all the decisions in those markets.
Also, The Growth Imperative overrules what little illusion of self-determination the markets provide to us, as individuals. If the imperative for all is Growth, then all decisions that get made in the markets must be made in the pursuit of Growth. We each may have some small say in how Growth is to be pursued (although if we really are small, what we say doesn’t really matter - see 1, above), but we have no freedom to decide NOT to pursue Growth. None. Zero.
So the Invisible Hand is a scam. The real dynamic of social decision making within the framing of Neoliberalism is that rich people get to make all the decisions, but within Neoliberalism even rich people are constrained by The Growth Imperative to make decisions designed always to generate Growth.
So, what, exactly, is growing in this Growth Imperative?
Numbers. Transaction volumes in the commercial markets of the physical economy, that translate directly into trading volumes in the capital markets for securitized share price trading. Remember, these trading markets need liquidity to be profitable. And the formula for delivering liquidity, constantly, consistently, reliably, all the time (well, most of the time, but more on that later) is Growth. In transaction volumes in the physical economy. Measured in prices. Paid in money. Unqualified growth. The securities markets do not care what is growing. All that matters is that the numbers are going up. Not all the time. Volatility is also good for profit-taking by market professionals. But overall, the trend must be up for the markets to make money.
And making money is what the markets are all about. They have no other reason for being.
And so, when we, as individuals, buy into the mythos of Growth, we are selling ourselves into servitude to the money-making ambitions of market professionals.
Think about that.
Then ask yourself, Why are markets so hostile to government? Because Government is actually ruled by the not-so-invisible-hand of electoral politics, and one-person-one-vote at the ballot box.
Rich people don’t make the laws. Unless there is corruption in government. Which is a huge problem, and a constant threat against which we must exercise constant vigilence.
When government is not corrupt, we individuals, through our self-determination, use governments that are properly accountable to us, our popular choice, to make laws that interfere with the ability of market professionals to make money in the markets. And market professionals hate that. “It’s not fair!” they cry, “ We should be free to make as much money as we can. Who cares about the impact on others, or habitats, or our future? That’s their problem. Not ours! We have money. We can take care of ourselves. They should also make money in the markets. Then, they can also take care of themselves. It’s not my fault if they can’t make money, or don’t want to.”
Markets must be free from government regulation and constraints, so that rich people will be free to make all the decisions for society. About how society is going to pursue Growth.
Unqualified Growth.
Reductionist Growth.
Extractive Growth.
Externalizing Growth.
Uncaring Growth.
None of this, of course, is dignified.
None of it is fiduciary.
Why are we letting - even requiring - our fiduciaries to choose Growth, when that is non-fiduciary?
Because we have allowed, and are allowing, our common sense to be hi-jacked by Neoliberalism, and our Fiduciary Money - the tens of trillions of society’s shared savings that are aggregated into social superfunds for retirement (pensions) and other social goods (endowments) - to be trapped in Financialization.
A convenient trope of Neoliberalism is that we have only two choices for participating in social decision making: Government or Markets. There is no other way. Then, the Markets take over Government, and we are left without a choice. We are trapped. In the Markets. Where our voice does not count. Only our money does.
That is not true. There is another way. A way of Finance for shaping our economy that is not securitization, is not speculation, is not the Markets. A way of Fiduciary Money. A way in which our common sense casts the deciding vote. Authentically.
Let’s find that way.