1961. The political regime is the major product of the economy

The political regime is the main product of an economy.

Most are aware that the history of economics since the marginalists and classical economics has striven to separate the political from the economics.  Economics is the realm of balance and equilibrium and politics the realm of messy conflict. Also fairly well-known, if not affirmed, the motive has been to keep economics “simple” so it can be subject to the mathematics of the dynamics of just a few variables. 

The problem for us as we enter a twilight zone of obscure complexities involving climate, inequality, automation and the weakness of the governance of nations is that we have to face the fact that – 

the politics we have, the regimes, are the main product of  the economy, producing narrow ownership and political power in the hands of people with money – not so often direct but  through representatives and lobbyists who owe their careers to the money of the major asset holders. It really is a plantation model obscured by a vulnerable middle class.

In this sense the economy, aided by economics – has done what it was supposed to – protect “private property.”  Of course the idea that a chain of factories across the world, or digitalized assets in the world’s computer banks are “private” is fairly ludicrous.

Amazing how economics has avoided a more straightforward analysis of debt, ownership, and the supporting politics, but there are hints this is changing. 

The state of affairs produced by the economy:  climate damage, wars on the horizon, inequality, bad government, all make us feel that we need to do better. The danger is that wealth will circle the wagons and co-opt the political budget for defense of enclaves.

Yet we hold on to keeping politics separate from economics. We could start modeling what a major disruption could look like, a world where corporations have more power than states, a world where migrations throw land ownership into deep disarray, a world where a thousand variables come into play simultaneously , where prediction is not possible and attempts at prediction show more about old ideology than emerging reality, 

 We might model policies preferring flexibility in everything we do to defensible but breakable  rigidities we are building in most of our systems..

Recent articles like the Guardian’s. 

The demise of the nation-state http://www.theguardian.com/news/2018/apr/05/demise-of-the-nation-state-rana-dasgupta

and books like

Climate Leviathan: A Political Theory of Our Planetary Future

Point to the scale of the problems we face.


Here is a simple idea, still schematic, but suggestive. How much of our problems could be solved if we distributed ownership of stock broadly, making everyone a partner in society and its economy, everyone a part owner, everyone a capitalist? Just appropriate existing stock,  say ten percent, and putting those stocks in a federal fund that pays out the accumulated dividends to all citizens an equal amount? After all, most companies, take Apple, are built on public property like patents on military technology, and thousand of people participated as employees. Those employees were mostly educated at public expense, The customers are part of society and supported by society, yet the corporation benefits.. Why should not all who participate also be owners?  As it is, we have  that a small sub set of society can own the whole society. 

(There is some parallel thinking with Peter Barnes. 

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough

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