The problem with capitalism isn’t so much that it has winners and losers. That’s a problem, of course, but with a strong social safety net, and an eye toward social, economic, and environmental justice, it’s most ill-effects can be negated. That this is more common in the breach than in practice doesn’t mean it can’t happen.
The problem with modern capitalism isn’t even that there is a sector of it controlled entirely by the skittery greed of hyperactive man-children who do nothing but make and lose money by swapping paper. In any society, you can have a clique of gamblers.
No, the problem is that so much of the economy revolves around, and is in fact dominated by, this skittery greed, this reckless gambling, this enormous creative and computative power dedicated toward gaming the system, boosting the fortunes of a small number of shareholders, and powering stock at the cost of any workers. It’s a problem because the markets have a deep impact on the way the economy is perceived, and the way it acts.
Look at right now: the DJIA and S&P 500 are both at record highs, and that’s good. It’s amazing it can happen with an anti-business socialist in the White House, you know? The problem is thinking that this in and of itself is the indicator of a sound or sustainable economy, or a just one.
The soundness is evident by the market fluctuations. A few weeks ago, things seemed bleak, as reactions to Brexit sent the market into panic. But now it has rebounded, or, as CNBC said, “as fears eased over Brexit and Japan signaled more economic stimulus.” Many are crediting the new stability in Great Britain, as Theresa May is today becoming the new Prime Minister.
Now…did the markets think that wouldn’t happen? That they would be without a Prime Minister forever? Conversely, do they think that the worst of Brexit is over, just because they’ve gotten over the initial yips, even though the impact has barely begun? Do they know that a object still exists when it leaves their line of vision?
That’s sort of the point. “Markets were shaken today following turmoil in the Middle East, sun rising in east.” It’s not the market isn’t reacting to real things. It is (oil prices, company losses, etc). It’s that it is reacting often insanely, with short-term thinking, and in a way that impacts the broader economy. The problem isn’t that the market reacts; it is that we react to it.
Our economy is tied up inextricably with gamblers who are concerned with short-term profit, and so many businesses are geared toward appeasing them. You could lose your job to make a shareholder another buck. If a mouse sprints across the trading floor you could lose your pension. It’s an insane economy, and the more you think about how precarious it is, the more terrifying it gets. I won’t pop champagne to celebrate new highs, but I might drink it to be able to sleep.