Mon Jan 28, 2013, 02:20 AM
HiPointDem (20,729 posts)
Restoring the Commons
The redoubtable green philosopher Garrett Hardin played a central role decades ago in drawing attention to the phenomenon in question with his essay The Tragedy of the Commons...Hardin asks us to imagine a common pasture, of the sort that was common in medieval villages across Europe...
At this point, though, I’d like to shift focus a bit to a different class of phenomena, and point to the Glass-Steagall Act, a piece of federal legislation that was passed by the US Congress in 1933 and repealed in 1999. The Glass-Steagall Act made it illegal for banks to engage in both consumer banking activities such as taking deposits and making loans, and investment banking activities such as issuing securities; banks had to choose one or the other. The firewall between consumer banking and investment banking was put in place because in its absence, in the years leading up to the 1929 crash, most of the banks in the country had gotten over their heads in dubious financial deals linked to stocks and securities, and the collapse of those schemes played a massive role in bringing the national economy to the brink of total collapse.
By the 1990s, such safeguards seemed unbearably dowdy to a new generation of bankers, and after a great deal of lobbying the provisions of the Glass-Steagall Act were eliminated..banks went right back to the bad habits that got their predecessors into trouble in 1929, profited mightily in the short term, and proceeded to inflict major damage on the global economy when the inevitable crash came in 2008. That is to say, actions performed by individuals (and those dubious “legal persons” called corporations) in the pursuit of their own private economic advantage garnered profits over the short term for those who engaged in them, but imposed long-term costs on everybody.
When individuals or corporations profit from their involvement in an activity that imposes costs on society as a whole, that activity functions as a commons, and if that commons is unmanaged the tragedy of the commons is a likely result. The American banking industry before 1933 and after 1999 functioned, and currently functions, as an unmanaged commons; between those years, it was a managed commons.
The Declaration of Independence, the wellspring of American political thought, defines the purpose of government as securing the rights to life, liberty, and the pursuit of happiness. There’s more to that often-quoted phrase than meets the eye. In particular, it doesn’t mean that governments are supposed to provide anybody with life, liberty, or happiness; their job is simply to secure for their citizens certain basic rights...
That is to say, the core purpose of government in the American tradition is the maintenance of the national commons. It exists to manage the various commons and commons-like phenomena that are inseparable from life in a civilized society, and thus has the power to impose such limits on people (and corporate pseudopeople) as will prevent their pursuit of personal advantage from leading to a tragedy of the commons in one way or another. Restricting the capacity of banks to gamble with depositors’ money is one such limit; restricting the freedom of manufacturers to sell unsafe food is another, and so on down the list of reasonable regulations. Beyond those necessary limits, government has no call to intervene; how people choose to live their lives, exercise their liberties, and pursue happiness is up to them, so long as it doesn’t put the survival of any part of the national commons at risk.
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