“This system worked for us until our political parties were overtaken with corruption.”

I appreciate this sentence because it has an important clause, “for us”. Yes, the system worked for us, it has not worked for the majority of the people on this planet. There are large and growing differences in wealth between the richer and poorer and within the richer and poorer countries, the economic policies that the rich countries have chosen have DESTROYED the developing and underdeveloped world. The people of those countries are forced to pay back obscene amounts of debt (many countries paying far more towards debt repayment than they do towards social programs), which has benefited the rich countries like the US. Look at figures for loans, aid and foreign direct investment vs. capital flight in the poorer countries. Essentially we the taxpayers have been subsidizing the debt accumulation of the poorer countries, to our banks. That explains in large part the monstrous amounts of debts we now have in the US. When the poorer countries cannot pay the debt back (and in the long run they can’t, it is impossible) we force economic policies on them that essentially loots them and that their people entirely reject. They are forced to sell off their resources, environment and work forces for pennies on the dollar. The only countries that have a chance to escape this are countries that go against the rules of the “free market”, especially in regards to finance. Ecuador is telling the financial vultures, most of whom are in the West, to f%ck off. It benefited them and they are paying about 35 cents on the dollar for their debt. Paraguay, Venezuela and a few other countries might follow suit. Watch how it affects the economies in the West, it won’t be pretty. Most of the “wealth” in places like the US has come on the backs of the poor people in poor countries through debt and exploitation.

Besides that, there is a finite amount of resources in the world. We in the West consume about 6 times more per capita that people do in the developing countries. If we consume 84% of the resources and are the minority of the world’s population yes, the system will work “for us”, will it work for everyone? No, it never has or will. If poorer countries consume more, again there is a finite amount of resources in the world, we must consume less or the environment will be destroyed in the process.

Forget things like economic development and independence. The current system doesn’t allow countries to control their resources and to protect infant industry, like the West did without exception when it was developing. We put interests in charge of the development in the poor countries that would be harmed by their development. Essentially, we say, “do what is your best interest”, then ask these parasitic corporations to fund their eventual competition. Is that a realistic expectation? Has that lead to development? Has financial liberalization lead to anything but financial giants and investors having a virtual veto over any governmental policy that they don’t like?

Even within the US the idea that the system worked “for us” is a bit weak. Real wages haven’t grown for about 40 years. Debt has grown, differences in wealth has grown, the US relying on the unreal financial markets and the not the real economy has grown, but wages haven’t. Who is the system working for and how can the system possibly change to benefit us all without radically changing it? If we do radically change it in ways it needs to change can we even call what it will turn into “capitalism”? I don’t think so myself.

Also, the fictitious “free market” is only adopted by countries when they have a competitive advantage vs. other countries. The British were the champions of “free trade” (even though they were protectionist and always had massive state involvement), until the US and Japan started to challenge them. Then they cut off the Japanese even further and it was a big reason why WWII came about. “Free markets” work only under certain conditions: IF there are gigantic differences in wealth, IF we have “perfect information” and there isn’t large differences in access to information, IF there is “perfect competition”, IF there aren’t large external effects like environmental externalities, IF the pricing mechanism has all relevant information, amongst other conditions, the “free market” will work well. Is any of that even remotely the case? Has that EVER been the case. If reality is the exact opposite of these assumptions what can we predict the effects will be? If not, can we move onto economic ideas that are realistic and more just?