The explosion of the BP oil rig on April 20, and the subsequent saturation of the Gulf of Mexico with oil, will go down as the biggest environmental catastrophe of all time. We still don’t know what caused the initial blast that took the lives of eleven workers, but there is one important lesson we have learned from the incident. Crony capitalism is the culprit once again.
Our old friend, crony capitalism, unlike free market capitalism, is that mutation of the latter caused by unconstitutional reaches of government. As discussed in previous editions of this column, the most egregious example of cronyism in our economic system is the financial cartel run by the Federal Reserve Bank. We are all familiar with the way banks are permitted to inflate our money supply through fractional reserve banking, ensuring huge profits for them and higher prices for the rest of us. Of course, when the banks overstretch their lending and run into trouble, the Fed is there to bail them out with more of our money.
Besides an endless stream of money to bail out fraudulent banking practices, crony capitalism has attempted to remedy union-induced bankruptcies in the auto industry, and has also provided cash subsidies to wheat farmers and price supports to dairy farmers to keep their products’ prices artificially high and our purchasing power artificially low. Then there are the hidden cronyisms in our system. One of them has been exposed with the current crisis in the Gulf.
Under current law, it turns out that BP is responsible to pay for 100 percent of the cost of the clean-up of oil. Beyond that, the company’s liability for economic damages is limited to $75 million. This means that BP must pay to clean up their mess, but all the fisherman, crabbers, restaurateurs, hotel owners, and others that rely on the gulf for their livelihood will have to split the $75 million pot. Clearly, the losses suffered by the locals on the coasts of Louisiana, Alabama, Mississippi, and Florida will far exceed $75 million. Given that BP earns multibillions every year, a $75 million cap on damages is a pittance of what they should be paying to make lives whole. Perhaps BP wouldn’t have taken such risks by drilling in deep water if faced with catastrophic losses, or they would have at the very least put in place more precautionary measures.
But it’s the same old story – crony capitalism. BP and other oil companies grease the palms (no pun intended) of members of Congress and in return receive special protections in the law. At the end of the day, the taxpayers will foot the bill for this malfeasance.
Article comments
— go to most recent comments1 - roger nowosielski
Almost in total agreement with you, Kenn, except that your belief in the possibility of "pure capitalism" is a fantasy.
It's in the nature of the system to become emboldened and to permeate all levels of government - to include campaign financing.
So in my view, you're no different than Don Quixote, fighting the windmills. Besides, you're exhibiting an unwarranted belief in the integrity of the politicians and the old adage that power corrupts.
So if you disavow yourself of any one of these presumptions, preferably both, we might yet come to see the world eye to eye.
2 - Dr Dreadful
I don't see how changing the law and making it apply to BP now would be ex post facto. The spill is, let's remember, ongoing. You would just start counting dollars from the date the bill was signed by the President.
3 - roger nowosielski
Not to mention, the issue of constitutionality is bogus, I think. It elevates the notion of contract to something immutable.
4 - Kenn Jacobine
Dr. D,
The event that initially caused it happened before the law was enacted. Hey, I don't like the law either, but you can't change the rules of the game in the middle. I would say that is the protection afforded by the Constitution through the prohibition of ex post facto.
5 - Allergic2Apathy
75 million is the financial equivalent of BP spitting in their faces. It's disgusting. It should be at least that per state. You can't tell me BP can't afford it. And if not, oh well. I guess they go belly up. BP is not 'too big to fail'. I want to see BP execs on those beaches with the rescue workers cleaning up this spill, that's what I want to see.
6 - Mark
So, any 'crony capitalist' guarantees and indemnities offered by governments to the re-emerging US nuclear industry should be reconsidered in light of this accident and argument.
7 - roger nowosielski
Well, it's Kenn's last line of defense. If you want to convince yourself and others of the purity or the wholesomeness of your pet belief, just preface it with a disqualifier. It's on old Jedi mind trick.
Crony capitalism: by implication, capitalism is good
8 - Mark
What I find most...bizarre in this piece is the twice used, "It might not have happened..."
'If wishes were horses...'
9 - Mark
(or is that thrice?)
10 - Mark
Oh man! If only the US had been a commie pinko fascist totalitarian dictatorship. Then this might not have happened.
11 - roger nowosielski
Come to think of it, Mark, I tried to provide additional examples to substantiate point in #7 but couldn't think of any good ones.
Which got me to think. It looks like capitalism is the last myth of the modern man. Perhaps that's why it's so difficult to put it away.
12 - Mark
Oh man! If only the US had been a proper Christian Theocracy. Then this might not have happened.
13 - Mark
...capitalism is the last myth of the modern man...
The 'Robinson Crusoe' myth of individualism -- the part claiming to be the whole, you mean?
14 - roger nowosielski
Well, yes, but that's part of the same picture.
Indeed, this suggests formidable difficulties, precisely because we're dealing with a myth.
15 - roger nowosielski
The myth of individualism, of human progress, of the little engine that can.
16 - roger nowosielski
Actually, I shouldn't be surprised because it's all part of the myth of Enlightenment, but for some reason it had struck me in a very concrete way.
17 - roger nowosielski
Which suggests another line of thought, Mark.
How do you fight a myth if not with another myth? Or to put it differently, have we transcended the phase of human development so that we might envisage and realize a new future without the help of a myth?
If the answer is in the negative, different possibilities and solutions suggest themselves.
18 - roger nowosielski
Marcuse's One-Dimensional Man may have to reconstructed to mean a faithless man.
Rorty's vision of liberal democracy is a myth; the problem is, it doesn't do away with capitalism but tacitly embraces it.
Marx vision of a classless society and of the withering of the State is a myth which aims at defeating the myth of capitalism.
We are in a mess.
19 - roger nowosielski
Since I was on Marcuse, here's another find.
A quote from the Wiki:
In his 2004 book Understanding Postmodernism, Stephen Hicks[9] argues that Marcuse's One Dimensional Man can be understood as part of a broader far-left response to the failure of socialism in theory and practice. Hicks notes that from the 1800s, socialists typically argued that wealth was good, but predicted that capitalism would lead to poverty and desperation for the working classes as wages fell and wealth was concentrated in fewer hands. By the 1950s, however, it was clear that capitalism had developed contrary to Marx's predictions: virtually all capitalist nations saw rising wages, higher standards of living and increased liberty and equality for previously marginalized groups (e.g., women and ethnic/racial minorities). In contrast, socialist nations had lower rates of economic growth, lower standards of living, censorship and oppression, and large-scale human rights atrocities. In response to the failure of socialism, Hicks notes that some prominent socialists, such as Marcuse, made an about face, now arguing that wealth was not good:
Following Marx, Marcuse believed that the historical purpose of the proletariat was to be a revolutionary class. Its task was to overthrow capitalism. But that presupposed that capitalism would drive the proletariat into economic misery, which capitalism had failed to do. Instead, capitalism had produced great amounts of wealth and--here is the innovation--capitalism had used that wealth to oppress the proletariat. [...] Capitalism's producing so much wealth, therefore, is bad: It is in direct defiance of the moral imperative of historical progress towards socialism. It would be much better if the proletariat were in economic misery under capitalism, for then they would realize their oppression and then be psychologically primed to perform their historical mission.(p. 154)
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Of course, this rosy picture of capitalism has been dispelled by now. Still, the preface to Hicks's book is telling, and I quote:
THESIS: The failure of epistemology made postmodernism possible, and the failure of socialism made postmodernism necessary.
20 - roger nowosielski
And here is another myth: Love conquers all.
And this myth pushes the myth of capitalism aside.
21 - roger nowosielski
All of which seem to place Chris Rose's thesis in doubt.
How is it possible not to be a "faithist"? Perhaps only in a brave new world.
22 - roger nowosielski
All of the above points to the major strength of French postmodern thought. Instead of representing itself as just another myth, it's express purpose is to debunk any and all myths. It aims at unmasking them. It is a method for unmasking.
Which perhaps also explains why the postmoderns are being unjustly accused of not offering a theory. If myths are on the order of theories, the postmoderns are not in that business. They're in the business of unmasking theories, not creating new ones.
Unmasking will make you free.
23 - Cindy
Roger,
You changed the word from 'metanarratives' to 'myths'. But what do you say about this assertion? (Remember it from my email?)
Is Poststructuralism a Metanarrative?
Lyotard's analysis of the postmodern condition has been criticized as being internally inconsistent. For example, thinkers like Alex Callinicos[5] and Jürgen Habermas[6] argue that Lyotard's description of the postmodern world as containing an "incredulity toward metanarratives" could be seen as a metanarrative in itself.
In your reply you only stated your feeling in relation to Habermas' views (generally). But you didn't really talk about the point above.
Is changing the word from 'metanarrative' to 'myth' a way of addressing that? I am thinking about it and if the word 'myth' is substituted it does give a different feeling. But I have to think about it more.
24 - roger nowosielski
Well, changing the word in this case amplifies the meaning.
Actually, there is a crucial distinction to be made: Metanarratives have to do with rules of justification and legitimating which are implicit in the narrative (in the same sense that rules for what counts as a scientific statement, verification, controlled experiment, etc., are implicit in universe of discourse we call Science). Grand narratives, on the other hand, are narratives which aim to account for a history of humanity or culture from one overriding perspective. (Local narratives are not that ambitious.)
So given this definition of terms, grand narratives do indeed strike my as myths.
As to your citation, I have reservations. I'd rather think of the French postmodern thought, as initiated by Foucault, as something on the order of method or technique - a technique at unmasking.
25 - roger nowosielski
Habermas does indeed subscribe to a myth of human rationality - in that it will eventually lead to universal consensus and universal(ly accepted?) truths.
He hasn't been able to shake himself off the myth inaugurated by Project Enlightenment