We pretty much avoid political commentary on this site, mostly because this is a trading site, and you don’t come here because you care about our opinions on elections or on policy matters.
But at the same time, it’s worth noting that when we trade, we’re all participating in a very powerful, very complex system that has effects all over the world - effects that are not always good or even intended. When Schumpeter first described capitalism as creative destruction, he couldn’t have fully known how right he was. With all the benefits that economic growth and global expansion bring to previously impoverished peoples and struggling economies, the forces of global capitalism also leave many people behind and keep some people impoverished.
And what’s more, many of the losers in the game of global capital aren’t the victims of some blind system, but of the malicious and wholly intentional policies established by others.
In The Shock Doctrine: The Rise of Disaster Capitalism
Naomi Klein explains forcefully and convincingly how neoliberal orthodox economics wreaks havoc on so many countries around the world. The “Friedman two-step,” we might call it, consists of privatizing any publicly-held industries in a country, slashing social spending, and forcing through free trade initiatives that may or may not be in the best interests of all concerned. The common effects of such policies are familiar: economic strain and collapse, oligarchic rule by enriched corporations, mass poverty, and worse. But people in developing countries can’t be expected to regularly vote against their own economic interests, so neoliberal policymakers have to make use of - and, it is Klein’s contention - even perpetuate or exacerbate extreme situations in order to ram through their policies. By catching a populace when it is in a state of shock, demagogues and political hatchet men can impose free-market initiatives that would otherwise be roundly rejected. Klein pursues several examples: the Bush administration’s run-up to war and expansion of executive power after 9/11 is perhaps the most obvious recent example, but she also points to the privatization of land in Southeast Asia following the tsunami, the exploitation of Katrina victims, and sale of the Russian economy to the highest (and most corrupt) bidder in the immediate post-Soviet era. There are, of course, numerous other examples.
Why mention all this? Well, traders can sometimes be a myopic sort, and it’s worth reminding each other that there’s a bigger world out there beyond our trading screens. And, like it or not, we are each responsible for that world, and for one another. It’s easy to buy your shares of EEM - or of SPY for that matter - and never think twice about the powerful and often completely unjust system that makes those trades profitable and possible. We are all implicated in that system, and the responsible reaction to that fact is to devote some of our intellectual and financial resources to undoing some of the unfortunate damage:
- intellectual response: reading up on the truth about the poverty that capitalism causes (Klein’s book is a good start)
- financial response: give to a credible charity that fights hunger, disease, or poverty around the world. Kiva is an interesting example.
Oh, and we can vote.