Thursday, December 17, 2009

When New Frontiers Become The Village Commons

Ayn Rand capitalism works best on a flat earth. There it can grow larger forever. Boundaries can always be expanding on such a terrain. There is always another hill to cross, always more nature to conquer. A galaxy far away would work well, too.

On a round earth, in limited space, expansion runs into itself. When expansion in the global marketplace is geographic, for example, the final unsold market may be a small island chain in an ocean far away, perhaps a place like the Seychelles. Lovely but distant, and oh, so enticing. The final market. No one else left to sell to.

So it is that new products blossom onto the marketplace as specialty products, then become commodities. Not much profit in commodities. Banks, the final salt mine, try to create new thrilling products out of the one thing they sell - credit - and introduce so much fluff and fakery that they bring the system down. Anything they do to recapture their youth works against them.

Large companies run government. We live in a capitalist society. Senators are openly bought, and they blithely ignore the public shame. The military professionals and the defense industry have sold the country on a war that drains it even today. The insurance industry - which moves paper around, pooling risk and selling thrilling new insurance products - celebrates that it has killed, it thinks now, a health care bill that would have ensured that all Americans have health care.

Whatever of wealth is left in America, whatever has not been grabbed, is up for grabs. As the pile of wealth grows smaller, the grabbing gets more fierce.

In villages in early America, cattle were kept on a shared commons surrounded by houses. Whoever could breed the most cattle got the lion's share of the grass that grew in the commons and crowded other householders out of their share. A limited supply of grass could not provide for a village containing expansionists. Milk cows, perhaps, herds, no. Limited supply requires limited participation. The Law Of The Commons.

The earth being round, supplies are limited.

So what's a poor aging business to do? When your stocks behave like your bonds, how can you spin a profit? When your market is saturated with product and the customers haven't been given raises in years, what can you do?

When the pool of customers hasn't been given raises in years, when you send their jobs overseas, golly, what can you do? When you fight to deny them health care so more can be driven into bankruptcy, what can you do?

How can capitalism survive a round earth?

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