Re: Your message

2/14/2001, Paul Riesz wrote:
    > Richard Moore asked me to list the primary reforms
    that I suggest imposing on capitalism to make it acceptable

Dear Paul,

Many thanks.  A good, balanced list, imho.  In fact, I want
to post it to the simpolicies list - that's the 'policy
development arm' of the SP group.  We're just beginning our
discussions.

I support, more or less, all of your proposals.  I see us as
'movement allies', and I imagine we might find ourselves
supporting the same initiatives.

Where we differ is in our beliefs about what the
consequences of implementing such changes would be.  You
point to Sweden as a proof-by-example that such reforms are
consistent with capitalism, and I agree that does force one
to sit back and take notice.

It seems that the Swedes have been willing to live with
modest growth, and to invest in productive enterprises
instead of speculative or exploitive quick-profit ventures. 
When our new society arrives, perhaps Sweden will be one of
the least-affected nations.  Fair play to them.

Unfortunately, when you look at the overall global economy,
you find a quite different investment pattern than Sweden's.
 Earlier I stated that the speculative economy is ten times
larger than the 'real' economy, and I haven't been able to
find my source for that.  But I did find a citation in
Korten which conveys the magnitude of the speculative
markets:

    "Allen Metzler, one of the world's leading authorities on
    central banks and monetary policy, estimates that if the
    world's central bankers agreed among themselves on a
    coordinated commitment to protect a currency from a
    speculative attack, they might at best be able to muster $14
    billion a day, a mere drop in the bucket compared with the
    more than $800 billion that currency speculators trade on a
    daily basis". 
    - "When Corporations Rule the World", p. 201.

In some sense that $800 billion (larger now) is virtual
money, but in another sense it is very real.  The value of
your pension fund, for example, is linked to the $800
billion.  If we were to wipe out this speculative market,
then there would be a knock-on effect that would wipe out
the other markets.  Even Sweden would be affected as its
export orders were cancelled.  It would be South Korea
on a global scale.

Your reforms are aimed at ending this kind of speculation,
and they would succeed at that.

But how would you deal with this inevitable collapse of the
capital bubble?

rkm