The Transparent Paradox

The Free Market appears to be a logical utopian vision but it is also being criticised for leading to the failure of the banking system and the questioning of Capitalism. As the debate continues one of the biggest questions that should be asked is why do monopolies exist in a free market? If during the last decade regulation has been too weak and markets too free why didn’t monopolies get broken by free competition? There are a number of reasons, some political, but perhaps the greatest is the lack of transparency in business and the free market.

With hindsight most people can see that the complex repackaging of toxic debt relabelled and sold as AAA grade investment was not only unethical but also improbably stupid. Yet it happened. Some would argue that this was down to lack of regulation but the more regulation you have the more complex the system becomes and exactly the same hidden problems will eventually arise but just in a different light. The problem is that the language of the products sold and the illusion of the free market fooled people into naively not looking too hard at what was being traded. Some people did act unethically but I suspect a lot of people were just playing a system that they genuinely believed was stable. Now ignorance isn’t necessarily a defence for incompetence but further regulation just provides an even greater level of misplaced reassurance as problems bubble away. Would these problems have occurred had the products sold been transparently labelled as toxic and in a free market why didn’t this automatically occur?

The collapse of various banks has led people to portray Capitalism as a system that feeds off the people through a competitive ideology rather than support the people through cooperation. Yet if you do any research into charity models you begin to question how ‘companies’ that make no profit and pertain to do good in the world seem to achieve so little but still manage to pay such generous salaries. Maybe both sides of the ideological battle need to swallow the bitter pill of transparency. This is especially true if you receive any sort of state support or tax benefits from the people. There are many systems in our civilisation that are corrupt but hopefully the human species isn’t one of them. Maybe Competition + Transparency = Cooperation?


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Planet Earth ‘Winners’

 

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Jacob’s Ladder

As we begin to see light at the end of the recessionary tunnel, governments around the world are advocating an entrepreneurial spirit to lift society into a new era of growth. Unfortunately the reality of a boom and bust economy is that, while those with little free capital struggle to survive, the wealthy are finalising patents, partnership agreements and investment deals which will guarantee rapid success in the next decade and no doubt create yet another recession in ten years time.

It would help greatly if governments inspired entrepreneurs with a realistic ladder to climb when at the moment too much time is wasted building the ladder. The main barrier to success in society is that it is often unclear as to the next step needed in developing ones self. Fortunately the power of the internet provides a mechanism to research for free any topic of use and this helps break down exhausting barriers.

We forget that the internet is a relatively new invention and one that is greatly underestimated for the potential it has to improve society. The internet represents a distributed network model where a simple framework or ‘world wide web’ enables the distribution of knowledge thereby short-cutting bureaucracy, hierarchy and general middlemen. While systems such as Twitter have been used to bring down dictatorships, the internet will inevitably lead to the evolution of democracy and capitalism in the coming years.

The existing capitalist model relies on monopolies and centralisation to fuel consumptive growth. It requires a level of control which ironically contradicts the ideals of the free market it so advocates to increase profits. This has led to an erosion in morality, cultural identity and community as problems caused by this process have been moved out of sight and out of mind.

We see the internet as a key tool to put these social challenges back into focus so they can be solved by a global community. On a smaller scale the internet, a tool not discussed in the latest government retail review , is also the mechanism to empower local communities and high streets that have lost their identity and soul. Sir Francis Bacon famously said that ‘knowledge is power’ and with the birth of the internet we may now have a digital prophet to help balance society.

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