Changing the unwritten rules of The Market itself
The success of self-regulation and external measures must be that they change the hidden logic that drives the ‘unwritten rules’ of The Market itself – otherwise they will fail
Before some financial institutions become too big to save, governments and banks across the international community must address the current misalignments in the global capitalist system and realign their activities accordingly. They must re-evaluate just what The Market most usefully can be. And they must reassess how it is allowed to operate. This needs to have been sorted long before the inevitable stock-bubbles that will rise (just like the dot.com boom and bust) with biotech, nanotech and AI. And that is only possible with global agreements that actually change the hidden logic that defines the Unwritten Rules of Banking – in the same way as regulation aimed at Media and other sectors must also do.
By this measure, Basel 3 seems set to prove insufficient. And although bodies such as the G20 will be crucial in moving the debate forward, because ultimately they represent the interests of individual nations – not global interests as a unified entity – even they will not be sufficient unless they are supported by new powerful bodies that truly can take an independent view of the new world order. Ultimately, the political paralysis that often accompanies escalating financial crises needs to be addressed at source: the structure of The Market itself.
It is time to stop running scared of The Market. It is time to stop treating it as if it had some divine right to existence in its current form. And it is time to debunk forever the absurd myth that in the long-term The Market optimizes the world economy in the best possible way. In an analogous situation, until very recently, the apparent omnipotence of the dominant players in the global news-media remained unquestioned. Many politicians resented the situation – but felt there was in practice nothing they could do. All that changed. Very fast. Those who ride high on The Market’s financial behemoths currently rampaging uncontested across the world economy would do well to take careful note. And then, in the furtherance of Unelected Responsibility, use their phenomenal collective power to change The Market – before others combine together to change it for them.