Umair Haque writes: To the long, dismal list of fatally broken institutions — GDP, governments, schools, corporations — we can add the mysterious Libor, and its conveniently comfortable calculation. It’s difficult to overstate what a pillar of the global economy Libor is — it’s used in setting interest rates that affect the daily lives of pretty much every citizen of every advanced economy across the globe. And it’s difficult to overstate how troubling it is that this, too, is an institution rigged by the few, for the few; that this institution too, is, corrupted.
This scandal isn’t about price-fixing. It’s not about a bank. It’s not even about power and privilege, corruption and compromise. It’s about life, tragedy, and human potential. It’s about the capacity to create a worthwhile future. It is, in short, about you and I, and the places we seek for ourselves in the world.
Let me couch this for you in the pedestrian terms of financial hydraulics — the tawdry terms which seem to substitute for thinking in what’s become of our thin, shallow economic and political discourse. The most basic function of a financial system is to price money. If a financial system can’t undertake that simple task effectively — if the price of money is fixed like a roulette wheel stuck on red — all else must necessarily fail: investment must become malinvestment, speculation must precede creation, “profit” must become divorced from benefit, and wealth is effectively transferred from poor to rich, in a form of quiet but lethally effective institutionalized theft.
Now, let me couch this for you in the human terms of political economy — the terms in which you and I should rightly conceive of an “economy” as the sum of the enduring human good; not merely as a set of pipes for the grease of finance to be injected into.
Who authors the destiny of nations? Which compact governs the relations between the powerless and the privileged? Whose rights are sacrosanct? How are fortunes earned — and spent? What does “wealth” mean? If money is in a basic sense a currency in which the fruits of enterprise past are safely kept, to seed the soil of prosperity tomorrow — and if the value of that money itself is corrupted — can one be said to be a participant in “an economy”? Or is one more a pawn in a rigged game of self-destruction; a mark in a Ponzi scheme; a dull-eyed pack animal to which the engines of extraction are yoked? Does “freedom” — in the most primitive sense, autonomy from the circumscription of one’s own inalienable rights, those basic liberties which don’t just accrue to us, but inhere in us — still allow one freedom? Who’s who — master and servant, mechanism and operator, principal and agent, sovereign and serf?
These are the terms of the debate we’re not having. These are the words that are left unsaid. These are the concepts and ideas on which prosperity itself was built. These are the unspoken phrases that flit like ghosts through what’s left stammeringly unspoken by the finely-suited pundits and so-called “leaders” too cowering and afraid, too tempted and silenced, too timid and too petrified to challenge the primacy of a system that’s leaving millions to choke on the fumes of the collapse of their own futures. [Continue reading...]