Thank you Barbara Ringer

Our lives are bound by complex ties that connect us to people we never know or never meet. I did not know this woman who died on April 9 at the age of 83. I only realized our connection when I read her obituary in the Washington Post on Sunday April 26.

Barbara Ringer, you see, was the main architect of the Copyright Act of 1976. This Act affects my life as a writer and academic on a near daily basis. The law it enacted allows fair use whereby scholars can quote short extracts from copyrighted work, and it also extends copyright for an author’s lifetime plus fifty years. Before Ringer’s bill revised copyright, it only lasted for 28 years from the date of publication unless renewed. Every year I receive small--very small--royalty checks. My royalties offer little purchasing power but enormous satisfaction. They are manna from heaven, small but wonderfully unexpected gifts and cheering reminders that my work continues to be read and used.

Barbara Ringer worked at the Library of Congress most of her life. She crafted the basis for the 1976 Act, thus assuring me the ability to quote other writers as well as securing the copyright of my work for a long time. She defended the rights of creative people to have their work protected. Receiving her law degree from Columbia University in 1949, Ringer had to battle a sexist world, and she successfully won a discrimination suit in 1973 after she was passed over unfairly for promotion. She gave her collection of books and movies to the Library of Congress. Furthermore, she placed the land she owned in conservation easements so that the property remains wild in perpetuity. Her many good deeds will live on long after she has gone.

So thank you Barbara Ringer.

Finance Capitalism and Public Policies

In the early 20th century, the Austrian economist Rudolf Hilferding proposed that a new form of capitalism was taking hold. In his book of 1910, Finance Capitalism (Das Finanzkapital), he ventured that the increasing concentration of economic activity and banking into larger and larger combines was effectively producing a new form of capitalism, the finance capitalism of the book’s title. Because this new form of capitalism controlled the flow of investment, he suggested that it was displacing competitive industrial capitalism while creating a demand for a centralizing and “privilege-dispensing state.” According to Hilferding, finance capitalism was always on the lookout for state intervention to prop up its wealth and privilege. Sound familiar?

Here is a photograph of a scary looking Rudolf Hilferding.

Fast -forward almost 100 years and we can see the full unfolding of Hilferding’s prediction. It is evident in the massive amounts of money being made. Lloyd Blankfein, the CEO at Goldman Sachs, received compensation of around $43 million for fiscal year 2008. Lots of people make lots of money in this sector, and as we now know it is neither connected to their skill in assessing risk or foresight in managing change and economic uncertainty. The compensation reflects itself: people get paid a lot, not necessarily because they are any good, but because they are in this sector. And the sector binds government to its needs and requirement through the slick passages of individuals who move effortlessly and often from finance to government and back. These moves transcend party affiliation: Paulson moved from Goldman Sachs to Treasury Secretary under Bush: Rubin moved from Treasury under Clinton to Citibank after deregulating the banking system; and more recently Rubin’s colleague at Treasury, Larry Summers, moved from a lucrative hedge fund gig to advising Obama. In the May issue of The Atlantic, the former chief economist at the IMF writes of a quiet coup in which the US government was hijacked by the finance industry (http://www.theatlantic.com/doc/200905/imf-advice).

Public policies are not only shaped to suit finance capital--and these include the promotion of free movement of capital across borders, the repealing of regulatory frameworks and the overturning of oversight regimes--but also are taken for granted as “the right and only things to do” in the name of general welfare. While change is currently afoot for reregulation, be on the lookout for how the resultant systems will be shaped by financial interests.

In the fall of 2008, the US Congress could not move fast enough to prop up the banking system. The $750 billion TARP (Troubled Asset Relief Program) bailout was exactly the “privilege-dispensing” Hilferding was writing about in 1910. And compare the political response to the banking crisis with the meager, parsimonious reaction to the problems of the automotive industry or even of the housing crisis. Cars and housing are important, but not nearly as important, in this new form of capitalism, as finance and banking. Paulson and Bernake managed to frighten politicians into accepting the package by painting a scenario that the world was going to collapse if nothing was done. This may or may not be true. My argument is that this conclusion comes less from a fully formed economic analysis than from the contemporary ideology that fixates on banking and finance. The power of finance capitalism is such that this ideology is now viewed by the US government as the only the way to see and understand the world. Current policies and beliefs clearly reflect the interests of bankers and not the general welfare or common good.

Interview

Click on the above title to see me being interviewed by Professor Steve Braude about two of my recent books. It is a short 12 minute clip.