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Concentrated Economic Power

IMF Employee of the Year! (Papandreou)

Note:a version of this post is cross posted at the-peripatetic.com.
Though I didn’t really intend to blog about so many political issues, I find myself coming back to issues that are as much political as they are economic or cultural.  I guess those IPE guys have a point about the connection between politics and economics.  Whether or not this latest “crisis” has been averted, those who have the most to benefit from this latest Greek salvationare those who already had the most: the elites, and that makes this an issue of social justice as much as of economics.

I’m no crazy radical.  Remember, I want the Indignants to move across the street from Syntagma and  collect the taxes.  I also want my own country to raise the effective tax rates on the wealthiest citizens, shake down every bank in Switzerland, and impose economic sanctions on tax havens like Ireland.  That’s because I want it to reinvest that money in the American people who need it most.  I firmly believe that one of the most critical functions of a modern government is to combat rising income inequality.

In the context of a discussion of Greece and democracy, Alex Marsh throws out one of the most startling clear summaries of the central problem facing Greece and so many countries around the world.

Concentrations of economic power can reach a point at which the political process ceases to be one for deliberating and determining the direction for society as a whole in the interests of society as a whole. Instead it becomes a mechanism by which the interests of the few are preserved and protected, to the detriment of the interests of the many.

Reading this, I, of course, vigorously nodded my head and then thought of Indonesia.

National Development in a Kleptocracy

In doing my research for my upcoming coverage on Indonesia, I am trying to follow the subtle and not so subtle differences between their two major post-colonial leaders, Sukarno and his successor Suharto.  While both men were quite different in their approach to central authority, both believed quite strongly in central control of…well, everything.  Apparently Suharto took things a bit farther, wanting not only to control everything but to own it as well.


Kleptocrats can lead their countries to prosperity, and Suharto clearly did.  Putin and Medvedev have not prevented a nation as significant as Russia from asserting its economic muscle in the world market, at least not entirely.  But ruling a kleptocracy can be much like riding a bull: great while you can hang on, but falling off means you might get the horns.  While the analogy is not perfect between Suharto-era Indonesia and Greece today, I think it’s not absurd either.  In the words of the Greeks, their government is run by thieves.

There are people of reason in Greece deliberating and trying to set the direction for the country as a whole, and I sincerely hope that they can effect change and serve as a powerful example for the western world.  Beyond the indentured servitude of debt, greater concentration of power into the hands of political and economic elites, there has to be another path.  Kleptocracy may be survivable, but it will never be enviable.

Right now, the US and so many other western nations are struggling with questions of debt and economic recovery. Even the ratings agency have woken up from their naps to take notice.  In times of such widespread difficulty and confusion, each nation must find its own way to grow and prosper in an increasingly hot, flat, and crowded world awash in debt.  I for one, hope that America, Greece, Indonesia-everywhere that wants to, can find real solutions to the huge problems of the 21st century.

The  peripatetic1 is a recovering American looking to share some of his thoughts on economic development in the places he encounters as he wanders the world in search of wisdom, employment, and a decent cup of coffee.  Follow along at the-peripatetic.com.
  1. October 4, 2011 at 10:30 am

    Great photos, they really serve to illustrate your points well. It just goes to show that fashion is in the eye of the beholder. Whilst I liked certain aspects on the design, some I would not wear.

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