This is about all you need to know about the global economy and the structure of capitalism:

Bonuses paid out to Goldman Sachs executives in 2009: 20 Billion Dollars

Total Gross Domestic Product (GDP) of Haiti: 7 Billion Dollars

That’s $20 billion for a thousand Wall Street investors and $7 billion for 10 million Haitians. The average Haitian makes 700 dollars, the average Goldman Sachs executive makes 20 million dollars in bonuses alone, not including salary. Profound differences like these are the rule rather than the exception in global capitalism, demanding the continuous upward distribution of resources away from developing countries. The perpetuation of gross economic and political inequalities is crucial to the excess created for the financial elite in the West.

Jobless recovery, in case you were wondering, is a tidy euphemism for “the rich are fine now, but you sure as hell aren’t”:

With the current economic climate, there has been much discussion about the origins of the financial crisis and the future of capitalism. In these typically hollow debates, Adam Smith is routinely and thoughtlessly invoked as the founder of modern capitalist though, based on unrestrained trade, limited government, and the mechanics of market economies. To this day, The Wealth of Nations is held up as the espousal tome for free-market ideology that decries government regulation, excessive taxation, and wealth redistribution (in whatever contrived shapes it may take).

But the myth of Adam Smith created by two centuries of advanced industrialization and capitalism is very far from the reality of Adam Smith. The majority of academics and pundits alike generalize on Smith’s observations about the invisible hand, the benefits of division of labor, and the growth of wealth through free trade.

Richard Posner at the Atlantic has come out with his own blog in conjunction with the release of his new book, A Failure of Capitalism: The Crisis of ‘08 and the Descent into Depression.

The most interesting discussions so far have had less to do with the book itself (I have yet to read, but judging from his entries, mostly deals with regulating banking system and its relation with a stable capitalist system), but the explanation of semantics he is forced to go through in introducing his book:

There is a sense, in short (turning to the second concern that I flagged), that capitalism has failed us, and we need something different, and that the title of my book signals support for that view. But that is not my intention. “Capitalism” is not a synonym for free markets. Capitalism is a complex economic system with many moving parts, and buying and selling and investing and borrowing and other activities carried on in private markets are only some of those moving parts.

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