A social paradigm, in the context of this essay, refers to an operative theory of reality, namely, a conceptual framework, which influences human social existence and behaviour. People do not act on instinct as animals do; human life is much more complex. People function through a socially accepted conceptual framework that entails a specific perception and interpretation of reality reflected by a correspondingly nuanced discourse and language.
This theory of reality denotes assumptions and presuppositions, attitudes and values, which have practical, legal, and moral ramifications, which, in turn, are nourished and sustained by the prevailing economic, political, and social activities of a nation. A social paradigm is an essential fabric of the human life form, even if it is not always acknowledged or consciously articulated, thus remaining part of the collective sub-conscious of a nation.
Of course, social paradigms, the way we look at and interpret reality, changed throughout history; every succeeding epoch reflected its own particular social paradigm. For example, the slave-based paradigm of ancient Greece and Rome or the feudal paradigm of medieval Europe was radically different from the capital-based paradigm of contemporary Greece and other countries. One might add that, stimulated and encouraged by the increasing globalization of the economic, industrial, and financial realities, the capital-based paradigm prevails in most countries throughout the world and the economic, fiscal, and social angst effecting contemporary Greece is shared by other nations embracing the same social paradigm.
The capital-based paradigm
To appreciate the nature of this paradigm, one must consider the ruling principles and imperatives which sustain and nurture it. These include:
- the creation and relentless increase of material wealth;
- the maximization of profit;
- the reduction of production cost through various means;
- the elimination of interference in enterprising ventures;
- the freedom from any constraints, considerations and other factors that thwart economic, productive and financial activities:
- the subordination to, and supremacy of market forces;
- the absolute and unconditional entitlement of private property; and
- the legislation to protect and ensure the implementation of the above.
Together, these principles and imperatives act as the operative theory of reality and create a corresponding culture and a mindset that express themselves in the beliefs, attitudes, decisions, and activities of governments and people. In other words, these principles and imperatives infiltrate and seriously influence the collective sub-conscious and the social consciousness of a nation, both its leaders and the populace.
Recognizing this vital link is essential to understanding what goes on in a country committed to the capital-based paradigm. The political agenda, the legal system, and the social conditions of a nation, as well as the values system, are tinted by and reflect these principles and imperatives. Quite often democracy itself becomes identified with them. Woodrow Wilson once claimed, “If America cannot have free enterprise, it can have no freedom whatsoever.”
In the context of the above, one can begin to understand the “logic,” the reasoning behind the recent rejection of Bill C-300 by the Canadian government -- a bill aimed at protecting the poor against the unjust conditions imposed on the workers by Canadian mining companies; the reopening of the asbestos factory in Quebec and the marketing of this deadly product condemned by the United Nations; the Canadian government’s decision to limit the environmental review of the tar sands and fracking.
Justice to the poor in developing countries, the health of people both working in the asbestos factories and those in countries importing it, and environmental protection are sacrificed in homage to the imperative of increased capital and material wealth. The thrust of the Conservative agenda reflects the capitalist operative theory of reality and its influence on the human psyche. This is not a value judgment, but a statement of fact.
The debt crisis within the capital-based paradigm
Based on the reductive and simplistic “logic” of the capital-based paradigm, the wisdom of the age dictates that the problem bedeviling many European countries can be reduced to a simple fact of living beyond one’s means; the respective government and its people have adopted a standard of living they could not afford. In simple terms, the resources of the country and the revenue that the country generates from its various assets through taxation, services, user-fees, investments, fines, and other revenue-earning activities or institutions are not sufficient to pay its bills.
And where specifically were these countries spending their money? Unlike the situation prevailing in countries ruled by unconscionable and venal dictators, the bulk of the money was spent on services to the people. With some exceptions, these services were responsible and fair, expected from a just, compassionate, and civilized society in an age of plenty and inspired by a progressive social consciousness. These include:
Universal health care, better education, decent pensions, just wages, old age pensions, hospital care, nursing homes, family assistance, child-care centres, income supplement, subsidized housing for the needy, etc. – what is commonly referred to as reasonable and justifiable communal welfare and social services which point to a progressive social paradigm.
However, since the country’s revenue, within the current paradigm, is not sufficient to cover the cost of these services, governments have had to borrow money from banks and other lending institutions, both local and foreign; hence the debt problem.
The “solution” within the current capital-based paradigm
According to this analysis, the solution is obvious and morally binding: Live within your means! Greece and other countries, suffering the same affliction, must take serious, even radical austerity measures. What are these measures?
1) First of all, they must honour and pay their loans; defaulting is absolutely unacceptable. If this were to happen, it would send tremors throughout Europe and the rest of the world; the defaulting country would become an economic and financial pariah; other countries may follow suit with unimaginable consequences. Creditor countries will fret and fuss and try to do damage control by reducing the debt, writing off some of the debt and providing more loans.
2) Debt-straddled countries must impose austerity measures, the bulk of which will fall on ordinary people, especially those in low-income brackets. The measures include wage cuts, higher taxes, lost or diminished pensions; loss of jobs in the public sector, loss of vital services, lowering of the tax ceiling, reduction and/or elimination of other services, etc.
3) Steps are to be taken to attract investment by lowering corporate tax and the minimum wage; relaxing environmental regulations on investments; surviving frugally; limiting spending and borrowing, selling national assets, reducing social services, and privatizing others, removing subsidies on essential services, etc.
4) Although the above may provide a respite for a while, given the prevailing economic and financial paradigm, it will eventually compound the problem because the high interest on borrowing and rising unemployment act as recessionary forces. The debt will continue to increase and the country will be caught in a vicious circle of having to continue borrowing to finance the loan and wasting millions of Euros every day paying the interest on the debts. This will call for decades of austerity measures and social misery and will lead to growing social unrest.
Such, in essence, is the “solution” imposed on Greece and other countries by the European Community and its allies -- a “valid” solution to those who subscribe to the principles and imperatives of the capitalist paradigm. In essence, this paradigm subordinates the well-being and welfare of the people to the protection and welfare of capital, and private wealth in general. Actually, it is a solution based on misery and deprivation of the majority; a sterile and enfeebling strategy that lowers the standard of living and the quality of human life, without offering any genuine plan of action or “road map” to recovery.
It is an inane attempt to resolve the glaring contradictions of a legal and economic system that sustains, protects, and promotes immense wealth in the hands of industrial corporations, banks, and financial institutions, and an increasing number of millionaires and billionaires, while the rest of the county and the majority of its people live in misery. Besides, it is an abortive solution because, contrary to what capitalist economists contend, the “fundamentals” of the system, as I hope will become clearer, are rotten to the core.
Putting one’s house in order
The capitalist “solution” can be expressed as an injunction to “prodigal” governments to “put their house in order.” The problem is that no meaningful order can be established when the prevailing capital-based paradigm remains inherently disordered. First of all, it is an irrational paradigm. It is, in essence, run by blind greed, wild and irresponsible speculation, and lack of planning/regulations, and is dominated by the irrational forces of the markets, thus subjected to the boom-and-bust syndrome.
Secondly, the paradigm is predicated on a limited and restricted understanding of wealth; only material wealth is recognized; the welfare of people, the common good, health and medical plans, education, pensions, culture, environmental and ecological enhancement, and similar desiderata are not recognized as vital elements of wealth, but as liabilities, as a drain on wealth.
Herein lies the crux of the debt problem devastating Greece, Spain, Portugal, Italy, and a growing number of other European countries -- a problem that is bound to infect every other country sharing the same paradigm unless radical changes are introduced. Within the past decades, these beleaguered countries began to experience a conflict of paradigms: the capital-based one which remains dominant because the capitalist principles and imperatives remain in force in each country, and an incipient, progressive one trying to obtain a foothold without the necessary legal, economic, and political props to sustain and strengthen it.
This generates frustration and social unrest. It is a conflict experienced by a growing number of people in many different countries, but which so far remains blind, amateurish in expression, and unproductive because it lacks the insight, analysis, understanding, and the specifics necessary for a resolution. However, the conflict makes it clear that what the European Commission and capitalist economists are calling extravagant and irresponsible living is being claimed by the nations’ people as theirs by right and entitlement.
The question of property is a case in point. A trip to Europe, during this time of austerity, rampant unemployment, and crippling debt provides an interesting perspective. In many major European harbours and “marinas” one sees thousands of very expensive yachts, some resembling small ocean liners; airports are dotted with private planes and helicopters; any country you go to boasts of hundreds of five-star hotels filled with wealthy travellers; the night life is both expensive and vibrant, and villas and mansions abound by the millions.
All these signs of opulence are found in Greece, Spain, and other debt-ridden countries. The message is loud and clear: although the majority of people, the common taxpayers, the workers, the unemployed and pensioners in these and similar countries are hurting badly, a growing minority shares no part in the austerity. In short, there is a scandalous discrepancy between classes of people within the debt-ridden countries.
An essential weakness of the capitalist-inspired solution is the complete neglect of the proprietary rights and entitlement and the near absolute control of those owning the country’s assets, both corporate and individual. The vital link that exists between these property rights and controls and the same country’s financial and economic misery is not recognized.
Free enterprise is accepted and understood as freedom from non-economic concerns, such as the common good, sustainability, social welfare, environmental and ecological protection, social justice issues, social safety net, etc. Free enterprise became, in effect, irresponsible enterprise, devoid of humanitarian, philanthropic, just, and other spiritual considerations. These higher values and principles have to be introduced from “outside” the paradigm.
The problem is exacerbated by a legal system that not only supports this irresponsible enterprise, but also enforces it. Indeed, the legal system is in the employ and service of wealth, capital, and the maximization of profit. For example, a private corporation – once it becomes a public corporation -- will no longer be able to operate within its original ethical code of conduct that puts people, workers, and the environment above profit. The “law” will force the new public company or corporation to seek the maximization of profits as its over-riding imperative to protect the interest of shareholders.
The Body Shop company is a case in point. The same applies in the situation of vulture funds.
Present-day capitalism has had to mitigate its monstrous urges to dominate completely the social agenda as prevailed in the 18th and 19th centuries. But the change did not reform or transform the “logic” of capitalism. The change was in degree, not in kind – quantitative, not qualitative. The “logic” of capitalism remains intact, and whatever “concessions” were made were due to pressure from the “outside,” enforced by law; hence, the reduction of the working week, the increase in wages, the elimination of child labour, etc. These reforms, and others like them, go against the grain of the capitalist-based paradigm and had to be enforced by law following intense resistance.
In summary, putting one’s house in order cannot be done without a radical transformation of the prevailing operative theory of reality.
(Tony Cuschieri is a retired ediucator who did his doctoral studies at McMaster University in Hamilton. He was a high school teacher for many years, followed by ten years in curriculum as a principal of programs. The second part of his essay on the European debt crisis will be in our December-January issue.)