The misfit class do not want society to express solidarity between people but prefer that each person remains in a state of tension, competing with others in the community, to make their way in the world through life stages of childhood, education, work and social interaction. Such an environment is stressful because it is uncertain and depends upon a dynamic competition where unfair devices can be used to gain individual advantage through aggression, hiding facts, barring access to means to advance and others. Since it is social misfits who will not follow social norms as a means to gain advantage over others, it is therefore to be expected that macroeconomic policies facilitate the ease with which the misfit class can benefit while imposing various devices that limit the ability of the rest of society to benefit.
The realization that macroeconomic policies are so socially-destructive has only become evident in the last 25 years, but especially so in the last decade. The GEL cartoon's pollution cloud (see left) contains a partial checklist of what has gone wrong with macroeconomic policy. Clearly policy reflects the social deprivation and the degree of misfit of those who have devised the policies. From the highly egocentric motivations of misfits one only needs to find out who is riding above and benefiting from this social destruction to come full circle to the nexus of political parties, corporate lobbies, media and financial agents.
One of the notable realities has become the dominance of finance as a result of "financialization" which has its roots in significant changes that took place in the 1970s. However, the danger of financialization was pointed out before it caused the 1929 crash by Thorstein Bunde Veblen (1857-1929). Although many see this evolution as recent, it had already been detected before the Great Depression and, indeed, was to a large extent the cause of the Great Depression, and the crises in 1970s and 2008. The American economist, Thorstein Veblen wrote in 1921 the following:
"Half a century ago it was still possible to construe the average business manager in industry as an agent occupied with the superintendence of the mechanical processes involved in the production of goods and services. But in the later development the connection between the business manager and the mechanical processes, has on average, grown more remote; so much so, that his superintendence of the plant or of the processes is frequently visible only to the scientific imagination. His superintendence is a superintendence of the pecuniary affairs of the concern, rather than of the industrial plant; especially is this true in the higher development of the modern captain of industry."
Veblen considered this evolution to be associated with a change in motivation that brought to the fore social misfits in the form of financial manipulators, who sabotage and retard, rather than advance technological development. He considered success in the business world to wait on guile:
"The successful man under this state of things succeeds because he is by native gift or by training suited to this situation of petty intrigue and nugatory subtleties. To survive in the business sense of the word, he must prove himself a serviceable member of this guild of municipal diplomats who patiently wait on the chance of getting something for nothing; he can enter this guild of waiters on the still-born pecuniary gain, only though such apprenticeship as will prove his fitness. To be acceptable, he must be reliable, conciliary, conservative, secretive, patient, and prehensile."
So well before the first major financial crisis, Veblen has described the specific changes that would give rise to such crises. Because nothing in macroeconomic theory has sought to tackle these issues, the schools of economic thought have fashioned elaborate kaleidoscopes that do not dare tackle such basic flaws for fear of upsetting those who dominate the "pecuniary" affairs of the economy and who continue to promote increased financialization. It is understandable why Thorstein Veblen's seminal work is not widely taught in our schools of economics, many of which were established or supported by funds provided by the same social misfit class as a way to perpetuate their influence over society.
As a democracy it is of vital importance for society to react to begin to work towards transparency and fairness in all that concerns political parties, corporations and their lobbies, media and financial agents in the form of banks, hedge funds and central banks. The first step is to begin to disentangle the affront to society of the eistance of regulatory agencies that are managed by those they are suppored to regulate in political parties, sector corporation, the media and banks. Enforcement procedures following abuse of regulation should not be meaningless fines that become the cost of doing business but should include the full force of the law to associate personal responsibility of executives to the decisions that lefdmto legal abuse. With weak regulations there is no incentive to abide by the law and yet law should be to prevent abuse of society and individuals.
Corporate and political decisions rest in a zone of tension between ethics, law and prudence. When the law is weak and of little consequence it becomes prudent to serve one's interest through ethical or unethical decisions. Thus weak laws imply no significant costs, prundent decisions, under notions of shareholder value, therefore slide towards unethical decision-making because the cost is marginal. Unethical decisions bolster profit, often at the expense of specific communities and society in general.
Society and the social conscience contain a strong expectation that all decisions affecting society should be ethical. Therefore, the way to ensure this, to the benefit of society, is to change regulations to possess effective enforcement. In this way prudent decisions will tend towards ethical decisions because the costs of any other decision would be too high. This situation is one of general benefit to society rather than to those who prefer to design macroeconomic policies and regulatory frameworks that permit behaviour that is unethical and socially destructive.