Ben Buchwalter

Old Tom Joad Calls for Nationalization
March 17, 2009, 9:14 pm
Filed under: Economy

As the economy took a dramatic turn for the worst in the past few weeks, prompting “tent villages” to sprout up in cities like Sacramento and Seattle, I had an unavoidable urge to re-read The Grapes of Wrath. I’ve only just begun, but one passage jumps right off the Kindle.

When a man comes to kick the Joads off their land – the land they lived on for generations – they don’t take too kindly to it. They ask, who is behind this decision to kick us off our land and make us starve? Surely, the men in charge of the banks have families and understand that you can’t just strip people of their livelihoods for no good reason.

They get this response:

No, you’re wrong there – quite wrong there. The bank s something else than men. It happens that every man in a bank hates what the bank does, and yet the bank does it. The bank is something more than men, I tell you. It’s the monster. Men made it, but they can’t control it.

This is where capitalism falls short. In the past three decades, international events have proven beyond a reasonable doubt that capitalism is the best way we know to run a government. But there is something inherently harsh, mean, and inhuman about it.

I think that the majority people – even those most horrified by the actions of executives from Bear Stearns, Lehman Brothers and AIG – would argue that we can’t do away with capitalism, which is essential to promote competition and keep us moving forward. So why, then, are we so angry at the banks that caused the financial crisis? Is it really appropriate to condemn financial institutions for doing what is central to capitalism – to make a shit-ton of money?

Well, yes. Even though these newly failed financial institutions were prime examples of capitalism for a while, we now know that their business model was incredibly unsustainable. If you make a lot of money for a few years and then lose it all, you don’t count for much IMHO.

The big problem here is that major financial institutions have too much power. If these businesses fail, everyone is screwed — even those who had nothing to do with them. We have given God-like power to people who are driven purely by capitalism to make as much money as possible.

So maybe nationalization of the banks isn’t such a terrible idea. If banks were nationalized, at least at least they’d be run by political appointees who would only keep their jobs if they kept things running smoothly and transparently.

But to me, the most comforting aspect of bank nationalization is that government does not run like a business. In government, people — not profits — are the most important factor. That’s why we pay taxes for Social Security, Medicare, and other social welfare programs. In government, you won’t see as many risks and massive profits, but you also aren’t likely to see massive economic destruction.

Government looks out for the Joads because government relies on their vote. Financial institutions as they currently exist, though, operate in an inhuman world that allows the Joads to starve because their land won’t produce crops. We shouldn’t accept this inhuman system simply because its the best way we know.

Maybe its time to give nationalization an honest try.