The Social Contribution Rule

There is a rule in economics that says that all transactions must make a contribution to society. It is very easy to satisfy this rule, but there are many transactions that fail to do so.

Almost any common transaction
demonstrates obvious social benefit.

Take a common banking transaction. When you get money from an ATM, the bank or credit union provides a social good in the convenience you enjoy, thereby satisfying the rule. The grocer brings produce to you, an obvious convenience, satisfying the rule. Almost any common transaction demonstrates obvious social benefit.

But what about Wall Street’s “algo-bots”, those computer monsters that do battle with each other many times each second trying to buy and sell to gain some tiny fraction of profit? These violate the rule, because there is no benefit to us from this war. There is no product. There is no service. At day’s end, the bots’ owners return them to their cages and tote up the day’s receipts. They get some money, but that money has to come from somewhere and that somewhere is our pockets. That’s called theft. Much the same thing can be said for derivatives, which have no social value at all. The only reason banksters get away with this stuff is that the law hasn’t caught up to these computer games and Franken-ventures. It’s not against the law—yet—it’s merely immoral and unethical, terms that are not well understood on Wall Street.

Wall Street’s algo-bots bring no social benefit.
Nor do derivatives.

Here’s how to control the bots: put a one penny fee on each transaction. A penny isn’t much, but the daily blizzard of pennies will get Wall Street’s greedy hands out of our pockets. Here’s another way: require a one-hour waiting period for computer transactions to take place. Naturally, those who benefit from these bot wars will fight tooth and nail. They like our free money.

It’s not hard to find examples of transactions that offer no social benefit, because we have laws against most of them, complete with prison terms. That meant nothing to the banksters who engineered our economic downfall with investment practices that any half-knowledgeable fool could see were bereft of social virtue. And the banksters were right that their behavior was risk-free because none of the hundreds who should be relaxing at government expense have been imprisoned.

Wall Street will fight
any restraint on their bot wars.
They like our money!

When you get right down to it, most of the troubles we face stem from the fact that the mega-rich buy laws that benefit themselves. This is such common knowledge that it’s hardly worth mentioning that they accomplish this by purchasing legislators with large campaign donations, huge contributions to Super-Pacs where their identities are hidden, and organizations such as our evil uncle ALEC that submit custom-built legislation to state legislatures for their personal benefit. The rest of us, who are supposed to be represented by our representatives (thus the quaint name), aren’t always so served.

All this has led to a degree of inequality that puts the United States third from the bottom of modern nations. And it has been shown that the way to improve virtually all social conditions is to improve equality. We could begin by euthanizing the monsters that trade with our money every day.

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Published in: on 2012/09/02 at 11:59 pm  Leave a Comment  
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