For at least three decades now, personal wealth has been a political asset. In both the industrialized and developing worlds, in the words of Deng Xiaoping of China, “to get rich is glorious.” Money was access to political power, political power (especially in the developing world) access to money. I remember about four years ago, when Michael Bloomberg ran for a second term as New York City mayor, a Nigerian editorial, voicing the people’s fury about oil corruption, that complained that in Africa people sought political office to get rich, whereas in America, you first had to be rich to run for office. It was not the right lesson to be learned.
This past week, hopefully, has been the beginning of a political sea change.
Money has always been and will always been vitally important in real life and in politics, but something seems to be shifting ideologically. Michael Bloomberg squeaked out a win for his third term only after spending $90 million of his own money, against a pleasant, little-known man who spent $6 million. Governor Jon Corzine of New Jersey lost to a man who does not reflect New Jersey’s social or cultural beliefs. The public turn against these two for the same reason: being a self-made billionaire doesn’t mean you’re so smart anymore.
Both Bloomberg and Corzine had always run on the platform that, as giants in the business world, they could provide jobs and sound economies if they governed. In Bloomberg’s case, being rich had seemed to mean he could also override election law and run again — ostensibly because his financial acumen was needed to save the city in the recession. Needless to say, the past year has given lie to this. It was the guys who spoke to change, willing to face problems on a humble level, who mattered.
For the decades since the 1980s, when we in the West promoted the ideas of free market capitalism to the rest of the world, we have been fairly sheltered from the wildness and dangers of what we preached. Communism died, but Russia descended into chaos for a long time. Much of the world got a terrible taste of the risks during the Asian financial crisis of the mid-1990s.
The idea of make-money-at-all-costs has dominated the developing world as it races to catch us. Too often this means survival of the financial fittest: corruption has always abounded, but rarely so universally and so proudly as recently. Developing countries have too often been willing to sell anything that isn’t nailed down (oil, gas, minerals, land, timber, etc) to make a quick buck for themselves.
Commodities had been one of the two forces that led to the crash in 2008 (with derivatives being the other). During the crash and last winter’s terrible losses, commodities sold at record low prices, and as China snapped up everything available, it looked like commodities would lead the world back out of the slump. Now most commodity prices are no longer a steal and inflows in the third quarter, according to the Wall Street Journal, are half of what they were during the first.
“Investors plowed a record $50 billion into commodities this year, helping drive prices for crude oil up 79% and gold 23%, but just $2.2 billion of new money flowed into commodities in October.”
As at the end of the 1920s, another time when greed trumped honesty, when stockbrokers, financiers, bootleggers and gangsters had assumed near heroic status, we are awakening from that dream. We now look at those mired in corruption as a public threat. It isn’t just American bankers and mortgage brokers. In the past two weeks, huge corruption probes have arrested thousands of accused crooks in China (9,000+ suspects) and in India (telecommunications, iron, oil and gas).
Let’s hope for the end to the day and belief that businessmen are the saviors of the world and should be trusted with our economic and political future. Stability in business and finance would be a welcome relief.
