The 2008 global financial crisis has had far-reaching implications, depressing markets for years. Charged with US monetary policy, the Federal Reserve Bank, with its mantra of “too big to fail,” is empowered to manage the economic downturn. The central bank’s monetary policies effectively redistribute wealth to the upper tiers of society — and the proof is in the pudding. Economic mobility is restricted, in tandem with an incredible wealth gap, a shrinking middle class, growing debt and rising poverty. As the United States, and the world for that matter, continues to struggle in its recovery from the Great Recession, the implications of Fed policy are taking center stage in the political arena. The sights are set on income inequality.
What’s missing from the political discussion is any mention of the Federal Reserve at all — even as new executive Janet Yellen takes the reins of arguably the world’s most powerful economic institution. Even worse, the very political ideology that has created systemic poverty, the top down approach to economics, guides the current conversation.
That discussion needs to shift to the mechanisms of poverty and how to liberate ourselves from them. Until we do so, we will continue to witness a precipitous increase in wealth disparities.
Income inequality restricts market opportunity. Extreme inequality — characterized by rampant poverty — chains our inclined labor. Economist Amartya Sen describes the persistence of poverty as the robbing of human potential, stating “poverty is not just a lack of money. It is not having the capability to realize one’s full potential as a human being.” Poverty, then, is the reduction of human contributions to the market, to the commons and, ultimately, to the human condition.
Systemic poverty exists because people are not able to access or create markets. In order to alleviate poverty we need to struggle for market liberation. This calls for the rejection of authorities who wish to direct economic systems. As witnessed in bailouts, corporate aid/welfare and their subsequent restrictions to economic diversity, it is the political class that benefits from the top down approach. In the liberated market, the populace will labor to create new ways — alternative institutions and new federations — to serve one another. Outside the current system, in the true public arena, markets can create a new mutualism, social goods, common interests among market actors and individual prosperity.
Centralized authority steers our creative output away from the dreams, aspirations, ethics and labor of individuals and to the benefit of the politically connected. In the halls of power, economic policy is decided upon, announced to the populace and defended against popular protest. In this model, outside knowledge is imposed upon us. But the individual and the collective know how to better the community. The decentralized, networked, stigmergic revolution works around command and control to co-ordinate and cultivate markets.
If we are serious about tackling income inequality and systemic poverty, we must first realize that any authority over the market is illegitimate. Then, on an individual basis, we can decide to directly engage or work around the current political system to dismantle such authority. Liberated economic systems will arise out of the old order, granting each individual sustainable agency over his or her own labor.
The key to success and actualization of human potential is, as always, liberty.