Archives for category: 1989 and the Global Financial Crisises.

From a friend’s FB wall:

“African proverb:
Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve to death.

It doesn’t matter weather you are a lion or a gazelle.
When the sun comes up, you better start running.”

(from The World Is Flat, by Thomas L. Friedman)

It seems that the modern world is gradually becoming more and more ‘African’.
We’re so busy running ourselves out that we’re failing to remember the essential.

That we’re people.
Neither gazelle nor lion!
And that most of us have long ago left the jungle and now live in cities!

How about ‘taking five‘ from our incessant quest for trinkets and use the time to remember “togetherness”?
As in “communion”?

In the civilized world, ‘Dog eat dog’ was supposed to be an exception, not an everyday occurrence…

Ruthless acquisition or competition, as in With shrinking markets, it’s dog eat dog for every company in this field. This contradicts a Latin proverb which maintains that dog does not eat dog, first recorded in English in 1543. Nevertheless, by 1732 it was put as “Dogs are hard drove when they eat dogs” (Thomas Fuller, Gnomologia).”

PS.
After reading this, my son pointed out that lions are the only cats which hunt cooperatively on a constant basis.
Could this be the reason for which they are seen as the royals of the animal world?

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A huge, and growing, number of people, of all ages and from all social strata, are mad about capitalism.
They see it as the ultimate cause for the misery and unhappiness too many of  us seem unable to escape.
On the other hand, a very vocal and very influential group, most of its constituents belonging to the mature section of the society, keeps  saying that ‘greed is good’.

What’s going on here?

Human minds, yours and mine, have to deal with information belonging to two, actually three, categories. I’ll leave aside the third one – ‘details’ concerning the innards of our bodies.
We have to deal with facts and with impressions/opinions/sentiments.
The facts happen or are ‘perpetrated’ and impressions/opinions/sentiments are felt and/or expressed.
We find out – or are told – about both facts and impressions/opinions/sentiments
Simultaneously, what’s going on around us elicits an emotional response from us, drives us to formulate impressions/opinions and, sometimes, to react. A.k.a, to commit other facts.

In fact, our present situation is the consequence of the accumulated facts ‘perpetrated’ by our predecessors. And, to a smaller but significant degree, by us.

This whole introduction was meant to explain the fact that we are here as a consequence of what we did during our earthly existence, including under ‘capitalism’, and that our impression/opinion/sentiment about capitalism will shape our future. And that of our children.
I’ll make a small intermezzo here and address myself to those of you who believe that our fate is determined by ‘God’.  “No one has ever seen God; if we love one another, God abides in us and his love is perfected in us.” 1 John 4:12

Now please let me make a very short recap of how we got here.

I’ll be using ‘scientific’ information. I know that some of you will find it ‘unreliable’.
The following questions are meant to help you decide ‘on whose side are you’.
Did you ever travel in a plane?
Were you, or a family member, ever saved by modern medicine?
Do you use the internet?
Are you aware that planes, medicine and internet have been brought to us by ‘science and technology’?
I agree with you that individual scientists are prone to making mistakes but will you agree with me that planes most often than not reaching their destination, medicine not killing all its patients and internet being used by so many of us are strong indications that science and technology, on the whole, are ‘right’?

Let me go on.

We, Homo Sapiens, have two close cousins. Pan Troglodytes and Pan Paniscus.
The common and the pygmy chimpanzee. The latter also known as ‘bonobo’.

The differences between the regular chimpanzee and the bonobo are very important for those studying ‘capitalism’.
You see, both are social animals which live in close groups – like us, humans.
Chimpanzees are ‘authoritarians’ by definition. They follow a strict hierarchy – as long as the alpha male is able to impose it – and the leader harshly punishes any misdemeanor. Fights between chimpanzees are rather common and sometimes they end up with the death of one of the opponents.
Sex has a strict reproductive function and the dominant male sometimes discourages ‘his’ male ‘subjects’ from copulating with ‘his’ females.
Bonobos are democrats by excellence. When a male becomes too aggressive a few females – who are individually smaller and weaker than the males – band together and ‘knock some sense into his head’. But this instances are rare, more often any disputes are solved through sex. Yes, sex. The bonobos share our ‘ability’ to have sex, homosexual sex even,  “in a social context, with the same benefits as humans, such as stronger bonding and social hierarchies. It also has been seen to maintain a more peaceful environment amongst their community as aggression amongst the males can be vented through sexual acts.

What both chimpanzees and bonobos have in common is the fact that they have multiple sexual partners – which makes it impossible to know, bar a DNA analysis, who is the father of a certain baby.

I’ll come back to this in a short while.

After coming down from the trees of our early childhood and after having learned to run – as a manner to chase pray and to escape danger – we ‘discovered’ our ‘free’ hands.
And started doing things with them.

One other small thing was ‘the cherry on the cake’. Our ability to articulate sounds.

I don’t know when our brains had started to grow. Before or after we had started to hunt cooperatively, using weapons and verbal coordination. Does it really matter for the problem at hand?

Fact is that at some point in our history we were in possession of certain attributes and certain abilities. Big and flexible brains, the ability to walk using only two limbs – freeing the rest for other uses, the ability to communicate meaningfully with the rest of the gang and the ability to vent our frustrations through sex.

From here, our evolution has been very fast. Determined exclusively by the geography of the places where we happened to live. In the prairies we learned to raise animals and became herders, near rivers we learned to till,  seed and harvest while in the Arctic and in the jungle we remained hunter-gatherers.

The herders and the agriculturalists developed in two different directions.
The herders adopted – unwittingly – what is now called ‘the extensive way of development’ – by increasing the size of their herds – while the agriculturalists have tried to maximize the output of their limited plots of land.
The herders – being on constant move – have coalesced later into states, or never, while the agriculturalists had done it earlier. For reasons pertaining to labor productivity and the administration of justice.
In a herding environment there is no ‘police’ to turn to so individuals tend to fend for themselves. Some coalitions of tribes did organize annual meetings – Loya jirga  and Kurultai being but two examples – where ‘things’ could be discussed and settled but it was more often that people had resorted to a vendetta like justice.
In an agricultural environment things are more stable and a different set of demands have to be met.
Herders have very few property other than their stock and relatively little trade is exchanged among the members of the community.
Agricultural economy works differently. Higher productivity means the division of work is way deeper so trade is a lot more intense in this environment. This calls for ‘police protection’ which, in turn, calls for a relatively stronger state. Anyway, a stronger state was already needed since a richer, and sedentary, agricultural community is way more attractive for ‘thieves’ than a constantly traveling band of herdsmen.

A community which has a powerful group of professional fighters – ‘police’ and/or ‘army’ – is prone to become, sooner rather than later, an authoritarian regime. Where the ruler imposes his will over the entire community.
If we look closely this is what had happened all along human history. All states which depended heavily on agriculture had become authoritarian regimes. From Ancient Egypt and Sparta to the Medieval France and from the Aztec and Inca empires to China, on either side of the globe.
The problem with authoritarian regimes being that they inevitably fail. History doesn’t offer us a single example of an authoritarian regime which had been able to survive his own increasing weight. Rome was crumbling long before it was finally sacked by Odoacer, the American empires so easily conquered by the Spaniards were riddled by superstitions and by individual people being unable to think for themselves – living under terror tends to have that effect on those who survive – and there are countless more examples.

On the other hand, herders and those who trade in wares  made by others tend to behave ‘democratically’. Simply because herding and trading asks for a more individualistic and quicker thinking person. Compare Ancient Athens to Sparta, Medieval England and her Viking traditions to Medieval France and her Romanic reminiscences.
And also the democratic precursors I’ve already mentioned. The Mongols had their Kurultai, the Afghans their Loya Jirga.

By looking closely at all these examples I’ve reached the conclusion that people ‘yield’ better results whenever they enjoy as much individual autonomy as possible in a given situation.

The authoritarian Sparta had time and time again been beaten by the democratic Athens.
Athens had been destroyed as soon as it had lost her democratic status – Pericles was a dictator, you know…
The Roman Empire had been build as a democratic Republic and had started to crumble as soon as it was run as a dictatorship.
Slavery used to be a just as widely spread institution in Europe as it was in Asia at a time when Europe was extremely backward compared to Asia. Slavery had remained widely spread in Asia until recently while in Europe it had almost but disappeared since the VI-th century. Now consider the differences which existed between Europe and Asia around 1900…

The Soviet Union had crumbled under the combined weight of the apparatchiks while the US had become, for a while at least, the sole hegemon.

Now some people want to give up capitalism!
And replace it with what?

But what exactly is capitalism?

We currently use the history as it had been ‘layered’ by Marx.
He had done that using his preferred criterion: ‘who owned the “means of production”‘.
According to him we had three main historical stages and one bright future.
‘Slavery’, ‘Feudalism’, ‘Capitalism’ and ‘Communism’.
We already know that Communism has failed, abysmally, so let’s see what Marx might have overlooked.

‘Slavery’ means that the owner has every right over his possessions, even when those possessions are other human beings, while the ‘possessed’ individuals have absolutely none. A slave had no more rights than a modern day hammer. I can do whatever I want with my hammer – except using it to kill someone – just as I could have done with a slave in Ancient Rome. Including burning both of them, alive!
Can we speak of any autonomy being enjoyed by the slaves? Other than that extended, ‘haphazardly’, by the owners?
And you know what? The people were OK with all that. They simply thought that ‘that was how it was meant to be’. Until Spartacus had a different opinion…

‘Feudalism’ means that the king has every right over everything under his domain, including that of burning alive any of his subjects. But he was the only one to enjoy such  rights. A marked improvement over slavery!
The lords acted as the trustees of the king. They were given certain pieces of land, or other ‘perks’ – to collect a tax at a river crossing, for example – but not the right to dispose at their will of those living on the land at their disposal. And, at first at least, the lords were not entitled to sell those lands – only to bequeath them to their children, or other relatives, and even that was subjected to royal approvement.
A marked improvement – individual autonomy wise – from what was going on when Slavery was in full swing, at least for the commoners, but still far from what we have today. Ordinary people could not own much of anything, usually they could not live where they chose or exert the ‘profession’ they  liked without somebody allowing them to, etc., etc.,… Trade was also tightly ‘regulated’, whenever some merchandise was traveling from one place to another a lot of ‘right of way taxes’ had to be forked out towards various landlords.
The landlords, and the king, were also the ‘keepers of justice’. OK, they usually followed the ‘rule of the land’ but they were also able to ‘bend’ it to suit their will.

Not quite harsh as ‘slavery’ but still a very authoritarian regime, right?
Remember what I said about authoritarian regimes? That they tend to buckle under their own weight? As the French Monarchy did during the Revolution?

Now, who would initiate anything while living under an authoritarian regime? Where everything has to be ‘approved from above’? Specially when that ‘anything’ was an untried novelty or, God forbid, something that might have produced the slightest controversy?
Well this is exactly why authoritarian regimes have very little ability to innovate/adjust to external change.

Now that we’ve learned how authoritarian regimes dig their own graves – by insisting that there is only one correct way – ‘theirs’ – and that nobody may cross certain limits – those that have been drawn by ‘them’ – let’s examine what ‘capitalism’ looks like.

People usually associate capitalism with ‘money’.
Not even Marx had made that mistake. In his view ‘capital’ was everything that could be used to produce something: land, tools and raw materials and capitalists were those who owned that ‘everything’.
What Marx had forgotten to mention – or to understand – was that ‘merely’ owning something was never enough.
In order for ‘something’ to be truly ‘productive’ somebody must use it.
And in order for somebody to embark on an enterprise more complex than his ‘cooking his next dinner’ that somebody must be reasonably convinced of two things. That nobody would try to rob him of whatever he was going to do and that he will be able to trade the results of his work for anything he might covet.

See what I mean? For capitalism to flourish it is not enough for people to own things. People must be able to freely transform those things, according to their skills and abilities, and to trade them at their will.
In this sense capitalism needs to happen under the rule of law and its wares must be traded on the free market.

Then what went wrong? According to what I have written until now, everything couldn’t be better.  A considerable number of us do live under the rule of law, the markets are reasonably free in a considerable number of states… then why is so much unhappiness oozing from almost everywhere?
And how long are we going to remain steeped in it? To what consequences?

To be continued.

Each of us tries to deliver themselves from the misery of this world.

We attempt that at the intersection of three realities.

The ‘hard’, the ‘virtual’ and the ‘socially constructed’.

The ‘hard’ one is what Marx called ‘the objective reality’. Whatever exists outside our individual minds. Whatever doesn’t need any confirmation from any of us.
For instance, a rock can very well lay on the bottom of the sea without any conscious agent being aware of its existence. No one might ever become aware of its existence but that actually doesn’t matter. Same thing goes for a man made piece of furniture. The original craftsman might die, the owner also,  and the ‘thing’ might be forgotten in a warehouse – or attic – without its existence, ‘in the hard reality’, being jeopardized in any way.

The ‘virtual’ one is whatever each of us makes of what happens around them. It consists of three, separate yet interdependent, ‘ingredients’. The ‘perceived’ realities, the ‘intended’ realities and the ‘engines’ that make all of them possible – our conscious selves.
I’m speaking of ‘realities’ because each of us is different from all others – hence ‘sees’ slightly differently from all others, cannot inhabit the same place in space – hence ‘sees’ the world from a slightly different perspective, doesn’t have the same goals – hence entertains different intentions.

The ‘socially constructed one’ comprises the aggregate consequences of our efforts. Intended and unintended. Known to us and unknown by us.  Belonging both to the physical and metaphysical realms. As in both the Egyptian pyramids and language being parts of the socially constructed reality.

Please note that the first and third ones are ‘objective’ in Marx’s terms while the second in purely subjective.
It is also worth noting that the ‘hard’ reality is not immune to our efforts and that the ‘socially constructed one’ becomes ‘harder’ with the passage of time. The pyramids dotting the banks of the Nile constitute a very good example of our ability to change the ‘hard’ reality while the Catholic Church – one institution among many – is a good example of a metaphysical construct resilient enough to survive for two millennia.

Another very interesting ‘social construction’ is the concept of liberty.

I find it very interesting because it is simultaneously ‘objective’ and ‘subjective’, ‘natural’ as well as ‘man-made’.
It is objective in the sense that it continues to exist no matter how many individuals subject themselves to abject spiritual slavery.
It is subjective in the sense that each of us understands freedom in their own way.
It is ‘man made’ in the sense that we have coined the concept and minted the words used to describe it.
Yet it is ‘natural’ since we all are made of flesh and blood and need to breath in order to stay alive. And yes, it is us who have invented the dog-collar and the leash we use to restrain the liberty of our dogs. Exactly because it is natural for them to try to be as free as possible.

Since this is but a blog post I’ll fast forward to what I had in mind for today.

The free market.

Which is, evidently, a socially constructed institution.
Supposedly, a place which miraculously transforms “private vices” into “publick benefits“.

Well, I’m afraid that those who have convinced themselves that ‘greed is good’ have understood nothing of Bernard Mandeville’s stark warning.

A market may be fueled by ‘greed’, or even by (evil)’vices’, but it is the freedom of those who partake in that market which keeps everything in check.

The communist centrally planned economies were also fueled by individual lust for power. They failed simply because no small group of people is smart enough to master such complicated matters nor humble enough to see/accept its limitations.

The very same lack of freedom has produced the financial crises of 2008.

‘Greed is good’ is nothing but a rationalization of the current obsession with monetary rewards over the very shortest time frame coupled with a blatant disregard for the longer term consequences of our actions.

And as any drug addict can confirm – whenever they are not ‘feeling high’, entertaining any obsession means loosing one’s freedom.

In reality, actually free markets are fueled by trust, not by greed.
And (self)governed by the fact that each participant is free to define/pursue its own interest and react to anything that is happening inside the market’.
Unfortunately, current markets are no longer free. Not that much because of governmental intervention but mainly because too many of the participants are blindly chasing the same narrowly defined ‘interest’.

“But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

Smith’s words could not have been any clearer. Each of the participants to the free market wants something different from the market and each of the participants trusts the others to provide those different somethings – as long as the buyers can satisfy the sellers, of course. Nobody gets robbed while everybody gets whatever specific things they had come for.
In modern terms this would have been described as an ‘everybody wins’ situation.

Compare this with the contemporary mantra.
‘Profit maximization’.
Everybody chasing the proverbial ‘fast buck’
‘Enjoy the moment’ & ‘forget about tomorrow’.

And we continue to kid ourselves about the ‘freedom’ of our markets…

Even funnier is how we have twisted Mandeville’s warning to fit our own narrative.

“Millions endeavouring to supply
Each other’s Lust and Vanity …
Thus every Part was full of Vice,
Yet the whole Mass a Paradise …
The bees, however, are not satisfied to have their viciousness mixed with their prosperity. All the cheats and hypocrites declaim about the state of their country’s morals and pray the gods for honesty. This raises the indignation of Jove, who unexpectedly grants the hive its wish.
BUT, Oh ye Gods! What Consternation,
How vast and sudden was th’ Alteration!
As Pride and Luxury decrease,
So by degrees they leave the Seas.
All Arts and Crafts neglected lie;
Content, the Bane of Industry,
Makes ’em admire their homely Store,
And neither seek nor covet more.

In this way, through the loss of their vices, the hive at the same time lost all its greatness.

Now comes the moral:
THEN leave Complaints: Fools only strive
To make a Great an Honest Hive.
T’ enjoy the World’s Conveniencies,
Be fam’d in War, yet live in Ease,
Without great Vices, is a vain
Eutopia seated in the Brain.

Fraud, Luxury and Pride must live,
While we the Benefits receive. …
So Vice is beneficial found,
When it’s by Justice lopt and bound;
Nay, where the People would be great,
As necessary to the State,
As Hunger is to make ’em eat.

Apparently, Mandeville’s verses do not make much sense.
Why would a hive which had successfully purged itself off all vices find itself in a far worse situation after the cleansing?

Let’s first try to understand what those vices were.

Millions endeavouring to supply
Each other’s Lust and Vanity …
Thus every Part was full of Vice

Let me remind you of the fact that Mandeville had lived, and written, during the same period when the Puritans were trying to impose their strict moral code on the rest of the British society. And for the Puritans any attempt, made by ‘millions’, to supply ‘each other’s lust and vanity’ (a.k.a. various personal needs and fancies) was ‘vicious’ in itself.

The point of the whole thing being that it was not the absence of vices which had brought down the hive but the obtuse single-mindedness with which the vices had been banned. A line of thought very much the same with Durkheim’s ‘normality of crime‘.

And not very much different from our current obsession with (short time) profit!

 

 

No matter what opinion each of us entertains about ‘alternate reality’, fact is that none of us is able to grasp all relevant aspects of even the most basic concepts.

Growing under a communist regime I had learned, very quickly, to keep my mouth shut.

Like all authoritarian regimes, communism eventually crumbled.
Mostly under the pressure that had been built from within and which could not be accurately measured, simply because people were conditioned to keep their mouths shut.

Nowadays technology makes it possible for some of us to ‘look’ ‘beyond’ what most understand by ‘freedom of expression’.

… anxiety and action shouldn’t be based only on what could happen in theory as much as what’s likely to happen in practice — and how much it will affect you.

Some people are afraid of sharks. While the prospect of being eaten by a giant fish is vivid and terrifying, it’s also unlikely, old chum. In fact, the drive to the beach is far more dangerous than the swim once you get there.

Likewise, avoid getting hacked. But more important, start taking action on the bigger risk: The stuff publicly posted on social sites.

Alternate meaning of ‘freedom of expression’?

‘You are free to express yourself and I am free to use whatever information you have chosen to share’!

Actually it makes a lot of sense.

Let’s imagine, for instance, that my son comes home and tells us he is going to marry someone.
Twenty short years ago my wife would have phoned her best friend and told her about it. In two days the news would had traveled around and feed back would had poured in, specially if we were living in a small community. We would had been informed about all past indiscretions attributed to our son’s intended spouse, as long as any had ever surfaced.
Nowadays, being technological savvy, my wife would google the name first, even before phoning her best friend – if she wasn’t already privy of ‘enough’ indiscretions, of course.

Would it make any sense to blame the public authorities who do the same thing? Or the private agents who, in their attempt to fulfill their jobs, use whatever information is publicly available about each of us?
My question should have a special meaning for those of you who live in democratic countries – where the public authorities execute whatever mandate you have entrusted them with, and under an economic regime governed by the (more or less) free market – meaning that all ‘private’ agents need at least some support from their stakeholders (yes, that’s you!) in order to remain economically viable.

I’ll come back to this subject.

Meanwhile you can learn more about it by reading the article that spurred my rantings:

“Anything you post can and will be used against you”

Just click on the title.

Tallow = “the white nearly tasteless solid rendered fat of cattle and sheep used chiefly in soap, candles, and lubricants“.

bite-the-bullet

The mutiny (India, 1857) broke out in the Bengal army because it was only in the military sphere that Indians were organized. The pretext for revolt was the introduction of the new Enfield rifle. To load it, the sepoys had to bite off the ends of lubricated cartridges. A rumour spread among the sepoys that the grease used to lubricate the cartridges was a mixture of pigs’ and cows’ lard; thus, to have oral contact with it was an insult to both Muslims and Hindus. There is no conclusive evidence that either of these materials was actually used on any of the cartridges in question. However, the perception that the cartridges were tainted added to the larger suspicion that the British were trying to undermine Indian traditional society. For their part, the British did not pay enough attention to the growing level of sepoy discontent.

tallowed-five-pounder

The new £5 notes contain tallow, a substance made from animal fat Credit: AP

“…a trace of tallow in the polymer pellets used in the base substrate of the polymer…”
“As the tweet was shared, social media users expressed their disgust at the news.
“New £5 note isn’t vegan. Was everyone’s 2016 New Year’s resolution to do ridiculously insane stuff like adding meat to money?” “

What are we to learn from these two (separate ?!?) incidents?

That we have not yet learned how, or when, to use tallow?

Or that we have reached, again, such a level of generalized discontent that people might use whatever plausible pretext in order to vent their accumulated grievances?

“It is as irrational to reject all conspiracy theories as it is to accept them.”

Nassim Nicholas Taleb

Conspiracy theories are similar to religious superstitions.
They offer comfort to the emotionally insecure and create a meeting ground for the like minded.

Unlike full grown religions they lack a proper structure but that doesn’t mean their main ideas are not used for propaganda purposes, just as all religious dogmas have been. And still are….

Another difference between conspiracy theories and religions is that while both have been produced by human minds some of the conspiracy theories had been proven true while the most that can be said about religions is that they had been useful …

But what is a conspiracy theory and what does Utopia have to do with anything?

“Conspiracy theories as a general category are not necessarily wrong. In fact as the cases of Watergate and the Iran-Contra affair illustrate, small groups of powerful individuals do occasionally seek to affect the course of history, and with some non-trivial degree of success. Moreover, the available, competing explanations—both official and otherwise—occasionally represent dueling conspiracy theories, as we will see in the case of the Oklahoma City bombing…[but] there is no a priori method for distinguishing warranted conspiracy theories (say, those explaining Watergate) from those which are unwarranted (say, theories about extraterrestrials abducting humans).” (Brian Keely, Of Conspiracy Theories)

According to this definition a conspiracy theory is a ‘shape-shifter’. The notion covers both the true and the bogus ones while it can be used both ‘admiratively’ and disparagingly.
Again, just as it happens with religion, the mind set of those who consider each of them is of paramount importance.

Meanwhile ‘Utopia’ is, yet again, another creation of the human mind.
While religions and conspiracy theories are shared mental constructions that try to explain something which already exists Utopia is a shared mental construction which describes the ‘ideal’ state of  something that already exists and is perceived by those who experience it as being ‘perfectible’.

The link between all these being that the only two roads that lead to Utopia are, of course, ‘religion’ and ‘conspiracy theories’.

Am I being too harsh?

Utopia, “an imagined place or state of things in which everything is perfect“, is a word coined by Sir Thomas More “for his 1516 book Utopia, describing a fictional island society in the Atlantic Ocean.“. It “comes from the Greek: οὐ (“not”) and τόπος (“place”) and means “no-place“, and strictly describes any non-existent society ‘described in considerable detail’.”

Now why would a reasonable person attempt to reach a ‘no-place’ unless conned into it by a ‘conspiration’? No matter how desirable that ‘place’ might be…

The way I see it this is yet another argument that rationality is not at all the perfect ‘balancing’ tool some of us believe it to be. In fact we are not ‘rational’ at all but ‘rationalizers’. Since it is impossible to gather and analyze all pertinent information before making a decision we try to convince ourselves, and others, that the decision we are about to make (or have already taken) is the right one. In order to do that we marshal all arguments we can find that confirm our hypothesis and we (honestly?) try to water-down those who are contrary to our views.

Until our coveted utopia becomes a real-life dystopia…

Trump's shirts

 

Did you know that Trump was selling shirts over the Internet?

Yes, Trump, the guy that so many Americans are going to vote for simply because they are convinced he will completely change the way America works.

Why?
Because he says so.
He presented himself as the quintessential anti-establishment candidate and they bought it.

OK, something has to be changed so I fully understand their exasperation with the current state of the Union.
But is he “the” guy?

And since deeds are, or should be, more convincing than words, lets see if he is as anti-system as he pretends to be.

Well… at some point he did try to use the power of the government in order to con an old lady out of her house, didn’t he?
from the vera to the Donald

And he did ‘bribe’ Senator Clinton to come to his wedding. Simply because he had the money…

clinton came because I gave

 

And now this.
The way I see it the real problem is not the fact that he makes his shirts in Bangladesh in spite of being vocal about the need to preserve American manufacturing jobs. After all it’s his job to conduct his business as he sees fit. And if he is comfortable with doing one thing while saying the complete opposite…. that’s his job too.

But how come so many people take his words for real, without at least perfunctorily checking the facts?
How come so many are they so convinced he is ‘the right guy’ when he sells himself so cheap?

Oh, you didn’t know you could buy a “Donald J Trump Signature Collection” shirt for as little as $12.56!
Why is he doing this? Because he is so anti-Establishment that he doesn’t care about money?
You’re already laughing, right?

Or he simply does it because he can get away with it!
Because we don’t really care. Not anymore…

As one of my friends said about Hillary Clinton, Trump’s ‘Democratic’ counterpart:
” Hard to fathom how someone so openly, unapologetically corrupt can be the front runner. I think that says a lot about what we really expect from our politicians.”

I’m afraid she’s absolutely right.
We are the real culprits here.
‘They’ are simply doing what they are good at, grabbing gleefully whatever opportunities are within their reach, but we are the ones providing those opportunities.

Not only in America.

Clinton, trump, unpopular

Not so long ago I was asking myself “What’s going on there?“.

Now, that my nightmare is very close to becoming reality – both major American parties are about to nominate unpopular candidates for the 2016 presidential elections, I’m wondering about the current meaning attached to the very concept of ‘politics’.

For an impersonal and very theoretically minded observer ‘politics’ would seem to describe the job of those who make it possible for the rest of us to lead our lives in an orderly fashion.

I believe you are familiar with what a ‘super’ does. ‘Super’ as in ‘superintendent’ for a residential building.
“The super must be conversant with every mechanical and technical system in the building, work diplomatically to solve problems in the building, be responsive to residents and be able to work as a team member with the board and the managing agent.”
Not exactly ‘rocket science’ but a very important role. So important that when poorly played the whole thing might very quickly deteriorate beyond repair.

After all, ‘the government’ should do nothing more, and nothing else, but act as a nationwide ‘superintended’ while ‘politics’ should be nothing more, and nothing less, than what we, all the inhabitants of a country, do in order to make sure that the government, our government, does its job. Properly.
Especially when living in one of the so called ‘democratic countries’.

Then how come I’ve got a growing feeling that ‘politics’ have become just another set of means towards specific goals? Goals that are more often than not detrimental to the society, as a whole?

PS.
This is for those of you who are not familiar with how this site works.
By clicking on the pictures, or the highlighted text, you are automatically linked to the sources of the quoted material. Sometimes they might be interesting, to some of you.

It depends on the meanings we attach to these two concepts.

Yanis Varoufakis, Greece’s ex finance minister, is convinced that ‘Capitalism will eat democracy – unless we speak up.

Since he has some experience in this matter I’ll follow his line of thinking – for a while.

His point being that you can have successful capitalism in undemocratic societies – like Singapore and China – and that effective power has slowly shifted from the political sphere of the society to the economic one – which is undemocratic by definition.

Can’t say he’s entirely wrong, can we?

But we can say he’s somewhat confused…
So, he mentions Lee Kuan Yew’s Singapore and China as capitalistic success stories and then says that  the political sphere is gradually falling  under the yoke of the economic one… Well, last time I looked, in China the state was still in full control of everything that moved and the state was firmly in the hands of the politicians. Same thing was happenning during Yew’s tenure as Singapore’s good willed dictator.

Unfortunately there is some truth in his words when we look at what’s going on on the both sides of the Atlantic and that’s why I’m going to examine whether we have the same kind of capitalism in both situations.

By Google-ing the word I got two definitions for the concept.

The first definition that was offered by the search engine came from Oxford Dictionaries, “An economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state” and the second one came from Merriam Webster: capitalism is “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market“.

Putting them together we have private ownership, private decision, free market and profit as a goal.

Are these enough to describe a reasonably well functioning economic system?
I’m afraid not.

Let me give you some examples.
The French state has a controlling interest in Renault and the land of Bavaria quite a sizeable one in VW. Renault is in good shape and VW was too, until very recently. So private ownership is not an absolute necessity.
In the US we had quite an interesting situation. Two out of the three big car manufacturers  had to be bailed out by the state. All three were privately owned so we must look somewhere else: the Ford family still has a powerful word in the management of the single one which didn’t had to be bailed out. In Europe the best run auto company seems to be BMW – again controlled by a single family, the Quandt’s. It seems that it helps a lot if those who call the shots have a long time interest in the well being of the company versus the situation in which the top management has (short time) profit as the single/obsessive target.
Coming back to Renault and VW, they can be compared to Singapore, China and, maybe, Spain. Singapore was able to develop a ‘capitalistic’ economy despite it being an authoritarian society simply because Lee Kuan Yew was a very special kind of ‘dictator’ – one that not only cared sincerely for the greater good of his people but also didn’t loose his head during his long stage at the helm. A similar thing happened in Spain – Franco was the sole dictator who had made preparations for a democratic evolution after his demise, while China had to wait for another good-willed dictator to grab the power – Deng Xiao Ping – before it could steer towards the present course. No other authoritarian regimes but these two have ever managed to replicate this feat – we still have to wait a little before pronouncing Vietnam as the third, and very few other publicly owned companies fare so good as Renault does.

So, we have rather strong evidence suggesting that ‘skin in the game‘ trumps blind insistence on short time profit and that a free, democratic, society offers greater chances for economic development than a authoritarian one. In fact the politicians that need periodic confirmation from the people they govern do have some skin in the game while the authoritarians are in a position that is somehow equivalent to that of the CEO’s of the huge corporations whose stock owners are so disspersed that practically don’t count much – the members of the board practically slap each-other on the back and are able to do practically what they want with the companies. Look what happened at GM, Chrysler and, for example, ENRON.

But how free should be that society in order for capitalism to thrive?

Could it be so free that a guy could come from the street and claim your house as being his own? No?

So we need a free but orderly society. One where private property changes hands only when its owner says so – or has previously entered into a contract which stipulates that in certain conditions that transfer has to take place.

Meaning that in order to have a functioning capitalist society we need not only private ownership but also private owners who have enough trust in each other to start making business together.

You see, the feudal lords of the Dark Ages did have a lot of private property but capitalism couldn’t take hold in earnest as long as the (absolute) monarch could strip a man of his property and give it to somebody else. They couldn’t enter into (longish time) contracts because the era was dominated by huge uncertainties regarding various aspects of the social and economic life.

In fact it is exactly this well tempered freedom that is the crux of functional capitalism. Enough freedom so that everybody could feel confident that he is his own master but tempered by rules enforced in a pwerfully enough manner to give everybody sufficient trust that most contracts will be executed faithfully.

In this sense for capitalism to work properly we need to have a market that is free in more dimensions that one.

It has to be free from political intrusion in the sense that the government should leave it alone as a rule of thumb but also that the same government should keep it free from becoming cornered by a single group of interests.
In fact there is no difference from a market that is run by a governmental agency or by a monopolistic corporation – no matter if the latter is private. As soon as decision making becomes concentrated in too few hands mistakes starts happening. And their effect accumulate until the system finally collapse. Or is dismantled by some ‘exasperated’ more powerful agency – as Standard Oil and  ‘Ma Bell’ were dismantled by the US government. Which, by doing so, created the premises for  the huge development of those two respective markets – oil and communications.

Only this freedom of the markets can seldom be preserved by an authoritarian regime. Yew’s Singapore and contemporary China are exceptions, not the rule. Most authoritarian regimes cannot resist temptation and start meddling in the economic life of their countries. By doing so, they introduce a lot of ‘noise’ into the system. Eventually, this noise drowns the useful signals and ‘blinds’ the decision makers.

Same thing happens – and here Varoufakis has a valid point – when economic agents become so powerful that they can dominate the policy makers. The politicians can no longer preserve a balanced stance towards the economy and give in to ‘special interests’. This way the markets loose their freedom, with all the malign consequences that come with this situation. Among them, the lack of trust that slowly creeps in the souls of those who have to do business in the no longer free markets. Which lack of trust is very bad for all those involved.

And another thing about which Varoufakis is absolutely right. A lot of money are not being moved through the ‘front doors’. Not that they are not invested at all but because they are kept somewhat hidden they do not contribute as much to the well being of the world economy as they could/should.

2.1 $ trillion have been accumulated, as of  October 2015, in off shore accounts by the top 500 American companies in order to avoid taxes and
Between $21 an $32 trillion have been hiding in 2012 in various offshore jurisdictions.

Why is that? Simply because those who are called to decide about these money do not ‘trust’ that by bringing these money home and by investing them there, after paying the taxes, will be able to generate profits equivalent to those produced by leaving them off shore?

So what should we do? Tell them ‘democratically’, by electing somebody who is crazy enough to implement such a measure, to bring them home? Or even  confiscate them, one way or another?

I’m afraid that here I part again ways with Mr. Varoufakis. And with Aristotle: the way I see it democracy is not ‘the constitution in which the free and the poor, being in majority, control government‘. That would be ‘mob rule’.
A truly democratic process starts before the vote. When every stakeholder can make its point known to those who are going to cast a ballot so they’ll be able to do that having a reasonably clear understanding about what’s going on.

Frankly I’d rather rephrase Varoufakis’ message. ‘Corporatism has a tendency to disembowel democracy and transform it into ‘mob rule’ – the situation where the poor are no longer that free simply because they are convinced through ‘unholy’ methods to vote one way or another.

What can be done? Explain, loud and clear, that if jobs disappear the same thing will happen with the aggregate demand?
Explain that by giving their workers as little money as they can in reality the results are way worse than if the wages were as high as the companies could afford?
Ford didn’t give his workers more money because he loved them but simply because he had understood that in the long run he would be better off himself by doing this, you know!

I recently shared this meme on my FB wall:

when_i_was_poor_and_i_complained_about_inequality_they_said_i_was_bitter_2014-07-23

This is what happened next:
No two people are the same.“”That’s why I prefer equal opportunities instead of equality.
No two opportunities are the same. What you might consider an opportunity I might pass up. It’s a very diverse world we live in, a wide one in which hopefully everyone can be accommodated.

‘Can be’ or ‘will be’?

And who is the real looser here?

Let’s see what the broad picture looks like:

The world’s super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.”

Meanwhile

education debt

And what’s wrong with that?!?
Everyone has the right to do what ever he wants with his money and why should anyone expect to be educated for free?!?

OK, let me put it differently.

Every society is like a big community, even if its members do not share an intimate knowledge of each-other.
At least theoretically an overwhelming majority of any nation share the same set of values and the same goal – the long term survival of both the population and the afore mentioned set of values.

Now please consider which society would be better at the game of survival:

One which would make it easier for as many of its members to develop as much of their individual potential as possible or one that would make it easier for a small number of its members to spirit away so much wealth that the rest would remain crippled?

One which would use the very concept of a ‘free market’ as broadly as possible – make sure that as many as possible of its members enjoy the widest possible autonomy – or one that would allow the ‘never as free as advertised’ market to degenerate into the ‘winner takes it all‘ situation we are bound to reach if we continue on our present course?

How could enough people afford to ‘wander around’ for long enough to find the opportunities that would fit them if they are saddled at birth with a huge burden – the ever burgeoning national debt?
Would enough people risk to take on any additional debt (in order to prepare themselves to make better use of the opportunities they might find) if too many of those opportunities, even if met diligently, do not pay enough to ‘eat’ AND pay back the debt?

How is a society going to survive, let alone thrive, if a lot of ‘opportunities’ (social needs) end up being ‘plugged’ by unfitting/under-skilled/’less than enthusiastic’ individuals? Or not at all?

On the ‘supply side’, what do you think of those who choose to dodge paying taxes?
On the ‘demand side’, what do you think of those who squander public money as if there is no tomorrow?

So what should we be talking about? Equality or Equal Breadth of Opportunity?
About the Bed of Procrustes or about a ‘Free Market’ where all participants are simultaneously autonomous and fully aware of their responsibility for their children’s future?

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