All other green campaigns become futile without tackling the economic system and its ideological defenders. Economics is only dismal because there are not enough of us making it our own. Read on and become empowered!
31 October 2008
Samhain blessings
With November 1st we reach one of the pagan quarter days of the year. These have all survived the advent of Christianity in various guises - in this case the festival of halloween. Behind the tawdry pumpkin balloons and plastic tridents, what can we grasp of the deeper meaning of this commemoration of one aspect of our relationship with the earth?
In spite of the cold and the falling of leaves, this is a time of abundance on our community farm. Plants and animals are storing up energy for the winter - the period of rest that our restless economic system no longer allows us. In Celtic tradition, this time of year saw the slaughter of animals that could not be fed through the winter. This meat and the abundant vegetables were preserved for the times when the earth could not provide.
In the pagan system this is the festival of new year. The cycle of the year was seen as symbolic of the life cycle, from birth through flourishing to death and decay. And as the earth came back to life in the spring, so there was promise of reuniting with the earth mother in death. The fading of nature's life in the autumn leads to the dark thoughts of mortality that we now make fun of by dressing up as ghosts.
The failure of our culture to accept the rhythm of life is at the heart of our unsustainable exploitation of resources. Without any sense of connection with the earth we fear death as our final annihilation and struggle to make our material presence felt. Samhain is the best time to re-examine our attitude to death - and to life. Tweet
Global poll
Weggis has asked me to add this link to my blog:http://www.iftheworldcouldvote I feel a bit uncertain about the poll, since it seems to be tantamount to accepting that the US President has some sort of right to rule the world. The results are interesting though - especially to see where in the world people favour McCain.
Tweet
27 October 2008
International Monetary Farce
Where do you turn as national chancellor when your country is bankrupt? If you don't have a reserve currency to protect you this is a situation you are pretty likely to face in the coming months. Your only option is to hope that you get in while the IMF still has some funds.
The International Monetary Fund is the part of the global financial system that is supposed to support the occasional accident that results from over-exuberant capitalist enterprise. It is not in a position to support the whole global banking system. Its pot apparently only extends to $200bn, which, given the size of money flows we've seen recently, appears extremely modest.
So, it could be that the Fund will be coming to national governments, asking them, on our behalf, to put our hands in our pockets again. Now we will be expected to bail out not only our own banking system, but whole economies across the world. The countries themselves will be required to take on more debt - the last thing they actually need. Surely it would be better to cancel all these debts in one almighty jubilee and negotiate the whole system again from scratch?
Imagine yourself as that national chancellor. You have only done what you were advised by economic theory. You have no control over global capital flows, and is isn't really your fault that your rely heavily on oil, or steel, or that you are a country which financial speculators don't like the look of.
The IMF tends to make offers to people who are in no position to refuse, and the offers are usually in the neoliberal mode, requiring restraint on public spending, a contracting state, and more market liberalisation. Exactly the sorts of policies that got those countries into the mess in the first place.
Interestingly, in the past few years many of the poorer countries who have been the recipients (victims?) of IMF loans have wised up and chosen to repay (see stories on Argentina and a story of recent IMF politics). In the insane world of banking, without anybody to lend to, the IMF would have gone bankrupt. It does seem a strange coincidence that exactly at this point a whole new range of countries are being forced into bankruptcy and into crippling loans that will keep the IMF afloat for another few decades. Tweet
Labels:
Bretton Woods,
Hungary,
jubilee,
reserve currencies,
Ukraine
23 October 2008
So Long, and Thanks for all the Fish
I feel tempted to begin in the immortal words of E. J. Thribb, 'so farewell then Iceland'. The country has overreached itself and been forced to learn the lessons of hubris. I had a conversation with my son in which I said 'Iceland is bankrupt' and he asked, 'What? The supermarket?'. That is the nature of the global economy - it is quite simply beyond belief.
What is the difference between Iceland and the UK or US? For once, in economics, there is a simple answer to that question: we have reserve currencies; Iceland does not. The viking raiders who bestrode the globe arranging impossible deals failed to grasp this fact about the global economy. Only those who are part of the charmed circle can get away with this sort of behaviour.
In a world of global finance, who is really backing up anybody's savings? If your bank is owned by a country with international clout it will be defended by others when the crunch comes. Iceland found itself left exposed - and rather smartly turned to Russia for help. This leverage appears to have resulted in 'support' from the IMF: the terms of this remain to be clarified.
Iceland is an object lesson in what is wrong with capitalism. Like all capitalist economies it grew exponentially and using debt rather than saved value. It ignored the fact that, with few resources other than hot water and fish, and with a population barely larger than the size of Bristol, it was always on borrowed time in its competition with the big boys of global capitalism.
But let us not be deceived by the 'one bad apple' mantra that is used to explain away capitalist disasters. Iceland was not an economic basket-case - it was just a country that played by the rules of the system without knowing its place and ignoring the crucial rule - if you are not at the top table you have nowhere to go when the creditors come to call in their debts. Tweet
What is the difference between Iceland and the UK or US? For once, in economics, there is a simple answer to that question: we have reserve currencies; Iceland does not. The viking raiders who bestrode the globe arranging impossible deals failed to grasp this fact about the global economy. Only those who are part of the charmed circle can get away with this sort of behaviour.
In a world of global finance, who is really backing up anybody's savings? If your bank is owned by a country with international clout it will be defended by others when the crunch comes. Iceland found itself left exposed - and rather smartly turned to Russia for help. This leverage appears to have resulted in 'support' from the IMF: the terms of this remain to be clarified.
Iceland is an object lesson in what is wrong with capitalism. Like all capitalist economies it grew exponentially and using debt rather than saved value. It ignored the fact that, with few resources other than hot water and fish, and with a population barely larger than the size of Bristol, it was always on borrowed time in its competition with the big boys of global capitalism.
But let us not be deceived by the 'one bad apple' mantra that is used to explain away capitalist disasters. Iceland was not an economic basket-case - it was just a country that played by the rules of the system without knowing its place and ignoring the crucial rule - if you are not at the top table you have nowhere to go when the creditors come to call in their debts. Tweet
21 October 2008
Can't Buy Me Equality
The news today is that we do not need to worry about the inequality in our society. A combination of poor people working more and stealthy redistribution of wealth has solved this problem, a new report from the OECD informs us. New Labour has been true to its roots and dealt with the problem of unequal distribution of wealth.
This seems a rather strange story to emerge from the OECD data when what it actually shows (see the figure) is that the UK is the seventh most unequal of the 31 countries that are members of the OECD and that, leaving aside the US, which is a self-referential scandal in equality terms, only Italy, Poland, Turkey, Portugal and Mexico are more unequal societies.
The data for trends in real household income by quintiles, i.e. dividing the population up into 5 strips according to how rich they are, is also interesting. It shows that for the UK, from the 1980s to the 1990s, those in the middle of the income distribution saw an increase of 2% in their incomes while the richest 20% saw their incomes rise by 4.3% and the lowest 20% saw their incomes rise by only 0.7% This was the time when Thatcherite inequality really bit into our social fabric. The fact that things have been reversed very slowly since then seems little comfort. The inequality that developed in our society then has not been reversed.
Leaving aside arguments over measurement and spin - we all know how assumptions and definitions can distort data findings - is it healthy for society and for the planet that the response to the inequality generated by capitalism is always and only through more work? The quality of this work is never questioned, nor its consequences for children being brought up without parents. And for a gaian economist, the question of the increased pressure on the planet that the extra work creates is the most important of all. Tweet
This seems a rather strange story to emerge from the OECD data when what it actually shows (see the figure) is that the UK is the seventh most unequal of the 31 countries that are members of the OECD and that, leaving aside the US, which is a self-referential scandal in equality terms, only Italy, Poland, Turkey, Portugal and Mexico are more unequal societies.
The data for trends in real household income by quintiles, i.e. dividing the population up into 5 strips according to how rich they are, is also interesting. It shows that for the UK, from the 1980s to the 1990s, those in the middle of the income distribution saw an increase of 2% in their incomes while the richest 20% saw their incomes rise by 4.3% and the lowest 20% saw their incomes rise by only 0.7% This was the time when Thatcherite inequality really bit into our social fabric. The fact that things have been reversed very slowly since then seems little comfort. The inequality that developed in our society then has not been reversed.
Leaving aside arguments over measurement and spin - we all know how assumptions and definitions can distort data findings - is it healthy for society and for the planet that the response to the inequality generated by capitalism is always and only through more work? The quality of this work is never questioned, nor its consequences for children being brought up without parents. And for a gaian economist, the question of the increased pressure on the planet that the extra work creates is the most important of all. Tweet
16 October 2008
Hero or Heroin
I'm sure Gordon Brown was secretly delighted to have been compared with Flash Gordon at a recent press conference. Given his recent shady dealings with the bankster fraternity I would have thought Flash Harry was more appropriate. What would the flaming red Gordon of his student days have made of this man who is putting the poor of this country in debt to prop up a failing capitalist system?
But is it the right thing to do, to fuel capitalism's addiction to money? Isn't Gordon rather acting as a drug dealer, providing more of just what is worst for the global economy, bloated with years of excess and destroying the body it depends on?
If you will indulge my extended metaphor for a while longer, perhaps we could explore what mechanisms we might pursue to tackle the addiction, to move the economy away from its moneylust and towards a balanced steady state. What would be the methadone that we could introduce as a substitute during the transition?
Gordon is calling for a summit to debate a new financial architecture. Part of that might be Richard Douthwaite's Ebcu or environment-backed currency unit. This is a neutral currency created by agreement between the world's nations and under their control. It could contribute to a global economy where the economic power of countries was more equal; in a world dominated by the dollar this can never be the case.
But more importantly, because the ebcu is linked to emissions of carbon dioxide, it operates like a carbon standard, linking economic activity to the ability of the planet to support that activity. It follows the Contraction and Convergence model for a decline in CO2 emissions and a fair sharing of these emissions between countries.
Although the 'summit' will be exactly that - our exalted leaders meeting like so many Old Testament prophets on the mountain top - we should make our demands clear. The agreement should be for a steady-state economy that balances the interests of the people of the world, and the planet we all depend on.
[Thanks to Polyp for another brilliant cartoon. Visit his website and check out his great new animated version of the rats in the trap] Tweet
But is it the right thing to do, to fuel capitalism's addiction to money? Isn't Gordon rather acting as a drug dealer, providing more of just what is worst for the global economy, bloated with years of excess and destroying the body it depends on?
If you will indulge my extended metaphor for a while longer, perhaps we could explore what mechanisms we might pursue to tackle the addiction, to move the economy away from its moneylust and towards a balanced steady state. What would be the methadone that we could introduce as a substitute during the transition?
Gordon is calling for a summit to debate a new financial architecture. Part of that might be Richard Douthwaite's Ebcu or environment-backed currency unit. This is a neutral currency created by agreement between the world's nations and under their control. It could contribute to a global economy where the economic power of countries was more equal; in a world dominated by the dollar this can never be the case.
But more importantly, because the ebcu is linked to emissions of carbon dioxide, it operates like a carbon standard, linking economic activity to the ability of the planet to support that activity. It follows the Contraction and Convergence model for a decline in CO2 emissions and a fair sharing of these emissions between countries.
Although the 'summit' will be exactly that - our exalted leaders meeting like so many Old Testament prophets on the mountain top - we should make our demands clear. The agreement should be for a steady-state economy that balances the interests of the people of the world, and the planet we all depend on.
[Thanks to Polyp for another brilliant cartoon. Visit his website and check out his great new animated version of the rats in the trap] Tweet
14 October 2008
Nothing to Fear but the Flannel
It was the fact that we were hearing a lot about Zimbabwe on the news again that gave me the clue. The media-financialist complex has moved into a different gear. Now that they have frightened us into ramping up the national debt even unto the tenth generation we have stopped hearing the market disaster stories and the traders are playing along by boosting the values of stocks.
It is still unclear whether the elastoplast solution will work as there is as yet no sign of a fall in the interest rates banks are charging each other, or any increase in lending between them. The success of this latest attempt to reboot the corrupt banking system so that banks will accept each other's debts as money is not yet evident.
But what about the attempt to convince people that a system which has been variously referred to as a rollercoaster and a confidence trick by sober BBC commentators is the best we ingenious and sophisticated people can come up with? Will this crash prove a radicalising experience that people will remember and that will undermine their faith in the capitalist system as such and send them looking for something better?
As green economists we have grown tired of being told we must be communists just for questioning this wasteful and destructive way of organising economic affairs. We have an alternative paradigm up and ready to go. It will only take the courage of green politicians to announce it and the wisdom of the voters to choose it at the ballot box.
In the mean time I, for one, will be keeping in mind the words of John Lennon from 'Give Me Some Truth':
No short-haired, yellow-bellied, son of tricky dicky
Is gonna mother hubbard soft soap me
With just a pocketful of hope
Money for dope
Money for rope Tweet
It is still unclear whether the elastoplast solution will work as there is as yet no sign of a fall in the interest rates banks are charging each other, or any increase in lending between them. The success of this latest attempt to reboot the corrupt banking system so that banks will accept each other's debts as money is not yet evident.
But what about the attempt to convince people that a system which has been variously referred to as a rollercoaster and a confidence trick by sober BBC commentators is the best we ingenious and sophisticated people can come up with? Will this crash prove a radicalising experience that people will remember and that will undermine their faith in the capitalist system as such and send them looking for something better?
As green economists we have grown tired of being told we must be communists just for questioning this wasteful and destructive way of organising economic affairs. We have an alternative paradigm up and ready to go. It will only take the courage of green politicians to announce it and the wisdom of the voters to choose it at the ballot box.
In the mean time I, for one, will be keeping in mind the words of John Lennon from 'Give Me Some Truth':
No short-haired, yellow-bellied, son of tricky dicky
Is gonna mother hubbard soft soap me
With just a pocketful of hope
Money for dope
Money for rope Tweet
Labels:
credit crunch,
green economics,
John Lennon,
money creation
11 October 2008
Hoist by their own petard?
The confusion over where exactly money comes from seems so widely shared that I wonder whether it is a conspiracy of silence, a conspiracy of ignorance, or maybe just ignorance plain and simple. The smoke-and-mirrors and creative use of jargon is deliberately intended to conceal a simple fact: the banking system, as opposed to any individual bank, has been able to make as much money as it can persuade us to borrow.
A bemused reader of today's Guardian asked, 'Why do banks need to borrow from each other?' and was greeted with the usual confusing and misleading account. The response begins, 'Banks do not have vaults stuffed with money', agreed, but the following sentence about how they 'trade on fairly thin margins' is confusing and irrelevant. Deborah Hargreaves then drivels on about Libor and other irrelevant and technical sounding nonsense for a while. No doubt the reader feels none the wiser.
This confusion is not necessary because the way money is created is simple. Essentially, the banks operate as a kind of closed club, within which small amounts of money are inflated many times over until, as in recent years, the only limit on money creation is the willingness of borrowers to get into debt. Hence the growth of debt-concealing activities that are now unravelling.
This process is explained very clearly in the film Money as Debt, which is available on Youtube and on Google video. A laudably clear written account is given by Richard Douthwaite in chapter 2 of The Ecology of Money. So why the confusion? We can only assume that, if the simplicity of this scam were to become more widely known, in J. K. Galbraith's famous words, 'the mind would be repelled'.
It might also undermine any lingering support for the policy of throwing money at the banks. Since the money they loaned never existed, there is not enough money in the world to actually pay back all the debts of the financial institutions. Our money is being used to attempt to crank the debt-money system back into an upward rather than downward spiral; nothing more.
It is interesting to speculate to what extent bankers, financiers and finance ministers have begun to believe their own fantasy. If the reality of the money creation system were clear to them I can't help thinking they would be following a different sort of policy altogether. Tweet
9 October 2008
'Let Finance Be Primarily National'
In recent weeks we have probably all looked back wistfully to the days of John Maynard Keynes. It just feels like a world where stability was a normal state of existence, not a chimera that seemed unavailable no matter how many billions we were prepared to spend to achieve it.
It seems to me that Keynes was always right about economics. I really wish I had more time to read his lucid and insightful writings about money and inflation. Sadly, the academic's life was not what it was in Keynes's day - and besides, like Ricardo before him, he made a fortune from the stock markets that funded his life of thoughtful leisure.
I sympathize, therefore, with those who would minimize, rather than with those who would maximize, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel--these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.
The quotation from which the title of this post is taken is a favourite amongst greens, who usually cite it because of its emphasis on economic self-reliance. But Keynes's focus is on the importance of national governments having control over finance.
Once finance is no longer national we have lost effective control and no longer live in a democracy. Our government can do nothing about the lending policies of US mortgage dealers or insurance companies. If these companies can bankrupt our banking system which we then have to subsidise with our own money, what is the point of voting? The fact that the three main parties simply congratulate each other about their ability to prop up capitalism is only a complacent confirmation of the reality of politics since the globalisation of finance and deregulation of the money markets in the 1980s.
I feel similarly reluctant about giving my money to people who sent their money overseas to invest in countries beyond their democratic remit for an extra half percentage point of interest. Guaranteeing rich people's savings in our banks is one thing; guaranteeing rich people's savings in Iceland, Bulgaria or the Cayman Islands feels quite different.
The 1930s was a time when men who modelled their sartorial style on Mr Cholmondley-Warner, spoke like Trevor Howard and were exclusively white, dominated economic and political life. Although we feel ourselves infinitely more sophisticated and cosmpolitan we haven't solved the problem of our powerlessness in a world dominated by global capital. Credit and exchange controls, giving us as voters power over our national economy, seems increasingly attractive. Tweet
7 October 2008
Credit crunch for breakfast?
This is obviously a cereal that will run and run. Robert Peston reports that he expected the banks to be too proud to ask for government money. I’m rather bemused about how he might have formed this opinion given their recent behaviour. Fawning over the hand that feeds has been more the style amongst financiers of late. Darling is quite rightly resisting giving any more public money than is absolutely necessary, hence his piecemeal rather than global rescue strategy. The pundits who are calling for total guarantees and US-style largesse should be reminded that it will be their grandchildren who will be paying off these debts, just as we, the grandchildren of the 1930s, only finished repaying the wartime debts to the USA last year. I wonder if there is a connection there?
The real policy question is why any Chancellor should shovel money into the gaping maw of the banks where it will serve no purpose but paying off their debts. They have provided an effective distraction by arguing that without their finance the real economy would seize up. But our primary attention should be focused on that economy, the one where people actually make stuff and do useful things. There is no reason to use the banks as middlemen.
The banks’ lack of concern for the real economy is shown in their profiteering from the difference between the bank rate and the rates of interest they charge to businesses. This is now the only way banks still have to leverage money out of the economy and their use of it will rapidly increase the number of businesses going bankrupt. They are using the same tactics on mortgage-payers, which will cause an increase in foreclosures and damage the housing market yet again. Far from being the saviours, the banks are shown again to be the destroyers of the economy.
Darling’s plan should focus on the small businesses that provide 99% of the employment in this country. He should establish an ‘Economy Saving Bank’ (literally!) and use taxpayers money through that route to be channelled into business lending. Does this begin to seem like political management of the economy? Might I be the first to mention that unspoken phrase ‘credit controls’? If money is in short supply it seems only sensible to ration it. Those who need to borrow can justify their right to the shrinking pot on the basis of their usefulness to society. My guess would be that in any democratic system the banks would come rather low on this list at present.
Thanks to the Green Bean Counter for the joke and to Lew Rockwell for the cartoon. Tweet
The real policy question is why any Chancellor should shovel money into the gaping maw of the banks where it will serve no purpose but paying off their debts. They have provided an effective distraction by arguing that without their finance the real economy would seize up. But our primary attention should be focused on that economy, the one where people actually make stuff and do useful things. There is no reason to use the banks as middlemen.
The banks’ lack of concern for the real economy is shown in their profiteering from the difference between the bank rate and the rates of interest they charge to businesses. This is now the only way banks still have to leverage money out of the economy and their use of it will rapidly increase the number of businesses going bankrupt. They are using the same tactics on mortgage-payers, which will cause an increase in foreclosures and damage the housing market yet again. Far from being the saviours, the banks are shown again to be the destroyers of the economy.
Darling’s plan should focus on the small businesses that provide 99% of the employment in this country. He should establish an ‘Economy Saving Bank’ (literally!) and use taxpayers money through that route to be channelled into business lending. Does this begin to seem like political management of the economy? Might I be the first to mention that unspoken phrase ‘credit controls’? If money is in short supply it seems only sensible to ration it. Those who need to borrow can justify their right to the shrinking pot on the basis of their usefulness to society. My guess would be that in any democratic system the banks would come rather low on this list at present.
Thanks to the Green Bean Counter for the joke and to Lew Rockwell for the cartoon. Tweet
4 October 2008
Bush is laughing all the way
George W. Bush has been the most successful president of the US I can remember. He came to office with specific objectives, aiming to serve a tiny kleptocratic minority of US citizens, and he has done this with huge success. His role of the fool has been a skilful ruse to distract us from a ruthless and highly effective economic and political manoeuvre.
Let's consider the three sectors of the US economy whre the wealthy earn their money: banking, arms, and oil. We'll start with the most obvious: arms. When Bush came to power I would never have believed that the US, still suffering the hangover from Vietnam, would willingly engage in not one, but two lasting military commitments. The profiteering this enables for arms companies is clear. Major success number one for the Bush Presidency.
In the case of oil, the Bush administration worked closed via its networks in the industry to hold back policy to tackle climate change. And of course the wars in Iraq and Afghanistan have both interrupted oil supplies, thus pushing up price and increasing the profits for Bush's cronies.
And now finance. What an extraordinary state of affairs that the the law-makers of the foremost democracy in the world can vote to extort $700bn. from middle-income Americans to bail out Bush's banking chums. As I understand it, this deal comes down to passing a bag of gold to Paulsen, who can then give it to financial institutions in return for worthless assets. There is no suggestion that the US public will take corresponding ownership or control in any of these banks, which are just going to enjoy a gargantuan free lunch.
Hats off to Dubya. While we laughed, he just single-mindedly achieved everything he came into office to do and more. This only proves that it isn't the spin that matters; it really is the substance.
Meanwhile we should not be so smug on this side of the Atlantic. With typical British deceit, the Bank of England is playing a similar game but without any discussion by democratic representatives. Behind the cover of the Mandelson gossip yesterday The Bank agreed to accept much weaker collateral (for which read worthless assets) at its credit window. Tweet
Let's consider the three sectors of the US economy whre the wealthy earn their money: banking, arms, and oil. We'll start with the most obvious: arms. When Bush came to power I would never have believed that the US, still suffering the hangover from Vietnam, would willingly engage in not one, but two lasting military commitments. The profiteering this enables for arms companies is clear. Major success number one for the Bush Presidency.
In the case of oil, the Bush administration worked closed via its networks in the industry to hold back policy to tackle climate change. And of course the wars in Iraq and Afghanistan have both interrupted oil supplies, thus pushing up price and increasing the profits for Bush's cronies.
And now finance. What an extraordinary state of affairs that the the law-makers of the foremost democracy in the world can vote to extort $700bn. from middle-income Americans to bail out Bush's banking chums. As I understand it, this deal comes down to passing a bag of gold to Paulsen, who can then give it to financial institutions in return for worthless assets. There is no suggestion that the US public will take corresponding ownership or control in any of these banks, which are just going to enjoy a gargantuan free lunch.
Hats off to Dubya. While we laughed, he just single-mindedly achieved everything he came into office to do and more. This only proves that it isn't the spin that matters; it really is the substance.
Meanwhile we should not be so smug on this side of the Atlantic. With typical British deceit, the Bank of England is playing a similar game but without any discussion by democratic representatives. Behind the cover of the Mandelson gossip yesterday The Bank agreed to accept much weaker collateral (for which read worthless assets) at its credit window. Tweet
Labels:
bail-out,
Bank of England,
banking system,
George W. Bush,
Paulsen
3 October 2008
Prince of Darkness Returns
I have been wondering for a while what Mandelson has been up to. Along with Kenneth Clarke - and we've certainly been seeing a fair bit of him on our TV screens - he has been identified as a key member of the Bilderberg Group. Will Hutton has referred to this shadowy bunch as the 'high priests of capitalism'. so we might expect them to have been rather busy recently.
Mandelson has taken a few blows in his time, most recently when the trade talks, the Doha round which had been billed as the round for the poor nations, collapsed during the summer. Globalisation is really about money, but in order to make the extortion of resources from the world's poor seem more decent it has to have trade as well. The terms of trade need to be fixed so that the rich countries will always win the game. It was that which the more powerful of the producer nations refused to accept in Geneva in July, and so the talks collapsed.
And now the financial side has fallen apart as well. No wonder we need dear Peter back in the Cabinet. Some speedy restitching of the global capitalist pact must be achieved without delay. No chance this time of a transparent international negotiation, or a fair balancing of the needs of all the world's people. This will be Bretton Woods on the back of a fag packet and behind closed doors.
So I'm not taken in by the drivel about Labour patching up its quarrels. We long since reached the Cat's Cradle world of Gore Vidal, where the politicians allow us a meaningless choice between policy platforms that are only cosmetically different. Who do you vote for if you don't want capitalism at all? If you're tired of a world where children are allowed to starve so that we can have plasma TVs? Where middle-income taxpayers in this country are subsidising the Bank of England's decision to buy the worthless assets of the morally as well as financial bank-rupt? By the way, this is not a rhetorical question. Tweet
Mandelson has taken a few blows in his time, most recently when the trade talks, the Doha round which had been billed as the round for the poor nations, collapsed during the summer. Globalisation is really about money, but in order to make the extortion of resources from the world's poor seem more decent it has to have trade as well. The terms of trade need to be fixed so that the rich countries will always win the game. It was that which the more powerful of the producer nations refused to accept in Geneva in July, and so the talks collapsed.
And now the financial side has fallen apart as well. No wonder we need dear Peter back in the Cabinet. Some speedy restitching of the global capitalist pact must be achieved without delay. No chance this time of a transparent international negotiation, or a fair balancing of the needs of all the world's people. This will be Bretton Woods on the back of a fag packet and behind closed doors.
So I'm not taken in by the drivel about Labour patching up its quarrels. We long since reached the Cat's Cradle world of Gore Vidal, where the politicians allow us a meaningless choice between policy platforms that are only cosmetically different. Who do you vote for if you don't want capitalism at all? If you're tired of a world where children are allowed to starve so that we can have plasma TVs? Where middle-income taxpayers in this country are subsidising the Bank of England's decision to buy the worthless assets of the morally as well as financial bank-rupt? By the way, this is not a rhetorical question. Tweet
Labels:
Bank of England,
Bilderberg Group,
capitalism,
Mandelsohn
1 October 2008
Moral economy takes the sting out of things
Like many, I have been mesmerised by the drama unfolding in the world's financial institutions for the past couple of weeks. In fact I must confess that the word Schadenfreude has taken on a new depth of meaning. So it was pleasant to be reminded this morning by the Bishop of Liverpool about the economy that matters: the natural economy.
He quoted the poem Providence by George Herbert and discussed how Herbert's image of the bee is a suitable one for a sustainable economy:
'Bees work for man; and yet they never bruise
Their master's flower, but leave it, having done,
As fair as ever, and as fit to use;
So both the flower doth stay, and hony run.'
This is a way of viewing resources and thinking about the economy that was commonplace before we left the land and were corrupted, mentally and physically, by capitalism.
As the new economic system spread throughout the country, and then the world, it replaced the older moral economy or the people, which had been supported by the church. According to the old ways it was a religious duty to work well and to be rewarded fairly. In the marketplace the church agreed a 'just price' and traders who exceeded this were excluded from the church and ostracised from society.
E. P. Thompson in his Making of the English Working Class describes the decades of riots that coincided with the enforcement of unjust markets in British society: 'the final years of the eighteenth century saw a last desperate efort by the people to reimpose the older moral economy as against the economy of the free market.' (p. 73)
Working people took direct action, removing the grain and flour from stores and mills, taking it to the market, and selling it themselves for 'the popular price'. They then took the money earned (and even in one case the flour sacks) back to the rightful owners. They were challenging not the right to ownership but the sin of profiteering; they were enforcing what had long been recognised as a moral economy against the immoral market economy that was being imposed.
As the institutions of capitalism totter we need to challenge its supporting ideology. Our ancestors mocked the laws of supply and demand and punished those who charged people more just because they had bought up supplies in advance, or held them back to watch prices increase. We can only guess what they would had had to say about the commodity futures market. Tweet
He quoted the poem Providence by George Herbert and discussed how Herbert's image of the bee is a suitable one for a sustainable economy:
'Bees work for man; and yet they never bruise
Their master's flower, but leave it, having done,
As fair as ever, and as fit to use;
So both the flower doth stay, and hony run.'
This is a way of viewing resources and thinking about the economy that was commonplace before we left the land and were corrupted, mentally and physically, by capitalism.
As the new economic system spread throughout the country, and then the world, it replaced the older moral economy or the people, which had been supported by the church. According to the old ways it was a religious duty to work well and to be rewarded fairly. In the marketplace the church agreed a 'just price' and traders who exceeded this were excluded from the church and ostracised from society.
E. P. Thompson in his Making of the English Working Class describes the decades of riots that coincided with the enforcement of unjust markets in British society: 'the final years of the eighteenth century saw a last desperate efort by the people to reimpose the older moral economy as against the economy of the free market.' (p. 73)
Working people took direct action, removing the grain and flour from stores and mills, taking it to the market, and selling it themselves for 'the popular price'. They then took the money earned (and even in one case the flour sacks) back to the rightful owners. They were challenging not the right to ownership but the sin of profiteering; they were enforcing what had long been recognised as a moral economy against the immoral market economy that was being imposed.
As the institutions of capitalism totter we need to challenge its supporting ideology. Our ancestors mocked the laws of supply and demand and punished those who charged people more just because they had bought up supplies in advance, or held them back to watch prices increase. We can only guess what they would had had to say about the commodity futures market. Tweet
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