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!
25 February 2010
More on Money
As the bank results roll in, and the bonuses roll out, it is good to have a reminder of where this money came from. This letter to the FT from an economics professor at Strathclyde makes the point that the money queased into the economy might have achieved its aim if it had been spent directly into the real economy, rather than sent via the banks, who merely absorbed it into their profits. He does not make the additional point that it could have funded the Green New Deal type proposals we desperately need to build our low-carbon infrastructure.
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24 February 2010
A Little Bit of History Repeating?
At last the blackout on any discussion of the radical potential of running a massive public debt has been overturned - but only because the debt in question happened 200 years ago. For those who missed The Long View on Radio 4 last night, you might enjoy listening to it in the next six days.
Interestingly, all the commentators were pretty right-wing, Will Hutton representing the radical voice. This was not true of the historical figures who were cited, with William Cobbett's outrage raging across the centuries, its heat undimmed.
Niall Ferguson took the high-Tory opposition, seemingly unaware that he was arguing against his own position as a self-proclaimed Cameroon by simultaneously delighting in the inevitability of either a default or a revolution as the possible outcome of the sort of public-spending position we currently find ourselves in. But what a delight to hear this view from the lips of a capitalist apologist such as Ferguson.
The commentators agreed that the reason we are not seeing bricks flying through the windows of Downing Street, as they flew through the window's of Wellington's Apsley House is that we have not yet had to pay the price for the deficit accrued last year. They also shared the view that the major difference between this deficit and that following the Napoleonic Wars is that public opinion supported fighting the French (Cobbett was also the exception here) whereas bailing out the banks is universally unpopular outside the square mile.
What chance history repeating in the next decade or so? If you trace the consequences of the 19th century public spending crisis you end up with Chartism and huge democratic renewal. We live in hope. . . Tweet
22 February 2010
How Green Was the Man with the Beard?
Like all economists Marx was a product of his time and his concern for the environment was limited to specific ecosystems and spaces, since the global economy had not, in the late 19th century when he was writing, reached such a scale as to threaten the whole global eco-system. Hence while Marx and Engels were critical of the effect of capitalist production on local environments, as well as the appalling conditions in the industrial cities,they failed to take seriously enough the limited nature of natural resources and the second law of thermodynamics.
For Marx, capitalism is a system which generates and thrives on conflict and crisis. In his own work the central conflict is between the owning and working classes and the crisis arises from the allocation of productive value, as profit extraction leaves an ever-smaller share to be distributed amongst those who work, earn and therefore have the spending power to buy goods. Once we introduce the concept of a limited planet into this framework we see that the same concepts remain useful but undergo a change of emphasis. Here is what James O'Connor has to say on the subject:
'An ecological Marxist account of capitalism as a crisis-driven system focuses on the way that the combined power of capitalist production relations and productive forces self-destruct by impairing or destroying rather than reproducing their own conditions. . . Such an account stresses the process of exploitation of labor and self-expanding capital, state regulation of the provision or regulation of production conditions, and social struggles organized around capital’s use and abuse of these conditions.'
According to Marx, within a capitalist economy every commodity has a use value and an exchange value. Exchange value is measured in terms of other commodities or in terms of money, as the universal source of ‘value’, whereas use value is the inherent value of the commodity either for immediate consumption or as in input to a further production process. Capitalists generate profits by selling the products of their factories for a price greater than that of their use value, but the workers who make the products are paid only the use value as wages. Thus ‘surplus value’ can be extracted as profit.
Marx identified a contradiction inherent within the capitalist system arising from the inability of the productive forces to generate sufficient surplus value to pay for profits and large enough incomes to buy the products of economic activity. This would lead inevitably to insufficient demand for the products of economic activity. The latter is a crisis of overproduction or under consumption which is central to the ‘first contradiction of capitalism'. The distinctly ‘ecological’ dimension to the Marxist analysis is what O’Connor terms the ‘second contradiction of capitalism’ in which capitalism expands to such an extent that it undermines its ‘productive conditions’, degrading the environment and exhausting the inputs it needs to make products and create profits by selling them.
This notion of the second crisis seems especially relevant to our economic condition just now. In fact we appear to be running into the first and second contradictions simultaneously. New markets are exhausted and the strategy of forcing ever more consumerism appears to be similarly running out of steam. Evidence of the second crisis, in terms of accelerating environmental collapse, is also increasingly evident. Tweet
For Marx, capitalism is a system which generates and thrives on conflict and crisis. In his own work the central conflict is between the owning and working classes and the crisis arises from the allocation of productive value, as profit extraction leaves an ever-smaller share to be distributed amongst those who work, earn and therefore have the spending power to buy goods. Once we introduce the concept of a limited planet into this framework we see that the same concepts remain useful but undergo a change of emphasis. Here is what James O'Connor has to say on the subject:
'An ecological Marxist account of capitalism as a crisis-driven system focuses on the way that the combined power of capitalist production relations and productive forces self-destruct by impairing or destroying rather than reproducing their own conditions. . . Such an account stresses the process of exploitation of labor and self-expanding capital, state regulation of the provision or regulation of production conditions, and social struggles organized around capital’s use and abuse of these conditions.'
According to Marx, within a capitalist economy every commodity has a use value and an exchange value. Exchange value is measured in terms of other commodities or in terms of money, as the universal source of ‘value’, whereas use value is the inherent value of the commodity either for immediate consumption or as in input to a further production process. Capitalists generate profits by selling the products of their factories for a price greater than that of their use value, but the workers who make the products are paid only the use value as wages. Thus ‘surplus value’ can be extracted as profit.
Marx identified a contradiction inherent within the capitalist system arising from the inability of the productive forces to generate sufficient surplus value to pay for profits and large enough incomes to buy the products of economic activity. This would lead inevitably to insufficient demand for the products of economic activity. The latter is a crisis of overproduction or under consumption which is central to the ‘first contradiction of capitalism'. The distinctly ‘ecological’ dimension to the Marxist analysis is what O’Connor terms the ‘second contradiction of capitalism’ in which capitalism expands to such an extent that it undermines its ‘productive conditions’, degrading the environment and exhausting the inputs it needs to make products and create profits by selling them.
This notion of the second crisis seems especially relevant to our economic condition just now. In fact we appear to be running into the first and second contradictions simultaneously. New markets are exhausted and the strategy of forcing ever more consumerism appears to be similarly running out of steam. Evidence of the second crisis, in terms of accelerating environmental collapse, is also increasingly evident. Tweet
18 February 2010
The Last Professor
A guest post from the Green Bean Counter:
Professor Khipu was intently examining the small clay tablet on the desk. There was a knock at the door. “Come in” he said, without looking up. Behind him a hooded, cloaked figure with a sickle entered. “Professor Khipu?” “Yes, yes, come and look at this.”
The visitor slid across the room and peered at the tablet. Khipu said breathlessly “it’s a Mesopotamian clay writing tablet. This is a record, written in cuneiform, of workers’ beer rations. It’s one of the earliest examples of state records that have ever been found. This is a bit like the Cabinet Secretary’s notebook. The early origins of state formation are represented here.”
“Fascinating” said the visitor, pushing back his hood to have a closer look at the wedge-shaped writing. “You specialise in this sort of thing don’t you, palaeography?”
“Yes” said Khipu, “I’m the last professor of palaeography in the UK. It’s vital work – we read the texts of the ancient world. I work a lot for the British Museum and what I’m doing here” gesturing towards the tablet, “is for a Radio 4 programme called A History of the World in 100 Objects. They’re going to have an object a day and discuss its significance to human civilisation, development and history. This is the first time that this tablet has been read – it’s quite a knotty problem.”
Khipu turned to his visitor, remembering his manners. “Can I help you dear boy? Are you a student?” The visitor smiled smugly, “err, noooo.” He pulled his hood back up and twirled his sickle idly in his hand.
Khipu blanched. “Oh, but I have so much work to do. I can’t die. The British Museum has thousands of these tablets alone that have to be read...”
The visitor sniggered. “No, I’m not the Grim Reaper. My name is Peter, an outsourced worker for the Department of Business, Information and Skills, we control English universities.”
“But why is the trade ministry in charge of universities?” quizzed the puzzled Khipu, “and why are you here?” Peter the Reaper grinned and said “I’m here because your university, following a careful decision to enact efficiency savings in the higher education sector, has decided upon a strategic disinvestment programme which encompasses your particular employment category.”
Khipu, the master of ancient runes, was confused by modern ones. Grim Peter leaned over and hissed “you are being made redundant. The university will replace you with a junior lecturer in entrepreneurship. Your subject generates insufficient business revenue to justify its continuation. The university needs to strategically re-focus its investment portfolio into revenue generating fields. Palaeography is not part of that business picture, going forward. We need dynamic and low cost deliverers of business-facing learning materials.”
Khipu stared at the beer tablet. “But what I do holds the threads of civilised life together. When I read these texts I’m reaching into the past to explain the essence of our presence, here in 2010. This is where we come from, we must understand our contexts or we stop being human.”
“Yes, Professor Khipu. But nobody pays to go into the British Museum and nobody pays for Radio 4. Your work doesn’t contribute a penny,” he hissed, “to Britain Plc and has no measurable impact. Come along now.”
A khipu is a knotted string used by ancient Inca civilisations to record matters of state, such as taxes.
You can hear and read about the Mesopotamian beer tablet at bbc.co.uk/ahistoryofthe world/
King’s College London has recently announced that it is to make Professor David Ganz, the last UK professor of palaeography, redundant on 31 August as part of a strategic disinvestment process. Tweet
15 February 2010
The Tories: Good for Your Health?
In his inept and inarticulate way, George Osborne is doing his best to portray the Tories as the public sector's friend. Nurses and teachers are encouraged to forget the fact that he has a large knife in his back pocket and listen to his honeyed words about them being able to enjoy greater control.
The co-operative economy was and still is about ownership and control. We still own the Co-operative shop, the Phonecoop and the Nationwide Building Society. Our votes decide who is on the board and, broadly, what policies the businesses follow. Of course we also, in a broad and indirect sense, own the schools and hospitals which George Osborne is suggesting can become co-operatives. While they remain in the public sector, our votes can make a difference - if a far too indirect one - to how they function and the services they offer.
In the UK the strength of the co-operative movement has been on the consumer side, yet the co-operatives George Osborne appears to be suggesting for the public sector will be worker co-operatives. If the Tories meant this, it could mean that your surgeon or job counsellor would decide what operation you needed or how long you could claim benefit before you were struck off the list.
But of course he does not mean it. This is not a proposal to empower public-sector workers, but a cynical first step on the road to the privatisation of the health service. With US corporations eager to take over hospitals and clinics - and pharmaceutical corporations already dominating the policy agenda (viz. the recent massive waste of money buying unnecessary and ineffective anti-virals) - we should be very cautious indeed about responding warmly to Osborne's weasel words.
Many of our public services began as mutuals - working people joining together to pool their resources and provide each other with health and education when the state did not. Especially in health, these local and empowered solutions were swallowed up into the National Health Service, and the mutual impulse and local accountability were lost. This history offers a sense of the potential of co-operatives, but it would require a much greater shift of political power than the Tory proposals countenance.
This is the first attempt during this election campaign for one side to claim the laurels of the co-operative movement, which has drawn increasingly positive attention since the advent of disaster capitalism. But if it was the private sector that screwed up so badly in recent years, why is mutualisation being suggested for the public sector? George Osborne might gain considerably more credibility with the co-op movement if he gave support to the campaign to remutualise the Royal Bank of Scotland and introducing financial support for employees who wish to take over their own workplaces, rather than offering public-sector workers a share in schools and hospitals which his own policies will make unmanageable Tweet
The co-operative economy was and still is about ownership and control. We still own the Co-operative shop, the Phonecoop and the Nationwide Building Society. Our votes decide who is on the board and, broadly, what policies the businesses follow. Of course we also, in a broad and indirect sense, own the schools and hospitals which George Osborne is suggesting can become co-operatives. While they remain in the public sector, our votes can make a difference - if a far too indirect one - to how they function and the services they offer.
In the UK the strength of the co-operative movement has been on the consumer side, yet the co-operatives George Osborne appears to be suggesting for the public sector will be worker co-operatives. If the Tories meant this, it could mean that your surgeon or job counsellor would decide what operation you needed or how long you could claim benefit before you were struck off the list.
But of course he does not mean it. This is not a proposal to empower public-sector workers, but a cynical first step on the road to the privatisation of the health service. With US corporations eager to take over hospitals and clinics - and pharmaceutical corporations already dominating the policy agenda (viz. the recent massive waste of money buying unnecessary and ineffective anti-virals) - we should be very cautious indeed about responding warmly to Osborne's weasel words.
Many of our public services began as mutuals - working people joining together to pool their resources and provide each other with health and education when the state did not. Especially in health, these local and empowered solutions were swallowed up into the National Health Service, and the mutual impulse and local accountability were lost. This history offers a sense of the potential of co-operatives, but it would require a much greater shift of political power than the Tory proposals countenance.
This is the first attempt during this election campaign for one side to claim the laurels of the co-operative movement, which has drawn increasingly positive attention since the advent of disaster capitalism. But if it was the private sector that screwed up so badly in recent years, why is mutualisation being suggested for the public sector? George Osborne might gain considerably more credibility with the co-op movement if he gave support to the campaign to remutualise the Royal Bank of Scotland and introducing financial support for employees who wish to take over their own workplaces, rather than offering public-sector workers a share in schools and hospitals which his own policies will make unmanageable Tweet
14 February 2010
Robbin' Hoods or Tobin Taxes
The problem with simple and appealing ideas is that they are usually wrong. I really am not going to enjoy pouring cold water all over the idea of a 'Robin Hood Tax', especially since I am a person who shamelessly enjoys Richard Curtis's cheesey films - yes even The Boat That Rocked. The problem is that a good script, some decent acting, a rather trite idea and a good backing track works well in Hollywood; in the world of global economics things just are a bit more complicated than that.
First or all, the point of the Tobin Tax is not too siphon off a tiny proportion of the arbitrage profits from banking to help the world's poor. If it were, then surely our first complaint would be that the tiny rate of tax being talked about - whether the 0.5% proposed by Tobin or the much lower rate proposed by the campaign - is just absurdly, embarrassingly, insultingly small.
The Tax was in fact proposed as a penalty to discourage pernicious behaviour by financial investors. If all currency exchange transactions were charged a small rate of tax, the speed and quantity of such speculative transactions would be reduced. This would lead to more judicious operations of currency exchange markets, which could then fulfil their true role of sending signals about the relative strengths of different economies, rather than merely offering a gambling opportunity.
But surely we have moved beyond this since the debacled of the past 18 months? This tepid and timid demand is far short of what the people of the world require. Nothing short of a politically negotiated global agreement on an economy structured to serve people's needs will make up for the disasters we have suffered. Remember the Monty Python sketch of the burly king offering his son the view of his land through the castle window? Our inheritance is the whole world, not just the curtains.
How appropriate that we end back in the world that Robin Hood inhabited. In spite of our national myths, if Robin Hood existed at all he was a landowner, whose own father might perhaps have shown him the lands he would inherit from a lofty castle tower. His objection was not to unequal distribution of land or cash, but that his own power had been eroded by the social unrest of the crusades. The proto-redistribution Robin Hood may or may not have been involved with was only necessary because of the theft of land by the Norman barons.
I agree with the implication of Richard Curtis's short film that bankers use complexity to conceal what they do. But we should not adopt a simplistic response. A tiny tax is not sufficient; what we need is an economic system that enables justice. We should be calling for predistribution rather than redistribution, not only because this structure is unjust but also because it is dangerously unstable and ecologically destructive. Tweet
10 February 2010
Told Euro So
Smugness is never an appealing characteristic, but I think we Greens are sometimes a little too reticient in taking the credit for being right. On our political wing discussions about the imminent collapse in the financial system were everywhere for a good five years before it happened. And recent events across Europe have shown that we were right about the euro as well.
The central case for the UK not entering the euro was that we would lose political control over our economy, if we gave up the ability to control our national currency. Entering a single-currency area would require us to accept the interest rate of the most powerful economy in that area, in the case of the euro that would mean Germany.
The disasters that have befallen especially Ireland and Greece have arisen from them having to take the euro interest rate, which was much to low for their economies during the last decade, leading to housing-market bubbles and speculative inflation in their economies. Now that the bubble has burst they are having to accept an interest rate that is too high, whereas in the UK our central bank has been able to reduce the cost of borrowing money to a mere administrative charge, giving the economy the best possible chance of recovery.
The lesson is not that we are prudent and the marginal Greeks and Irish are feckless. Rather it is that in global capitalism size matters, and that controlling your own currency matters most of all. Greece's deficit is 12.7% of its GDP, way beyond the euro limit of 3%. But the UK's is already 7% and that takes no account of the potential banking liabilities we have taken on, nor the off-balance-sheet debts represented by PPP contracts.
And beyond these special cases, the wilder baying of the market hounds is, as the Spanish government has claimed, an irresponsible attempt to change investor sentiment. While they are untrammelled by political controls, speculators will seek to gain market advantage by artificially increasing or decreasing the value of currencies and national bonds. Whatever we think of the situation of Greece, the Spanish economy is not demonstrating any inability to make good on its debts: its debt-to-GDP ratio is below the EU average, less than that of the UK and well below the 60% allowed by the European Central Bank.
The conclusion should surely be that what counts is not the view of the bond traders or the power of the markets, but our courage to stand up for ourselves. Greece will come out of this crisis better than Ireland - with fewer cuts to services and wages - because the Greeks have the courage to exercise their democratic freedoms and go onto the streets. The Irish, by contrast, seem to have believed the myth about the battle between capital and labour over economic value as being something historical. In fact, the power games between Europe's politicians, the central bankers, and the speculators is being played out daily in our news bulletins. Tweet
The central case for the UK not entering the euro was that we would lose political control over our economy, if we gave up the ability to control our national currency. Entering a single-currency area would require us to accept the interest rate of the most powerful economy in that area, in the case of the euro that would mean Germany.
The disasters that have befallen especially Ireland and Greece have arisen from them having to take the euro interest rate, which was much to low for their economies during the last decade, leading to housing-market bubbles and speculative inflation in their economies. Now that the bubble has burst they are having to accept an interest rate that is too high, whereas in the UK our central bank has been able to reduce the cost of borrowing money to a mere administrative charge, giving the economy the best possible chance of recovery.
The lesson is not that we are prudent and the marginal Greeks and Irish are feckless. Rather it is that in global capitalism size matters, and that controlling your own currency matters most of all. Greece's deficit is 12.7% of its GDP, way beyond the euro limit of 3%. But the UK's is already 7% and that takes no account of the potential banking liabilities we have taken on, nor the off-balance-sheet debts represented by PPP contracts.
And beyond these special cases, the wilder baying of the market hounds is, as the Spanish government has claimed, an irresponsible attempt to change investor sentiment. While they are untrammelled by political controls, speculators will seek to gain market advantage by artificially increasing or decreasing the value of currencies and national bonds. Whatever we think of the situation of Greece, the Spanish economy is not demonstrating any inability to make good on its debts: its debt-to-GDP ratio is below the EU average, less than that of the UK and well below the 60% allowed by the European Central Bank.
The conclusion should surely be that what counts is not the view of the bond traders or the power of the markets, but our courage to stand up for ourselves. Greece will come out of this crisis better than Ireland - with fewer cuts to services and wages - because the Greeks have the courage to exercise their democratic freedoms and go onto the streets. The Irish, by contrast, seem to have believed the myth about the battle between capital and labour over economic value as being something historical. In fact, the power games between Europe's politicians, the central bankers, and the speculators is being played out daily in our news bulletins. Tweet
9 February 2010
Don't Get Caught on the Rebound
It is generally assumed that efficiency of resource use will lead to a lower level of environmental impact, most commonly in the case of energy efficiency which is suggested as a major policy response to the problem of climate change. However, this is an assumption that fails to take into account the human factor and the range of possible responses that people might make to higher efficiency levels. An example of an unexpected response is the ‘rebound effect’, which means that when energy efficiency is increased, the response may be to use more of the good or service that is now produced more efficiently.
For example, is a home is better insulated, the people who live there may choose to enjoy warmer surroundings, rather than using their central heating less, thus some of the efficiency will not translate into energy savings. These rebound effects are illustrated in the figure, which shows the intricate relationship between product design, improvements in design processes, economic structure and social responses that are all involved in productive activity. Reducing the energy required to produce any particular good will lead to a fall in its price, which may then stimulate further demand, increasing the sales of that product.
This system of growth in the productive economy can be conceived as a reinforcing feedback cycle, with technological advance being one of the factors that drives economic growth (and hence resource and energy demand), rather than reducing demand and promoting conservation of energy and resources.
Rebound effects point to the difficulty of devising policies to tackle environmental problems. They also indicate that the major changes that need to occur as we move towards a lower-carbon economy will be in terms of a social and cultural paradigm shift rather than a technological change. So having citizens who appreciate the depth of the environmental crisis and are engaged in changing their lifestyle to contribute to its solution is more important than paying scientists to devise gadgets or even to redesign production systems.
You can find out much more about these effects in a useful book called Energy Efffiency and Sustainable Consumption. Tweet
For example, is a home is better insulated, the people who live there may choose to enjoy warmer surroundings, rather than using their central heating less, thus some of the efficiency will not translate into energy savings. These rebound effects are illustrated in the figure, which shows the intricate relationship between product design, improvements in design processes, economic structure and social responses that are all involved in productive activity. Reducing the energy required to produce any particular good will lead to a fall in its price, which may then stimulate further demand, increasing the sales of that product.
This system of growth in the productive economy can be conceived as a reinforcing feedback cycle, with technological advance being one of the factors that drives economic growth (and hence resource and energy demand), rather than reducing demand and promoting conservation of energy and resources.
Rebound effects point to the difficulty of devising policies to tackle environmental problems. They also indicate that the major changes that need to occur as we move towards a lower-carbon economy will be in terms of a social and cultural paradigm shift rather than a technological change. So having citizens who appreciate the depth of the environmental crisis and are engaged in changing their lifestyle to contribute to its solution is more important than paying scientists to devise gadgets or even to redesign production systems.
You can find out much more about these effects in a useful book called Energy Efffiency and Sustainable Consumption. Tweet
6 February 2010
Markets Beware Greeks Bearing Gilts
As Greece stumbles its way towards the humiliation of an IMF loan it is the way this latest economic tragedy is being reported that causes most concern. The hegemony of market domination is complete as journalists report on the need for the country to rapidly cut public spending with no voice given to those in the country who need public spending to continue.
The flight from Greek national debt is a demonstration of the growing power of the market makers, as they attempt to sideline and denigrate the more vulnerable of the European economies. Far from reducing their power, the financial crisis has emboldened the finance traders, since it proved that no government had the courage to make politics and public interest count for more than market profit. With a few exceptions, commentators who might defend the interests of the citizen against those of the speculators are excluded from the media so that the public debate is framed entirely in terms of what Greek politicians must do to please the markets. There is no sense of irony that, even in the home of democracy, the wishes of the people have become an irrelevance.
The speculative attacks on Greece and the lining up of the countries that are to follow - Portugal and Spain are in the firing line first, since Ireland kowtowed and put its credit-rating before the needs of its people - is reminiscent of the 1997 Asian financial crisis. The movements in value of national economies and their debt enables the gaining of arbitrage profit for the speculators, whose room for manoeuvre always expands during a crisis. Hence the credit-rating agencies and the media are working together to create opportunities for profit.
The case for a new international financial system, negotiated on a democratic basis, grows ever stronger. The original role of the IMF was to intervene in just this sort of situation, and in its early days its facilities were used mostly by the European economies who were taking the rocky road to reconstruction following the Second World War. The Greek crisis is a clear demonstration of the need for a democratic and accountable lender of last resort for the world economy to replace the disaster of a financial system dominated by private speculative interests. Tweet
The flight from Greek national debt is a demonstration of the growing power of the market makers, as they attempt to sideline and denigrate the more vulnerable of the European economies. Far from reducing their power, the financial crisis has emboldened the finance traders, since it proved that no government had the courage to make politics and public interest count for more than market profit. With a few exceptions, commentators who might defend the interests of the citizen against those of the speculators are excluded from the media so that the public debate is framed entirely in terms of what Greek politicians must do to please the markets. There is no sense of irony that, even in the home of democracy, the wishes of the people have become an irrelevance.
The speculative attacks on Greece and the lining up of the countries that are to follow - Portugal and Spain are in the firing line first, since Ireland kowtowed and put its credit-rating before the needs of its people - is reminiscent of the 1997 Asian financial crisis. The movements in value of national economies and their debt enables the gaining of arbitrage profit for the speculators, whose room for manoeuvre always expands during a crisis. Hence the credit-rating agencies and the media are working together to create opportunities for profit.
The case for a new international financial system, negotiated on a democratic basis, grows ever stronger. The original role of the IMF was to intervene in just this sort of situation, and in its early days its facilities were used mostly by the European economies who were taking the rocky road to reconstruction following the Second World War. The Greek crisis is a clear demonstration of the need for a democratic and accountable lender of last resort for the world economy to replace the disaster of a financial system dominated by private speculative interests. Tweet
Labels:
euro,
financial crisis,
IMF,
national debt,
public spending cuts
1 February 2010
Knowledge 2.0
I've been wondering for a decade or so what the government actually means by 'the knowledge economy' and the more I think about it the more it reminds me of Baudrillard's simulacrum: the reason we have to be told so much that we live in a knowledge economy the less most of us know.
The credit crunch illustrated this superbly. We had offices full of people at the FSA producing massive reports about the soundness of a range of financial institutions but, as the horror show unravelled, it became obvious that they did not understand what those organisations were doing. The words had no relationship to the activities; the 'knowledge' was utterly disembbed and functionally useless.
How do you prove your worth in a knowledge economy? Clearly by producing more words than anybody else, hence the explanation for the rooms full of people at conferences and conventions who are just advertising piles of reports. Who has time to read all these words? Even if we could read a small proportion they would have no practical use because 'It ain't what you know it's the way that you know it'. If your knowledge is not embedded so that you can use it to forge a relationship between yourself and something of importance to you, especially something physical and real, then it will always reamin virtual knowledge.
This is why I find my knowledge of basket-making the most valuable knowledge I possess. It is also why I have particularly enjoyed reading The Spell of the Sensuous by David Abram. For those who are not already familiar with this book, it explores the history of our dislocation from our planet, which Abram suggests was accelerated by our shift from a society that relied on story-telling to one whose history was literate.
Our knowledge has no resilience. If we fear for the security of our supply chains for food and energy, how much more should we be nervous about our knowledge. Not only is it floating free of any relationship with the real world, it is also stored on highly transient media. Without a computer most of it is not even available. The media we use to store data are so fragile that, within 20 years, we will have more photos of our great-grandparents than of our own children that we have taken in the past year.
Lest you fear that I have at last taken leave of the modern world, I will end this post with a recommendation for an excellent piece of knowledge-based writing that I would never have been able to find without the internet. Nicholas Hildyard's A (Crumbling) Wall of Money might as well have been called 'Derivatives for Dummies'. I would suggest you read in small chunks, for the same of your blood pressure. Tweet
The credit crunch illustrated this superbly. We had offices full of people at the FSA producing massive reports about the soundness of a range of financial institutions but, as the horror show unravelled, it became obvious that they did not understand what those organisations were doing. The words had no relationship to the activities; the 'knowledge' was utterly disembbed and functionally useless.
How do you prove your worth in a knowledge economy? Clearly by producing more words than anybody else, hence the explanation for the rooms full of people at conferences and conventions who are just advertising piles of reports. Who has time to read all these words? Even if we could read a small proportion they would have no practical use because 'It ain't what you know it's the way that you know it'. If your knowledge is not embedded so that you can use it to forge a relationship between yourself and something of importance to you, especially something physical and real, then it will always reamin virtual knowledge.
This is why I find my knowledge of basket-making the most valuable knowledge I possess. It is also why I have particularly enjoyed reading The Spell of the Sensuous by David Abram. For those who are not already familiar with this book, it explores the history of our dislocation from our planet, which Abram suggests was accelerated by our shift from a society that relied on story-telling to one whose history was literate.
Our knowledge has no resilience. If we fear for the security of our supply chains for food and energy, how much more should we be nervous about our knowledge. Not only is it floating free of any relationship with the real world, it is also stored on highly transient media. Without a computer most of it is not even available. The media we use to store data are so fragile that, within 20 years, we will have more photos of our great-grandparents than of our own children that we have taken in the past year.
Lest you fear that I have at last taken leave of the modern world, I will end this post with a recommendation for an excellent piece of knowledge-based writing that I would never have been able to find without the internet. Nicholas Hildyard's A (Crumbling) Wall of Money might as well have been called 'Derivatives for Dummies'. I would suggest you read in small chunks, for the same of your blood pressure. Tweet
Labels:
credit crunch,
credit-default swaps,
derivatives,
disembedding
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