Republished from the Broad Oak Blog:
In the comments section of my previous piece on the Broad Oak Blog,"Arthurian" picks up on a remark I made regarding the mindset of some it's-all-going-to-end-ers. I respond:
What I'm thinking re the bit you quoted is that there is a self-aggrandizing tendency to think that the end of the world is nigh, which kind of ties in with one's own mortality and somehow makes the latter more meaningful, e.g. when I was a teenager we'd write poems about the threat of nuclear war.
Take James Kunstler: very sparkly prose style, but through it you sense a relish in contemplating the end of the corrupt old order, which will be replaced by an energy-efficient, sunny, bike-riding, low-food-miles happyocratic New World. In its way it's the sort of fantasy promoted by Communists to justify the awful things we must regrettably do before we get there, only here it's simply inevitable and we don't have to do anything to make it happen, so no guilt.
Fact is, when the money system broke down in Germany in 1923 and Hungary in 1946, the history books don't conclude their accounts with the sentence "As a result, everybody starved to death". The worst things that happened in Germany were what people decided to do about the collapse, in particular to look for a strong leader - ah yes, what we all need.
So ignoring the Doomsdayists and the Bright New Worlders, we should look at the social and political ramifications of what is undoubtedly major financial change. Growing inequality, increasing unemployment, and a State more determined to keep tabs on the populace. Money meltdown has been prevented, but civil liberties and the democratic system are definitely threatened. We've all (or most of us) been a lot poorer materially before now, but our birthright (even in the UK) is the expectation of liberty and the rights and intrinsic, inalienable worth of the individual.
The US has an advantage in that this eighteenth-century vision of man and society was preserved, crystallised, installed in the Constitution, and there'll be a hell of a ripping sound if someone tries to tear it out. The UK's constitution is much more liable to change and so while the biggest noise comes from America, the biggest loss may be ours - if we don't fight for the Rights of Man.
As a financial adviser (while there is much of a financial system left), I try to defend the little wealth of my clients - property rights are part of the R of M - but as I say, at the end it's not really about money. Once a basic minimum has been achieved, the material aspects of life are less important than the social.
What good would all the money in the world be, if you were the last human being on earth? That's a question I'd like to ask the 1% who own 40% of everything. I suspect many of them are gripped by a kind of madness.
The 1% might well view trading with 65 million others (so more than one), in that 1%, is OK for 40% of their trading.
ReplyDeleteThey probably also value those with whom they trade for the other 60%.
More broadly, you have raised this point of unevenness of wealth distribution a few times (including on Broad Oak Watch). My view is that, if the system has tolerated this imbalance for centuries (which I suspect it has) the situation is stable. However, if there has been a marked change in a short time (and not just a gradual one over a longer time), that might well be more worrying. In analysing that, one does also have to consider the possibility that such financial imbalance is a natural, and tolerable, effect of greater prosperity, as measured against the basic essentials of food, shelter, warmth (and sex).
Also, as everyone is getting richer and living longer (and happiness might, on balance, also be improving slightly too), what are the dangers in some change in relative wealth metrics such as GINI? Most of us (me too) would not know what to do with the money if a billion dollars dropped into our laps; 10 million perhaps (given my age); 100 million if I was still 21. A billion or more sounds too much like hard work (keeping hold of it), when the best most of us can conceive is never having to work again.
The problem looks to me to be envy, as usual stoked up by those with some hidden agenda.
If one can better one's lot by working harder, longer, cleverer, most people will view that as tolerably fair. Only where such opportunity is not available, will the envy-mongers get their civil unrest and revolution. So we just need to counteract the message of the envy-mongers with the existence of fair opportunity.
Looking at those places with the least fair opportunity, they seem to be the ones we send aid to: poor people in rich countries sending money to rich people in poor countries. Fixing that one would stop more wars, and hence increase human happiness more than anything we do with claimed 'financial misbalance' in the rich countries.
Best regards
Thanks for visiting again, Nigel. Can of worms.
ReplyDeleteGini Index in the USA has risen sigificantly since the 70s, last peak was in the late 20s, so there's a worrying suggested correlation.
Not everyone is getting richer. Median real hourly wages in the USA haven't risen since the 70s. Top end has gotten vastly richer in the same time.
I don't uncritically accept the "wealth creator" argument. In the case of supermarkets, seems to me that individual entrepreneurs are crushed by the corporations and I'd like to see a calculation as to the wider net change in wealth as a result. Not that money is everything - think of the social benefits of a trader building up a business for his child/ren to take over - though that might be said toi have some calculable value in terms of less vandalism, benefits claimimg etc. How, in a society increasingly facing mass structural unemployment, is Joe Average expected to rise and better himself? I posted pics on the Broad Oak Blog of my local shopping area: gambling joints, boozers, gold-buyers, knock-off shops, paycheck credit chops. When I first came here there were 3 butchers, 2 greengrocers, a second-hand bookshop. All gone.
Remember I write as an entrepreneur - I'm an IFA, been struggling to build a business without ripping-off my clients with rosy visions of a great financial future. I'd like to get rich (or comfy) through my own efforts, but the royal road appear to be the kind blazed by Madoff and the others they haven't yet arraigned.
It's not just the envious that see massive, destructive corruption in our finance and politics. I think we may be in pre-revolutionary times and I'd like to prevent the great upheaval.
The worst things that happened in Germany were what people decided to do about the collapse ...
ReplyDeleteYes, they did precisely nothing and the people funded to take over, e.g. Hitler, did so and the result, as they say, was history. To look at "the worst thing that happened" in purely market terms is astounding, when there was so much social turmoil and misery which followed the manipulation of the markets.
The two are linked and one can't just ignore the social ramifications.
So, ignoring the Doomsdayists ...
The Doomsdayists I read do not say it's the end of the world. They say that the markets are running fraudulently, that they have little to do with the real state of the economy, that rampant fraud is going on, e.g. CB holding about half the reserves in gold they claim and a proportion of those are alloy, OTC derivatives rampant, the BofE considering QE again and so on and so on.
These things are happening and Dave goes to India and never mentions them nor has any idea how to address them.
How do you read Cameron, James? Bravely battling the inevitable like Canute? Invincibly ignorant? Man who finds he's got a tiger by the tail? Or a shill for vested interests?
ReplyDeleteBTW, tried to read Denninger this AM, he's off-line. Cyber-attack, censorship or just one of those things?
佩吳璇佩吳璇:
ReplyDelete我们能否成为自食其力的？
Cameron is in the know on the EU plans and sees himself as the white knight to lead us out but his limited understanding of the bigger picture [or wilful refusal to accept it, as the LPUK leader also did], plus his pinkness and the effect of the Lib Dems on any plans he has plus his cuts being precisely in the wrong areas at the wrong time, has me scratching the head.
ReplyDeleteHeath was an out-and-out traitor to the country but maybe Cameron thinks he's being a patriot in some way. He should, for example, be acting on firms as in this post:
http://theylaughedatnoah.blogspot.com/2010/07/protest-index-linked-savings.html
... getting away with that and also implementing tax breaks for start-up small firms, that sort of thing. The mania over plunging us into austerity to assuage the IMF and Chinese debt can only be because he wants our credit rating not to be cut.
And why would he want that? To borrow again, of course. There's no other value in the credit rating. If our product is good, trade will take place anyway with the world, irrespective of whether Moody's or the BIS think we're being good boys.
Cameron calls what he's doing fiscal responsibility. I say it's plunging the country into a second recession.
To come back to your question - is he a shill?
It looks like that but he might be playing his own game and playing yesman to them for now, while his hand's still weak. He certainly told the party faithful that at the conference.