Propaganda Wars : Their Version – “Markets don’t fail”.

History is written by the victors. It should be no surprise then, that the bankers have developed a very clear story of how the financial debacle happened and who should be blamed, and are now engaged in a campaign to have their version of events accepted and all others declared as dangerous demagoguery. What the bankers realize and so must we, is that unless you write the history, and so control the story,  you won’t be the victors.

It is imperative therefore that we expose the bankers’ narrative for the strait jacket of self-serving lies it is, and that we have our own.

The bankers’ version has the advantage that it is already accepted and endorsed by all wings of our political class, that the mainstream media lap up anything the super wealthy and their bankers say, and of course that the banking lobby has more heads than a hydra.

What is their version? Let’s look at one of the more recently created lobby groups the Job Creators Alliance.  According to their web site they were set up by ten of America’s present or former CEOs  for ‘…the defence of the free enterprise system…in the court of public opinion.” The web site goes on to say that it is their aim to “educate the public and policy makers…” and “…shape the national agenda….”

What is that agenda? Well its made quite clear on their web site in an article called “Markets don’t fail” in which it is declared that,

…the onset of the financial crisis three or four years ago was largely due in the US and the UK to excessive demand for mortgages from people who couldn’t afford them.

There, simple as that. Nothing to do with the banks or bankers, nothing to do with robo-signing, selling CDOs which were designed to fail so others could profit by betting against them. Nothing to do with banks lying about the worth of their assets or having a fundamentally stupid and unstable funding model. Nothing to do with insane leverage levels or ‘To Big To Fail’ institutions gambling with client’s money. None of that is to be allowed in to the public discussion. The entire discussion must be, from the bankers point of view, carefully managed.  The discussion, in so far as the public are to be allowed to partake at all, must be carefully shaped and steered, and above all, the assumptions from which it starts and by which its eventual outcome will be determined, must be set and controlled by the Bankers.

Thus it’s worth noting that the article I quoted from the Job Creators Alliance, in America, was also posted on the Adam Smith Insititute in the UK. A ‘think tank’ whose aim is, “… to promote libertarian and free market ideas.”   The  Insititute was very influential in the Thatcher Privatizations and has close links with the libertarian and Free Market US think tank, The Heritage Foundation.

The author of the article, Mr Jan Boucek, is not from either The Job Creators Alliance nor the Adam Smith Institute but from a company called  ECD which describes itself as ,

Mr Boucek is described as, “…an expert in international business communication and the finance media. He has extensive experience in message development, editing skills, coaching and personal development.” In other words he is a spin doctor.  Now anyone can write an article for another organization whose aims they share, but it does change how  we read his opinions when we know who he works for. None of this, however,  is mentioned by either The Adam Smith Insitute or the Job Creators Alliance. It seems to me there is a campaign but that those running it would prefer we not see it as such.

So the bank narrative is that the credit crisis was due to people demanding mortgages they couldn’t afford.  However, are ordinary people in a position to ‘demand’ a mortgage from a bank? It’s like that other phrase much used and approved of by the banks, ‘…people took on debts they couldn’t afford’. ‘Demand’ and ‘Took’ both try to make ordinary people the culprits and the banks the vicitms. But can ordinary people ‘demand’ and then ‘take’ a mortgage from a bank?

Al Capone took money from banks. You and I can demand all we like, but we can’t ‘take’ a loan unless the bank offers it. The fact is, the loans people couldn’t afford were  offered, advised and approved by the banks. It is the bank’s line of business to know if someone can afford a loan or not. That is what bankers do for a living. The bankers knew they were offering and ‘extending’ loans to people above what those people could really afford but did so anyway. And the bankers above them in the bonus pyramid approved.  Our guilt and greed was to ‘accept’ loans that were unwise and unstable. But we did not ‘take’ them from innocent bankers against their better judgement and advice.

Nevertheless the Bankers narrative of events is that markets don’t fail only people. Of course there have been some difficult cases of bank failure and even some cases of outright fraud. How to deal with those? Ah, well there we have the “One Bad Apple’ argument, which is usually teamed with the, ‘now under new management’, message development strategy.

One Bad Apple is from the same stable as ‘rogue trader’. Both are important strategies to ensure that any potentially damaging criticism of the system itself is deflected on to a lone or rogue element which we can then be assured, has been replaced.  Phew! Problen identified, corrected and now , if you please ladies and gentlement, just move along quietly.

And the ‘liberal’ press readily swallows both strategies. The New York Times ran an article in October 2011 in which it talked about how Citigroup had been found guilty of fraud and

“.. had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust.”

As the article said, “It doesn’t get any more immoral than this.” But then just one paragraph later the author reassures us not to worry because that that was then but,

“Citigroup is under new and better management now,..”

Of course you might remember Goldman Sachs did almost the same thing and had to pay $550 Million to settle its case. But importantly for the banks and bankers I cannot say Goldman was ‘guilty’ of anything because it was not found guilty. Instead it was allowed to settle the fraud case with a $550 million fine which is far less than it would have made from its trading practices.  Far more importantly, the settlement allowed Goldman to walk away “neither admitting nor denying wrongdoing”. A careful peice of ‘message management’.

Now is Goldman under new and better management? NO. But no one mentions that. Just as they don’t mention that Deutsche Bank is also up on fraud charges. So is Bank of America. All the big four accountant firms were recently or still are under investigation. I could go on.

But instead I’ll just quote US liberal magazine Mother Jones from December 2011 which said,

“…the ‘few bad apples’ argument really is worth acknowledging…”

So the bankers’ sanitized narrative is that markets don’t fail, people do and when a bank or a banker is caught doing something fraudulent or immoral it is just a bad apple which is neatly replaced. Imperative is the message that there is NOTHING intrinsically wrong with the banking/finance system as it is now constituted. THAT is their central concern and version of reality.

The other side of their strategy, which I suggest we”ll see more of in the coming months, is to suggest those who oppose them are suspect or even dangerous. Note how Jamie Dimon, CEO of JP Morgan, took time before flying to Davos to give an interview in which he said, that anti-banking sentiment was,

“…a form of discrimination that should be stopped.”

How to stop it? Well one suggestion came from US lobbying firm, Clark Lytle Geduldig & Cranford in a memo sent to the American Bank’s Association on how to discredit the Occupy Movement. According to Reuters,

The four-page memo outlined how the firm could analyze the source of protesters’ money, as well as their rhetoric and the backgrounds of protest leaders.

“If we can show they have the same cynical motivation as a political opponent, it will undermine their credibility in a profound way,” said the memo,

Now the American Banks Association (ABA) was quick to say the suggestion had not been taken up. The banks have tried to suggest that this was an unsollicted, even perhaps a ‘rogue’ memo. In a word – bollocks.  Clark Lytle Geduldig & Cranford are not fly by night chancers who send off-the-wall suggestions on spec. They are a Washington institution. They are very, very well connected. The ABA are long standing clients. Their business is lobbying. They know their clients. They know what they are thinking, what they need and what they might like to hear. Memo’s don’t get sent out to America’s bank lobby on spec by the work experience intern.

The memo would not exist at all and certainly not suggest what it does if  the partners of Clark Lytle Geduldig & Cranford did not think this was already in their clients minds.

So I think we now have a rough outline of the narrative the bankers want endorsed and promoted. I think we also have an inkling of the measures they are going to deploy against those who oppose them.

That’s ‘Them’. What about ‘Us’ and our narrative?

Well here I find I agree with Jamie Dimon on one thing. He said generalized banker bashing was wrong. I agree. Blunt generalizations are not good enough. What we need are stout reasons that can be sharpened to a fine point and then used to stab (metaphorically only of course) deserving bankers through the heart.  Fortunately there are many such reasons and an almost equal number of thoroughly deserving bankers.

But I will leave that till part 2. Picking up the boys from school now beckons.

 

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207 Responses to Propaganda Wars : Their Version – “Markets don’t fail”.

  1. bill40 February 9, 2012 at 6:27 pm #

    This actually ties in very nicely with Bill Mitchells’ blog today, how the neo liberals are scurrying around denying that that their pet models failed. The bankers have been given everything they wanted. Light regulation, bought and paid for politicians, a MSM fawning all over them and still they manage to not only f++k everything up, but to deny it was them in any way involved.

    It’s the same with austerity. wherever it is tried it fails. Oh well we didn’t do enough of it just keep sacking people. Unemployment really helps contribute to servicing debts doesn’t it? At the risk of someone invoking Gowins Law on me, I think it was goebells who said the bigger the lie….

    The bankers want to delete 2007’8 from history. It was the time their Berlin wall came down and everybody knows it. Even the MSN is starting to ask awkward questions even if in a feeble way.

    We need to define who the enemy really is and drop the term bankers. We need to define Retail,Investment and shadow banking, the latter of which is virtually unregulated. We need a robust strong banking sector that is highly regulated and not parasitic on the economy. Banks produce nothing should be the motto.

    A final thought, before I write a book, we ask one banker to give up his bonus and another is stripped of his knighthood. And this is call “anti business hysteria”.. Of all the fraud that must have been perpetrated in the UK not one banker has ever been prosecuted.

    Everyone knows this a joke.

    • Michael Fish February 10, 2012 at 5:03 pm #

      If enough people have purchased the available housing stock, the price of homes that are new on the market will rise. When the media hype the rising prices of homes, those that need them, will pay the raised prices. Repeat, repeat again. The bubble inflates. Send door to door salesmen to poor neighbourhoods with offers of inflated mortgages on existing homes with no payments for a couple of years and then rising payments that are unaffordable……. Securitise these loans away from the Lenders and sell the securities as triple A bonds to whoever at high and obviously unsustainable interest, Then as bankers-speculators, buy puts on the securities or sell them short to profit for the fourth or fifth time from the whole scheme. These tactics were illegal years ago. Natural Law says that these are all criminal. In fact, they are almost certainly criminal under existing law. The criminal profits have been estimated at near a trillion dollars. A 25 billion dollars settlement is less than a slap on the wrist. Nobody goes to jail. Nod good for the future of the Western World.

  2. Piano Racer February 9, 2012 at 8:25 pm #

    Golem,

    The frustrating thing is that these jackals are partially correct – in a free market, which we obviously don’t have, none of this would have been possible. Think about it; I have extra capital, you want a loan, but you don’t have a job or any skills that would possibly allow you to pay back the capital, let alone interest. What possible motivation could there be for me to lend you the money? How could I possibly benefit from this scenario?

    The libertarians would argue that the only way the lender in this scenario could benefit is if the government steps in and changes the rules, which is what happened in this case, in two different ways. First, the government (through GSEs) buys the bad loan from the lender, leaving them with a tidy profit and the taxpayers with the inevitably defaulted loan. Second, the government changes the rules and fails to enforce the contracts and prosecute fraud, so that when the lender sells the bad loans to unwary investors they have no recourse for the fraud that was perpetrated upon them.

    In this way we can see that it is ONLY through the government’s actions that this theft is possible. If we had, as the libertarians and Austrian economists promote, a very limited government whose role was primarily to enforce mutually agreed upon contracts, NONE of this would have been possible.

    The “Libertarians” you linked to are complete frauds, and they give the rest of us a bad name. A bank’s primary, if not their ONLY, purpose is to assess risk, and they have historically been proven more than capable of that task. When the government isn’t trying to centrally plan the economy, a bank that made too many bad loans would go bust, simple. It is the short-circuiting of that process by the government that has resulted in what we are currently experiencing.

    • Mike Hall February 10, 2012 at 12:19 am #

      The governments have been entirely captured by the financial sector. It is not ‘less’ government that is required, rather governments that actually represent the interests of the majority of citizens.

      This fundamental flaw in what passes for ‘analysis’ of Austrians renders anything they offer worthless.

      In many respects, this is what we’ve had & has created the mess. Market actors got whatever they wanted with the inevitable result that the biggest players rigged the markets in their favour & are now more powerful than ever.

      • Piano Racer February 10, 2012 at 1:35 am #

        Mike Hall,

        Of course the banks took over the government, that’s what always happens. Not representing the interests of the majority of the people is not a bug in government, it is a feature. It is also inevitable, which is why it has been the result of every government ever conceived by humans. The motivations of the people running the government is not really that material to the effect that they have, which is what Austrian economics is all about. Austrians do not attempt to define or describe motive, because their central tenet is “value is subjective”. Another core tenet of the Austrian school is that the government is simply not capable of allocating resources more efficiently than a free market because they simply do not have the information, the most important of which is the wants and needs and desires of the people they presume to govern, who are in the best position to maximize those desires by applying the fruits of their labor directly towards them. I do not see how the motivations of those who claim power “renders anything [Austrians] offer worthless”?

        Also, it is not possible for big players to “rig” a free market. I have something you want, you have something I want, we both desire the thing we want more than the thing we have. That is a free market. How could a third party with a great deal of wealth “rig” our transaction?

        • Mike Hall February 10, 2012 at 2:34 am #

          Information asymetry is not confined merely to governments, it’s an inherent characteristic of the entire world. And your assertion about resource allocation is absurd. Ideology not fact. You need look no further than than existentially threatening ecological destruction going on for proof.

          Your free market is a complete myth. I repeat, this is what the last 30yrs of financial deregulation has demostrated. We see the results.

          The operational rules of markets do not land preformed from Mars – they are made by people. People with power. Power derived either from wealth or violence, or some combination.

          In removing government, you remove democracy & produce something akin to feudalism. In fact that is where we are heading. Because we have not had any meaningful democratic governments for decades.

          • Piano Racer February 10, 2012 at 4:19 am #

            I think the misunderstanding you are operating under is that you believe we’ve had a free market for some period over the last 30 years, which I assume to mean that you are not looking beyond your immediate experience/lifespan when forming your opinions.

            We have not had a free market here in the United States for the better part of a century, starting with the creation of the federal reserve bank, and certainly not in the last 40 years, when the last tie of the US dollar (the world’s reserve currency) was severed from anything tangible and we went to a 100% government-backed cartel-issued fiat “token” system. I implore you to visit the link I posted below and read the account put forward of the free market working quite well. I assure you that free markets are not “myths”; they are, in fact, the natural state of things when government is not attempting to interfere. It is simply two individuals exchanging goods with each other with no external threat of force interfering with the decision-making process. As soon as you introduce a tax (VAT, income, sales, etc.), a penalty, have a government buying and selling the goods being exchanged, etc. you no longer have a free market.

            The reason people like you cannot possibly conceive of a free market or believe that they can exist in the real world is because your support for government intervention is absolute. Only governments, or any other party who threatens physical violence, have the ability to make a market “un-free”.

        • Ian Britton February 10, 2012 at 9:44 pm #

          Quite simply by standing between the producer and the consumer. This is what speculators do, only it’s not really speculation, it’s holding the consumer to ransom.

        • mikems February 11, 2012 at 11:52 am #

          It’s not inevitable. That’s why working classes around the world demanded democracy and suffrage, to get rid of partial govt for the corrupt.

          You are confusing the fact that our victories so far have only been partial and incomplete, that the ruling class has always managed to retain control and wealth, despite our advances.

          Obviously this is a constant struggle, with the capitalists always trying to undemine democracy, and the people always trying to extend it.

          We have to win our battles when we fight hard, and that is something we are already good at. When the working class unites and makes demands, it generaly wins. It is when we are divided and set at each others throats that we lose.

          We also need uncompromised leadership, not people who want to circumscribe our interests in order to accommodate the ruling class. They will always attack any gains we make, until we make our power so comprehensive, our democracy so overarching, that they won’t have any answers left and they won’t be able to buy off our leaders.

          • Roger Lewis February 13, 2012 at 9:26 am #

            Made in Dagenham a wonderfull recent British Film demonstrates this very well.
            I agree with everything you have said Mikems save as to Leadership structures should be flat with organisation in guerilla type cells the occupy movement and the struggle of the 99% should become a many headed hydra.
            Reading piano racer and mike and the spikiness inevitable is disparate views coming together for discussion recognising common cause as Golem says if we get back to some sort of democracy where we can discuss and agree our ways forward even agree to disagree.
            Dogma is our enemy for our own beliefs as much as in the current corrupt hegemony and their fundamentalist fascist zionism.
            I have been following a series of lectures on Philosophy yesterday I listened to one on Hobbes contemporaneous with the English Civil war and another on Hippocrates. So much of what we discuss here is seen in the history of philosophy sadly with the stick and the Carrot the simplest of weapons, the masters of Money can move mountains with modest stipends corruption comes at a high price to the commons and a low price relatively to the sponsor.

            The Great Ideas of Philosophy, 2nd addition Professor Daniel N Robinson. Theres a torrent of the complete lecture series which I recommend very highly.

            Made In Dagenham official trailer.

            http://www.youtube.com/watch?v=DZ509hHkHO8

            On Hobbes and on through to Adam Smith on to Galton Darwin and through to thatcher and now on to Cameron we see the evolution from thinkers to sound bite spewing useful idiots. Original thought, misplaced sometimes or coloured by selective bias to full out and out delusion.

            A return to Natural science and admission of the world as it is with Nature in all its beauty simplicity and complex structures and true wealth and bounties. JP Morgan wanted to put a meter on everything this is the basis of the oil myth, the scarcity myth the myth of the laziness in Human nature.

            I was very taken by the divide and conquer algoritm article in Wikipedia,Propaganda does that. Cointel Pro shows how states employ means to undermine and to scapegoat mention names like Dr David Kelly , or Clive Pontin. Adrian Assange. I made this posyt last year on the Positive Money forum.( Post seems to have disappeared it related to the Climate Change debate and the Spin behind pushing a particular carbon taxing narrative? anyway struck by this .

            I don’t doubt the banks have their own version of Cointelpro, and the Greed evangelists don’t need much encouragement to do their bidding with plausible deniability built in. Primary Colours anyone?. ( see the Chomsky Andrew Marr interview for details.)
            http://forum.positivemoney.org.uk/viewtopic.php?f=4&t=445

            I am a little embarrassed that I really don’t have the time and have never really had the inclination to polish stuff up and make it presentable as a consumer product and my posts become streams of consciousness part of my philosophy on life is allowing the freedom to brainstorm to Rap with ideas and notions and so forth
            anyway I have thought about this for a few days and thought about the idea that Praxis is what this whole problem requires. We need to take that leap of faith to jump away from a system that is clearly hurting most of us.

          • Piano Racer February 13, 2012 at 9:47 pm #

            “You are confusing the fact that our victories so far have only been partial and incomplete, that the ruling class has always managed to retain control and wealth, despite our advances.”

            You keep installing Kings to rule over you, so that you can convincingly tell yourself that you are not responsible for yourself or your actions, and then you are confused when the King ends up betraying you in order to advance his own interests instead of your own. Some say that insanity is repeating the same actions over and over again and expecting different results. It is only when you stop putting your faith in Kings that a different result will be achieved.

            I am sure you will argue that there is some fundamental difference between a King and a President or a Chancellor or a Prime Minister, but every day your argument grows weaker as these “Democratically Elected Officials” concentrate more and more power in themselves, and your futile attempts to “reform” the system become more and more fruitless.

      • John C. Randolph February 10, 2012 at 5:04 am #

        Mike, you have come to precisely the wrong conclusion. It is the very power of government which made it possible for the banks, the Federal Reserve, and the GSEs to create this mess. Power is like uranium: if you let too much of it accumulate, Bad Things Happen. If you imagine that a government can protect you from corporations, then you are hopelessly ignorant of the entire history of government interference in the economy, from the Roman empire to the present day.

        -jcr

        • Toby February 10, 2012 at 10:33 am #

          But where does government get its power from, if it does not represent the people? It has a monopoly on force. But how does it pay for this force, these armies, these police, these jails? With money. What makes money work? Markets. How do the very successful profit-seeking businesses establish and sustain entities like corporations? Via government.

          There’s no dichotomy except as propagated by media and educational establishments, which are part of the system. The dichotomy between state and market is false, a trick, kabuki theatre, ‘divide and conquer’. Our focus should be the underlying system, which is stubbornly hierarchical, scarcity- and fear-based, elitist and wired to grow forever. Until we have addressed these points, there can be no ‘small government’ and no ‘free market’. The money system, education, and the Perpetual Growth consumerist paradigm, all have to be revolutionized.

          • mikems February 11, 2012 at 12:00 pm #

            The development of the modern state can be viewed from an evolutionary perspective.

            Five hundred years ago it was fit to rule a medieval societ of hierarchical, inheriting classes.

            Naturally, as the mode of production changed from local self-sufficiency with surpluses traded in local markets, to the shifting of the entirety of social production for the market, then those structures were inadequate.

            Hence the political and social turmoil of the Tudors, Stuarts, the revolution, civil war, restoration etc.

            That was all about forcing the state to evolve to serve emerging interests as the economic basis of society was being transformed.

            We can see the same sort of patterns later, after the sort of working class we recognise now first emerged. Then the political and social demands began to change to those of democracy and socialism.

            That’s still the position we are in now, after some two hundred years of class struggle under these new conditions, but always evolving and adapting as a result of class struggle.

            Recognising this picture as a reasonable portrayal of history and a reasonable explanation of current reality, is a step in the direction of putting an end to class injustice.

          • Toby February 12, 2012 at 10:24 am #

            Hi mikems,

            absolutely, it’s the evolutionary view which is most helpful, but the state is very old, thousands of years old, and has been hierarchical from its inception, as it is today. Chieftancies, which precede the early state, were already hierarchical. If it’s an end to class injustice we seek (as we should), then it follows we should seek an end to institutionalised hierarchy; that is, an end to the state. That this process includes democracy is clear, but should democracy bring about a social mode in which class injustice has ended, that social form will no longer be a state, by definition.

            Pre-state peoples, hunter-gatherers, were anarchic, egalitarian. They ruthlessly made sure that no alphas came to power to get control of others, and spent much of their cultural energy ensuring ‘equality.’ The emergence of leaders, and then slowly the state, most likely due to the advent of farming and early notions of property, say 10,000 years ago, marked the beginning of class divisions, specialisation, and scarcity, concepts which humanity needed to acquire to make the state form possible.

            By medieval times, there was the medieval city of course, very creative, quite democratic, distributed power structure, cities loosely federated together, plenty of equality, and they achieved wonders (see Kropotkin’s “Mutual Aid” for more on this). That system was crushed by princes, lords and feudalism generally. Out of that victory the nation state emerged. Today, we have representative democracy, which is a sop to keep the ruled from becoming too independent, that is, to keep them ruled. In other words, we have modern states which permit a faux democracy (as afforded by easy oil) as a strategy to maintain the class divisions and the extractive, exploitative dynamic states enable, states are. Usury is an extraction, tax is an extraction. The entire momentum of wealth distribution in the state form is upwards towards the pyramid’s top. Only what is required to keep the ruled numb and peaceful is sent their way. It has never been otherwise, not in terms of the core dynamic. And moments in history where something else has been tried, have been fleeting and easily crushed. The nature of the money systems and our fake economics enable its crushing.

            Altering this unjust dynamic requires ending the state, which will require revolutionising the institutions I listed. On the other side of that would be, I believe, a self-governing set of social systems of distributed power, if we make it. Or, we slip ever deeper into fascism, neo-feudalism, and wind up being mostly wiped out by ecological breakdown.

          • steviefinn February 12, 2012 at 1:32 pm #

            I read Umberto Eco’s ” The name of the rose” a little while ago. Two of the things that particularly struck me about the novel was how the then religious establishment viewed the organisation of the world, or universe as it basically was to them: Dogs, shepherds & the simple. Dogs representing soldiers & princes, the clergy as the shepherds & the majority as the simple. It also struck me that the battle for souls (votes) that took place between the various sects within the Catholic church, which eventually resulted in the ascetic Franciscans amongst others being persecuted, tortured, burnt at the stake etc by the pope & his followers. I suppose, it was like a kind of world order led by a Dictator who was suppressing the more socialism minded members of his brethren, as of course the pope & his cardinals were very wealthy.

            I would suggest it’s not all that different today, but with politicians taking up the role as the shepherds, the dogs being the financial princes & coporations the simple being the majority. Later of course, the Medici only achieved real power by first electing a pope & then becoming popes themselves. Seems to me to be similar to the Goldman Sachs strategy for achieving ultimate power.

        • Mike Hall February 10, 2012 at 11:42 am #

          jcr

          It is yourself that is hopelessly ignorant of the last 3 decades that have led to the present crisis. You & other ideologues of the right also try to persuade people that the power relationship between government & wealthy elites is opposite to what has actually been the case. Wealthy elites have increased their hold over government to the point where democracy is meaningless. You need look no further than the power of billionaire funded ‘superpacs’ to distort the US electoral process.

          Democratic government is the only thing that has protected ordinary citizens from the power of wealthy elites. That is why these interests do not want democracy to succeed & have done everything in their power to corrupt the operation of governments.

          Frankly, you & Piano Racer are simply trolling here, peddling the complete nonsense that if governments just step away everything will be all right.

          You are wasting your time. Most people remain ignorant of how democracy & economic policies could be radically reformed with infinitely better results for the majority of citizens in a ‘mixed’ economy. But they do know that corruption & deregulation in the interests of wealthy elites is why we are in this mess.

    • Synopticist February 10, 2012 at 12:48 am #

      . “Think about it; I have extra capital, you want a loan, but you don’t have a job or any skills that would possibly allow you to pay back the capital, let alone interest. What possible motivation could there be for me to lend you the money? How could I possibly benefit from this scenario?”

      Well, 2 possible reasons. Firstly, you know you can sell that loan for a profit. Secondly, because markets AREN’T RATIONAL, and you’ve been made stupid by listenning to what others around are saying, and you’re scared of losing out. You’re caught in a big herd, charging towards a steep cliff, and congratulating yourself for your rapid pace.

      The bankers got their own way, they had everything going for them, and they still f*cked up the entire global economy. This was not purelly because thay were badly regulated, or even because they were stupid, self-serving, corrupt, powerful, and greedy. (which they were). It was because they thought that markets can’t make mistakes, and they were the market, so, great, everything’s fine.

      Libertarians are idiotic enought to imagine that crime and wickedness can only happen because of bad governments making mistakes. They fundamentally misunderstand human nature.

      • Piano Racer February 10, 2012 at 1:44 am #

        “It was because they thought that markets can’t make mistakes, and they were the market, so, great, everything’s fine.”

        Not so, sir. The banks crashed the “system” that was created by government regulations because it yielded them tremendous profit due to rules they themselves had put in place, and because they knew that they had enough control over government to socialize the losses.

        “Libertarians are idiotic enought to imagine that crime and wickedness can only happen because of bad governments making mistakes. They fundamentally misunderstand human nature.”

        This is not at all the case. Libertarians recognize that crime and wickedness are committed by individuals, and we deplore and demand justice for individuals that harm other human beings’ person or property. We simply abhor being forced to participate in systems that we did not choose and do not want. We abhor the violence that this system claims the right to inflict, and believe the evidence clearly shows that this system is a massive net drain on the productivity, joy and well-being of the human race.

        • Konstanz February 10, 2012 at 11:26 pm #

          Piano Racer:

          Your argument is flawed because you ignore the fact that markets are not free of human traits just like governments aren’t – as much as you would wish your markets to be pure and unsullied by the effluence of humanity – so that they fit your convenient reductionist model of comparative advantage – they are not and never will be. It may be an inconvenient truth that people exist and display human characterists but what a boring world it would be if there were no people to play with your models.

          Have you considered lego as an alternative?

        • mikems February 11, 2012 at 12:07 pm #

          Government regulations emerge from reality, from crisis, from the evolution of our society, our economy, our political structures. They result from constant class struggle, from wars, from climate change.

          They aren’t drawn up by students of economics on bits of paper and then presented as the perfect solution to everything, which is then simply implemented by an all-powerful centre dictating its will.

          In fact, it is you that is holding the piece of paper, full of scribbled recipes for utopia. And it is so easy! Get rid of govt and all human problems will be solved.

          But that is utopian idealism, not any sort of description of human reality. It isn’t humanly logical, doesn’t conform to lived human experience or our understanding of history as it is currently known. Put simply it has no basis in material reality.

          That you are so sure you are right is a sign of fanaticism, not truth.

          • Piano Racer February 13, 2012 at 9:55 pm #

            “But that is utopian idealism, not any sort of description of human reality. It isn’t humanly logical, doesn’t conform to lived human experience or our understanding of history as it is currently known. Put simply it has no basis in material reality.

            That you are so sure you are right is a sign of fanaticism, not truth.”

            I would agree with your final paragraph and encourage you to apply it to your first four! I disagree that my ideas are utopian or idealistic, but I agree that they certainly do not conform to YOUR experience or understanding of history. As a remedy I would encourage you to broaden your understanding, a task that only you can perform once you have tamed your confirmation bias, something that requires constant vigilance. I’ve given you a start with my links below of Rothbard’s description of the Pilgrims and the “I, Pencil” essay, but I assure you there are many others and encourage you to fearlessly seek them out!

    • Zoltan February 10, 2012 at 12:48 am #

      So in an ideal free market there would be no fraud, no criminality and no ponzi schemes?

      Why?

      Would everyone suddenly become honest because they were so happy to have the utopia of a continuum of independent agents with complete and instantaneous knowledge of pricing of a set of homogenous products with no externalities that are all perfectly substitutable and the suppliers of which have free entry and exit from the market?

      Or would they wake up and realise that this was actually impossible so they must have been dreaming?

      • Piano Racer February 10, 2012 at 1:50 am #

        Fraud will always exist, just like rape and murder, because it is perpetrated by individuals against other individuals. This is why enforcing contracts is one of the few roles that libertarians believe governments should undertake. A free market would not eliminate fraud, but it would minimize it by ensuring the right of the counterparty to appeal to the government to enforce the contract. If fraud were actually punished as a crime, which you may have noticed is not presently the case, there would be no incentive for anyone to engage in it.

        • Zoltan February 10, 2012 at 4:16 pm #

          I notice you didn’t address my second para which gave some examples of the sort of assumptions required for so-called “efficient markets” to work. Assumptions that have never and can never actually exist in the real world. Sadly the ideal of the free market is as utopian and naive as the ideal of true communism. Unless you realise that, you are doomed to chase a mirage across an increasingly arid economic desert. You are also indavertently giving succour and support to the neo-classical paradigm that has gripped our economies and led to the current disaster.

          Get with the programme – neo-classical (aka neo-liberal) economics has failed and is broken because the models it uses are so seriously flawed they produce nonsense – GIGO. They need replacing with ideas that actually work, based on models that accurately reflect the real world, not some bizarre computer-generated fantasy.

          May I suggest you read some Warren Mosler, Randall Wray, Marshall Auerback or Bill Mitchell? That might help point you in the right direction.

          • Piano Racer February 10, 2012 at 6:00 pm #

            Zoltan,

            Thanks for the reading suggestions, I’ve read a bit of Marshall Auerback on Yves Smith’s blog, and have enjoyed his writings. I will be sure to check out the rest.

            I agree that the current economic models are GIGO and, more generally, useless. Again, Austrian economics teaches us that because all value is subjective and differs dramatically from individual to individual, economic models simply do not work because it is an attempt to model the behavior of a group of individuals that could have any motivation under the sun to influence their perception of value.

            You asked me to address your second paragraph, which I’d be happy to do, but I have to admit I don’t really understand the point you’re trying to make. Free markets are not mythical, they are the natural state of things. Imagine two people, Steve and Bob, stranded on a desert island. They both build huts, they fish, and Bob crafts things out of wood. Steve likes Bob’s wood carving of a duck, and offers to trade him two fish for it. Bob really likes fish, and has made a dozen carvings, so he makes the trade. This is a free market, simple. They do not have to consider paying a VAT, or a sales tax, or having a share of their fish confiscated by a man with a gun. Why is this so hard to understand? Is it perfect? No. But my point is that Steve and Bob are in the best position to better their own lives and make decisions in the marketplace over a third party brandishing a gun, who has no way of knowing the individual hopes and desires of these other individuals.

            I am not saying that freedom and liberty result inevitably in utopia, that was your suggestion. I am merely arguing that freedom and liberty are much more personally rewarding, and dramatically increase the joy, happiness, and well-being of the Human race.

        • mikems February 11, 2012 at 12:11 pm #

          Why must society be like this?

          At least communists are able to say ‘if we get rid of capitalism, we can work less, have a fuller cultural life, much better public infrastructure, more control over your work and life’ etc, even if that hasn’t been acheivable in practice, for all sorts of reasons.

          But what are you offering? What is your message of hope to humanity if we adopt your political ideas?

          Isn’t it really just self-interest dressed up as a political theory?

          What is the logical connection between what you say you want and a better world for humanity as a whole, i.e. what good will libertarianism do us?

          • Piano Racer February 13, 2012 at 7:37 pm #

            It will allow humanity to be free. Do you not yearn for freedom? Are you so happy with your chains?

      • Synopticist February 10, 2012 at 2:25 am #

        ” The banks crashed the “system” that was created by government regulations because it yielded them tremendous profit due to rules they themselves had put in place, and because they knew that they had enough control over government to socialize the losses.”

        Up to a point you’re right. But they didn’t realise they were crashing the system, because they thought that markets are rational. This deluded idea is one that Austrians, bankers and retarded libertarians share.

        And that, of course is what the article is about, a current attempt by the very rich to persuade everyone else that markets can’t fail, only individuals. So everythings ok, leave the bankers be, it won’t happen again. Call out the army of sad, pasty faced libertarian trolls who still live at their mums but have a need to feel superior to welfare claimants, and the 1% scores a great propoganda coup.

        • Piano Racer February 10, 2012 at 2:32 am #

          You have been deceived, friend. How can you be so certain of their motives, intentions, and understanding? Certainty is a dangerous thing, friend, especially when you use it as a basis to verbally assault your “retarded libertarian” fellow humans.

          “Retarded libertarians” have feelings too, you know. The dehumanization of individuals is a product of the thinking that enables the system to exist in its current form.

          “So everythings ok, leave the bankers be, it won’t happen again.”

          That is a shockingly inaccurate depiction of what I and many libertarians believe. Everything is NOT ok, the bankers must be punished severely, and it will continue to happen as long as the fascist government (the definition of fascism is the marriage of corporation and government) is supported by people like you. I am defending libertarian ideas because I have the same motivation as Golem: the record must be set straight, the problems must be understood, and it would be a grievous error on our part to replace our current system, once it inevitably collapses, with another that will inevitably suffer the same fate.

          I can tell by most of the responses that my goal may be a bigger challenge than I had feared.

          • Synopticist February 10, 2012 at 4:23 am #

            “You have been deceived, friend. How can you be so certain of their motives, intentions, and understanding?”

            What, decieved by Golem? His article is about an attempt by rich, deeply monied, hard economic right and libertarian institutions to attempt to set a media agenda. They want to spin the line that the crash was the fault of ignorant debtors. Because there’s nothing wrong with the markets per- se, just a few bad apples etc etc.

            Now, non-retards know that that is bullsh*t. Libertarians are ideologically disposed to accept it, because they’re instinct is always to blame governments, not corporations or individuals.

            Thats why those 1%ers the Koch brothers adore you libertarians so much. Their money has got you to choose the interests of the super rich over the interests of everybody else, because you think governments are intrinsically evil. And you’re retarded, which they understand .

            So instead of hating the theiving, lying, stealing 1%, instead of recognizing the billionaires and their machinations, you side with them. you seek an alternative, but prefer some fantasy world where the strong are virtous and good, and governments eternally banished.

          • Piano Racer February 10, 2012 at 5:32 pm #

            No, not deceived by Golem. Deceived by the bankers. You have been deceived into thinking that they actually believe we have a free market or are libertarians. You have been deceived into thinking that this was all some big mistake, and libertarian ideas are the culprit. I assure you that a free market is anathema to parasites like Jamie Dimon and Lloyd Blankfein and the Koch brothers. I am in 100% in agreement with Golem that the bankers that control our government want to make us think that it is the actions of the debtors that has gotten us into this mess, and that this is a gross distortion of reality. I think your obvious hostility (evidenced by the repeated use of the word “retard”, which I am sure our mutual friend Golem would not approve of) is largely due to the fact that you believe I am attempting to defend the bankers, or the Koch brothers, or whoever your particular beef may be with. What I am trying to say is that these people are NOT libertarians, they are criminals, and they have wrought enormously more damage than they ever possibly could have without utilizing the force of government. Just because they claim to be libertarians or to believe in free markets, does not make it so.

            Concerning the “myth” of the free market, please see my link below. I assure you free markets have existed and continue to exist. It is not complicated or novel to allow a man to keep the product of his labor and spend it freely. The income tax in my country, the United States, has only existed for a little less than a century. Believe it or not, there have been vast periods of time where human beings coexisted and prospered via the use of free markets and personal liberty; these were some of the core tenets that the founders of the United States believed in.

            Not all of the 1% are liars and thieves. I believe the Koch brothers are, and should be tried as such, primarily due to their use of government power to advance their personal fortunes. Is Steve jobs a liar and a thief? Was Henry Ford? What about Bill Gates, Mark Zuckerberg?

            I do think governments are intrinsically evil, because they impose their will on humanity with the implicit threat of force and caging for non-compliance. I believe people should be free to live their lives however they choose, as long as they are not harming the person or property of another human, and that includes not polluting the environment. Pretty simple.

            I can see that you are very emotional, Synopticist. I think it is good that you care so much, and your ire is well-directed at the bankers. I would encourage you to recognize an ally when you see one, however, and to have an open mind. I find that people in a heightened emotional state have a difficult time learning.

          • The Happy Hobbit February 10, 2012 at 7:33 pm #

            Fascinated to read the spat between Piano Racer and others.

            Piano Racer,

            I am naive and poorly read, so I do not understand how indivuals serving their own interests can also serve Humanity’s interests. I thought that Humanity prospers when many people work together, often forsaking their own individual wants, for the good of all.

            As one who is heavily involved in sport, it used to be clear to me that all my athletes working together become much more successful than they would were they to decide to work as they saw best suited themselves. Should I let them do their own thing and expect better results?

          • Piano Racer February 10, 2012 at 11:07 pm #

            Mr. Hobbit,

            I am so glad you are finding the conversation fruitful!

            I must keep it brief as I am on my phone, but the quick answer to your question is that it is not groups of people that is the problem, in fact groups of humans can accomplish amazing things! It is when groups of people force you to join their organization and follow.its rules without first obtaining your consent by threat of violence and caging that is immoral and unhelpful.

          • mikems February 11, 2012 at 12:16 pm #

            Fascism is not the simplistic merger of corporations and govts.

            That is to misunderstand an alternative meaning of the word ‘corporation’, which is specific to fascism.

            The fascist idea was to create a corporate state, not of private corporations agreeing contracts with the state – though that was certainly a big part of it, but that is capitalism, not fascism – it was that the state, capital and labour, would, at all levels of society, form into corporations which would pursue the ‘national interest’ together.

            Of course, the ‘national interest’ turned out to be pretty much the same as under the previous and succeeding regimes – the interests of the ruling capitalist class.

            This system was replicated up the hierarchy ending in the Grand Fascist Council presided over by Mussolini.

            It is a simplistic distortion to call modern corruption fascism. It isn’t it is the result of libertarian ideas on capital and trade freedom, but in an historical context of class domination by an elite.

          • Charles Wheeler February 11, 2012 at 5:32 pm #

            I think someone may have been watching too much Star Trek.

            I tend more towards the view that libertarianism and ‘free markets’ lead inexorably to a polarization of wealth and political power (as in any political system, but with fewer checks and balances). The constructed view of a couple of people with complementary skills and wants evades the issue of what happens if one has power over another or why this couldn’t happen in a ‘state of nature’?

            What happens when the interests of two people are in conflict?
            Let’s say I’m stuck in a lift (a recurring theme in my posts) with someone who is desperate to smoke to calm his nerves and I’m prone to asthma – whose liberty takes precedence?

            My neighbour likes to play loud music late at night – whose liberty takes precedence?

            My neighbour wishes to build a block of flats just outside my window – whose liberty takes precedence?

            My neighbour decides he’s going to take care of his own sewerage system (OK I do live next to the neighbours from hell) by dumping his waste at the end of his garden to save on charges?

            My semi-detached neighbour decides he’d rather not pay tax for the fire service, preferring to take the risk? (Headline: ‘Libertarian Reluctantly Calls Fire Brigade’)

            My neighbour decides MOTs and insurance are an infringement of his liberties?

            If these can all be sorted amicably through some system of contracts all well and good, but my neighbour doesn’t recognise the system others are using and insists on one he finds more preferable. Who decides on which should prevail, and how are they chosen?

            John Stuart Mill is often quoted as the poster-boy for libertarianism for his assertion that one should be free to act as one pleases as long as not causing harm to others – but the sting is in the tail – the instances where one person’s ‘free choice’ has a negative impact on others abound. Which is why Mill moved towards a more social democratic viewpoint in his later writing.

            If libertarianism is ‘the natural state of man’, how was it perverted, and how could that be avoided again – other than by imposition? Whose particular brand of libertarianism prevails? And how could that be assessed other than by some sort of … er … vote? What if one person disagrees with the result? We’re going to need a hell of a lot of desert islands!

            It’s difficult to see how any major development could ever take place. Building a road or railway would require the consent of everyone in its path; libertarian arguments were out in force when nimbys were trying to stop the construction of the national grid. Public works would become impossible due to the free rider problem. And so on.

            I can see why a multi-millionaire who doesn’t want to pay tax might find libertarianism attractive, but the idea fills me with dread nightmares invariably involving Ayn Rand.

            Where do people with no power in the market place fit in to this utopia? The sick and disabled are finding out what ‘small government’ means for them – as will those ineligible for or unable to afford private health insurance when the NHS is sold off to ‘the market’.

            Anyway, the discussion reminded me of this: http://goo.gl/SUkrg

        • Phil February 10, 2012 at 4:29 pm #

          One the best things about David’s blog is that we treat each other with courtesy and respect. There have been precious few Trolls here so let’s keep it friendly. I don’t agree with Libertarianism but then they wouldn’t agree with a Left winger like me either. Please, we don’t need to add pejoratives into our debates.

          • Piano Racer February 10, 2012 at 5:39 pm #

            Thanks Phil, I agree that we can and should disagree with respect. That is how learning is achieved. People just shouting at each other that they are WRONG WRONG WRONG does not serve to accomplish anything other than to divide.

            I am not trying to troll, merely to converse and share my opinion, which I recognize is not the mainstream for this blog. This is a subject that I care about, and wanted to add my perspective. My goal is only to elucidate, to challenge people to think and question some of their underlying presuppositions.

            If there is one thing that should unite us, it is the drive for justice. My position is that imposing the will of the state on an individual without his or her consent is not just, and further it does not serve Humanity’s interests. Where I hope we can agree is that grievous crimes have been committed, and justice is not being served.

          • mikems February 11, 2012 at 12:21 pm #

            But people don’t have the state thrust on them without consent. We live in partial democracy and they govern by consent.

            That is the basis of the British constitution, at least formally. This follows from our historical turmoil and the subsequent emergence of an ideological basis for the new post-medieval society. John Locke wrote influential pamphlets which demanded freedom of religion and located sovereignty in the people. Locke, of course, was far from a revolutionary. He was seeking to find a philosophical and ideological basis for the contemporary situation.

            But, at least in the UK and USA, this is the basis of our social contract.

    • Gordon February 11, 2012 at 6:10 pm #

      @ Piano Racer (first comment at 9 Feb 8:25 pm)

      The libertarian premise of your first two paragrahs – that in a TRULY FREE market there is no possible way a lender could benefit without government intervening to change the rules – is flawed. Whatever might be true of some simple markets with well-understood products (as in a medieval village perhaps) is not true of markets involving complex products or where multiple markets interact. In such cases a ‘free’ market can and frequently does go unstable and blow up even without external shocks or government interventions.

      If I, as a mortgage broker, discover I can sell mortgages to people with limited finacial experience (which typically was true of sub-prime mortgagees) and then sell that mortgage on to a big bank for slicing and dicing then the stage is set for disaster.

      Now as a broker I see that it will take perhaps two years before this blows up, especially if I design mortgages with two year ‘teaser’ rates that are relatively affordable. And if I can grow my business very fast on the basis of this bad (and frankly dishonest) underwriting, then my share price (if I am quoted) and my pay anyway can go through the roof.

      So this creates a system of perverse incentives without any government intervention that enables me to make a bundle before it eventually blows up.

      And this is exactly what many brokers did.

  3. princesschipchops February 9, 2012 at 8:48 pm #

    ”the onset of the financial crisis three or four years ago was largely due in the US and the UK to excessive demand for mortgages from people who couldn’t afford them.”

    Hhhmm. Lets say this is the case, and their narrative is the real facts of the situation. I don’t get how they can extrapolate ‘markets don’t fail’ from this statement. if the markets were working properly then people would either be able to afford homes (supply and demand etc) or there would be rental property’s they could live in or…there wouldn’t be the mortgages available in the first place for anyone who couldn’t afford them. Surely the fact that the ‘excessive demand’ (by ”unworthy” applicants) was met means the market wasn’t working?

    I suppose then they’ll use that old lie that it was government intervention – as in – ‘the government made us sell mortgages to those pesky poor folks’. But of course the government only made it legal to sell these types of mortgages in response to pressure from – yep you guessed it – the bankers!

    I read a fact the other day about how many mortgages were so called ‘liar loans’ in the UK by 2006 (mortgages where you just make up your income basically) and the numbers were truly frightening.

    The other thing that these free market defenders don’t get is that the market is now totally and utterly divorced from reality. So we have even at the micro level a breakdown in how the system is supposed to work. For example more and more owners are being trapped in negative equity – not because their house has lost a ton of value but because mortgage lenders are being increasingly tight when it comes to the valuation they will place on a property. They’ve gone from being overly lax to being overly strict. Which means you might have a semi where next door sold for £150k but when your mortgage comes up for renewal the lender declares your house is worth only £120k. You are in ‘negative equity’ and then you will be put on a crushing repayment rate making default more likely.

    Of course you could appeal and get an independent valuation etc at a cost of hundreds of pounds to you personally but at the end of the day the mortgage company has the upper hand and often stick with the lower valuation. Fighting them can be a long drawn out process whereby you then have to submit tons of evidence as to why their valuation is wrong.

    That is one small example of the markets not working. There are hundreds of them. Still we’ve had some more lovely QE today, that should sort it out.

    • Charles Wheeler February 11, 2012 at 6:14 pm #

      McLean and Nocera’s All The Devils Are Here is very good on the subterfuge that went on – which had little to do with the Community Reinvestment Act – or the notion that poor black people were conning major financial institutions into making them loans!

      The banks went subprime because it offered bigger rewards at little perceived risk – they would be sold on (thanks to the wonders of securitization) before they defaulted, or ‘insured’ through CDS. In any case, if you could convince yourself the market would keep rising losses would be few and far between – at least for as long as you were still in the very lucrative game (like a gambler on a winning streak). As prime opportunities became saturated, so subprime became the only game in town to keep the whole Ponzi scheme running – and as soon as that began to collapse the whole system seized, as it had to – ‘If something can’t go on forever, it won’t’

      In a classic ‘fallacy of composition’ they figured that what was good for their firm was good for the system as a whole – so just kept on parcelling up toxic products to sell on and re-’insure’ – hence the daisy chain of defaults that would have followed Lehman had AIG’s fate been left to ‘the market’.

      But, in one sense, the big players were proved right – they got away with it. Even if their whole company went down, like Lehmans, the Dick Fulds of this world got away with a dose of pubic opprobrium and a rap on the knuckles (He received nearly half a billion dollars in total compensation from 1993 to 2007. In 2007, Fuld was paid a total of $22,030,534, which included a base salary of $750,000, a cash bonus of $4,250,000, and stock grants of $16,877,365., Wiki). Others got off more lightly. Those who ran banks that were Too Big To Fail didn’t even have to face up to failure, just got back on their horse and rode into the sunset (the sun is setting), picking up saddlebags of bonuses in a perverted form of Wild West finance. Now they can make bonuses by borrowing money at near zero and loaning back to the cash-strapped governments that bailed them out [nice work if you can get it Pt. 763]

  4. Golem XIV February 9, 2012 at 8:55 pm #

    Hello Piano Racer,

    I agree that if the market was left to allow failing banks to fail andf bad loans to be cleared then banking would work and loans bad dbets would be flushed.

    I agree that the people I linked to are cynical. I agree that in theory a properly free market would act as you say.

    Where we may diverge is that I am less sanguine than perhaps you aare that a free market is any more possible than a workers communist paradise. Both ‘in theory’ should work wonderfully. Neither has been seen.

    I think there are problems in which central planning is invariably useless not least becaiuse it is nearly always captured by powerful interests who come to ‘own’/ have undue influence over the planning. Problem is, the same groups achieve comparable distorting influence in the regulation of the markets as well.

    It seems to me that we presently have the worst of all wolrds. We have a huge interventionst governemtn which is now the interventionist tool of a small elite who use that interventaion to rig the market so it is little more than a tool of economic extortion.

    What I can say without reservation is that I am glad you are with us. I think we will not find our way out of this crisis if we cannot work together in a broad church of heterodox opinion.

    What I feel more than anything else is that democracy is under attack. And if we allow demoracy to be hollowed out then libertarians and socialist alike will find themselves with their backs against the same wall.

    I would rather fight side by side to preserve our right to disagree with each other in a free and fair society.

    • Dave Holden February 10, 2012 at 12:15 pm #

      Piano Racer’s input is crucial here – less this be turned into a pointless market bad, government good fight (or vica versa). in which case the bankers aim of divide and rule will have worked.

      The fact is whether markets fail or not what we’ve had can’t in anyway be described a market economy. It’s been a crony capitalist economy, plain and simple.

      Now, you could attack the cronyism by trying to change the politic system itself but I think that won’t get the broad church of support your looking for, not least because of the divide present in the comments. I’d suggest however, that a more tractable approach would be to focus on getting reforms to the parts of the system where that cronyism has been concentrated. Which in my mind are monied politics and the broken private sector monetary system.

      • Zoltan February 10, 2012 at 4:22 pm #

        I think you are missing the point. The real problem is that economics as it is most commonly expressed today, i.e. neo-classical economics, is so seriously flawed that if applied, it produces the sort of results we see all around us. It isn’t simply that the banks are bdadly run or that politics is too enmeshed with the financial industry -although both of those are also true.

        Even if we had a shiny new politics that was totally public spirited and pure, as long as they believe in the neo-classical myth, the end result will be high unemployment, inequality and widespread environmental degredation. Our only hope is to replace the broken theory with one that actually works, and puts people first. Then we can really have government by the people FOR the people.

        • Piano Racer February 10, 2012 at 6:08 pm #

          100% agree Zoltan, I am glad we are able to find common ground! Our current mainstream understanding of economics is not only “seriously flawed”, but I would go so far to say that it is a deliberate lie that is bent to serve whatever goals the powers that be might have.

          “Our only hope is to replace the broken theory with one that actually works, and puts people first. Then we can really have government by the people FOR the people.” ABSOLUTELY! The economic theory that I advocate that I believe actually works, and I will guess that we may disagree on this point, is AUSTRIAN ECONOMICS! Do you assign any validity to the Austrian school? If not, why, and what economic theory would you advocate?

          • Zoltan February 12, 2012 at 1:34 pm #

            I do not subscribe to the Austrian school. It seems equally flawed. It shares quite a few of the basic ideas of neo-classical economics which have been demonstrated to be incorrect.

            My other issue with it is the idea that removing any regulation and controls will produce a society that most of us would want to live in seems naive.

            Presumably you would agree a police force is necessary. We also need a central authority to coordinate infrastructure. And so on. Government is necessary, it’s a question of how we choose it, how it is monitored and controlled, and whose interests it acts in.

            You can argue about the extent of government, and whether it should be involved directly in delivering certain services, but to argue against it in absolute is extreme and, without intending any insult, deluded.

            I don’t think there is a definitive and proven economic theory which actually delivers yet. With regard to monetary theory, I like the MMT approach, but there seem to be quite a few areas this doesn’t deal with and a lot more work is needed. My view is that Economics is not a science, and that this is its problem. You can pick and choose which school to follow depending on your bias. You can’t do that with physics or chemistry. We need to get the politics out of economics, and the humanity and context (i.e. of us being part of the natural world and subject to its laws) back in.

        • Dave Holden February 11, 2012 at 9:55 am #

          Firstly I agree on neoclassical economics being bunk. However the reason we are here is only partly related to economics, the *main* reason is because private sector banks can create money out of thin air without regard for it’s ROI. In fact it’s worse than that, they are incentivised to do so. Pair that up with monied politics and they’ve got a get out of jail free card when it all goes wrong.

          On economics, substitute whatever pet theory you particularly favour, they’re all either dead wrong, or in such an early stage of development as to be speculative, anyone could be used as a political tool for a political end.

      • Charles Wheeler February 11, 2012 at 6:29 pm #

        “It’s been a crony capitalist economy, plain and simple.”

        A disillusioned Republican on that very point: http://vimeo.com/35372114

        • Dave Holden February 12, 2012 at 11:20 am #

          It’s my belief that If there is one area that both left and right could agree on, it would be an attack on cronyism.

    • mikems February 11, 2012 at 12:34 pm #

      Golem

      You are too dismissive of central planning as a tool to advance society.

      Just look at what was acheived by central planning in the USSR, even though the system was notoriously bureaucratic and inefficient. The population increased, wealth increased enormously, the whole country became industrialised, a nuclear power with a space programme. By the end of the fifties the Soviet Union was more productive and was growing faster than western capitalism. This was during the west’s post-war boom period, to boot.

      It transformed a backward peasant population into one of the best educated in Europe.

      That is all just fact, not some of my own perceptions. I was never a supporter of the soviet union, because it didn’t practice central planning through democratic workers’ control, which is the hallmark of socialism.

      If you aren’t convinced by the soviet example, then what about our planning of the economy during the second world war? In that crisis no one wanted to leave our success to the interests of market forces and quite right too.

      But, I believe our society is capable of it. We are already very highly educated, very literate and we are currently having a debate on a central planning system par excellence, the web.

      • Golem XIV February 11, 2012 at 3:31 pm #

        DIdn’t mean to be dismissive. I would rather think less in terms of central planning and more in terms of central support.

        To give a brief example of what I mean. It is often said that the Free Market or market in general is where new ideas and Innovation come from. Not true.

        Take the internet. The idea and basic infrastructure came from ARPA (government) and universities (government).

        THE central invention/idea which makes the internat work is Packet Switching. Two men invented it. I interviewed both of them though I can’t now recall their names. One was at UCLA (state supported university) the other worked in Teddington at the Post Office Research lab. (government).

        The private sector invented…nothing. The private sector came along later and made stuff once the whole thing was already an evident force.

        Central planning? No. But centrallly supported? Yes.

        • mikems February 12, 2012 at 10:08 am #

          Yes I learnt about those two at university in a ‘machine learning’ course about the development of neural networks and AI.

          The fact is that even in this capitalist society which has tried to rubbish the idea of central planning, planning is everywhere and indispensable.

          Look at the way our whole distributibe economy works – everything is planned down to the last detail in order to maximise profit : just in time system for example.

          But the thing is that under capitalism it is both entirely private and secret, but also unecessarily replicated inside every business.

          Thus Tesco and Asda whill have similar, parallel systems of planning. So will all the others. And distribution networks.

          There’s a lot of redundancy in capitalist planing that could be rationalised and democratised quite easily.

          Our supermarkets are effectively socially constructed businesses, autonomous almost and could easily operate without the need of private shareholders.

  5. 24K February 9, 2012 at 10:07 pm #

    What is a free market?

    A market where things move freely?

    Lets call it the Christmas Bauble Free Movement Machine (TM). A machine that releases baubles from the top and they make there way down to the bottom (bit like a GS IPO) and the machine carries them back to the top ad infinitum.

    A bit like How It’s Made.

    Now not all baubles are the same, some are round with that cap on the top, some are pendulous, some are the shape of a can of Coke bottle top. To get them to move freely through the machine the machine needs all those little bits like on How It’s Made to ‘help’ them along. Like gizmos that vibrate so they work freely, like the latest gyroscopes. If not certain baubles will have an easier ride in the Christmas Bauble Free Movement Machine (TM).

    We have a monopoly commision yet I see Tesco everywhere.

    I’m well up for Grownupism or the now famous Adultocracy but as we see from opposing views peoples ideas get in the way and those people that without a doubt conspire (greed can communicate) get away with red white and blue murder. In 4 comments we see why we fail.

    In the 5th we see how we can win.

    Please take notice.

    This isn’t about bankers or government. It is about us.

  6. old dog February 9, 2012 at 10:12 pm #

    odd how the term – ” workers communist paradise ” has flipped, the horror has gone now its nearly aspirational, John Lewis even.

    this was posted here earlier, tremendous -

    http://www.youtube.com/watch?v=LEzXln5kbuw

  7. old dog February 9, 2012 at 10:15 pm #

    sorry the link was to La Toma, the take about worker occupation in Argentina, Naomi Klein

  8. Piano Racer February 9, 2012 at 10:41 pm #

    Thank you so much for the thoughtful reply Golem, your insight and temperance have made me a loyal reader who always enjoys your writings. I understand exactly what you are saying, and I agree that we have common cause to fight what is happening. I do disagree when you say that a successful libertarian society has never been seen or for that matter flourished, for in my research I have found countless examples of this. One of my favorites is the story of the Pilgrims at Plymouth Rock. Murray Rothbard has a great summary here:

    http://lewrockwell.com/rothbard/rothbard130.html

    What it comes down to for me is the (perhaps idealistic) idea that human beings are smart enough and capable enough to run their own lives without the government stealing a share of the fruits of their labor for their own purposes or enacting a never-ending list of decrees regulating every aspect of their lives. My observation is that while this hubris is initially undertaken with at least the suggestion that it is done for the benefit of those who are being robbed, or if not them then for the benefit of society as a whole, inevitably the fruits of the theft are always turned to nefarious purposes, as we are seeing play out globally today. A pile of corpses in Iraq and Afghanistan and Korea and Vietnam and on and on and on… has soured me on all governments, permanently. I feel morally obligated to reject not just the killing and the torture, and not just the particular government that perpetrates it, but to in fact reject the entire concept of forced government that could allow and condone such atrocities.

    If you’ve got an idea for how to organize people in a way that makes us all better off, that’s great. All I want is the ability to opt in or out. If your socialist society is demonstrably superior to anarchy or libertarianism, I will be the first in line to sign up. But I will also be the first out the door when the killing inevitably begins.

    • Hawkeye February 9, 2012 at 11:29 pm #

      Piano Racer

      In my head true socialism and true libertarianism are about implementing a policy of symmetric risk and reward:

      Socialism / Social Democracy = Socialised rewards & socialised risks
      Libertarianism = Privatised rewards & privatised risks

      However, the current Anglo-Saxon model is actually a contorted amalgam of laissez-faire and social-democracy. There is enough “right-wing” policies to annoy the left, and plenty of “left-wing” policies in place (e.g. social security) to rally the righteous right.

      The facile debates among the majority in our country completely overlooks this ploy to pit underling against underling. The distraction of the masses helps divert attention from the real gameplan, which is the concentration of wealth and power through a corporate/Gvt/banking oligarchy (a.k.a. Kleptocracy).

      “Yes we have a mixed economy, but one that is instead the worst of both worlds; privatised profits and yet socialised losses.

      It is a form of Crony Capitalism, and a slippery route back to the retrograde structure of Feudalism. It is what James K Galbraith calls a Predator State. The state as monopoly collector of taxes and corrupt distributor of the spoils to the private sector.”

      http://forensicstatistician.wordpress.com/2011/05/23/a-predator-state-the-worst-bits-of-capitalism-communism-and-feudalism/

      • Piano Racer February 10, 2012 at 1:00 am #

        Hawkeye,

        I do not disagree with anything you say, with the exception that I do not feel the word “capitalism” is in any way applicable to our current system as it is traditionally defined. Maybe “crony debtism”? “Predator State” is, I think, an apt term, as is “kleptocracy”. When you say that “Libertarianism = Privatised rewards & privatised risks” I think that is accurate. To me it is also another way to define freedom. When you say “Socialism / Social Democracy = Socialised rewards & socialised risks” I agree that that is how most human beings with yours and Golem’s views would define it. However, I would add two very important words: “Socialism / Social Democracy = SOME Socialised rewards & FORCED socialised risks” This is why I personally find socialism is immoral in all of its forms. Socialist rewards & FREELY CHOSEN socialized risk already exists and has been an enormous benefit to mankind: it is called the company, and it is a great way to organize and combine the abilities of like-minded individuals to empower them to create value that far exceeds the value that could be created by the sum of the individuals, working alone.

        “political power flows from the barrel of a gun”

        • princesschipchops February 10, 2012 at 4:49 pm #

          The thing is though ‘the state’ as we know it was created when ‘capitalism’ as we know it became the dominant economic system. The state isn’t some counterpoint to capitalism, some horrendous leech sucking off the teet of capitalism, the state is absolutely vital to the capitalist system itself. They were born together, and this is what libertarians don’t get.

          You can’t have capitalism without a state.

          You can also have left wing libertarianism and that is so much more attractive and less inherently selfish than the right wing version. My problem with right wing libertarianism is that it isn’t really libertarian. Many, particularly in the US are all about meddling in others affairs when it comes to things like reproductive rights etc. Right wing libertarianism would also demand an extremely strong state, not the stateless nirvana they pretend to want.

          You get rid of all the bits of the state the right wing libertarian doesn’t like – free healthcare, welfare, education etc and you’ll need a huge and costly police force, massive prisons, that will cost more than the welfare state itself and probably a huge standing army too.

          Furthermore you don’t want ‘your taxes’ to pay for others, you feel it is robbery. Yet I’ve never met a right wing libertarian who doesn’t want some form of taxation to pay for a strong legal system and a large police force to defend their property rights, so at that point if I am a poorer person, with no welfare, no hospitals but I am paying taxation to protect YOUR property rights, than aren’t I the one being robbed?

          As for it working it never has. The period you refer to in the US was one in which many actually died of hunger, now if you call that success then we have to agree to disagree.

          I must say though I’d rather have a debate with a right wing libertarian than with a neo-liberal because at least they admit they subscribe to an ‘ism’, to an ideology, as would socialists etc. Neo-liberals like to pretend their is no ideology surrounding what they do and that they way the world works and the economic system works right now just ‘is’ that way. The whole TINA argument.

          • Piano Racer February 10, 2012 at 6:30 pm #

            Boy, defending your views can be a full time job! I hope I am up to the task, let me give it a shot.

            “The thing is though ‘the state’ as we know it was created when ‘capitalism’ as we know it became the dominant economic system. The state isn’t some counterpoint to capitalism, some horrendous leech sucking off the teet of capitalism, the state is absolutely vital to the capitalist system itself. They were born together, and this is what libertarians don’t get.”

            You can’t have capitalism without a state.”

            I emphatically disagree with this statement. Capitalism is absolutely possible without the state. Capitalism is defined as “an economic system based on private ownership of capital”. Why is the state necessary for private ownership? Can you elaborate?

            “You can also have left wing libertarianism and that is so much more attractive and less inherently selfish than the right wing version. My problem with right wing libertarianism is that it isn’t really libertarian. Many, particularly in the US are all about meddling in others affairs when it comes to things like reproductive rights etc. Right wing libertarianism would also demand an extremely strong state, not the stateless nirvana they pretend to want.”

            I reject the terms left and right wing, as they oversimplify ideas that should not be simplified. A left-right dichotomy only serves to divide us, I address issues and ideas on an individual basis. Any libertarian who demanded an extremely strong state is NOT a libertarian, period.

            What other area besides “reproductive rights” do libertarians want to meddle with? On that specific issue, I see it as a no-win scenario, as someone’s rights are inevitably violated. At what point is an unborn child considered a human being, and thus deserves the protection and right to life as any other human? That question is debatable, but I think we can agree that it occurs somewhere between conception and birth. Why should the mother’s “reproductive rights” trump the right to live of another human? I am not saying I have the answers to these questions, but my view is that on this specific issue, a libertarian viewpoint would say that at some point a child has the right to it’s life. A woman also has a right to control her own body, hence the dilemma.

            “You get rid of all the bits of the state the right wing libertarian doesn’t like – free healthcare, welfare, education etc and you’ll need a huge and costly police force, massive prisons, that will cost more than the welfare state itself and probably a huge standing army too.”

            Healthcare is not free, that is a grievous gap in logic. TANSTAAFL. Every bit of health care is payed for by someone, either the taxpayers or the currency holders via devaluation. Nor would I advocate anything more than a very minimal, voluntary police force. Caging people is absolutely immoral. No standing army is necessary. The people should arm themselves, and if necessary, as our founding fathers advised, form militias.

            “Furthermore you don’t want ‘your taxes’ to pay for others, you feel it is robbery. Yet I’ve never met a right wing libertarian who doesn’t want some form of taxation to pay for a strong legal system and a large police force to defend their property rights, so at that point if I am a poorer person, with no welfare, no hospitals but I am paying taxation to protect YOUR property rights, than aren’t I the one being robbed?”

            Then I am sorry to inform you that you have never met an actual libertarian. The only person that I need to protect my property rights is myself, I would never presume to rob my fellow man for any reason save abject desperation, and hopefully not even then.

            “As for it working it never has. The period you refer to in the US was one in which many actually died of hunger, now if you call that success then we have to agree to disagree.”

            Yes, many died of hunger, but not because of liberty. Can you acknowledge that evidence suggested that far MORE people died of hunger, per my link, under the socialist system as opposed to the system of liberty, in that scenario? I think you confuse the abundance that has been achieved by the development of our wonderful technologies, including our discovery and exploitation of oil, with the benefits conferred by government. Once again, giving the government credit for the achievements of the people.

            “I must say though I’d rather have a debate with a right wing libertarian than with a neo-liberal because at least they admit they subscribe to an ‘ism’, to an ideology, as would socialists etc. Neo-liberals like to pretend their is no ideology surrounding what they do and that they way the world works and the economic system works right now just ‘is’ that way. The whole TINA argument.”

            Again, I would never call myself a right-wing libertarian. My only ideology is that of non-violence with the sole exception of defending person or property. That is what has attracted me to the ideas of Austrian economics, Libertarianism, and Anarchy, but to say that I am ideologically committed to any of these is, I think, not accurate.

          • Hawkeye February 10, 2012 at 6:42 pm #

            Piano racer

            The state is essential for contract enforcement. If one takes the libertarian / Austrian perspective to its logical conclusion one gets into a bit of a bind:

            - All humans must be completely free to enter themselves into binding contractual obligations

            Which, really doesn’t seem that free to me.

            David Graeber’s “Debt: the first 5000 years” is a pretty solid text that traces the origins of state & capitalism, whilst also tackling some fundamental concepts of freedom, state & society.

          • Piano Racer February 10, 2012 at 6:53 pm #

            Thanks Hawkeye, I’ve seen that work mentioned several times before and I definitely want to read it.

            I still don’t see why a state is required to enforce contracts. Why couldn’t two people who enter into a contract, also agree to abide by some specific enforcement mechanism, perhaps some disinterested third party capable of arbitrating disputes?

            Or why could we not have a society that demanded contracts be followed, and the penalty would be to shun and not do business with those who violated them? The internet especially seems like it would be a good tool for this, think eBay sellers ratings or credit scores. If a counterparty is known to consistently not honor their obligations, I would simply avoid him or her as a counterparty, choosing instead to transact with entities that are more demonstrably trustworthy.

            It is prospect of losing the trust of the marketplace and thus losing their access that will keep market participants honest.

          • Hawkeye February 10, 2012 at 7:03 pm #

            Piano Racer

            I see what you are suggesting. It seems like a consensual transaction that is entered into but with both parties having requisite information and open minded enough to take it on the chin if they are cheated (or as you say, to punish through poor feedback / rating, rather than suing the person which just creates work for lawyers).

            Think of it a bit like equity investors. You know that your investment is at risk unless you supervise / scrutinise the operation properly.

            Equity based relations have better prospects for being consensual, symmetric and just.

            Debt is the poison that has yielded unhealthy concentrations of wealth and power.

          • mikems February 11, 2012 at 1:31 pm #

            Pianoracer,

            The Princess isn’t saying that ‘you have to have a state’ she is saying that capitalism and humanity have evolved like this.

            Ideologists tend to think that solving society’s problems is a matter of arranging systems and organisation in the right way, according to some unstated objective standard of what is right. But we simply haven’t got that option, not least because there is no such independent objective standard. There are only class interest.

            To paraphrase Marx ‘we make the future, but not in circumstances of our own choosing’. Meaning that ‘we are where we are’ is an ineluctable, unignorable fact of life. We cannot simply wish away the existence and evolution of the medieval, kingly state, via revoution and early capitalism to what we have today, nor is it possible to describe in any way how history would have been different had it never existed.

            Your position seems to demand that we unwind our evolution, that we simply abolish all that has been created or influenced by the state as it has existed, as if this is completely independent of history, the present or the future needs or desires of humanity.

            But all of this is entirey inextricable, cannot be unwoven, cannot be described separately with any sense or meaning.

            It is a very strange to believe that things ‘must’ be like this or that without taking into consideration why they are, in fact, like they are.

          • princesschipchops February 13, 2012 at 3:37 pm #

            Okay PianoRacer so healthcare isn’t free. But without any collective way of pooling resources, with only pure individualism then many would simply die from not being able to afford healthcare. Would you be content with that?

            Archeology and anthropology show us that we are deeply social animals and that actually survival of the fittest is often survival of the most co-operative. In very early human societies the strong definitely did help the weak – within their own social groups at least. heck scientific research is even showing that animals are way more cooperative than we ever even dreamt of previously.

            The ideas you support just don’t seem workable to me in the real world. People would starve (and yes to answer your question they starved under socialism too but we are talking about libertarianism now, specifically Austrian economics). People would die from lack of healthcare, the have’s would be armed to the teeth and constantly under seige from the have-nots. That would be the grim reality. Not a world I’d want to live in.

            the other issue is who says you ‘own’ your property? I mean even Mises admits that ownership of property has often occured through theft in the dim and distant past. That at some point someone TOOK that land, property – often by force. So there are no absolute property rights in one sense. In fact Mises even admits that socialism is probably the ‘highest pinnacle of mans idealism’ (something to that effect will have to find the exact quote) and that the idea is the only fair one but he doesn’t think it can ever work due to the inherently selfish nature of people and that therefore it needs violence to be enforced.

            He does however admit that the system he proposes is deeply unfair – he openly admits this – as wealth innequalities that have come about through centuries of property theft, wars, pillaging etc will be cemented. His answer? He just shrugs his shoulders. He basically says it is what it is, we are where we are so lets just enshrine property rights as they are.

            And you personally may not want a strong police force and a ‘strong state’ but many Austrian economists call for exactly that. I’ve read Mises and Hayek and scratch the surface and they’re not Libertarian at all! They are neo-fuedalists who want nothing more than to preserve their wealth and the wealth of others without having to bother at all about the plebs. Mises would rather have a king than a left wing democratically elected government.

            I give you Hayek himself as the final word on just how Libertarian he really is.: ”Personally I prefer a liberal dictator to democratic government lacking liberalism.” Ah bless the libertarians, willing to impose their ‘freedom’ on the rest of us even if we don’t want it!

          • Piano Racer February 13, 2012 at 8:29 pm #

            Mikems,

            I agree that we are where we are, and even conceptualizing a free society is currently outside the capability of the vast majority of the human race, including most of the otherwise intelligent and passionate commenters on Golem’s blog. I am not advocating a particular path to achieve liberty, save that we must have the backing of the people for it to even be a possibility. I do not think that it is impossible, and I also disagree with many other commenters that history is not replete with examples of liberty and freedom with minimal or nonexistant centralized control and coercion, and the benefits to mankind that this state of affairs has conferred, especially in the United States which was essentially an experiment in liberty.

            Princess,

            “Okay PianoRacer so healthcare isn’t free. But without any collective way of pooling resources, with only pure individualism then many would simply die from not being able to afford healthcare. Would you be content with that?”

            There are many, many ways of collectively pooling resources without resorting to violence! These include the corporation, the community, the family! And yes, I would be content with the VOLUNTARY pooling of resources to help those in need, in fact I would be the first to sign up if my resources were not already being stolen from me, and I would go so far to suggest that the health of the average human being would be markedly improved under such a system, a suggestion that I am sure you and many others would dispute but I hope you would at least consider!

            “Archeology and anthropology show us that we are deeply social animals and that actually survival of the fittest is often survival of the most co-operative. In very early human societies the strong definitely did help the weak – within their own social groups at least. heck scientific research is even showing that animals are way more cooperative than we ever even dreamt of previously.”

            I emphatically agree, together we can achieve far more than any of us can achieve alone! Do you understand that I am not advocating against the concept of humans working together voluntarily, only that humans should not be forced under threat of caging and violence to be a member of any particular group?

            “The ideas you support just don’t seem workable to me in the real world. People would starve (and yes to answer your question they starved under socialism too but we are talking about libertarianism now, specifically Austrian economics). People would die from lack of healthcare, the have’s would be armed to the teeth and constantly under seige from the have-nots. That would be the grim reality. Not a world I’d want to live in.”

            People are starving now. People are dying now from lack of health care, mostly because what passes for health care in the US is really “sick care” (there isn’t much money in a healthy person!) I know it is scary to put your faith in billions of individual humans doing the right thing and helping their fellow man, but I believe that with the abundance of the earth and the wonderful technologies we have developed, a system of freedom and liberty can not only provide humans with the wonderfully empowering ability to self-actualize their own hopes and dreams, but that the wealth and abundance that would result would leave us all FAR FAR much healthier and wealthier than we currently are! We work harder and longer hours, both parents now must work to support a family, and yet we have less, though our technology has made us so much more productive. You might wonder why this is. My answer is that the fruits of the labor of the productive humans are being stolen to confer benefits upon those who produce nothing (FIRE industry is now 40% of the US economy and 11% of the population works for the government!)

            “the other issue is who says you ‘own’ your property? I mean even Mises admits that ownership of property has often occured through theft in the dim and distant past. That at some point someone TOOK that land, property – often by force. So there are no absolute property rights in one sense. In fact Mises even admits that socialism is probably the ‘highest pinnacle of mans idealism’ (something to that effect will have to find the exact quote) and that the idea is the only fair one but he doesn’t think it can ever work due to the inherently selfish nature of people and that therefore it needs violence to be enforced.”

            He does however admit that the system he proposes is deeply unfair – he openly admits this – as wealth innequalities that have come about through centuries of property theft, wars, pillaging etc will be cemented. His answer? He just shrugs his shoulders. He basically says it is what it is, we are where we are so lets just enshrine property rights as they are.”

            Freedom, Equality, Security: Pick One. I pick freedom. I agree that most property (especially land but also, for example, gold) at this point in history has been grossly misappropriated. However, if humanity truly wanted to “claw back” this injustice, I don’t think it would be difficult to make some big strides. Start with the property controlled by the federal, state and local governments, as well as the megabanks and the category of megacorporations that are clearly parasites (i.e. JPM, Goldman Sachs, Enron, UHG and not necessarily Joe’s Family Hardware Store). I think we can agree that would be a start?

            “And you personally may not want a strong police force and a ‘strong state’ but many Austrian economists call for exactly that. I’ve read Mises and Hayek and scratch the surface and they’re not Libertarian at all! They are neo-fuedalists who want nothing more than to preserve their wealth and the wealth of others without having to bother at all about the plebs. Mises would rather have a king than a left wing democratically elected government.”

            I give you Hayek himself as the final word on just how Libertarian he really is.: ”Personally I prefer a liberal dictator to democratic government lacking liberalism.” Ah bless the libertarians, willing to impose their ‘freedom’ on the rest of us even if we don’t want it!”

            You’ve taken Hyek a bit out of context here, allow me to provide the full (translated) quote:

            Asked about liberal, non-democratic rule by a Chilean interviewer, Hayek is translated from German to Spanish to English as having said, “As long term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. [...] Personally I prefer a liberal dictator to democratic government lacking liberalism. My personal impression – and this is valid for South America – is that in Chile, for example, we will witness a transition from a dictatorial government to a liberal government.”

            That being said, I am not Friedrich Hayek, nor am I advocating his individual ideology. If I HAD to choose between various forms of the state, I could probably choose one over the other as well. But any system which claims the right to cage you and kill you for not following its rules, which typically include giving that system a portion of everything you produce so that it can murder other humans, is not a moral system nor a system that I want to be a part of, period, regardless of whether I get to have a tiny voice in this issue or that, and regardless of what benefits this system are believed (inaccurately, in my opinion) to confer upon humanity or any particular individual. I did not sign up for this system, I do not want it, I do not give my consent, and I do not recognize its authority to tell me how to live my life.

      • Piano Racer February 10, 2012 at 1:21 am #

        I wanted to add that when I argue that companies provide socialized rewards, I am referring to the iPods and iPads, the cell phones, the cotton gins and the internet and all of the other technologies that have allowed many of us to live in comfort and luxury and knowledge that could scarcely be fathomed by our fore bearers even a few short generations ago. People achieved this, despite governments stealing from them and starting wars and murdering millions and millions and millions of them needlessly.

        The very worst part for me is the monstrous lie that is believed by most all that the government deserves any of the credit for the progress of the human race. My personal theory is that a human being that has been trained to believe that all credit for personal accomplishment lies not with the individual but instead with some invisible omniscient father-figure (“God”), it is easy to believe the same thing about their government. No offense is intended by that, but to me it is an explanation that makes some sense.

        Human Beings are very intelligent primates, and the things that they have managed to accomplish are almost unfathomable. Though sometimes when I see how happy my dog is able to be for the vast majority of his waking hours I have moments of weakness where I question it, I believe that our brains are truly a wonderful blessing. I think we ought to have a little more faith in them.

        • Jamie_Griff February 10, 2012 at 2:28 pm #

          Apple sell iPods and iPads to American workers for hundreds of dollars. Those same iPads and iPods are manufactured in horrendous conditions (at least by the standards of American workers) for tens of dollars in Chinese factories. Those factories employ thousands of Chinese workers who are paid a pittance – ensuring that demand for iPods and iPads in China grows only very slowly.

          Meanwhile American workers see their incomes fall (or at least stagnate) as more and more jobs like these move overseas. This of course means that in order to purchase the iPads and iPods that are relentlessly marketed to them the American worker has to borrow money.

          The end result? Rising unemployment and increased burdens of personal debt in the US which presumably eventually lead to a complete collapse in the demand for consumer goods like iPads and iPods. At which point the American worker is assured that they can get their jobs back and work their way out of debt, that the corporations will return, as long as they drop all those pesky demands for things like decent working conditions and a minimum wage.

          All hail the market! You see as long as we give it 50 or so years to find the right price for an iPod/iPad and the right wage level for a worker in an Apple factory and are prepared to endure all the interim misery, exploitation and dehumanisation, eventually things will work themselves out. Now that’s what I call efficiency.

          • Piano Racer February 10, 2012 at 6:46 pm #

            I agree that the conditions endured by the Chinese workers at FoxConn factories seems pretty terrible. What I’ve always wondered is, what compels those Chinese citizens to voluntarily endure these conditions for such meager pay? A subsistence living seems like it would be a better option. My guess, and this is only a guess, is that the Chinese government is responsible for the conditions that motivate a FoxConn worker to endure what he or she endures. Perhaps you could share your opinion?

            My reason for referencing those devices was more to point out the innovations we’ve achieved that allow us to instantly access the sum of human knowledge (the internet) and communicate with each other anywhere we go. Heck, it’s the same technologies that is allowing a bunch of people sitting in front of computers all over the world to have this very conversation, which in my opinion is a remarkable achievement!

            I agree with you that the current employment and debt situation in much of the developed world is dire. I simply assign much more of the blame to fascist governments and their debt-based paper currency than any other single factor.

          • Hawkeye February 10, 2012 at 6:54 pm #

            Piano Racer

            In the 1970s and 1980s China woke up to the fact that it could out compete the West, thanks to it’s abundant supply of workers.

            The reforms were profound:

            http://en.wikipedia.org/wiki/Deng_Xiaoping#Economic_reforms

            I suspect that what compels the employees to endue such harsh conditions is by subjecting wage labour to market forces, e.g. supply and demand.

            And boy does China have a lot of Supply.

          • Piano Racer February 10, 2012 at 7:13 pm #

            Hawkeye,

            From your link:

            The strategy for achieving these aims of becoming a modern, industrial nation was the socialist market economy. Deng argued that China was in the primary stage of socialism and that the duty of the party was to perfect so-called “socialism with Chinese characteristics”

            This does not sound like a free market to me, but I am by no means knowledgeable on the forces that influence the Chinese economy and the economic decisions of it’s people.

          • steviefinn February 11, 2012 at 12:03 am #

            A company I worked for that outsourced in China, often sent out people to visit the plant. The story was always the same, a queue of peasants outside the factory desperately wanting to work there. The sad fact was, that the sweatshop was preferable to a paddy field or subsistence farming. This particular factory was engaged in manufacturing polyester resin products. This would involve fairly unskilled labour & would have been hazardous to health & safety.

            Perhaps now in more skilled occupations, like those involved in I-pad assemblage, the workers feel they have something to offer so can make demands, as was evidenced by the threatened suicide of Chinese workers at an Apple plant.

            I would say that the Chinese will be able to rely on a large, very poor rural population for some time to come. It reminds me of the Industrial revolution in England, in which a huge section of the rural population left the land to work in industrial centres. At the time their was starvation in the countryside & very bad working conditions. Like the Chinese, Indians & others, the hellholes of the big cities were still preferable to the alternative. It’s all relative, a step up from a very low rung on the ladder, as opposed to Western workers who are now, being forced to step down from a much higher one.

        • Zoltan February 10, 2012 at 4:38 pm #

          I didn’t realise that “libertarian” was a synonym for Anarchist.

          I have always liked the theory of anarchism, but suspected the reality would be even more unpleasant than communism, fascism or even crony capitalism.

          Your statement “the monstrous lie that is believed by most all that the government deserves any of the credit for the progress of the human race” reminded me of that classic scene from Monty Python’s Life of Brian when the various Judean zealot groups are talking about what the Romans ever did for them.

          Various people chip in with suggestions and the original questioner sums up by saying:

          “All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us?”.

          • Piano Racer February 10, 2012 at 6:39 pm #

            You are right that libertarianism and anarchism are not the same things, and I admit to endorsing elements of both, which is probably confusing. I cannot speak for anyone else, only myself, and consequently I simply try to take on ideas individually and explore their merits and morality on that basis. I don’t believe any “ism” has all the answers.

            I like that scene as well, but my impression is that it was about the Roman society with all of it’s advanced technologies, and not necessarily the Roman government. Heck, if you showed Thomas Jefferson the splendor of our technologies today, and the abundance they provide, he would surely be gobsmacked. If you showed him our government, however, I think he would be horrified. Again, the accomplishments and technologies achieved by freely-associated Human Beings is a splendor to behold. Just because governments take those technologies and beat people over the head with them, does not mean that they deserve credit for them.

        • mikems February 11, 2012 at 1:34 pm #

          Wars are to defend or extend the wealth of the ruling class, as is the organisation of industry.

          Once again you are trying to separate the inseparable.

          Governments do not ‘steal from people’. That is not objective language. Govts tax. By all means argue against taxes, but please use the correct terminology, rather than partisan rhetoric.

          • Piano Racer February 13, 2012 at 8:43 pm #

            “Wars are to defend or extend the wealth of the ruling class, as is the organisation of industry.”

            I emphatically agree with the first statement, and emphatically DISAGREE with the second. The organization of industry exists to meet the wants and needs of society, unfortunately including bloodthirsty governments. I would point you to the wonderful essay, “I, Pencil” as an example of this:

            http://www.thefreemanonline.org/featured/i-pencil/

            “Once again you are trying to separate the inseparable.

            Governments do not ‘steal from people’. That is not objective language. Govts tax. By all means argue against taxes, but please use the correct terminology, rather than partisan rhetoric.”

            After consulting the definition, I have to concede the point, but I have another. The definition of theft:

            n 1: the act of taking something from someone unlawfully;

            So you are correct that, because the government has designated the taking lawful, it is not technically theft. Since I do not view the law in this case as moral, I do not see why the distinction matters, and still consider it theft, but you are correct that it is not technically the definition. But then you must concede that the actions of Jon Corzine at MF Global, Jamie Dimon, Lloyd Blankfien, Robosigning, MERS… since none of these seemed to have violated the law, they were not thefts either… perhaps “tax” applies to them as well?

        • hedgey February 11, 2012 at 2:05 pm #

          Piano Racer:

          you’ve done a great job of defending the libertarian perspective, and under taxing circumstances too, what with the way Golem has anchored his argument on the premise that kleptocratic neo-cons can hiijack & coop the word libertarian and fundamentally distort it’s meaning to advance their fascistcommunist aims. (By the way – the last time I commented here David, it seems that the impression you got was that I was critical of your presentatition; so this time out, I would like to make clear that I love the blog and the tone you have engendered within it…top notch! I may quibble with what I think to be a misrepresentation, but not with your intent)

          My only caveat to lauding your reasoned responses and coolness under fire, PR, would be to suggest that you undermine yourself by using a definition of Capitalism as “an economic system based on private ownership of capital” and then appear to further endorse this mistaken view by asking Why is the state necessary for private ownership? Though the State is not necessary for private enterprise, in truth, it is necessary for capitalism, Capitalism has but glancing connection to private ownership(except for those elite enough to buy protection from the State while defrauding others of property), and almost none to private enterprise,

          Capitalism relies under the state to enforce it’s distortions of the market and to maintain the primacy of force over contract.-there is nothing defensible about a system[capitalism] which always works towards monopoly and rewards the monied above the creative. It is the concentration of unproductive resources in the hands of the serially idle: the opposite of what an unbridled market economy would look like.

          Therefore the false dilemma you have put yourself in is unnecessary and only serves your detractors. Capitalism must not be conflated with free enterprise anymore than libertarianism should be confused with left or right wing ideologies of power.

          I can’t write more about this at the moment, but I hope to see you respond to this comment and refine your excellent work even further..

          • Zoltan February 12, 2012 at 1:54 pm #

            Where do you get your definition of Capitalism from?

            There are many definitions and many types. Surely the ownership of the means of production (aka capital) by a defined element is a key component, as is the existence of a competitive market (of varying degrees of “freeness”) and waged labour. Most people would suggest that in a standard capitalist system, the ownership of the means of production would largely be in non-state hands.

            Whether you describe that as private depends on how you view corporations and other such commercial institutions. I think most would call it private, as that is usually meant as “not by the state”.

        • princesschipchops February 15, 2012 at 12:35 am #

          Thanks for your very thoughtful reply to me Piano Racer. I have to say although we may be ideologically apart its wonderful to be able to debate this in a civilised space – and so my thanks to Golem for this blog where there really is an exchange of ideas without the nastiness you often see elsewhere.

          You say: ”I know it is scary to put your faith in billions of individual humans doing the right thing and helping their fellow man, but I believe that with the abundance of the earth and the wonderful technologies we have developed, a system of freedom and liberty can not only provide humans with the wonderfully empowering ability to self-actualize their own hopes and dreams, but that the wealth and abundance that would result would leave us all FAR FAR much healthier and wealthier than we currently are!”

          I find it hard to put my faith in millions of individuals doing the right thing because so many of us are weak and also easily scared and also we have a need to control our fates – so hoard wealth beyond our means. I know people like Bill Gates give money away but they still have way, way, way more than any human could ever need. So I can’t put my faith in individual humans to do what is right *if* they are operating within an essentially individualistic, selfish and greed driven economic system.

          I mean research shows that people are more likely to give money to charities for dogs than starving children.

          Also I can see a point to what you say re the state here: ”which typically include giving that system a portion of everything you produce so that it can murder other humans”. Yes of course there is massive state violence but without the state there would be massive violence too – worse I would argue – while we have capitalism. And you say you don’t want to give a portion of what you produce – I presume you mean in taxes? Why is it okay then for the capitalist to take a portion of what I produce? This is why I always come back to getting rid of capitalism as the way forward because otherwise we have a system whereby those who already have can take more and more – simply due to owning the means of production. To me receiving less than your labour is really worth is the greatest injustice and that won’t be tackled under some sort of libertarian system that still operates under a capitalist system.

          • Piano Racer February 15, 2012 at 1:24 am #

            “Also I can see a point to what you say re the state here: ”which typically include giving that system a portion of everything you produce so that it can murder other humans”. Yes of course there is massive state violence but without the state there would be massive violence too – worse I would argue – while we have capitalism.”

            The way I have come to understand this is by thinking in this way: what would it take me, and most of the people I know, to actually perpetrate this violence that you are so afraid of? I know that the answer for myself, if I am honest, is simple: I would never choose to harm another human, unless I was desperate, and desperate to the point that I feared for the lives of myself, a loved one, or an innocent. I would commit violence against another person if I felt that in doing so, I could prevent greater violence against an innocent person or child.

            A study of history has convinced me that violence is typically a brother of desperation. I just do not see what would motivate people to commit acts of violence if they were not desperate, if we had the abundance that I truly believe liberty and freedom combined with our technology and knowledge of how to manipulate our surroundings would provide humanity.

            “And you say you don’t want to give a portion of what you produce – I presume you mean in taxes? Why is it okay then for the capitalist to take a portion of what I produce?”

            I am happy to give a portion of what I produce to support causes and individuals whom I support. What I object to is having it taken from me to support causes and individuals whom I find morally repugnant. If you think that I am arguing that anyone has any right to take a portion of what you produce, then I apologize for I have obviously misstated my case, for I am arguing percisely the opposite: that nobody has the moral right to take any portion of what you produce.

            “This is why I always come back to getting rid of capitalism as the way forward because otherwise we have a system whereby those who already have can take more and more – simply due to owning the means of production. To me receiving less than your labour is really worth is the greatest injustice and that won’t be tackled under some sort of libertarian system that still operates under a capitalist system.”

            I think you are operating under some false assumptions. Capitalism is a very vague concept, as another commenter pointed out. I think it muddies the waters here, perhaps you can restate this?

    • mikems February 11, 2012 at 12:41 pm #

      Where does democracy fit in to your world?

      If people demand that something is regulated, who will do it if not the govt?

      Please don’t give me the eyewash about competitive markets striding to the rescue. Capitalists hate competition and seek to destroy it. The internal driving impetus of capital accumulation is that it concentrates and centralises. It doesn’t disperse and fragment.

      So without regulation or govt we would soon end up with a group of cartels dominating every sector, just like now. But at least now we have a govt which has, at least in theory, the power to dismantle these cartels. Without a govt they would be immune to democracy, a private dictatorship.

      • Piano Racer February 13, 2012 at 10:49 pm #

        “If people demand that something is regulated, who will do it if not the govt?”

        I do best with real world examples rather than abstractions. Can you give me an example of something people might demand be regulated? If so I might be able to provide some insight.

        • Troy Prideaux February 14, 2012 at 5:41 am #

          “I do best with real world examples rather than abstractions. Can you give me an example of something people might demand be regulated? If so I might be able to provide some insight.”

          Nuclear reactors – do you want one in your back block built on minimal design standards? Are you happy with the transporting of nuclear waste and fuel rods down your street using minimal design standards?
          Are you happy receiving medication made in China with no certification, testing process, sanitary reliability or purity certainty?
          Are you happy having your local bay or lake filled with toxic waste?
          Are you comfortable having your beaches covered with oil?
          Are you comfortable having your neighbor store their 500lbs of TNT next to your fence or keeping you awake all night with band practice?
          Are you happy with the regulations imposed on aircraft construction and service when you’re sitting in an aircraft?
          Are you happy having your fresh food covered with toxic pesticides?
          Are you happy dining in a restaurant with an unhygienic kitchen?

          There are many ways of reducing monetary costs of goods and services but at a humanitarian or environmental cost.

          In a totally free market society, there are more incentives to cut corners, more pressure from shareholders to achieve growth, inherently more job turnover and also higher *management* turnover. High management turnover in particular can promote a reduced accountability, especially long term accountability. It promotes a selfish culture because it’s built on selfishness and low moral empathy as has been clearly demonstrated with the banking and petrochemical industries. Ditto for pharmaceutical.
          Where I’m from, regulations are often forced on government by their constituents or media pressure and often such new regulations are only implemented very reluctantly. It’s means more work for the regulators! A classic example here was the regulation of Ammonium Nitrate. Both the government and regulators didn’t want it regulated. Both parties knew it was going to result in a significant burden to business and produce, but the media campaigned relentlessly after the Bali Bombing until it was regulated.
          I don’t think many would argue, we are over regulated in many areas, especially you in the US with those silly ITAR laws, but I totally agree with others here that a healthy balance is crucial for a high standard of living.

          • Piano Racer March 2, 2012 at 5:48 pm #

            Here are a few links that help elucidate the Austrian / Libertarian position on most of the scenarios you describe, if you’re interested (and I hope you are!)

            http://lewrockwell.com/vance/vance279.html

            http://mises.org/daily/2120

          • Troy Prideaux March 5, 2012 at 4:41 am #

            I’m gonna need more convincing than some crackpot who still naively disbelieves the laws of physics, providing repetitiously monotonous non-evidenced based verbal hand-waving cries of “it’s a myth” to support what are obviously arguments devoid of foundation or supporting references. Please, let’s stick to arguments based on empirical (or objective) evidence not fideism.

  9. MEH February 10, 2012 at 1:14 am #

    I get tired of it. What seems to be missing is that there is nothing that you can consider an investment or an asset that desn’t represent someones labor and time. No matter if you socialize value or privitize it you don’t have an automatic call on anyone without their conscent. This current system is corrupt just opt out, don’t produce surplus. Take care of yourselves and those you care for.
    A new system will evolve and just possibly you can have some input along with any other that cares to contribute.

  10. bobrocket February 10, 2012 at 2:36 am #

    ‘…the onset of the financial crisis three or four years ago was largely due in the US and the UK to excessive demand for mortgages from people who couldn’t afford them.’

    It is a cracking line that.

    There is a slight technical problem that I don’t think the Finance industry has thought about.

    If you blame your customers for your problems then they might just stop buying your products.

    What kind of idiots thought that strategy up ?

    If you know who really caused this mess then you are more likely to avoid getting involved with the industry ( and as a result, not buy their products ).

    If you are gullible enough to swallow this line and were lucky enough not to have fallen victim to the industry already then you will take their sagacious advice and avoid getting involved with the industry ( and as a result, not buy their products )

    If you were unfortunate enough to be one of the people they refer to, you now know for certain that they are a lying bunch of shysters and conmen and as soon as you can extricate yourself from their clutches you will in future avoid getting involved with the industry ( and as a result, not buy their products )

    How to lose friends and alienate people in one line, I couldn’t have done better myself.

  11. bill40 February 10, 2012 at 12:32 pm #

    PianoRacer,

    I think we are all grown up enough here to know there is no perfect system, so we all seek something that will benefit the majority as we have no personal axe to gring. My preferred economics is MMT because it addresses the reality that markets are irrational and can fail.

    There is a thriving chemical industry which makes use of some natural resources and combines them to serve a thriving market and demand for such goods. This “industry is unregulaed and the players may compete as they wish. I am of course referring to the drug trade in Mexico.

    Allsystems would be perect if run by angels but they’re not. The libertarians seem to be in denial of basic human social evolution. We found out long ago that we are a social animal that thrives best through co-operation. Imperfect beings that we are we strive to come up with solutions that fit this basic premise.

    We need stunning individuals, like Einstein, to help us progress but the majority of people have shared concerns and a basic heirarchy of needs. Civilisation means creating a bottom through which we as a society will not let people fall.

    I am currently regarded as a success, my brief brush with unemployment excepted. This is not because I’m brilliant I don’t suffer from self attribution fallacy. It’s because I was born in the UK, have friends and family to help me, and I’m not prone to addiction or violence.

    Only a nation state can foster the best of the human spirit for the common purpose.

  12. Synopticist February 10, 2012 at 1:05 pm #

    “The very worst part for me is the monstrous lie that is believed by most all that the government deserves any of the credit for the progress of the human race. ”

    And there’s the rub. Personally, the good things I believe the government shares some of the credit for are too many to list. So for me, any “alliance” with libertarians is as artificial as it would be with “blood and soil” nationalists, doctrinaire communists or religious fundamentalists.

    I take this point from Dave Holden…

    ” I’d suggest however, that a more tractable approach would be to focus on getting reforms to the parts of the system where that cronyism has been concentrated. Which in my mind are monied politics and the broken private sector monetary system.”

    But I see some big drawbacks with it. Libertarians don’t really have a problem with money in politics. Rather the opposite in fact.
    And while the rest of us and libertarians might agree that the private sector monetary policy is broken, they blame the government for that, not the system itself. Did you ever meet a libertarian who wasn’t a free market fundamentalist ?

    A libertarian solution to the present economic crisis would be far more objectionable than the crisis itself.

    • Gordon Donald February 10, 2012 at 4:19 pm #

      It’s wrong to conflate libertarianism with ‘right-wing’ or ‘free-market fundamentalist’. Many on the left ignore, or are ignorant of, the long tradition of left-libertarian theory and practice by anarchists, anarcho-syndicalists and early Marxists. This combines the libertarian concern over the state as an oppressive institution with a rejection of capitalist organisation because of the inequality and exploitation intrinsic to it. The original vision of Communism was of a society based on the ‘free association of producers’ in which the state withered away to the administration of things, rather than the enforcer of unequal social relations.

      William Morris (the first English Marxist according to E.P.Thompson) rejected the notion of ‘State Socialism’ as the desired end point for change, but was unable to prevent the British socialist movement splitting at the end of the nineteenth century in to anarchist and Fabian/managerialist groups.

      When the choices for the left are often presented as simply between Leninist authoritarianism or ineffective Social Democracy it is worth remembering this tradition.

      http://www.marxists.org/archive/morris/works/1893/commune.htm

      • mikems February 11, 2012 at 12:49 pm #

        Left anarchists would have got rid of capitalism completely.

        Morris did oppose ‘state socialism’ but that doesn’t make him a supporter of market capitalism.

        These ‘early Marxists’ you speak of. Who were they? If they supported capitalism, they couldn’t have been Marxists, could they?

        You can’t call these people in support of current global capitalism to be fair, can you?

        • Gordon Donald February 11, 2012 at 8:13 pm #

          Mikems,
          Sorry if my post is confusing. I am not claiming that this left-libertarian tradition is pro-capitalist, quite the opposite. By the early Marxists I mean Marx and Engels themselves and many, like Morris, influenced by their work. If you read Morris’s speech about communism you will see that his worry about the growing support for Fabian-style reformism was that although the delivery of, say, better housing, education and working conditions for workers would be welcome, if it was done by the state it would dis-empower the working class and undermine the overthrow of the capitalist system.
          To put it crudely, for those concerned with replacing the current global economic system (capitalist neoliberalism in all its variations, including China) it requires not the replacement of one governing elite with another but the genuine empowerment of the 99%.
          The point I was trying to make is that ‘libertarian’ is not a right-left divide but rather an approach to authority and hierarchy. In this sense the Occupy movement is both libertarian (no leaders, direct democracy, consensus decisions via general meetings) and left, whereas the old Soviet system was authoritarian and left (but definitely not communist from Morris’s viewpoint). Since monopoly capitalism requires strong, centralised coercive states to maintain its accumulation and rescue it from crises (eg regulation of property rights and bailouts) there is some scope for dialogue between libertarians of left and right.

          • Gordon Donald February 11, 2012 at 9:16 pm #

            BTW this site

            http://www.politicalcompass.org/index

            uses the concept of both left-right and authoritarian-libertarian divides to map out where political parties stand in relation to each other (have a look at the 2010 UK election map to see just how close all the main parties are, and how authoritarian). There is also a test you can do to place yourself on the grid.

            A recent addition to the site is some songs allocated to different political spaces. They have included one of my favourites: Pete Seeger’s ‘What Did You Learn In School Today?’ (“Our leaders are the finest men, and we elect them again and again…”)

          • mikems February 12, 2012 at 10:16 am #

            It is confusing to use the term libertarian to describe anarchists.

            If you are speaking of left-libertarians, such as FAI and CNT in Spain, or the Russians, then try not to confuse them with modern day rightists who have adopted the term, but who stand against everything the old anarchists believed in.

            As for Marx and Engels opposing state socialism, that is definitely true, but, once again, you cannot enrol them into the libertarian camp. Marx argued with contemporaries who wanted to build a ‘worker’s state’ on the structures of the capitalist state. M&E argued for revolutionary overthrow of capitalism.

            He argued, and Lenin developed this in State and Revolution, that the state is nothing more than ‘bodies of armed men’ who form themselves into the ‘executive committee of the bourgeoisie’ to enforce class rule.

            Marx refused to prescribe the future state, saying that such matters were the task of the working class that overthrew the capitalist state.

          • Gordon Donald February 12, 2012 at 11:20 am #

            You are absolutely right that we should not confuse anarchists with modern, right-wing, free-market libertarians. The anarchist tradition (especially that of anarcho-syndicalism) is explicitly on the left and shares much of Marxism’s analysis of capitalism. But it is surely, by any reasonable definition, libertarian?
            I don’t want to labour the point but I think we should resist the tendency to conflate of the concepts of liberty/libertarian/freedom with the right-wing.
            Marx and Engels (and Morris) certainly did not believe that workers, or workers’ parties could simply capture the state and use it for their benefit. But this seems, over time, to have become the approach of most of the left, whether social democratic or ‘revolutionary’. Since we probably agree over the failings of the various examples of ‘actually existing socialism’ (not to mention the abomination of New Labour) isn’t it worthwhile rescuing the idea of communism from its authoritarian interpreters?
            BTW have you tried the Political Compass test? How libertarian are you? :)

          • princesschipchops February 13, 2012 at 3:52 pm #

            I did the political compass test years ago gordon. I came out as very far left and very libertarian. Just did it again as it was a few years ago I did it and wouldn’t have remembered the questions even if they were the same. Came out the same again, very left, very libertarian.

            So I suppose if I had to label myself I’d be some sort of anarcho-communist.

  13. graveltongue February 10, 2012 at 2:00 pm #

    Please excuse me for my cheek but I’d like to take this opportunity to personally commend Barclays Bank on their fantastic 2011 profit figures. It must be very tricky, in this current climate, to post such encouraging numbers when you can only borrow money at 0% and lend it out at 6%! How do they do it? Thank you to all those Barclays employees putting in the extra hours to make all our lives that much better, you should be very proud.

    • John Souter February 10, 2012 at 3:52 pm #

      graveltongue – I suspect you are not being cheeky enough.

      Borrow at .5% then lend at 6%? That must be to blue chips – for the rest it’s nearer 11 -13% and for Joe Soap with his overdraft its 18%?

      As for the rest of the comments – The present system has had its flaws exposed one after the other too the extent of the cumulative effect being seen as a major fault line built on a foundation of shifting sand.

      Golem is quite right in his argument. The architects and engineers of this sytem do want to shift the blame in order to plaster over the cracks and maintain their control. And in order to do so they’re offering nothing that incorporates a real structural solution other than scaffolding that will allow them access to do the plastering.

      We, the hoi pilloi -the bewildered herd – the sheeples are not to blame for this, any more than we could be blamed for dying while in the hands of an incompetent quack neurosurgeon. We have every right to expect excellence from professionals in all aspects of life, the damnable thing is, it’s by crises such as this that exposes all we get is elitism.

  14. keekster February 10, 2012 at 3:51 pm #

    An interesting aside from the above and a comment from my brother today:

    “The IAS (accountancy standards board) has recently decided to delay the manditory implementation date of the new IFRS9 rules by 2 yrs. These rules govern the classification and measurement of financial assets.

    You can guess what sort of thing that affects……. value of loans, mortgages, derivatives, etc on balance sheets.”

    Once again measures being taken to preserve the wealthy from taking a loss. Subtle changes lost in the background noise.

  15. keekster February 10, 2012 at 4:06 pm #

    The main benefit of a government, from the perspective of the mass populous, is to stand up to exploitation from the wealthy and powerful. Without some means of standing up against the vested interests of the wealthy, the masses will be exploited through division. But when the government stops listening to the wishes of the masses, then the social contract is broken, and the masses will join up together through revolt.

    “Because while the truncheon may be used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who will listen, the enunciation of truth. And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression. And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission. How did this happen? Who’s to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you’re looking for the guilty, you need only look into a mirror. I know why you did it. I know you were afraid. Who wouldn’t be? War, terror, disease. There were a myriad of problems which conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic you turned to the now high chancellor, Adam Sutler. He promised you order, he promised you peace, and all he demanded in return was your silent, obedient consent.” – V For Vendetta

  16. pilibi February 10, 2012 at 4:45 pm #

    “What happened in our country was that people simply went mad borrowing. The extent of personal credit, personal wealth created on credit was done between people, banks, a system that spawned greed to a point where this went out of control completely with the spectacular crash that you mentioned.”

    The first sentence is where the emphasis of the Taoiseach’s analysis lies – the people went mad borrowing and presumably spending on goods and services, without any encouragement of the banks, politicians or media.
    When he says the system spawned greed he apparently means greed among the mad Irish people.
    Interesting choice of words – ‘spawned’, what is, I wonder the subtext?

    Skillfully chosen words that avoids any direct criticism of the greed and recklessness of the bankers and the banks.
    The bankers at Davos will be delighted with his performance.

    Any day soon now we will have another boom based on the mad borrowing spawning greed among the people of Ireland.

    Such calumnies against the people of Ireland on the international stage does not auger well for any chance of fair resolution to the crisis.

    • mikems February 11, 2012 at 12:57 pm #

      The insults are everywhere but they don’t realise what they are saying.

      Take this Enda Kenny. Is he really so stupid, so resistant to reality, that he doesn’t think there was a banking collapse when he was leader of the opposition in Ireland?

      Or does he really think that the people caused this current crisis?

      Was it German and British finance capital that flooded the Irish banking system and housing market or not?

      Was it lack of regulation which provoked insane risk taking or not?

      Apparently, on all counts, ‘not’ according to the leader of the great Irish people.

  17. Peter Whale February 10, 2012 at 5:49 pm #

    Hi guys I like the way this discussion has gone, with value to both sides of the argument. My own thoughts are that government has overstepped its remit with regard to spending taxpayers money and future generations money.Private failure should never be rewarded or rescued by the public purse. The political scene must be sorted first so that a balanced budget is mandatory and various roles that the government takes where possible should always be localized and accountable (no quangos). If party politics is to be allowed manifestos should be honoured and only those policies allowed a whip. My own view is that party politics should be banned.
    Golem you should be very proud of your blog.

    • mikems February 11, 2012 at 1:00 pm #

      If party poliitics is ‘to be allowed’?

      Are you threatening us that you will abolish democracy unless we do what the bankers want? Because you are repeating their line.

      If you don’t mind I would prefer that the bankers got their comeuppance and we had more democratic control over everything. That way it couldn’t be casually threatened in such a blithe manner.

  18. Pat Flannery February 10, 2012 at 6:11 pm #

    Golem:

    I nearly threw my shoe at the TV last night watching Obama on the evening news tell us that he was rescuing homeowners who signed up to loans they didn’t even bother to read. Those were his words.

    I kept thinking of your “Propaganda Wars”.

    I feel so frustrated and violated.

    All four networks carried the same message last night: it was all our fault and Prince Obama is rescuing us with $26 billion “noblesse oblige”.

    Fuck. How’s that for a narrative?

  19. Hawkeye February 10, 2012 at 6:34 pm #

    Whether one has concluded that Gvt is too big or too small, I think we can all agree that the current political system of “representative” democracy is corrupt and corrupted.

    At the heart of the corruption is the collusion that has resulted in the privatised profits and socialised losses:

    “Enforcing austerity is not only morally wrong, but ignores the role of lenders in running up excessive debts. It is irresponsible, incompetent and illegal lending that is as much (if not more!) to blame for this financial crisis.”

    http://forensicstatistician.files.wordpress.com/2011/10/irresponsible-lending-leaflet.doc

    • steviefinn February 11, 2012 at 12:11 am #

      The shepherds are running with the dogs.

  20. Pragmatic Realist February 10, 2012 at 6:34 pm #

    Its theology, not economics. “Whatever God has done is for the best.”

    Market=God

    “Was Gott tut, das ist wohlgetan” BWV 100
    http://www.youtube.com/watch?v=_RfxEOoEcMU

  21. Hawkeye February 10, 2012 at 6:48 pm #

    Just when you thought that the fraud and manipulation couldn’t get any bigger, here comes Zerohedge with another mighty scalp:

    http://www.zerohedge.com/news/manipulation-and-abuse-confirmed-350-trillion-market

    As they suggest, perhaps LIBOR should be written as LIEBOR.

  22. John February 10, 2012 at 7:11 pm #

    I look forward to part 2. Please cite a bunch of links and scholars that support your thesis, with which I do agree. However, I live in a university community, and I need citations from credible scholars.

    I realize that the “free market” position has a strong hold on many universities, but there must be some who are now prepared to dispute that position.

    • bill40 February 11, 2012 at 1:13 am #

      John,

      I’d hate to speak on Golems’ behalf, because I don’t, but things are not always academic on here. Golem, aka, David Malone, moves in media circles and can’t always cite sources. Neither can many of the contributers to this magnificent blog.

      Not all knowledge can be cited, we sort of go against mainstream thinking here. That’s why we come. I hope you continue to enjoy what you find here.

    • nell February 11, 2012 at 12:27 pm #

      Hi John
      If you live in a university community then you will have access to great libary facilities. As an academic, if I find interesting ideas on the web I then hunt down academic sources to corroborate or refute ideas that are discussed. If you want to get started on academic sources then you should visit academic blog sites such as Steve Keens and the New Economic Perspectives.

  23. Gabi February 10, 2012 at 9:25 pm #

    Hello David,

    well written, as usual.
    However, this discussion to some extent falls besides the point:
    loans are given at a certain interest rate, partially to offset the risk of default.
    So banks receive interests from individuals, corporations, and sovereign alike, as a payment for a risk. This risk assessment decides on the interest rate. When the person defaults, the bank should take the loss. Any discussion that omits this, forget the most critical point on which sound banking is based.

    The new normal is simply that there are no further risks. Banks will be bailed out, and debtors will be looted. We are living in a weird system, where bank assets (ultimately debts to someone else) are taken by sovereign, which then pay back interest to the same banks on the same assets redefined as debt. Ho, and if they don”t pay the banks loot them! democracy has been brutally destroyed when this started to happen.

  24. steviefinn February 11, 2012 at 12:37 am #

    This article on Winsconsin, illustrates some of the points made in Golem’s article. It involves AIG & also some Citigroup leaked memos ( amazing stuff) that give away these bankers conclusions on how to handle the crisis, a kind of one man troika, governor Scott Walker & his race to the bottom, plus a population of around 6 million people of whom 1 million signed a petition for his recall. You couldn’t make it up.

    http://www.prwatch.org/node/11254?source=patrick.net

  25. DANIEL February 11, 2012 at 12:55 am #

    For an alternative view point to the orthodox economists( who have failed miserably ) check out http://www.michael-hudson.com

  26. patma2003 February 11, 2012 at 7:03 am #

    Firstly, would just like to say a big thanks to the blog author and it’s many contributors. Discovered this progressive site through a tennis message board a while ago and have frequented it since.

    Without a doubt what we are currently living inside is perhaps the worst form of socialism we could have ever possibly hoped for – ‘free markets for the masses that protect the few’. Once upon a time my views definitely sat on the left, but as a keen financial spectator since 2008 i’d definitely say my views have taken a more libertarian slant. So, yeah, was quite tough to watch Piano Racer cop a bit of a bollocking in here. Humans by nature are changeable and so, beliefs should be firm, yet, at all times own enough flexibility to allow for inevitable changes through the passage of time – for that is to be human. Without acceptance of that, and therefore one another, we do not evolve.

    As an aussie living in Ireland since 2006, it’s been a major spectacle in my life to see the devastation that speculative cowboy finance has wrought here in the capital. Skeletal landmarks, unfinished works and empty buildings scarring the cityscape. Otherworldly. So that was a bubble.

    Ironically, it is in the ‘land of the free’ that we can find a bank that kept the bastards honest. It has probably already been posted, but here:

    http://en.wikipedia.org/wiki/Bank_of_North_Dakota

    In actual fact, most commercial banks loved the state run Bank of North Dakota as it kept a playing field as level as a financial playing field can be, allowing for a sound and sustainable fiscal climate. Let’s hope this model can be used as a lighthouse for other small and/or rebuilding economies.

    People are looking for the answers, and it’s great to see Steve Keen shining a light on the role of debt in all this. But, for me, the reasons why my views have shifted towards the Libertarian school of thought are reasons of accountability.

    The simple fact is this: Until the criminal few have been held accountable for their fraudulent actions we can’t even begin to start planning the future. We just can’t move on. Until you systematically (and very publically) identify and neutralise those who have manipulated the ‘free markets’ for their own gain, then the practice is doomed to repeat itself in a shorter space in time than need be. There needs to be a very certain deterrent for this rot before we reset the machine as those who were jumping out of th 34th story in ’87 are pulling 4 course meals this very minute. Inside a Libertarian framework, the need to try these criminals would be redundant as the neoclassical notion of ‘too big to fail’ would not exist in the first place.

    The lefty inside me says capitalism is sh!t. But these days there is a louder voice that says free markets were never given a chance.

    Again, thanks for all the commentary from everyone, it has been truly enlightening – exactly what a forum on this topic should look like. The collective mind – from all angles.

    • mikems February 11, 2012 at 1:04 pm #

      The conditions which would allow free markets to ‘have a chance’ would be inimical to human life for a majority of us.

      • Piano Racer February 13, 2012 at 11:00 pm #

        “The conditions which would allow free markets to ‘have a chance’ would be inimical to human life for a majority of us.”

        It would not be inimical to human life, but it would be inimical (a word I had to look up – thanks for expanding my vocab!) to most humans living in Western societies’ perceived wealth. This is because most people living in Western societies have substituted much of their wealth, earned by a lifetime of labor, with imaginary government tokens (“Dollars”, “Euros”, etc.) that ultimately are backed by a gun and a cage.

        It is not until you repudiate these worthless tokens, with all the misery that they represent, that you will truly be free. This concept is very difficult for most people, because they have spent their entire lives in pursuit of these tokens.

    • Piano Racer February 13, 2012 at 11:04 pm #

      “was quite tough to watch Piano Racer cop a bit of a bollocking in here.”

      Perhaps one of my friends from across the pond could help me out here, is this good or bad?! I think I will allow my normalcy bias a rare indulgence and assume it means that I am having great success!

      “The lefty inside me says capitalism is sh!t. But these days there is a louder voice that says free markets were never given a chance.”

      I have traveled a similar path my friend, and I think you are moving in the right direction. The only way to truly achieve understanding is to undertake a study of history. I wish you the best of luck and encourage you to continue to explore this idea as well as your own personal convictions.

  27. Pat Flannery February 11, 2012 at 8:39 am #

    Don’t miss Bill Moyers latest guests http://billmoyers.com/

  28. nell February 11, 2012 at 11:24 am #

    @patma2003 and Piano Racer,
    I think one of the difficulities in discussing contentious issues like libertarianism, is that we all make assumptions about what we think certain words mean. For example, we all tend to assume that free markets and capitalism are inextricably linked from the dawn of time. However, as Graeber, points out this is not the case. The market is commodity exchanged for money exchanged for commodity (C-M-C), whereas capitalism is M-M or M-C-M. (Money in this instant might be coin, a commodity in itself, or credit instruments). It is quite possible to have a market without having a capitalist system and there are historical precedents for this. In addition, Graeber points to the islamic states as developing the worlds first popular free-market idealogy. A major difference between the islamist view of free markets and our current notions (stemming for Adam Smith) is that the former sees a market based on mutual aid and co-operation, whilst the latter sees a market based on competition and self-interest.
    A market based on trust, honour, co-operation and mutual aid is something that I would have no difficulty with, however, our current conception of a market based on competition and self-interest is tearing apart the very fabic of our social lives and taints many of interactions with each other. For example, the recent changes in higher education places students in the role of customers/consumers. Rather than viewing their lecturers as teachers who willingly share and exchange knowledge with them, they will view them suspiciously as self-interested individuals who may try to rip them off. Already one hears students complaining that their fees are not used on teaching but are being funneled into research for the benefit of lecturers. How can teaching and learning possibly be effective when the relationship has been distorted by competition and self-interest.
    The very notion of ‘competition’ means that there has to winners and losers. It seems to me that in the reason why people are attracted to libertarian views is that they do not consider the possibility that they themselves might end up as ‘losers’. Rugged individualism is all very well when you think that you will end up on top of the heap. Its quite a different matter when you think you will end up at the bottom.

    Graeber, 2011, Debt:The first 5000 years, Melville House, New York.

    • mikems February 11, 2012 at 1:07 pm #

      Nell, does Graeber credit Marx for the C-M-C cycle?

      Twas Marx who describes this first in Capital vol 1, not Graeber. Marx went on to elaborate the circulation of all values in the capitalist system in a similar way.

      • Nell February 13, 2012 at 4:09 pm #

        Of course he does, he’s a marxist writer

    • patma2003 February 11, 2012 at 9:22 pm #

      Good response Nell.

      I would say from my own perspective, as a once promising student to end up living below the poverty line at 18. Becoming not only unemployed, but probably unemployable for a few years as a result of living a wayward and reckless lifestyle was not the most seamless transition into adulthood. And, it is not something I wish to experience again. With that state, minimal state funding and a solid family upbringing saw me out of the university dropout phase, later becoming an electrician, and now travelling the globe as a sports coach and manager of the financial livelihood of other coaches alongside me. Funnily enough, I would probably say now that being unable to complete even a year of university was a blessing in disguise as my eyes and ears were only polluted by what I saw inside life itself. And although I never wish to experience that again, I am happy for the journey.This was Australia in the 90′s.

      There was avenues for the person I became at that stage. Free education being the most important. If I still have some blood of a lefty coursing through me, it would be because of free education. More so than health, if you have access to a certain calibre of education, then there is no excuse for a population. And for that i am grateful. The commonwealth played it’s part in doing me a great service and I won’t forget that. But, so did the self respect that only a sound unbringing can provide – ultimately it is up to the individual to make good.

      So while I do say that I am leaning towards a Libertarian viewpoint, it would not be 100% all the way. But, different sides of the fence do have their day.

      And this is where many ‘democratic’ political systems have lost there way. Democratic systems of government are preferred because of the ebb and flow from one ideology to the next. Yet, what happens when the right looks like the left, and the left appears to be right?

      This is where we are now. The sheer hopelessness of our political situation is plain for all with even a minimal amount of clarity to see.

      Governments have pretty much turned into tax collecting fronts for failing banks. That is what purpose they serve now. And so seduced are our governments by towering debts there seems no way out than to accept the status quo.

      And, I had to chuckle when CNN threw on a few ‘experts’ yesterday complaining about reckless borrowing. Right on cue, and no mention of reckless lending.

      I am not 100% subscribing to any ideology today. And never will. I don’t think anyone truly could. But without doubt I am leaning a certain way today, and there are certain parts of the Libertarian cause that would offer our political systems a hell of a lot now. Power swinging towards more localised responsibility is one as I mention in the case of the Bank of North Dakota in my previous post.

      The other being accountability as I also mentioned. The debt of hard time must be served to the selfish among us.

      Unfortunately, the seduction of government by greed is complete and the natural ebb and flow of democracy is blinded.

      On a lighter note, I would say I my recent visit to Australia at Christmas that I saw to great effect the power of the independent in the political system. The member of Federal parliament in my electorate was one of three independents that held the power. To take the Labour Party back to power for another term he bargained high speed broadband for his/my country electorate.

      But, he not only bargained that deal for our electorate – he made sure every regional centre received the same service.

      There is hope.

      • Piano Racer February 13, 2012 at 9:13 pm #

        patma2003,

        I, too spent much time wallowing in a government-run forced-education system. I did this for the better part of my life, eighteen years all told. Looking back, it saddens me that the government robbed (ok, “taxed”) so many hard working Americans to pay for my worthless “education” that provided me with so little of use but taught me to conform and obey and trust authority without applying critical thought. Truly I did not begin to learn until I began learning to navigate and elucidate using that other “free education” system called the INTERNET! This wonderful teaching tool has allowed millions of extremely generous fellow humans to take the time and effort to produce the writings, films, infographics, charts, and historical perspective to teach me several more orders of magnitude more than I ever retained in forced schooling, and it even gave me the context to make me CARE about the information and incorporate it into my life! The best part is that no government anywhere threatened anyone with violence or caging to put this wonderful system in place or to populate it with such vast, rich knowledge and information, what a wonderful achievement of mankind and what a terrible indictment of government! Al Gore might want to take credit for the internet, but I know who really put the pieces in place, and most of them signed this petition:

        https://www.eff.org/deeplinks/2011/12/internet-inventors-warn-against-sopa-and-pipa

        I am deeply grateful and indeed indebted to all of the selfless humans out there who made my true education possible. I attempt to repay them in kind on blogs like this. Good luck on your journey, fellow Human.

  29. steviefinn February 11, 2012 at 12:22 pm #

    I really don’t know what label I should apply to myself, & I’m not sure I want one. I am an old leftie who like George Orwell has become dissilusioned with the establishment left. I believe in capitalism as a system, because it seems to me to be preferable to the alternatives. Also on the whole I think in the past it is responsible, on the whole for a certain meritocracy being established, where people from any background could be rewarded for hard work, innovation & talent. The problem for me is that this system has been hi-jacked by greedy criminals which means that the ” American dream ” is only now available to a select few. This elite has become a parasite which is sucking the sustenance out of mankind & perverting democracy in the process to achieve these ends.

    For the common good it is recognised that although there are high speed cars available, people should not be allowed to drive them around at whatever speed they want, as this is obviously detrimental to the population, & in America seemingly it is easy to buy a gun, but likewise there are laws that prevent, most of the time, Wild West type shoot outs. I think that it is now proven that turbo charged capitalism is a similar case, it is dangerous to the common good when left to lunatics who drive at high speed, sometimes for the thrill of it, with no care for the consequences.

    These assholes because they have the politicians by their paid for short & curlies need to be subjected to the law because what they are doing is dangerous to mankind. I personally don’t care about what system of capitalism is in place as long as it is forced to look beyond the needs of short term greed & made to face the responsibility that we are all in this together. Once this is the case then obviously the system can be improved for the benefit of everybody.

  30. mikems February 11, 2012 at 1:09 pm #

    George Orwell remained a socialist until death. What he opposed was Stalinism, not socialism.

    I’m with him on that one.

    • steviefinn February 11, 2012 at 3:20 pm #

      Mikems

      .5. Orwell and the Independent Labour Party

      In 1938 Orwell joined the Independent Labour Party (ILP). In the article Why I Joined the Independent Labour Party he explains why. First, he is a writer. The era of freedom of speech is coming to an end. For some years Orwell has succeeded in making the capitalists pay him to write against capitalism, but Orwell is not so naïve to think that this can go on. Just look at what happened to freedom of speech in Germany and Italy – the same will sooner or later happen in England, as well.

      “I have got to struggle against that, just as I have got to struggle against castor oil, rubber truncheons and concentration camps. And the only régime which, in the long run, will dare to permit freedom of speech is a Socialist régime.” [CEJL vol. 1 p. 373]

      “One has to be actively a Socialist, not merely sympathetic to Socialism, or one plays into the hands of our always-active enemies.” [CEJL vol. 1 p. 374]

      The reason for choosing the ILP, Orwell says, is that it is the only British party – big enough to be worth considering – that advocates something that he sees as socialism. It is not because he has lost all faith in the Labour Party, but they are about to throw everything overboard and prepare for an imperialist war. Orwell believes that the ILP is the only party that will take the right position on the imperialist war and to fascism, when it turns up in its British version. Furthermore, Orwell was with the POUM in Spain, and their policy was more or less the same as that of the ILP. At that time he did not particularly agree with the POUM, but the party’s policy turned out to be the right one in the long term.

      This was the first and the last time that Orwell was a member of a political party, and it was perhaps a sign of how serious he took the problems of the time. Two years earlier he had fiercely attacked the orthodox Left in The Road to Wigan Pier, and he had seen the monstrosities that can result from following the party line. And now he himself joined a political party that – no matter how right its line seemed to Orwell – would entail a certain form of orthodoxy. Orwell was so worried that he had realised that it was no good fighting alone.

  31. Jim M. February 11, 2012 at 6:33 pm #

    ( previously posted but stuck in the mod queue, apparently!)

    @ Piano Racer:

    Thank you for your earlier contribution to this thread.

    It was refreshing to hear an alternative view expressed with passion and reason, and your references to Left-libertarianism, Anarchism, Austrian Economics and Lew Rockwell demonstrate a familiarity with the material. I suspect that you would agree with many here that the current state of affairs is unacceptable.
    You seem to be asking for the right to stand free, on your own two feet, in a fair game with firm rules and live according to your merits. Sounds fair enough.

    The devil, as always, is in the detail!

    To allow you that right, to guarantee the protection you will require, will itself require a mechanism, a State. It’s not really about adequately protecting yourself. It’s about achieving a set of circumstances in which you are not under threat. The issue of self-protection is actually a bit of a red herring, but enormously appealing to an old caveman like me.

    All this takes us far from the field of economics and deep into the depths of Social Contract Theory. (Like you, I’m an amateur at this so all all technical terms are to be treated with caution; they could be wrong!)

    You might like to look at the poster boy for many Austrians, Robert Nozick and then look at John Rawls for the counter-argument.

    http://www.iep.utm.edu/nozick/
    http://www.iep.utm.edu/rawls/
    http://www.iep.utm.edu/soc-cont/

    All that lot will lead you to Rawl’s concept of “the veil of ignorance”
    And now the fun starts!

    The challenge is to fit “the veil of ignorance” into your original demand of a free and fair game.

    If you can do that then you can have a market that is both free and fair, where information assymetry will not lead to economic advantage. But without that veil you are left with a bent game, a crooked casino, croney capitalism… condemned to play

    “On a cloth untrue
    With a twisted cue
    And elliptical billiard balls!”

    You get shafted, is what you get!

    Ok.. enough droning from me.
    Have a look. Let me know what you think.

    And please… contribute again, yours is a voice and a view that needs to be heard too!

    Oh… and Graeber is here:

    http://theanarchistlibrary.org/authors/David_Graeber.html

    • Golem XIV February 11, 2012 at 9:20 pm #

      Jim M.

      This was indeed stuck in the ‘To be Approved’ queue. I have no idea why.
      I am terribly sorry it took me so long to ‘approve’ it. I was out with the boys sledding and then busy with dinner etc and only now thought to look.

      Appologies. Please don’t let this put you off contributing. As you said to Piano Racer his voice and yours are valuable.

      • Jim M. February 11, 2012 at 10:17 pm #

        No problem, David.

  32. Charles Wheeler February 11, 2012 at 7:26 pm #

    “My reason for referencing those devices was more to point out the innovations we’ve achieved that allow us to instantly access the sum of human knowledge (the internet) and communicate with each other anywhere we go. Heck, it’s the same technologies that is allowing a bunch of people sitting in front of computers all over the world to have this very conversation, which in my opinion is a remarkable achievement!”

    The computer technology we use is the product of a huge amount of public research and investment, much of it driven by the exigencies of war or the space race – iPhones wouldn’t be much use without the satellite technology developed by NASA and the Soviets and its hard to see how private satellite technology would have been funded before its (unforseen) application in consumer technology. The same could be said for every major technological development in history, from shipping, to railways, and air travel in transport alone – all required heavy public investment before private entrepreneurs could establish a market. That’s not to deny the amazing advances that firms like Apple bring to the equation.

    Having said that, one reason Apple has been so successful is because it as been able to outsource production in conditions many would argue are unexceptable (http://goo.gl/50Wof) – the irony being that, were US workers employed under similar conditions, they wouldn’t be able to afford the products – which is why calls to lower pay and conditions in the US is so economically illiterate.

    The classic response is that conditions for Chinese workers will improve over time as they did in the West during the industrial revolution – but this was only achieved by intervening in the ‘free market’, bringing in chid labour and factory acts, public health projects, public sewerage systems and parks, health and safety at work programmes aimed at eradicating unnecesary industrial illnesses and injuries, sinking more than one shaft in a mine, etc., etc. (all resisted vehemently by the free marketeers of their day with their social Darwinist belief systems – which have been resurrected in the present age). Then came the era of ‘gas and water socialism’ as private companies failed to provide essential utilities beyond the confines of the wealthy, public transport which opened up markets for goods and workers, then the establishment of a state pension to save the elderly the ignominy of the dreaded workhouse, along with the establishment of public education and healthcare – none of this would have happened without intervention in the market, yet as Polanyi argues, little of it was ‘planned’ – but rather brought about through necessity by increasingly democratic governments – in symbiosis with the rise of capitalism.

    Of course the NHS isn’t ‘free’ – but it does provide care irrespective of income. In a libertarian society, if someone can’t afford, or is ineligible for, care – what do they do? If a child has cancer and their parents haven’t insured themselves, what happens? What happens to a child born disabled and unable to compete in the market? What of the child whose parents don’t value, or can’t afford education?

    We’re beginning to get an inkling of what would happen in the present government’s drive to ‘get government out of people’s lives’ and ‘set the market free’ – it will be sink or swim.

    The problem I see is that many people like the idea of libertarianism when they are successful and independent, but see the drawbacks when faced with some misfortune beyond their control.

    And while I acknowledge the myriad problems with liberal democracy, I can’t quite fathom the attraction.

    p.s. the price of cheap technology: http://goo.gl/jBGjB

  33. steviefinn February 11, 2012 at 8:35 pm #

    That’s right Charles, I just hope that conditions can be improved for third world workers a lot quicker than they were in the West. It took about 120 years for the British parliament to finally pass the factories act which excluded children from the workforce. One of the evils of this financial crisis & the race to the bottom is that things are likely to get worse for the majority everywhere unless the situation is altered. Obviously charities dealing with wildlife, habitat protection, famine, children etc are going to find it harder to raise funds. Just think what could be done with say 10% of the wealth of the 1%. I know it’s not just about money, but without it you have zilch.

  34. Charles Wheeler February 11, 2012 at 8:45 pm #

    Manufacturing Consent and the BBC: http://goo.gl/yq5qH

  35. Charles Wheeler February 11, 2012 at 8:49 pm #

    To infinity and beyond: http://goo.gl/qGzrm

  36. Charles Wheeler February 11, 2012 at 9:10 pm #

    Interesting critique of Paul Mason’s Why It’s Kicking Off … and why winning the argument might prove irrelevant:

    “So, retrenchment, too: unemployment likely to hit three million, double-dip recession, Eurozone crisis, real-terms wage stagnation and decrease for the past decade now suddenly stinging, incarceration, fear and isolation; the social crisis we’re likely to see as a consequence of austerity has barely begun to be revealed yet. The Guardian reminds us that we’ve yet to see 94% of departmental cuts, and 88% of cuts to welfare.

    There is a further danger in talking about technology and politics, that thinking the free flow of data and communication has overwhelming political power. Venting anger online, clicking ‘like’ on a Facebook page or retweeting some well-expressed ire can act as much as a safety-valve as it can a catalyst, with people blowing off steam for some back-slapping catharsis: worse still is the encouragement that underlies it to believe that society is constituted as a debate chamber, where simply having the best, and best-expressed, most-viewed or liked arguments, somehow can create political change. It can’t, and won’t, but the petitionary mode – the belief that adding one’s name to something, or asking for someone to change something on your behalf – is a continual peril of digital self-production.

    History doesn’t flow backwards, but we can learn its lessons: in a recent interview, the billionaire George Soros sounded curiously like Paul Mason, when he stated that the collapse of ‘market rationalism’ was as serious a crisis as he had ever confronted: ‘in the crisis period, the impossible becomes possible’ – and that is an opportunity we should seize.”
    Pierce Penniless, http://goo.gl/BDLrm

    • John Souter February 11, 2012 at 11:06 pm #

      Charles – I tend to agree with Mark Twain -”History seldom repeats itself but it sometimes rhymes.”

      Fact is for all their authoritarian bravado, the powers that be, both financial and political are not only flogging a dead horse, which as a spontaneous reaction may be understandable; but giving it the kiss of life takes fear to the level of idiocy.

      Economics based on cheap labour versus expensive labour has no purpose when the technology of machine labour enters into the equation.

      What will they do with all of the redundant serfs? Surely they can’t all go into politics or spend their lives as lobbyists and consumers restricted to window shopping are a waste of time?

      • bill40 February 12, 2012 at 1:06 pm #

        John Souter,

        The job market is a prime example of market failure. What ever happened to the coming “age of leisure’? I seem to remember all this technolgy was supposed to mean we worked less.

        As it is we have decided to make people work in Tesco for free. That’ll solve the problem in moments.

        • John Souter February 12, 2012 at 6:02 pm #

          Bill 40 – exactly Bill; and robots don’t pay tax, nor need NHS, pensions or benefits and labour agreements, minimum wages, holiday pay or redundancy allowances. Nor will there be xenophobic hysteria between Chinese, Brazilian or UK varieties?

          Meanwhile the powers that be only answer is work longer for less, pay more for less and live longer under duress.

          They obviously hope the stress will nullify the living longer.

  37. Charles Wheeler February 11, 2012 at 10:46 pm #

    Interview with Mike Norman (as RT.tv puts BBC to shame … again)

    http://goo.gl/XZgkQ

  38. Gordon February 12, 2012 at 5:19 pm #

    …the onset of the financial crisis three or four years ago was largely due in the US and the UK to excessive demand for mortgages from people who couldn’t afford them.

    So, let’s see if I’ve got this right.

    On the one hand we have the people demanding the mortgages. They are overwhelmingly from the wrong side of the tracks – poor, financially unsophisticated with limited education and even less financial savvy. For almost all getting a mortgage would be by far the largest – and probably the only large – financial transaction they had ever been involved in.

    On the other side we have the fianace professionals who deal in morgages and the like all day every day. Moreover, they – or someone senior in the firm – has designed the mortgage products they are selling – and its fine print. What they really thought of these products is revealed by their nicknames for them – NINJA (No Income, No job, No Assets); LIAR (false income details, often forged by the mortgage broker), TEASER rates (to make the deal look affordable even though rates soar ofter two years or so).

    And when these two groups met? Why, of course, the professionals were completely fooled by the novices! Who could have known this would happen?

    Just how cynically the right is persuing its propaganda wars is graphically illustrated in this clip.

    https://plus.google.com/113203226894654744883/posts/4TCZJH9xDru#113203226894654744883/posts/4TCZJH9xDru

    • Charles Wheeler February 12, 2012 at 11:08 pm #

      Monckton: “we want to keep the news fair and free and balanced, as Fox News does …”

      huh?

  39. Charles Wheeler February 12, 2012 at 10:59 pm #

    “And yet, five years on from the origins of the crisis, the power (if not the authority) of economics in public life is, if anything, greater than it was before. Credit-rating agencies make governments shudder with their risk models. The UK government’s austerity programme was backed up by zany claims from conservative economists (especially in the think tank Policy Exchange ↑ ) that rapid cuts in public spending would result in economic growth. When these predictions turned out to be false, few even bothered to register their surprise.

    As Woolfgang Streeck recently argued ↑ , there has always been an implicit tension between the demands of economic experts and those of democracy, but the crisis has elevated this to a new level. We are used to elected politicians (such as Ruth Kelly and Vince Cable in Britain) being trained economists or to economic advisors shaping undemocratic regimes (such as Milton Friedman in Chile in the 1970s or Jeffrey Sachs in Russia in the 1990s). But, until 2011, we had never witnessed the phenomenon of economist as unelected Prime Minister.

    It is time to acknowledge an uncomfortable truth about the public status of economics as an expert discipline: it has grown to be far more powerful as a tool of political rhetoric, blame avoidance and elite strategy than for the empirical representation of economic life. This is damaging to politics, for it enables value judgements and political agendas to be endlessly presented in ‘factual’ terms. But it is equally damaging to economics, which is losing the authority to describe reality in a credible, disinterested, Enlightenment fashion.”
    Uneconomics: http://goo.gl/O20QW

  40. Hawkeye February 12, 2012 at 11:48 pm #

    By the way, did anyone notice the small-print in the build up of all this excessive Gvt debt?

    I think it was something like:

    “Your country’s economy and democracy is at risk if you do not keep up re-payments on Gvt debt.”

  41. Bill Jones February 13, 2012 at 4:07 am #

    Markets, of course, don’t fail.
    It’s the political filth being bribed to rescue the losers that perpetuates the problem.
    Citi, Goldman and JPM have all been bailed out three times in the past two decades.
    The Market wanted to kill them. The government stopped it.

  42. Patrick Donnelly February 13, 2012 at 7:49 am #

    We all exist in markets that will eventually correct. Even if they were under distorted control. It may take decades longer. Pretending that labels apply to humans is an old trick of the fascisti.

    How we define the problem will define our answers. Clarity of thought is therefore essential. All so called economists who did not call what was happening are quasi criminals. Either they were incompetent or else evil and making money out of lying and failing to inform.

    Bob Chapman and others are heroes to some of us. Morgan Kelly and Steve Keen and those who contributed to http://www.prudentbear.com et al

  43. swissball February 13, 2012 at 11:27 am #

    Hello Toby,

    question to post:
    http://www.golemxiv.co.uk/2012/02/propaganda-wars-their-version-markets-dont-fail/#comment-15338

    “Pre-state peoples, hunter-gatherers, were anarchic, egalitarian. They ruthlessly made sure that no alphas came to power to get control of others,…”

    From which facts do you conclude your statement?

    Thank you for some more sentences on this topic
    greetings
    swiss

    • Toby February 13, 2012 at 9:14 pm #

      Hi swissball,

      there’s a lot of material on that in “Hierarchy in the Forest” by Christopher Boehm, also in “Stone Age Economics” by Marshall Sahlins (if memory serves), and in “The Art of Not Being Governed” by James C Scott. Egalitarian methods for suppressing alphas begin with teasing and other gentle attempts to bring the egotistical down a peg, but if that failed, and sharper warnings failed too, murder would be resorted to. I don’t want to wade through all that stuff, but did find these quotes:

      From “Hierarchy in the Forest” (page 5)

      “[B]efore twelve thousand years ago humans basically were egalitarian”;

      and this from p67 (quoting a !Kung bushman),

      “Each of us is headman over himself!”;

      and on page 270 of “The Art of Not Being Governed” Scott quotes anthropologist Karl Gustav Izikowitz:

      “The Lamet simply could not understand the concept “chief.””

      Hope that helps back up that statement a little (I know it doesn’t reference teasing and murder per se, but it’s there, I just couldn’t find it quickly).

      It’s not that egalitarianism is better or worse than hierarchy, it’s that when egalitarianism is the established social mode, that mode will be protected for whatever reason. Boehm suggests that hunters need to trust each other totally, implicitly, and that those members of the group more concerned with themselves than with the group cannot be trusted. That is a pragmatic, life a death matter in those ‘primitive’ circumstances, not an ideological one.

      • swissball February 14, 2012 at 11:43 am #

        Sawasdee Toby,

        thank you for the titles. All of them sound interesting.

        >>Pre-state peoples, hunter-gatherers, were anarchic, egalitarian. They ruthlessly made sure that no alphas came to power to get control of others, and spent much of their cultural energy ensuring ‘equality.’<<

        The list of possibilities how human beings can live together is one essential (first and tiny) step to make things better. Only proclaiming how terrible the things were and still are, doesn´t establish better systems.
        Even when you can describe verifiable all (society-) forms that ever existed, it will be a hard way to go in a better direction. Because not only the one percent that is terrorizing now the 99% must change (or be changed). Sure we all, the 99%, must change (and in some realms in very drastic ways). I mention only excess consumerism, TV-Film-Drug-addiction, luck of emotionality, false priorities (vactions and material things stand over relations…)… [and these things are not only induced from the rich standing aside us with pistols in hands...].

        Maybe some truth sits in (a very tiny fraction I guess) freemarket scenario, maybe some critics of capitalism from the side of comunism (and vice versa)…are true.
        But at the end of the day, a lot of the great drafts ended in disaster and blood (now yo can argue, cause the implementation was not correct…).
        We must REstart (and maybe we are forced cause of an mega-financal and then real world melt down) and be ready for the riscs to try new and creative ways. The old paths will lead nowhere.

        -realize what can humans do/how they can live together (knowing her limitations)
        -change yourself (in first place to disfruit your life more; grounded)
        -try to find ppl going in a "correct" direction
        -if you have time, than find/start the right political movement


        greetings
        swiss

        • Toby February 14, 2012 at 3:41 pm #

          As David Graeber points out, capitalism and communism exist side by side everywhere, quite happily. He gives the witty example of one trader at Goldman Sachs asking to borrow a pen from another trader. Unless there’s good reason not to lend the pen, the trader asked will lend the pen, ‘free’ of charge. (I still have no good definition of freedom.) In communist systems there were capitalist activities too, in which enterprise and entrepreneurial inventiveness result in personal gain. When it comes to profit (for which I also have no good definition) it all depends on what measure of value we use. I think money is a poor measure.

          There is no free market, there is no non-interference, if money is used to judge what’s valuable and what’s not. Money is a tool of control and organisation used to distribute via price scarce goods and services. To be traded in a market a thing has to be scarce. Air, for example, has a price of zero, a value of zero, because it is abundant. This means that markets are about competition, which means winners and losers. Because the winners and losers are humans, not tigers or wolverines, we get dynasties of the powerful. That is, we get states which include markets and governments, and recently media (though the priestly classes did this prior to the printing press). In short, while competition over scarce resources is the underlying dynamic, there can be no ‘free’ market. The only way to get a market which stays fluid and does not produce wealth gaps and classes and all that nonsense, is to proceed from abundance, have an access-based not property-based system, focus on a blend of cooperation and competition, and use money to free people to contribute (social dividend or guaranteed income) and keep it flowing with a demurrage (see Charles Eisenstein on this). Ah yes, an revolutionize education.

          In my opinion.

          And now I have to go and pick up my daughter from school.

          And you’re right. We are all involved in the process of learning to want a better system. This cannot be forced on us from above. In my opinion.

  44. steviefinn February 13, 2012 at 12:22 pm #

    Talking of markets, flying high again especially the Athens exchange, thriving on democracies downfall. A sickening way to start a week.

    & speaking of sickening, Pat Cox, Ireland’s main ruling parties former candidate for the presidency showing his true colours & probably Kenny’s too. The new truly international upper class elite, who believe they hold all the aces. I would imagine Mussolini was once as confident.

    http://www.independent.ie/business/irish/fg-insider-briefs-the-top-bankers-at-private-dinner-3017077.html

    • John Souter February 13, 2012 at 6:35 pm #

      Stevie – now why would the markets be flying high?

      In all these austerity amputations there has been no mention, not one, of a plan for growth for any of the countries involved.

      If anything damns the politicians in any of the countries involved it’s their lack of innovation and commitment to developing and instigating solutions.

      If the populace in any of the countries involved – and I include the USA, UK, Ireland, Greece etc – they would do well to ensure none of the representatives presently in office are ever re-elected to any political position.

      • steviefinn February 14, 2012 at 1:53 pm #

        John

        The problem is that there is no real alternative to the assholes who presently hold the reins, except more of the same. Seems as though it has to get as bad as it is in Greece before alternatives like the hard left are considered. Perhaps if it got to the same stage in Ireland Sinn Fein would get elected, probably within a coalition. So same old shite or extremism. If a government,- don’t laugh, stood up to the real powers that be, they would probably be isolated economically & brought down, so it seems to me that there has to be an awakening of a good enough %age of the worldwide population who can find common ground against the elites & can then force their elected governments to act by taking the money out of politics, proper financial regulation etc. Otherwise we descend into chaos, & I honestly think that most of the clowns responsible think that they are untouchable. They should read more history.

  45. deepgreenpuddock February 13, 2012 at 1:06 pm #

    Princess Chipchops used the term ‘free healthcare’ but of course it is not free, we pay for it in some form of taxation. I guess what she means is that the care provided is universal to all members of the community, even those that do not pay directly into the system, by working as we assume that people who do not work are probably doing some other essential task or are infirm in some way.
    One of the shocks of living in the US was realising that young people, children, do not have automatic access to health care. They depend on their parents insurance. It is not quite right to say that children would be denied critical care in the US, although it is very possible that they would be denied non-critical health care such as dentistry or elective procedures.
    The idea of welfare has a very complex history and I am aware enough to hesitate to delve deeply there, but it is a useful perception that many of the changes in availability of care came about due to the demands of the military and the technical demands of capitalism.
    Around the time of the Boer war there was a widespread perception that the human products of the British (capitalist) world were inadequate and deficient, in competition with the kinds of robust, well nourished, healthy individuals produced in the New World and the colonies. The Boers were better in just about every way, and humiliated the British army, at least to start with.

    The typical non-officer recruit into the British forces around the 1900′s was poorly educated and rather feeble-(about 5 foot 4) and not resilient enough to withstand the rigours of army life. These people were also just not up to the technical demands of the workplace. How was a feeble specimen expected to heave the more powerful weapons being designed. How was he to read the instructions, or absorb the complexities of the process that went with industry?
    The political and sociological context is really rather complex. There was also pressure from the Trade Unions and the Labour movement. The association of the political left wing of this country is rather different to that in many other countries where there was less dependence on subjugated colonies to provide a market without choice, which might explain the abject failure of british industry in comparison with say, German industry, There was a strong element of the Trade unions that saw themselves as part of a great imperial enterprise and the interests of the worker lay in a nationalist partnership which guaranteed the jobs and markets from overseas. Few from the British working class left then questioned the nature of colonialism or suggested that brown or black people were actually worthy of recognition as anything except perhaps being ‘remotely’ human. The residue of this distorted perception is still perfectly visible in the EDL or other working class reactionary movements.
    So we have to see welfarism as at least partly, a tool of capitalism and also a response to a changing technical context which is certainly partly, a consensus of all social elements. The arguments are not about new treatments better welfare, but about how these are implemented and distributed.
    The present time must also be seen in the context of a changing technical landscape. There is a distinct polarisation (of people) in many ways-not just a financial polarisation. I also see people who are ‘self-defining’ i.e. outside the (mainly financial) norms we think are inevitable, and achieving astonishing levels of personal freedom and satisfaction. People are also responding to changes in work patterns and social norms and grasping huge technical advantages in the face of very( apparently) constrained conditions. We really are living in a very strange world where the inversions of consciousness are possible.
    There is also constant tension to determine how we will respond to these changes. We see the problems being played out most acutely in places like Greece. Analysing
    ‘Greece’ in the terms that are often deployed here in this blog are not actually very helpful. The argument is constantly undermined by the retreat into the fury about ‘banksters’. Whether true or not,and I would accept that a great deal of the fury is justified, in terms of political strategy, it is a deadly folly, as it it the equivalent of troops armed with sticks furiously running at the machine guns and artillery of the enemy.
    Greek people need to look at how they can collectively step away from the game they are being locked into.They need to recognise the realities of their relatively materially poor country and stop defining themselves as victims, and explore more advanced forms of social organisation than the ones defined by late stage (cult) capitalism.
    I read this blog constantly and my sympathies certainly resonate well enough here but it is time to stop being mad, it is time to start getting even.

    • pilibi February 13, 2012 at 3:33 pm #

      You sound like a condescending smug fascist to me – but then again maybe I’ve mis-judged the content and tone of your comment

      • deepgreenpuddock February 13, 2012 at 6:06 pm #

        not sure who you are referring to but hope it isn’t me. If it IS me then i would have to question your comprehension.

        • pilibi February 13, 2012 at 9:53 pm #

          “Princess Chipchops used the term ‘free healthcare’ but of course it is not free, we pay for it in some form of taxation”

          ‘Free healthcare’ is shorthand and widely understood to mean “free at the point of service” and is well established in everyday use and paid by the taxpayer- no need for your condescension.

          “Around the time of the Boer war there was a widespread perception that the human products of the British (capitalist) world were inadequate and deficient, in competition with the kinds of robust, well nourished, healthy
          individuals produced in the New World and the colonies. The Boers were better in just about every way, and humiliated the British army, at least to start with.”

          Among whom was this perception widespread?

          “The typical non-officer recruit into the British forces around the 1900′s was poorly educated and rather feeble-(about 5 foot 4) and not resilient enough to withstand the rigours of army life. These people were also just not up to the technical demands of the workplace. How was a feeble specimen expected to heave the more powerful weapons being designed. How was he to read the instructions, or absorb the complexities of the process that went with industry?”

          Where to begin with rubbish like this.
          The officers were presumably robust and resilient, like the Boers and not feeble like the working class recruits and well educated too.Being 5’4″ makes you feeble.

          They couldn’t handle their weapons or read instructions – sons of miners and steel workers.

          “Few from the British working class left then questioned the nature of colonialism or suggested that brown or black people were actually worthy of recognition as anything except perhaps being ‘remotely’ human.The residue of this distorted perception is still perfectly visible in the EDL or other working class reactionary movements.”

          Quite a staggering statement to make.

          “We really are living in a very strange world where the inversions of consciousness are possible.
          There is also constant tension to determine how we will respond to these changes. We see the problems being played out most acutely in places like Greece. Analysing‘Greece’ in the terms that are often deployed here in this blog are not actually very helpful. The argument is constantly undermined by the retreat into the fury about ‘banksters’. Whether true or not,and I would accept that a great deal of the fury is justified, in terms of political strategy, it is a deadly folly, as it it the equivalent of troops armed with sticks furiously running at the machine guns and artillery of the enemy.

          If it is true I’d say it is helpful. Do you think it’s not true?
          I think the argument is reinforced , not undermined by venting fury at the banksters – a term that accurately describes them.

          How is it deadly folly?

          “it it the equivalent of troops armed with sticks furiously running at the machine guns and artillery of the enemy.”

          Where is the logic here?

          “They (the Greek people)need to recognise the realities of their relatively materially poor country and stop defining themselves as victims, and explore more advanced forms of social organisation than the ones defined by late stage (cult) capitalism.”

          More condescension bordering on racism.
          Do the Greek people need to recognise the realities of their relatively materially poor country?

          When have the Greek people defined themselves as victims?

          Your comment reaks of classism and racism.

      • Jim M. February 13, 2012 at 8:53 pm #

        Pilibi,
        If you are referring to deepgreenpuddock as fascistic then I suspect any smugness is on your part, not his.

        You may like to re-read his comment.

    • steviefinn February 13, 2012 at 4:20 pm #

      Any ideas on how to get even ?

      I still get mad about the WW1, never mind now. The fact that the officer class used their soldiers supposed feebleness as an excuse for why their lunatic battleplans failed, still makes me mad. I wasn’t aware that a great height was needed to fire a maxim gun or to go on a slow stroll through no-mans-land holding your rifle above your head. My 1st wife’s grandfather was from Hackney, about 5′ 3″, as were most of his peers, he went to France aged 15, was wounded once, gassed twice & lived till he was 96. He was incredibly tough as was the average Roman legionairre at about 5′ tall. A long neck & long legs are not the only measure of strength, I myself am 5′ 5″ & could lift my own weight at age 18.. If there was a problem with these men it was due to being undernourished whatever height they were. Working in Paters factories with long hours, bad conditions & low pay tends to play havoc with one’s constitution.

      • deepgreenpuddock February 13, 2012 at 6:46 pm #

        I think my point was that ‘welfare’ was largely put in place by the capitalist classes as a response to the perception that the working classes of the country were in some way inferior to the people they were fighting or competing against in labour terms. The withdrawal of ‘welfare’ as we see at the moment in the form of ‘austerity’ measures reveals that the political class, eternally wed to capitalism as a form of organisation of production, feel that withdrawal is equally within their gift, according to the way they choose to interpret the situation In other words they feel enabled and entitled to define the conditions under which the majority of people live. i

        Your ex-wifes grandfather may have been fantastically tough despite his small stature but surely that is the point. He was a survivor of hardship. Countless others were not and were sacrificed by those who were distant enough to avoid the stench of death and to make what they would have regarded as important strategic decisions. A million men to wear down and deplete the german machine? Probably they regarded the losses as ‘the price’.
        In the long run they knew they could probably break the Germans because they had control of lines f supply and the support of the Americans, and indeed that is what eventually happened-it is doubtful that the German army was actually ‘defeated’ in the 1st WW (in the simple sense) and indeed that was one of the issues that eventually led to the rise of Hitler-an answer to the grievance that they had been betrayed by the politicians. It wasn’t called National Socialism for nothing.
        I think we should also be looking long and hard at the way the Occupy movement has al but fizzled out despite an ongoing sense of grievance against those in positions of power and influence. Such protest is a naive response to the politics of the time. It simply ‘plays the game ‘and the protest strategy has been faced down and countless times. Strikes?
        the issues we should be taking on board at the moment are the things that have changed- communication is one of those things and finding common cause across much wider communities. The democratic ideal that seemed to be such an important and impregnable feature of the west now seems deeply flawed and undermined by big money and a new form of representation will have to be created to counter the use of money to support the status quo. Money being passed to the labour party through trades unions should probably be stopped and diverted into localism. I think the fracture of the UK is one major fear for the major parties because they know that the kinds of ‘enterprise’ the political system supports but which go against the interests of taxpaying people (such as Trident) become utterly unsupportable in that event.
        We need to question such follies which are based upon some now redundant thinking. No one is thinking of fighting a nuke exchange type of war but we are held captive to pay for the war machine in order to maintain the polity which has all its status and rewards conferred on it by the rhetoric of fear.

        • steviefinn February 13, 2012 at 9:46 pm #

          dgp
          I agree with you, I was just trying to make the point that the idiots in charge of the British army were often trying to deflect blame from themselves rather than accepting the fact that their tactics were out of date. In Blackadder there are references made to Fuzzy Wuzzy’s which were amongst the list of foes easily annihilated by the British army, with machine guns. Then there came Chelmsford’s disaster at Isandwhana, Rorkes drift used to deflect attention from that, Boer War guerilla tactics from the Dutch commandoes coupled with deadly accurate mauser rifles led to more humiliation, until eventually the British changed to similar tactics of the Boers including the 1st known use of concentration camps, & then of course the biggy. All of these fiascos would have occured no matter what the physical state of the soldier, but the powers that be will never blame themselves, for the defeats or the social deprivation that caused the lack of recruits.

          Incidently my Grandfather who served in North Africa, Italy & Burma, fought with British, Asian, Australasian & American troops, against German, Italian & Japanese forces. He insisted that the most effective out of all of these were the, Gurkhas, & the Burmese, followed by the Japanese, because of their toughness, willingness to take orders & their being able to handle hardship. According to my Father he later successfully predicted the outcome of the Vietnam war. American soldiers are too big, too smelly & too noisy, he said, perhaps that is why most special forces operatives are small to medium in height.

          Gordon
          There is a small amount of info here.

          http://www.historytoday.com/rowena-hammal/how-long-sunset-british-attitudes-war-1871-1914

    • Gordon February 13, 2012 at 6:40 pm #

      I remember reading years ago something to the effect that a large percentage of British working class would-be recruits for the Boer War proved medically unfit for service because of malnourishment etc. but I’ve never been able to find a reference online.

      Do you know of one?

  46. Art Smith February 13, 2012 at 1:13 pm #

    Hi Piano Racer and others.
    I have a question regarding the practicality of contract based social relations.
    The issue I have is with asymmetry of information between parties contracting. To give an example take mobile phone contracts. To survey the market I have to sift and assimilate a vast quantity of tariff infomation and small print sub clauses in a matrix set up by competing vendors who have structured their offerings to make cross comparision virtually impossible for the average buyer.
    Must I turn myself into an expert on every good or service I contract for? Obviously, ‘caveat emptor’ but you must admit there is a trade off between the amount of time and effort needed to overcome the ‘expert’ nature of the person or business offering the good/service and having a life!
    Mobile comms I could live without but what about electricity contracts, to take current hot potato? I can conceive of a similar environment evolving where complexity is encouraged under the guise of ‘choice’ (UK pols favourite) to take avantage of time poverty and lack of expert knowledge in the buyer to gouge them. What does the libertarian society you describe suggest to remedy this scenario? All sellers broadly benefit from business environment as described above. Buyers cannot boycott the market for electricity or gas without undergoing servere hardship.
    If the good or service is needed to survive should they be of a different contract category then goods or services that I can choose not to contract on?

  47. Hawkeye February 13, 2012 at 6:18 pm #

    Art

    “Buyers cannot boycott the market for electricity or gas without undergoing servere hardship.”

    I recall seeing a note from 38degrees with a proposal to get thousands of people to agree to block switch gas & elec supplier based on Which advice. Sounds an intriguing idea. The search effort is centralised (and hopefully transparent and honest), and then consumers can block vote with their feet:

    http://www.38degrees.org.uk/page/s/the-big-switch#petition

    Might help to tip the balance away from the oligopoly power at present in these (neccessity) industries.

    • Gordon February 13, 2012 at 6:53 pm #

      An ever better plan than the 38 degrees proposal would be to limit the gas and elec suppliers to only one price for each single fuel and one for dual fuel in each region. (Each region has different distribution costs so I would allow that much variation).

      This would replace the existing multiplicity of prices which creates the perfect opportunity for confusion marketing to the particular disadvantage of those least able to keep up. In contrast transparency and information equality are necessary for “perfect” markets. I was told several years ago by someone working for one of the price comparison sites that they charged the utilities around £40 for introducing a nerw customer. This is a lot of money all of which ultimately has to come out of customers’ pockets through higher energy prices.

  48. backwardsevolution February 13, 2012 at 6:25 pm #

    Former Assistant Secretary of Housing under George H.W. Bush, Catherine Austin Fitts, blows the whistle on how the financial terrorists have deliberately imploded the US economy and transferred gargantuan amounts of wealth offshore as a means of sacrificing the American middle class.

    Fitts documents how trillions of dollars went missing from government coffers in the 90′s and how she was personally targeted for exposing the fraud.

    Fitts explains how every dollar of debt issued to service every war, building project, and government program since the American Revolution up to around 2 years ago — around $12 trillion — has been doubled again in just the last 18 months alone with the bank bailouts. “We’re literally witnessing the leveraged buyout of a country and that’s why I call it a financial coup d’état, and that’s what the bailout is for,” states Fitts.

    http://www.youtube.com/watch?v=6nU7wGe2A6k&feature=player_embedded#!

    Very good video!

    • steviefinn February 13, 2012 at 8:42 pm #

      Cheers, scary stuff,

    • Pat Flannery February 14, 2012 at 5:01 am #

      And I thought I could talk.

    • Gordon February 14, 2012 at 1:27 pm #

      Longish at 47 mins but worth watching. She makes a lot of connections.

      • John Souter February 14, 2012 at 3:10 pm #

        Scary – bloody infuriating would be more apt.

        Why, when there are people of this calibre including many who are referenced on this blog, are we putting up with the snake oil diatribes of corporate lynch mobs?

        It adds credence to the conspiracy theories of world dominance by a corporate elite.

    • johnm33 February 14, 2012 at 5:57 pm #

      I first came across her via a link to a page in the online book at the top of this page http://www.dunwalke.com/catherine_austin_fitts.htm a real [scary] insight into the way the us works.

    • cynicalHighlander February 14, 2012 at 11:55 pm #

      Here is the script version Tapeworm Economy

      • Phil February 16, 2012 at 10:41 pm #

        Can we be certain of the veracity of her story? Alex Jones / Info wars have got form for conspiracy theories.

        • backwardsevolution February 16, 2012 at 11:30 pm #

          Phil – “Can we be certain of the veracity of her story?”

          She has been around Washington for a long time and has been cited by some very big players. I think she is credible and has a “pointed arrow” view of what’s going on.

          Read “Confessions of an Economic Hitman” as well as “Shock Doctrine” by Naomi Klein to get an almost identical feel. I’d like to be a fly on the wall at those Bilderberg and the Council on Foreign Relations meetings. I think our hair would stand on end if we knew how controlled we really are.

          We, the people, are only just beginning to see what has been there all along. Our heads have been so full of propaganda that we couldn’t even see what was going on.

  49. backwardsevolution February 13, 2012 at 7:33 pm #

    Re above video – Catherine Austin Fitts speaks about the “real story” and the “official story” beginning at 23:30 minutes. She speaks of “attack poodles” who go around and discredit sources, dig up dirt on them, plant stuff, etc. When the “official story” is attacked by other sources (radio, internet), these people go to work.

    As Golem says, the victors get to write the history. Let’s make sure that history is the “real story”.

  50. Charles Wheeler February 13, 2012 at 9:44 pm #

    Good piece on Greece here: http://goo.gl/OcnmG

    Doesn’t put Eurozone crisis in context of private banking failure that precipitated it, (that’s par for the course) but good on the madness of trying to get blood from a stone. ‘Carthaginian terms’ is right.

  51. keekster February 14, 2012 at 1:35 pm #

    Art Smith
    The purpose of capitalism is to accumulate capital or wealth. The more wealth you have the easier it is to accumulate more. Debt, and banking is the best tool for this purpose. But eventually this accumulation process leads to over accumulation of wealth, and this starts to reduce demand, and it goes into crisis. This is where we are at. Regulation and intervention by the public sector is required to prevent capitalism going into self inflicted crisis. When this crisis is reached, there is no longer a working free market. This is why I do not consider that free market capitalism can existing without a public sector to regulate and prevent its excesses. Furthermore, I am not convinced that the private sector could make any profit without the public sector. For example, how would it bring its products to the market and make a profit, if it had to provide a road network, it had to provide an education system, a health system etc etc. seems to me that little profit would be left. Free market capitalism, if it ever existed, cannot exist alone. Its contradictions always lead to its undoing. Marx figured this years ago. Trouble is he didn’t come up with a sustainable solution

  52. Jim M. February 14, 2012 at 7:13 pm #

    Several regulars here have long been singing the praises of MMT as a possible avenue to pursue.
    One of the issues that seems to be a source of potential conflict is the Job Guarantee Scheme, and this article from Pavlina Tcherneva tackles the antipathy head on.
    The article is, by it’s own admission, a little “wonkish”, but if I can follow it so can you!

    FWIW, I am broadly in favour but concerned that the private sector will again prove itself all too adept at cherry-picking the bits that the non-profits demonstrate to be potentially profitable.

    http://www.neweconomicperspectives.org/2012/02/alternative-fiscal-policies-why-job.html

  53. Mike Hall February 14, 2012 at 8:13 pm #

    Extraordinary events over the weekend re Greece.

    Ever since the ECB’s out-of-the-blue €500B LTRO lending to banks I’ve been suggesting that the ECB/Germans etc. were intending to push Greece out of the Euro. I see another €650B of keyboarded LTRO is in the pipeline this month.

    But of course, this has to be seen as Greece’s choice, so every time Greece agrees terms, even getting every Greek politician to sign solemn promises, the EC/ECB seems to find some further problem. As reported again on the BBC news tonight. Perhaps the Greek ‘leaders’ have continually exceeded the EC/ECB’s expectations in how far they will prostrate themselves?

    Interestingly, (for the ‘establishment’ line) the BBC had some ‘markets’ talking head doubting that Greece could succeed anyway, quoting the history of GDP loss & certainty of more resulting from the new ‘bail-out’ terms. (ie implying the bail out will just delay the inevitable.)

    Which, really, by now, is surely a statement of the bleeding obvious beyond even the most brain dead PR whores to spin differently, or politicians either.

    In which case, I’m thinking the Greek exit, by their own volition of course (haha), may yet be on for this week/month. (As opposed to whenever the next €130B runs out – 1 yr? less?)

    To Greek readers, my heartfelt sympathy for the brutal treatment of your country. But if you can find any leaders that can manage your economy properly (which will be hard admittedly), do please steer them to MMT economics (Bill Mitchell etc.). The most rediculous thing Greece could do is to cast off the crushing yoke of the Euro & then pretend it must wear a similar one of its own making. New Drachma, appropriately managed, offers rapid recovery to full employment & prosperity.

  54. Hawkeye February 15, 2012 at 3:07 pm #

    More propaganda wars
    —————————–

    “Finance trumps sovereignty”

    That is the essence of the message just delivered on the BBC News 24 by Martin Wolf. The presenter asked him about the situation in Greece and what his thoughts were on the fact that decisions on how to manage the country are being foisted on Greece from Europe. Wolf’s reply was along the lines of “well if you can’t finance yourself, then you can’t maintain sovereignty; that’s what happens.”

    Cunning bit of small print this: Your sovereignty is at risk if you do not keep up repayments on Gvt debt.

  55. Mira Tekelova February 15, 2012 at 4:18 pm #

    David, I really appreciate this phrase in the article: “banks having a fundamentally stupid and unstable funding model.”

    And would love to hear more on this particular issue from you.

    I think it deserves more attention, as the benefit frauds cost the UK taxpayers about £1billion, the tax avoidance cost us about £15 billion, but the fact that banking sector is allowed to use fractional reserve banking as their business model costs us £130 billion a year.

    £130 billion that we wouldn’t have to pay on taxes, if we would take back the power to create money from banks.

  56. backwardsevolution February 15, 2012 at 9:28 pm #

    There is little doubt that European governments, like Washington, have been financially improvident, living beyond their means and building up debt burdens on citizens. Something needed to be done. However, what is being done is extra-democratic. This is an indication that Western elites–the Trilateral Commission, the Council on Foreign Relations, Bilderberg Group, the EU, transnational corporations, oversized banks, and the mega-rich–no longer believe in democracy.

    Perhaps future historians will conclude that democracy once served the interests of money in order to break free of the power of kings, aristocracy, and government predations, but as money established control over governments, democracy became a liability. Historians will speak of the transition from the divine right of kings to the divine right of money.

    http://www.globalresearch.ca/index.php?context=va&aid=29291

  57. backwardsevolution February 15, 2012 at 10:00 pm #

    “…from the divine right of kings to the divine right of money.”

    And money no longer needs “democracy”. It’s a nuisance.

    Interesting, use democracy (rise up, people, and claim your land) in order to gain power. The people do the fighting for you, they rise up against the king, and you then proceed to strip the people to the bone.

    Isn’t that what happened after the Reign of Terror? Didn’t the merchant class gain hold of power again?

    The merchant class built my country. The wealthy merchants came in first, bought up vast tracts of the best land, then advertised that you can leave the Old Country and have your own independence in a new land. Of course, many did not survive the journey, but the ones who did were met with very high land prices. The merchants (speculators) held most of the land off the market, thereby keeping prices high. No way the settlers could return to their country. They were stuck and put into huge debt.

    I believe the money class probably worked both sides, telling the King to stand up to the people because after all he had a divine right, and then worked to stir up the people, enticing them with democracy in order to usurp the king.

    They came right up the middle, used both sides, and won. Three groups: two being manipulated, one with a plan.

  58. Troy Prideaux February 16, 2012 at 3:23 am #

    Re the new link to :The NHS and TINA – Mrs. Thatcher’s ideological, anti-democratic, political legacy | Think Left

    So, let me get this straight: the US health system was such a complete and utter proven failure, Cameron’s now choosing to head in that direction? Makes sense???

    Here in Australia, we have both a very efficient and effective public and private health system. Public nursing for example is one of the most productive service providers in the country.

    This is madness!

    • Charles Wheeler February 16, 2012 at 8:58 pm #

      Hard to make sense of it from patient’s point of view – the Commonwealth Fund ranks NHS #1 for efficiency; OECD puts it near top of table for developed nations — and that’s despite the last few years of creeping privatisation and imposition of internal markets which have seen admin costs rise from 6% to 12% (c/w 30% in US). The US spends 17% GDP and rising rapidly but still leaves 60m uninsured. Medical bills are second highest cause of bankruptcy in US – and 75% of those are people with insurance! So being able to afford insurance doesn’t necessarily mean your bills will be paid – and can you afford to take a private insurance conglomerate to court (legal aid for medical negligence claims is being removed).

      For the average person the costs and uncertainty of private medical insurance v. the service offered by the NHS according to need rather than ability to pay is an easy choice. None of us know if or how badly we may need treatment, so it makes sense to pool risk and hope we pay in for a lifetime without having to draw out too often.

      But that’s not the neoliberal approach – which is: market fundamentalist. The private health market will provide – and where it doesn’t it is inefficient to do so, and therefore a waste of resources.

      This plays well with the super-rich who would rather pay more for themselves than have to contribute to the healthcare of the poor and the undeserving.

      It also appeals to the private healthcare providers – so it depends on your perspective!

      http://youtu.be/zrb3rJoLu9g

      http://goo.gl/5Fdj4

      http://goo.gl/JPehV

      http://goo.gl/ARbS3

      http://goo.gl/OLhGm

      • Charles Wheeler February 16, 2012 at 9:02 pm #

        p.s. ‘Meet the new 1%: healthcare CEOs replace bankers as America’s best paid’

        http://goo.gl/joaEg

  59. johnm33 February 16, 2012 at 12:16 pm #

    if we dont like it we could sign up for an alternative http://lawfulbank.com/

  60. Phil February 16, 2012 at 10:19 pm #

    Good evening Golemites,

    can I get a difinitive answer on whether the Positive Money hypothesis (which also appears to be similar to that put forward by the Zeitgeist films) holds any weight? Is 97% of money in circulation a form of debt?

    http://www.positivemoney.org.uk/

    Thank you!

    • keekster February 17, 2012 at 1:37 pm #

      I believe so. Its a central part of steve Keens theory about how the economy works, and the Bank of england agrees that fractional reserve banking allows new/additional money to be created as debt. Neo-classical economics assumptions of how fractional reserve banking works do not seem to tie up to the evidence. Have a read of Keen’s book ‘Debunking Economics’.

      • Phil February 19, 2012 at 2:12 pm #

        Thanks guys!!

    • Mike Hall February 18, 2012 at 2:47 pm #

      I haven’t quite got my head around the implications of full reserve banking as yet. Partly because I lean toward the view that 90% of what is euphemistically called ‘investment’ banking needs to be banned anyway. And that this is possible. See this pdf for more on this:

      http://www.greenhousethinktank.org/files/greenhouse/home/Banking_inside_final_3.pdf

      I’m inclined to believe if the banking sector can be properly regulated/reverted to its historical role, then reform efforts can be concentrated more usefully on the other important (possibly more important) aspects.

      [I take some comfort from the fact that William K Black, a legendary anti-banking fraud expert is an MMT supporter & confident that banking can be regulated to function properly (as it largely used to be).]

      I’m referring here to the ‘functional finance’ part which both positivemoney & MMT both include. Arguably, there is a much more extensive body of work on this within MMT. This completely removes any importance of targeting some (arbitrary) gov debt/deficit level. Rather, gov issues or extinguishes money according to the prevailing requirements of the economy. Eliminating the scourge & waste of unemployment & optimising the productive use of resources for the widest benefit of society. Or at least doing an infinitely better job of it than now.

      If you’re not familiar with MMT follow the link provided in Golem’s links section to Bill Mitchell’s blog. Takes a bit of study, but totally worth it imo. Consistent with Steve Keen’s view also on how the monetary system & economy actually works in the real world. Essentially, debt money is perfectly ok & useful so long as it goes to productive purpose, not casino speculation & asset bubbles.

  61. keekster February 17, 2012 at 2:06 pm #

    http://www.zerohedge.com/news/market-slowly-figures-out-ecb-fake-out-euro-and-greece-negative-greek-1-year-bonds-hit-639
    Any comments on this. And likely outcomes

  62. Charles Wheeler February 17, 2012 at 2:51 pm #

    On Laissez-faire:

    “Let us look for a moment at these presuppositions. We have seen that the theory of laissez-faire assumed that the State would hold the ring. That is to say, it would suppress force and fraud, keep property safe, and aid men in enforcing contracts. On these conditions, it was maintained, men should be absolutely free to compete with one another, so that their best energies should be called forth, so that each should feel himself responsible for the guidance of his own life, and exert his manhood to the utmost. But why, it might be asked, on these conditions, just these and no others? Why should the State ensure protection of person and property? The time was when the strong man armed kept his goods, and incidentally his neighbour’s goods too if he could get hold of them. Why should the State intervene to do for a man that which his ancestor did for himself? Why should a man who has been soundly beaten in physical fight go to a public authority for redress? How much more manly to fight his own battle! Was it not a kind of pauperization[Pg 90] to make men secure in person and property through no efforts of their own, by the agency of a state machinery operating over their heads? Would not a really consistent individualism abolish this machinery? “But,” the advocate of laissez-faire may reply, “the use of force is criminal, and the State must suppress crime.” So men held in the nineteenth century. But there was an earlier time when they did not take this view, but left it to individuals and their kinsfolk to revenge their own injuries by their own might. Was not this a time of more unrestricted individual liberty? Yet the nineteenth century regarded it, and justly, as an age of barbarism. What, we may ask in our turn, is the essence of crime? May we not say that any intentional injury to another may be legitimately punished by a public authority, and may we not say that to impose twelve hours’ daily labour on a child was to inflict a greater injury than the theft of a purse for which a century ago a man might be hanged? On what principle, then, is the line drawn, so as to specify certain injuries which the State may prohibit and to mark off others which it must leave untouched? Well, it may be said, volenti non fit injuria.[Pg 91] No wrong is done to a man by a bargain to which he is a willing party. That may be, though there are doubtful cases. But in the field that has been in question the contention is that one party is not willing. The bargain is a forced bargain. The weaker man consents as one slipping over a precipice might consent to give all his fortune to one who will throw him a rope on no other terms. This is not true consent. True consent is free consent, and full freedom of consent implies equality on the part of both parties to the bargain. Just as government first secured the elements of freedom for all when it prevented the physically stronger man from slaying, beating, despoiling his neighbours, so it secures a larger measure of freedom for all by every restriction which it imposes with a view to preventing one man from making use of any of his advantages to the disadvantage of others.”
    L.T. Hobhouse, Liberalism 1911: http://goo.gl/eoIHf

  63. Charles Wheeler February 17, 2012 at 6:27 pm #

    Andrew Haldane on ‘The Survival of the Fattest’

    I would argue Haldane downplays the criminality and idiocy (see Robert Sherrill, Byron Dorgan, Brooksley Born for some who warned of the idiocy), but still essential reading:

    “The continuing backlash against banking, as evidenced in popular protests on Wall Street and in the City of London, is a response not just to the fact that the world is poorer, as pre-crisis riches have turned to rags, but to the way these riches were privatised, while the rags are being socialised. This disparity is nothing new. Neither, in the main, is it anyone’s fault. For the most part the financial crisis was not the result of individual wickedness or folly. It is not a story of pantomime villains and village idiots. Instead the crisis reflected a failure of the entire system of financial sector governance.”
    http://goo.gl/X3VcB

  64. John Souter February 19, 2012 at 4:43 pm #

    How ‘Poor’ is Greece Now & How Poor Will it Be?

    Who would have believed the 21st century version of blitz-krieg would be waged by the use of speculation backed by computed digits and Monopoly money?

    This is the financial shamans version of the neutron bomb – the one that supposedly annihilated all life forms but left the real estate and assets untouched and ripe for the victors spoils. Not a bad result for a threat backed by nothing more than a myth and a lobotomised propaganda machine.

    Was this a conspiracy or a cock-up? Is Greece merely a tactical test case to test a greater strategy? Iceland blew up, but it wasn’t part of the EU and didn’t play the game choosing instead to let their banks go to the wall. And, anyway Iceland was too small to be treated as a test case. ( Though strangely the money men have already decided Iceland can come back into the funny money club if it wants to – perhaps the club doesn’t want any country to survive and progress outwith the clubs ‘largesse’ of debt and interest?)

    Ireland and Portugal for the moment have played into the austerity pack of socialising real costs in order to pay real interests for computed Monopoly debts that circled only within the speculators and did nothing for their real productive economies. So for the present, they will be allowed to continue paying the pawn fee while the broker decides whether to sell their pawned assets or keep them in escrow.

    Until that is Greece succumbs or is subdued and the tactic is proved successful; then the PIIGS will be transformed to exactly one letter less than the acronym and given the same neutron treatment.

    Ireland, Portugal, Spain, Italy are already on the conveyor. The new Baltic and eastern European entrants have little in the way of reserves or financial clout to be able to withstand the ‘new’ club rules. Then on to France and the UK, both of whom, for the moment, are claiming the role of self sufficient internal and external gualeiters while in reality they are in just as much, if not more, hock to the Financial Storm Troopers as the countries they’re victimising.

    Some economists argue this isn’t a moral issue, purely an exercise in fiscal control. They might have a point if the money, the debt and usury charged were real and thereby creating real hardship for the alleged investors. But there not. It’s electronic Monopoly money that hasn’t even incurred the cost of the paper it isn’t printed on.

    If we allow this idiocy to win even a tactical skirmish we may as well write off the last five hundred years, democracy and the advance of civilization; and gird our loins with the sackcloth of feudal serfdom to serve the alchemy of the Overlords of Financial Funny Money.

    Whether through ignorance, incompetence or prior recruitment to their cause this is exactly what our political masters and their technocratic gualeiters want. There’s a lot of ‘profit’ in it and it would make their lives so much easier not to have to spin their way through the demands democracy places on them.

    For now we still have a choice. Either the easy way of apathy, or we take a myth by its mythical horns, expose it to the ridicule it warrants and deserves, then carve out for ourselves, our communities and our nations a real life based on our real values.

    In the real world, the Greeks are our neighbours and the rats in the financial shamans laboratory. How long before it’s our turn?

  65. steviefinn February 20, 2012 at 1:13 am #

    A set of 22 photos from a book called ” Someplace like America : “Tales from the new great depression” & some thoughts from Bruce Springsteen, whose new album ” The wrecking ball” is an angry indictment of big business & Wall street.

    The pics are reminiscent of 1930′s Farm administration photos.

    http://www.washingtonpost.com/lifestyle/style/bruce-springsteen-on-someplace-like-america/2011/12/19/gIQAx1Px4O_story.html

  66. Phil February 20, 2012 at 1:24 am #

    With speakers like David Milliband, Ed Balls and Jeff Sachs – I’d say this weekend of seminars was crying out for David, Charles Wheeler, Hawkeye, Mike, Bill and the rest of our happy band to skew a few myths.

    http://www.guardian.co.uk/open-weekend

    (24th/ 25th March)

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