Archive for the ‘money fetishism’ Category
This post is to mark the impending publication of the latest book from Naomi Oreskes and Erik Conway, entitled The Collapse of Western Civilisation: A View From the Future. The authors have already published a summary of this book’s thesis and purpose in the academic journal Daedalus. However, in July, the book itself will be published by Columbia University Press, who summarise it thus:
In this haunting, provocative work of science-based fiction, Naomi Oreskes and Eric Conway imagine a world devastated by climate change. Dramatizing the science in ways traditional nonfiction cannot, the book reasserts the importance of scientists and the work they do and reveals the self-serving interests of the so called “carbon combustion complex” that have turned the practice of science into political fodder. Based on sound scholarship and yet unafraid to speak boldly, this book provides a welcome moment of clarity amid the cacophony of climate change literature.
I was tempted to recommend readers look at all previous posts in my ‘Belshazzar’s Feast’ or ‘Collapse’ categories. However, this would take quite a long time. Therefore, if you have not read them before, I will just limit myself to recommending that you read:
– The first of two sequential posts in January 2012 about Jared Diamond’s Collapse: How Societies Choose to Fail or Succeed; and
– One of my earliest posts from September 2011 (reproduced in slightly modified form below), in which I mention the Civilisation: Is the West History? book and TV series by Niall Ferguson.
Taking these three books – from Diamond, Ferguson, and Oreskes and Conway – together, the one thing humanity will not be able to say is that it was not warned…
The Ark of the Covenant and the Temple of Dagon
I firmly believe that you do not need to be an adherent to any faith to find value in religious texts; and this is one of my favourite historical stories from the Old Testament: It tells of the Philistines (i.e. now Palestinians) capturing the Ark of the Covenant and – eventually – returning it to the Jews because of all the trouble having it caused (see 1 Samuel Chapters 5 and 6 if you’re interested). I think the moral of this story may be twofold: It tells us (1) that God can look after himself; and (2) we should not raise any object to the status of an idol.
Personally speaking, learning the first lesson from this story eventually convinced me in the mid-1980s that there was no point trying to persuade my devoutly-atheistic teachers at Portsmouth Polytechnic (as it was then) that not all Christians were Young Earth Creationists… However, globally speaking, learning the second lesson from this story will be necessary before humanity can dig itself out of the hole it is now in – as a result of (1) pride (in our own resourcefulness); and (2) complacency (regarding the Earth’s sensitivity to our activity)…
This was the warning given by E.F. Schumacher in Small is Beautiful (1973) and, most-recently, by James Lovelock in Revenge of Gaia (2006). Karl Marx called it “money fetishism” and Herman Daly called it “growthmania” but, whatever you want to call it, we need to renounce it; and acknowledge that all human actions – most important of all being waste production – have consequences… Therefore, more than anything else, this is a plea for anthropogenic humility, intellectual honesty, moral courage, and determined action. This is because if we fail to act soon then, yes, I do firmly believe that we face an environmental catastrophe.
If all of the above merely convinces you that environmentalism is a new religion, so be it but, I think you are wrong: I think consumerism is the new religion and, on the contrary, environmentalism is just a natural response to the realisation that humanity is having a terrible impact on the planet; and needs to change its ways before its very existence – in anything like current numbers and at current average levels of affluence – is seriously compromised.
Authors will have to forgive me if they feel I have here plagiarised any of their work, because this is an amalgamation of many different things I have seen or read. However, above all, it is influenced most-recently by watching Civilisation: Is the West History? by Niall Ferguson; and reading Requiem for a Species by Clive Hamilton… I do not believe either of these two men has been ideologically “captured” by any political agenda; they are merely being (at times painfully) honest and objective about the predicament in which we now find ourselves (though to be fair we were warned almost 40 years ago but chose not to listen).
In their latest book, Oreskes and Conway suggest that collapse will occur in 2093. Sadly, I suspect it will be a lot sooner than that. However, far from being mere pessimism, this conclusion is based on a great deal of scientific research. Research that shows that environmental change is now in the process of accelerating beyond our capacity to mitigate it:
– What on Earth are we doing? (19 February 2013).
– A summary of the ‘Climate Departure’ research of Mora et al. (11 October 2013).
This post has been prompted by an exchange of comments I have been having with Patrice Ayme – on my previous post (i.e. here) – that I feel deserves wider exposure and/or appreciation. However, if you have not the faintest idea what I might be on about, please be patient: This post is not too long and, if you read to the end, I believe all will become clear.
The image shown here is the cover of one of the two main course texts I had to buy in order to do my MA in Environmental Politics at Keele University in 2010-11. It is an excellent introduction to the subject of environmental politics and the concept of discourse analysis.
It is in this book that John Dryzek puts forward his own particular method of discourse analysis – analysing the things people say or have written – suggesting examination of: (a) the basic entities people recognise or appear to construct; (b) the assumptions they make about natural relationships; (c) the agents they recognise and motivations they assume; and (d) the key metaphors and rhetorical devices they use.
In the sphere of environmental politics, Dryzek suggests that it is possible to classify people on the basis of whether they appear to believe sustainability can be achieved by reformation of the status quo; and the extent to which they are thinking “outside the box”; as follows:
After Dryzek Box 1.1 on page 15 of The Politics of the Earth (2005).
In essence, economic rationalists assume market forces can be used to solve environmental problems; whereas ecological modernisers think it will take more than that.
This then was the starting point for my discourse analysis of climate change scepticism, which I have now published as The Denial of Science. However, in order to propose a similar classification of climate change scepticism, it was necessary to take Dryzek’s basic idea and combine it with what I have called the ‘Six Pillars of Climate Change Denial’ that I extracted from Robert Henson’s The Rough Guide to Climate Change:
The atmosphere may not be warming; but if it is, this is probably due to natural variation; but if it isn’t, the amount of warming is probably not significant; but if it is, the benefits should outweigh the disadvantages; but if they don’t, technology should be able to solve problems as they arise; but if it can’t, we shouldn’t wreck the economy to fix the problem (after Henson 2008: 257).
As I explain in my book, I simplified this summary of the positions adopted by those who are supposedly sceptical, in order to produce my Dryzek-style classification of climate change denial, as follows:
(1 – ACD is not happening)
(4 – ACD is not worth fixing)
(2 – ACD is not significant)
(3 – ACD is not problematic)
Contrarians are those refuse to acknowledge the nature of reality.
Cornucopians are those (like Julian Simon) who do not believe action is yet required to address any anticipated effects of anthropogenic climate disruption (ACD). They are named after Cornucopia, the horn of the goat Amalthea in Greek mythology, which Zeus endowed with a supernatural power to provide an unlimited supply of food etc.. As such, Cornucopians have unlimited confidence in the abundant supply of natural resources; the ability of natural systems to absorb pollutants; and their corrective capacity to mitigate human activities.
Economic Rationalists are defined and discussed by Dryzek (2005: 121-42) but, for the sake of argument, can here be taken to be synonymous with Karl Marx’s “money fetishism” as cited in Elster (1986); and/or Herman Daly’s “growthmania” (1974).
Prometheans are those (like Bjorn Lomborg) who propose radical technological solutions including environmental stabilisation of the atmosphere by means of geo-engineering. They are named after Prometheus, one of the Titans of Greek mythology, who stole fire from Zeus and so vastly increased the human capacity to manipulate the world. As such, Prometheans have unlimited confidence in the ability of technology to overcome environmental problems.
In a nutshell, my discourse analysis of climate change scepticism (i.e. the most prominent climate change sceptics in the UK) appears to suggest that the majority of these “sceptics” are either contrarians or economic rationalists. However, I suspect that as the outright denial of reality and the need to address the problem of ACD both become increasingly untenable, I think more and more people will try and find solace in either cornucopian or promethean beliefs.
In the discussion that I alluded to at the outset of this post, Patrice Ayme did not like the way in which I appeared to disparage the importance of human ingenuity (by suggesting that people who believe in both Cornucopianism and Prometheanism are deluded). I am pleased to say that we have now resolved any misunderstanding by agreeing that Prometheanism is the best option. However, crucially, we also agree that, in order to avert an ecological catastrophe, we will also need to modify our behaviour. That is to say, neither faith in Nature’s bounty (Cornucopianism) nor faith in human ingenuity (Prometheanism) should be used to deny our responsibility for causing the problem or to abdicate responsibility for doing everything we can to minimise its consequences.
Great stuff, hey? All we need to do now is get those with the power to make policy decisions to do the right thing.
It’s amazing really; thanks to the hypocrisy of the Communist Party of China (CPC) since the death of Mao Zedong in 1976, China has achieved in 36 years what Western Capitalism has taken more than ten times as long to achieve. Thanks to Andrew Marr’s History of the World, I recently became aware of the way in which stock markets were first created in the wake of the World’s first commodity trading bubble – the tulip mania of Holland in the 1630s…
Since that time, Western Capitalism has succeeded in inventing and then abolishing slavery (but not before making sure that this colonial exploitation denuded an entire continent of the one thing that might have enabled it to prosper on its own terms)… It invented industry, pollution, and sewage treatment works… It invented colonial exploitation and then made a great show of renouncing it; only to perpetuate it by other means – through the instruments of multi-national companies, stock markets, trade agreements, and global institutions… It extended the right to vote to all men and then even women too… It lifted huge numbers of people out of absolute poverty and tantalised millions more with the promise of a better life… In the UK, we invented mandatory education for all children; and created and later abolished Grammar Schools – favouring instead the Comprehensive system that has succeeded only in failing all children equally…
In the final analysis, however, globalised Capitalism has – just like the Atlantic Slave Trade – served only the interests of those who were already better-off; and it has been spectacularly successful in one thing only – making them even more wealthy than they were before… We may well have eradicated Smallpox but, in the last Century – irrespective of the changes of government – the gap between rich and poor has grown steadily wider and wider. The trickle-down effect of the Reagan and Thatcher era was a cruel myth; in reality wealth has become evermore concentrated in the hands of a super-wealthy elite. Some, like Patrice Ayme, would call it a plutocracy but – whatever you want to call it – its only interest today is in ensuring its own survival. In a way, it is analogous to the Skynet of the movie Terminator 3: The Rise of the Machines: It has become self-aware and is proceeding to exterminate its enemy – humanity itself.
As I said, the CPC has achieved all this in only 36 years and it too has now hit the growthmania equivalent of what Marathon runners refer to as “The Wall”… Ten times as fast and just as successfully, having promised to raise all its people out of poverty, it has comprehensively failed to achieve its stated aims. Once again, I find myself quoting John Gray from page xiv of the 2009 edition of False Dawn: The Delusions of Global Capitalism:
Along the way, however, the CPC decided to construct a protective fortress around itself in the form of a million millionaires; and a burgeoning middle class… The CPC has embraced the need to tackle climate change but only because it perceives it as a threat to its own long-term survival… Sadly, although it has not taken its foot off the economic accelerator, the fuel tank is now empty… It has lent so much money to the West and seen very little return in recent years… It has cities the size of Lower Manhattan with dozens of skyscrapers built and no-one to rent them to… What a mad, mad, World this is in which we all live…
But don’t just take my word for it, see it and read it for yourself, courtesy of the BBC’s China correspondent, Damian Grammaticas… In the run up to the latest renewal of the CPC’s very own plutocracy, Damian is once again performing a valuable public service by focusing on the spectacular contradictions that the CPC’s multi-decadal abuse of power has caused:
In the past two decades China’s economy has grown by 10% a year and more than 400m people have been lifted out of poverty. But China’s growth has been deeply uneven. Those in the right places with the right connections have been able to become astonishingly rich. There are now 1.4 million Chinese US dollar millionaires. The number of billionaires has grown from 15 in 2006 to 251 today.
Week in China: Guizhou, the poorest province
China’s economic growth has been deeply uneven. Most have seen their lives improve in the past two decades, and 400 million Chinese have lifted themselves out of poverty. But those in the right places with the right connections, usually in the cities, have gained incredible riches. So China today is among the most unequal countries in the world. The serious and growing inequalities are a problem China’s next leaders know they must tackle as the gap between the rich and the rest grows wider.
China’s ever-widening wealth gap
For more of my thoughts on (the climate sceptic) Andrew Marr’s History of the World programmes, you will have to cut and paste the programme title into the search box in the right-hand column.
For more of my many thoughts on China, you can do a category search (or just click here) – which presents all my related posts in reverse chronological order.
…because that is what all bubbles do!
At the risk of adding insult to injury (in the wake of Hurricane Sandy), I think the worst is yet to come – and I am not talking about the weather (unprecedented or otherwise).
It is already over a year since I first watched – and then blogged about – the revelatory movie Inside Job. In this movie, Hollywood megastar Matt Damon narrates the story of the 2008 financial meltdown. Since then, I have learnt a great deal from a variety of very knowledgeable bloggers – including Per Kurowski and Patrice Ayme – to whom I remain extremely grateful for their patience in teaching such a minnow in the sphere of economics.
I am afraid I do not really enjoy reading; I think I am a visual learner. I find it much easier to assimilate information from video presentations rather than reading blogs, articles, papers, and books. Thus it is that I find I have learnt more in watching a 45-minute documentary than I have learnt in an entire year of reading the above. Or, perhaps, it may be more accurate to say that the 45-minute video has just pulled it all together.
The video in question is based on the 2009 book Financial Fiasco by historian, Johan Norberg, who is (according to Wikipedia) “devoted to promoting economic globalization and liberal positions [and since 2007] has been a senior fellow at the Cato Institute.” The video, Overdose: The Next Financial Crisis, is – in the words of Norberg himself – “the story of the greatest financial crisis of our time; the one that is on its way.” I first watched the video without knowing who Norberg is and, once I found out, it seemed almost inconceivable that a fellow of the CATO Institute could produce such a devastating critique of his own ideology. For this reason alone, I think it is well worth watching.
With my thanks to the Asia Singapore blog for providing a source of quotations from the video, these are some of the best (in case you missed them and/or are unsure whether to watch it):
“After they did the dot-com bubble and that burst, they re-inflated it with real estate bubble and when that burst, they have created the bubble of all bubbles. It is not only the United States now. This is a global bubble. They are all into it. It is called the bail-out bubble. Hey the economy is going down, recession is setting in, sales don’t look good, exports soft, need more money. How about we call it stimulus package!” (Gerald Celente, Trend Analyst Trends Research Institute)
Low interest rates caused the housing bubble. Cheap loans caused the people to buy more and bigger homes. House prices began to rise 10 percent a year. So many took out a second mortgage to fund consumption… Why do you need a decent income to buy a home if you can get rich by just living in it? The market even coined a term NINA loans. No Income, No Assets. No Problem! You will get a loan anyway… (Norberg)
“There was a huge moral hazard created by the government in the mortgage market. When the government started to guarantee the mortgages, then the lenders stopped worrying about getting their money back, because the government said we guarantee it… The housing bubble that they inflated blew up with all the carnage and all the bankruptcies. And now what is their solution: We’ll just do the same thing we did before… Let’s print money and buy mortgages, let’s buy credit card debts, buy student loans… to get to the same excessive risk taking and gambling on the Wall Street. Let’s try to convince American’s already loaded with huge debt to go and buy new stuff and go into deeper to debt. The banks do not wanna lend them money, let’s make them lend more money. This is economic suicide.” (Peter Schiff, Euro Pacific Capital)
Forewarned is forearmed, as they say, so I would recommend all who are in any doubt to watch the video.
(Please note the absence of a question mark)
Last Wednesday, I eventually called a halt to an online discussion, which was threatening to get off-topic, by promising to dedicate a separate post to the subject today.
I think the problem is that we need altruistically-motivated public servants who enter politics to try and make the World a better place. Unfortunately, most of us get ideologically-driven career politicians who seek power in the World because they think they know best.
However, with my thanks to Christine, blogging at 350orbust.com, for bringing him to my attention, the President of Uruguay may well be a rare exception. I cannot put it better than Christine does at the start of her own post about a speech he gave at the Rio+20 Earth Summit in June this year:
President José Mujica of Uruguay [is] so unusual because here we see a political leader speaking the truth about our current situation…
The contemporaneous subtitling (i.e. simultaneous translation) is not very good and makes it harder than it need to be to fully appreciate what he says. However, his passion and his intent are clear; and make it well worth watching despite this. Nevertheless, thanks to the wonders of Google, I have tracked down a transcript of the speech made by a blogger in Uruguay (who was also appalled by the on-screen translation); but…
I really do think you should watch it. Therefore, even though I am sure the translator would not mind me reproducing the text in full here, I have not done so.
For an opposing view, by someone who considers president Mujica to be a dangerous misanthopic Communist, please visit ExPatBob’s blog. I am most certainly not a Communist sympathiser, but I find it very hard to fault President Mujica, when he says stuff like this:
I ask this question: what would happen to this planet if the people of India had the same number of cars per family as the Germans?… Does the world today have the material elements to enable 7 or 8 billion people to enjoy the same level of consumption and squandering as the most affluent Western societies?… Are we ruling over globalization or is globalization ruling over us?… Today, man does not govern the forces he has unleashed, but rather, it is these forces that govern man… And no material belonging is worth as much as life… I’m not talking about returning to the days of the caveman, or erecting a “monument to backwardness”. But we cannot continue like this, indefinitely, being ruled by the market, on the contrary, we have to rule over the market.
No, indeed not. This post is about the financial crisis.
I have been taking some time to read through the latest set of pages on Schalk Cloete’s One in a Billion blog and came across an excellent animated video, which I believe deserves to be made mandatory viewing for all citizens of planet Earth who have never formally-studied economics (i.e. like me).
Schalk has produced a great series of posts, under the collective title of Collapse, which look at the interconnected nature of all our problems but, it has to be said, they are not for the faint-hearted. Schalk has a wonderful ability to speak plainly but, when the truth is spelt out to you so clearly, it is very challenging stuff.
However, if you are (or have been) as confused by the complexity of the financial services industry as I was; and don’t know what the difference is between a collateralized debt obligation and a credit default swap…
Just watch this – it explains a lot:-
As Schalk points out in “More profitable to speculate than to produce” (i.e. the page where I found this video embedded):
Just to avoid any confusion, I would immediately like to draw a clear distinction between speculators and investors. Investors put the money they have earned through the production of valuable goods and services into some investment fund and trusts that the people who get to use this money will put it to good use (producing even better goods and services) so that it generates a return. This is good and very necessary to make society prosper. Speculators, on the other hand, use a variety of rather bizarre financial vehicles to lever up their bets and manipulate the market so that the valuation of all kinds of assets and commodities fluctuates widely over time. The more volatile the valuation of assets and commodities becomes, the greater the potential to buy at cheap prices and sell at high prices, thereby making a killing every time.
What scares me most about all of this is that, just at the time where humanity is finally facing up to the reality of a problem it has been (more-or-less) collectively ignoring for over 50 years, the pyramid-selling scam that is the financial services industry has finally collapsed. Thus, just as Meadows et al (1972, 1992, and 2005) warned, it is now becoming increasingly self-evident that…
Our Earth is unable to cope with the rate at which we are polluting it.
We have spent decades denying that the Earth has a finite capacity to deal with our pollution; and now we have just run out of money to spend on solving the problem. Basically, we’ve screwed-up, big time. What we need is politicians willing to admit it. What we’ve got is politicians apparently still fixated on the need to stimulate our economies into growing again. What we need is politicians willing to spend money we don’t have (only governments and investment bankers can do this) on investing in the future – renewable energy. What we’ve got is politicians refusing to give up on the past – fossil fuels.
Fossil fuels are history. We need to move on. To do that, we must all connect the dots
(Apologies for misleading you – this post was about the environment after all.)
I posted this on Learning from Dogs yesterday but it seems apt here too:
No it is not. This is the World we have corrupted… And, if it does not make you either angry or sad, I think you must have mislaid your humanity (which is very careless of you).
To mark this blog’s first anniversary today – and highlight the above – I am re-posting the item I posted exactly one year ago (and will return to the subject next week). Apart from the opening reference to my MA dissertation as being a work in progress, this could have been written yesterday:
Sceptical economists are intellectually bankrupt (10 August 2011)
As made clear in About, I am in the process of completing an MA in Environmental Politics at Keele University in Staffordshire (i.e. in the UK). As part of the requirements for my MA, I chose to undertake, as my dissertation topic, “A Discourse Analysis of Climate Change Scepticism in the UK”, looking at organisations, economists, scientists, journalists, politicians, and others, which was prompted by my reading the following:
— Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming, by Naomi Oreskes and Erik Conway;
— Requiem for a Species: Why We Resist the Truth about Climate Change, by Clive Hamilton; and
— Environmental Skepticism: Ecology, Power and Public Life, by Peter Jacques.
This, then, provides the relevant background to the following summary of my findings regarding economists:
I looked at 9 such economists (Roger Bate, Ian Byatt, David Henderson, Lord Lawson, Russell Lewis, Alister McFarquhar, Julian Morris, Alan Peacock, and Colin Robinson); and found that, 5 out of the 9 of them equate concern over AGW with a new religion; whereas 4 out of 9 suggest that pressure to take action to mitigate AGW is a politically-motivated conspiracy; and/or that AGW is a problem that is not worth fixing.
Lord Lawson is probably the most famous of these people, who, despite acknowledging his own scientific illiteracy, cites the “three greatest lies” of AGW as being (1) that the science is certain and settled; (2) that global warming is actually happening; and (3) that carbon dioxide is a pollutant (see Lawson 2009: p.107).
Therefore, although many sceptical economists (and scientists) may wish to draw analogies between concern for the environment and religious belief; and be very dismissive of “an uncritical acceptance of this new conventional wisdom” (Peacock), this does not negate the reality of the Limits to Growth argument; nor change the strong probability that, in addition to being the “greatest market failure in history” (Stern) and “a failure of modern politics” (Hamilton), AGW is the clearest evidence yet that the Earth has a limited capacity to cope with the waste products of human activity (cf. Meadows et al. 2005: p.223).
Notwithstanding all of the above, Greg Craven’s argument still holds, i.e. we need to decide how much risk we want to take hoping unpleasant things won’t happen.
The reason I want to return to this subject (i.e. the prejudice that drives economists to deny scientific facts) is that it has just come to my attention that the very aptly-named Global Warming Policy Foundation (i.e. promoting policies that will maximise global warming) has – in addition to a serving Bishop in the Church of England on its Board of Trustees – a list people (mostly economists) on its Academic Advisory Council that reads like a global who’s who of climate change denial…
It would therefore seem that, when it comes to the ideologically-prejudicial and economically-driven disputation of the basic laws of physics, the World is very small (and may well be flat)!
…is for good men to do nothing
(Pretty much the same thing happens when bad men do nothing as well)
Here’s a couple of tunes from great Antipodean bands of the 1980s for the senior management of Barclays to enjoy in their early retirement…
Dragon – Speak no Evil
Crowded House – Mansion in the Slums
So then, our politicians must now try and sort out this mess… Oh dear, why do I have this sickening feeling nothing is about to change…
This may have little to do with the environment but – I’m sorry – I simply cannot remain silent any longer about the revelation that the financial services industry in London is almost unbelievably corrupt. We are watching history being made here; this is bigger than the Olympics – and I think it will take the City of London decades to recover its reputation (if it ever can). It may be the CEO of Barclays, Bob Diamond, that has hit the headlines, but this scandal is set to envelop at least 20 banks; and I think there will be very few that will not eventually be tainted by it.
I stayed up late last night to watch two weekly current affairs programmes on the BBC, Question Time and This Week. The first question on the former set the tone for the evening: “Is there any integrity left in British Banking?”… The panel – including the CEO of brokering firm Tullett Prebon – were unanimous in their condemnation of Barclays; and every single one of them called for Bob Diamond to resign.
However, despite the unanimous view that he should resign (or be fired), a view clearly shared by the UK’s Prime Minister David Cameron, most people seem to think he will not go, simply because so many other banks are being investigated for the same thing; manipulation of the LIBOR – the interest rate banks use to lend each other money and/or make huge bets on future performance of equities. The fractions of a percentage involved are miniscule; but the sums of money involved are huge. This is indicative of the way in which the financial services sector is completely detached from reality; some of the trades involved sums of money in excess of the annual economic output of the entire planet.
Put simply, this money does not exist; and yet it has corrupted many of those involved. I therefore think the award for the soundbite of the evening must go to Michael Portillo, a former Conservative Minister in the Thatcher government, who said on This Week last night that (I paraphrase):
“If Pakistani cricketers can get sent to jail for match fixing, surely these traders should be sent to jail for what they have done…?”
Like I said at the start of this rant, I think it will take the City of London decades to recover its reputation (if it ever can); and I am very worried that no-one will ever be sent to jail for what they have done. However, I really hope action will be taken; and I hope that our politicians will stop trying to score political points against each other. This is no time for the present Coalition government to blame the previous Labour administration for light touch regulation. This kind of hypocrisy is almost as contemptible as the amoral behaviour of the bankers involved. How does the analogy go… “Before you try to take a splinter out of the eye of your fellow-man, remove the plank from your own!” The main reason we are in this financial mess is due to the action of another coalition – that between Reagan and Thatcher in the 1980s – which allowed the ‘Big Bang’ de-regulation of the financial services sector in London in 1986. This was the message of the movie Inside Job.
Barclays shares lost 16% of their value yesterday; but this is much bigger than Barclays. This scandal exposes the fact that our entire banking system is utterly corrupted; and rotten to the core. As many of the contributors to last night’s programme suggested, the high-street banks should now be separated from the investment banks. However, I do not think the Augean Stables can ever be cleaned-up; it needs to raised to the ground and completely re-built.
So, what, if anything, has this to do with the environment? A great deal, I suspect, because a very large proportion of humanity has very clearly taken its collective eye off the ball… I will close with the wise words of a Native American leader and poet:
When all the trees have been cut down, when all the animals have been hunted, when all the waters are polluted…
only then will you discover you cannot eat money.
Yesterday, on Learning from Dogs, Paul Handover published his thoughts on the 6-minute video of a presentation by a remarkably altruistic venture Capitalist, Nick Hanauer, which you can now view here (below). However, firstly, here are some words of introduction to provide necessary context:
Paul has published his thoughts under the title Inequality, a rich man speaks and, in doing so, has provided an excellent summary of Hanauer’s spectacularly-successful business career (e.g. being one of the first to invest in a new fledgling Internet-based sales idea called Amazon in 1995).
The core of Hanauer’s message is this: Venture Capitalists do not create jobs. Jobs are created in response to demand for a product; and demand for a product (i.e. sales) requires people to have a disposable income. That being the case (and ignoring for a moment that all growth in sales is perpetuated by the manufactured discontent peddled by advertisers), Hanauer argues that lowering taxes on the rich does not promote job creation; it perpetuates and exacerbates social inequality.
History is on Hanauer’s side so, I hope you will watch the brief video and see what you think but, for the record, my thoughts are appended below it.
Mr Hanauer needs to have a quiet word with George Osborne and David Cameron in the UK; because one of the few things that the Liberal Democrats are not challenging the Conservative-led coalition government on is their well-publicised and enacted policy of lowering Corporation Tax to the lowest level of any country in Europe – if not the World. They have also lowered personal tax on the wealthy – on advice from those trying to collect the taxes who say so much money is spent on tax avoidance that it is not economic to try and collect it all… Next stop for the UK may be Greece – where so little tax is collected from anybody that it is only good for cheap summer holidays, fine-sounding literature and philosophy, and ancient monuments.
Mr Hanauer’s appeal for the wealthy to shoulder more of the tax burden (not less) is welcome evidence of altruism sadly absent from the pronouncements and behaviours exhibited by most of the super-rich. It is somewhat reminiscent of the refreshing demand of the owner of a peat-extraction business calling for carbon to be taxed or even banned… in order to encourage demand for – and investment in – alternatives.
With people like Mr. Hanauer around, there may yet be hope for humanity to avert the catastrophe awaiting us all if we choose to ignore science, history and economics.