Laundering $800 Mil in Drug $, How Did HSBC Execs Avoid Jail?

[Ben]

Matt Taibbi: After Laundering $800 Million in Drug Money, How Did HSBC Execs Avoid Jail?

https://www.youtube.com/watch?v=K800WHFqy1g

[beandip]

....same as Citigroup did in the 1980's! Pay for the politicians.

Jail is for the serfs. You should know that.

[nysprod]

Matt Taibbi: After Laundering $800 Million in Drug Money, How Did HSBC Execs Avoid Jail?

https://www.youtube.com/watch?v=K800WHFqy1g

They're too big to jail

[sexyasianescorts]

Money and Good Lawyers.

Money does not buy you happiness only power and influence. (would love to be able to test that one lol)

[fivekatz]

They're too big to jailThe line of the week!:banana::cheers:

[buttslinger]

Imagine the stuff going on you don't hear about....

[Ben]

Money and Good Lawyers.

Money does not buy you happiness only power and influence. (would love to be able to test that one lol)

It doesn't buy happiness. That's fairly understood. But, you're right, it does bring power and influence....
An interesting book about the corrupting nature of our political system is called the Golden Rule by Tom Ferguson. (And, too, it goes back to the Powell Memo where Lewis Powell pointed out how the corporate class should and need to control the political system. As meaningful democracy diminishes the power of the, well, masters of the universe.)

[Ben]

Investment Theory of Politics

https://www.youtube.com/watch?v=RG5lQkkBqnQ

[fivekatz]

Corporate power in US knows few boundaries. The corporations budget for the fines they will receive as a cost of doing business and count on the fact that just like a casino even though they may lose a few, the odds are such that they are the house and house always wins.

These guys lobby the hell out of government at every level to get favorable judge appointments and laws that will favor them. They also create complex contracts with consumers that establish extraordinary limitations of liability and mandatory arbitration in front of arbitrators of the corporations choosing.

The reform movement of the early 1900's and the great depression of the 1930's somewhat leveled the playing field and the 1% in the US have been working ever since to reverse as much as they can of the gains of equity that were created by TR and FDR.

It has gone so far in the US that Ronald Reagan based on policy stance could not win a republican primary and that Barack Obama may just be a little to right of Richard M Nixon.

What is most scary is that if a catastrophic series of events demonstrating corporate governance gone amuck like we had first Enron-Tyco-etc and then the hole toxic assets crisis did not force serious shifts in power and oversight, just how bad will it have to get to reign in the corporate greed. And for what it is worth, by their very charters corporations are doing pretty much exactly what they are supposed to which is earning consistent profits for their shareholders with no regard for how it impacts anyone who is not a shareholder.

[robertlouis]

The HSBC guys are just the latest in a long and utterly dishonourable list. Our prisons all over the planet should be full of these rapacious bastards, who have learned nothing from the chaos and pain they have created and continue to be rewarded for it with increasingly big bucks.

The present financial crisis is without doubt the occasion on which capitalism finally jumped the shark.

[Stavros]

I don't agree, prison is a knee-jerk reaction from people who don't think through the crime and its social context, which is why incarceration for people who are a danger to themselves and others is a reasonable sentence. Most people who are in gaol do not belong there, either because the crime was trivial and they -in the US in particular- have fallen foul of the Baseball Clause (Three strikes and you're out!); or because they were not involved in violent crime. The cost of keeping someone in prison for something like embezzlement can often exceed the money that was involved in the crime.

Surely the greatest punishment for bankers and brokers would be to seize their assets, which would also include funds in overseas banks; impose a travel ban; and impose the financial equivalent of a 'community service' order in which they must work for x number of years on a low to median salary while being obliged to spend half their weekend doing something useful for the community.

It might re-calibrate their sense of what things are worth and how wealth is created. They might even come up with a new idea to start a business creating jobs for people...but gaol? No.

[fivekatz]

The HSBC guys are just the latest in a long and utterly dishonourable list. Our prisons all over the planet should be full of these rapacious bastards, who have learned nothing from the chaos and pain they have created and continue to be rewarded for it with increasingly big bucks.

The present financial crisis is without doubt the occasion on which capitalism finally jumped the shark.Rather than jail wouldn't it be cool if we could just take all their assets and give them minimum wage jobs, 1 room flats in worn neighborhoods and employers that do not provide health insurance?

[robertlouis]

I don't agree, prison is a knee-jerk reaction from people who don't think through the crime and its social context, which is why incarceration for people who are a danger to themselves and others is a reasonable sentence. Most people who are in gaol do not belong there, either because the crime was trivial and they -in the US in particular- have fallen foul of the Baseball Clause (Three strikes and you're out!); or because they were not involved in violent crime. The cost of keeping someone in prison for something like embezzlement can often exceed the money that was involved in the crime.

Surely the greatest punishment for bankers and brokers would be to seize their assets, which would also include funds in overseas banks; impose a travel ban; and impose the financial equivalent of a 'community service' order in which they must work for x number of years on a low to median salary while being obliged to spend half their weekend doing something useful for the community.

It might re-calibrate their sense of what things are worth and how wealth is created. They might even come up with a new idea to start a business creating jobs for people...but gaol? No.

No prison for bankers who have deliberately rigged interest rates and cost their customers millions, who have knowingly laundered billions of drug money and have broken the law of their own or several territories? Sorry, Stavros, there's an element of cold logic in what you say, but no justice.

Let's not forget that two years ago youngsters in the UK, however out of control, were being sent to jail for 18m or more for stealing bottles of water. There needs to be equity of treatment before the law, or the law loses its moral power and the state, ultimately, its right to govern. Just because the bankers haven't inflicted physical violence on their victims doesn't mean that the overall impact of their crimes is any less; we all know that the effect of their knowing and wilful negligence has cost the world billions in costs, jobs and ruined lives. White collar crime is never dealt with appropriately, blue collar crime is invariably dealt with harshly.

[Stavros]

Robert you are concerned to inflict punishment on people convicted of crimes, but you haven't given serious thought to what it should be, just the standard 'lock 'em up'. Prison for the most part doesn't work, and the reason why what you call 'blue collar crime' results in a custodial sentence is due to the violence it often inflicts on people and property.

The issue is not prison or not prison for people like Bernard Madoff who ruin people's lives, but what is the appropriate punishment for the crime? Madoff in the security of his gaol cell doesn't need to look any of his victims in the eye, every day, as he would if his punishment was to lose his liberty and be expected to clean their homes, mow their lawns and so on. If you decide that someone who breaks the law ought to lose their liberty, then if the crime did not suggest the person is a threat to others and himself/herself, why spend so much money keeping them in prison?

[an8150]

I haven't bothered, and don't have the time, to Google this, but am I not right in saying that HSBC was not shown to have laundered drugs money? Is it not in fact the case that HSBC was shaken down for failing to show that its systems were capable in theory of preventing use of the bank for laundering drugs money?

[fivekatz]

from a quick Google Search

Rolling Stone
Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a "record" financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213#ixzz2KMJDYTWA
Follow us: @rollingstone on Twitter | RollingStone on Facebook

NBC
A "pervasively polluted" culture at HSBC allowed the bank to act as financier to clients moving shadowy funds from the world's most dangerous and secretive corners, including Mexico, Iran, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.

The report [link to PDF here] which comes ahead of a Senate hearing on Tuesday, said large amounts of Mexican drug money likely passed through the bank.

HSBC's U.S. division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al-Qaida and other terrorist groups, according to an Al-Jazeera story on the report.

While the big British bank's problems have been known for nearly a decade, the Senate probe detailed just how sweeping the problems have been, both at the bank and at the Office of the Comptroller of the Currency, a top U.S. bank regulator which the report said failed to properly monitor HSBC.

"The culture at HSBC was pervasively polluted for a long time," said Senator Carl Levin, chairman of the U.S. Senate Permanent Subcommittee on Investigations, a Congressional watchdog panel.

The report comes at a troubling time for a banking industry reeling from a multi-country probe into the manipulation of global benchmark rates. Last month, rival British bank Barclays agreed to pay a $453 million fine to settle a U.S.-British probe into the rigging of the benchmark interest rate known as the London interbank offered rate, or Libor.

These people weren't shaken down, they were left to walk paying what in bankers dollars was a minor fine!

[an8150]

http://www.justice.gov/opa/pr/2012/December/12-crm-1478.html

Hm. The link above, which appears to be the US DoJ's definitive statement on the subject, is evasive. It skips from an initial claim that the 'crime' was as I described to an elaborated claim that actual drug money-laundering prosecutions followed.

What seems to me to be lacking is what, in even the prosecutorially happy US, I imagine is the requisite evidence that HSBC staff were deliberately laundering the proceeds of crime.

Nice little business you've got there, shame if somefink nasty were to 'appen to it. How's about an arrangement. We'll make sure no 'arm comes your way, an' you see us right?

One other thought occurs: in the link above, some apparatchik or other is quoted as saying banks are the first line of defence against drugs/money-laundering.

Since when was nominally private business an arm of government policy?

[broncofan]

"Nice little business you've got there, shame if somefink nasty were to 'appen to it. How's about an arrangement. We'll make sure no 'arm comes your way, an' you see us right?"

Ha, I can't tell if this is the Geico Gecko or some shady character from a British gangster film speaking. Certainly no Oxford educated Brit would talk like that!

They didn't prosecute the bank criminally. We've talked about this on this forum and I haven't done the research myself but if anyone knows I'd be interested. What would the criminal penalties be for the enterprise? Larger fines, injunction, temporary shutdown?

Why didn't they prosecute the individuals who signed off on these dirty transactions? Couldn't prove intent? No jurisdiction to pursue the matters overseas? Worried it might have negative effects on credit markets?

Again, I'm not making excuses for them at all as I posit that last question because it would be such a deplorable excuse not to prosecute. On the other hand, why would the DOJ not want a high profile prosecution if winning it would be so easy? Fivekatz has given some reasons and they are compelling in the abstract, but that's what we have right now. Perhaps it is corporate power greasing the wheels of the justice system; on the other hand perhaps there are practical issues such as evidence problems and the DOJ made a deal as prosecutors often do when it's easier to get some version of what you want in advance than face protracted litigation.

There does need to be a better deterrent for corporate crime. Prosecutions are few and far between. Maybe a better way to deter bad behavior would be to give companies incentives to clean house. I don't know if such laws would violate due process (or already exist), but if corporations could lower their liability by cleaning house and firing their corrupt executives this might make said executives less likely to be dishonest. If they fear unemployment as much as prison, it would be an internal mechanism for preventing such corruption. For instance, when their compliance department comes across violations of their own policies if the bank would get virtual immunity for blowing the whistle or firing the individuals, this might be more effective institutionally than one prosecution at a time. It might lead to scapegoating as well, but just a thought.

[fivekatz]

http://www.justice.gov/opa/pr/2012/December/12-crm-1478.html

Hm. The link above, which appears to be the US DoJ's definitive statement on the subject, is evasive. It skips from an initial claim that the 'crime' was as I described to an elaborated claim that actual drug money-laundering prosecutions followed.

What seems to me to be lacking is what, in even the prosecutorially happy US, I imagine is the requisite evidence that HSBC staff were deliberately laundering the proceeds of crime.

Nice little business you've got there, shame if somefink nasty were to 'appen to it. How's about an arrangement. We'll make sure no 'arm comes your way, an' you see us right?

One other thought occurs: in the link above, some apparatchik or other is quoted as saying banks are the first line of defence against drugs/money-laundering.

Since when was nominally private business an arm of government policy?

As to your first thought of the lack of reams of evidence, what essentially happened here is that HSBC basically plea bargained this case in part to avoid the full disclosure and in part because if the full judicial process did take place it would cost the bank far more.

Banks are not ordinary private businesses in the US and by charter are required to report all large and unusual transactions, much of which is residual of efforts to contain organized crime (mafia) versus organized crime by corporations.

If in fact the US government were prosecution happy the trail of damning evidence that Goldman-Sachs left behind as it advised clients to buy CDOs that it not only knew were to quote their own internal e-mails "shit" but also had the balls to by SCDOs betting on the failure of the products they were selling customers would have been enough to prosecute quite a few at GS.

So far the US DOJ has gone lightly on the financial institutions and the sad part is that risk of moral hazard could not be enforced because it would have literally taken down the world economy. Right or wrong the US administration has felt that if they hit the financial institutions to the letter of the law that it would create so much insecurity in the markets that consequences could be catastrophic if they did nail GS, Citi, BOA etc for the full range of their illegal activities.

So the whole principle of laissez faire capitalism hinges on moral hazard. But when banks become too big to fail, there can not be moral hazard. Perhaps no corporation demonstrates better than Goldman did that these folks know exactly what they are doing and know too well how the system works and that payoff even when caught is tremendous. Whether he was right or wrong Tim Geitner and the Obama Administration believed the system was to fragile to even enforce the existing laws, let alone passing meaningful financial reform.

Capitalism is a great system, it provides incentive and reward that brings out the best in people but unregulated it is a destructive system that brings out greed and the worst in people.

[an8150]

Fivekatz, HSBC was not unregulated. And it was not a laissez faire operation, as you seem to acknowledge in your remarks about too-big-to-fail banks (ie. they're too big to fail because they have state guarantees).

I suspect, although I do not know, that broncofan is right that the US DoJ had insufficient evidence for criminal prosecutions, or at least for prosecutions that would net serious convictions. And I'd add a suspicion of my own that the DoJ's cost-benefit analysis concluded that it would net more (ie cash) through a DPA than through costly trials of insignificant middle managers.

Anyway, the anti-drugs laws are both asinine and wicked, so I couldn't give a damn about their enforcement.

[fivekatz]

Fivekatz, HSBC was not unregulated. And it was not a laissez faire operation, as you seem to acknowledge in your remarks about too-big-to-fail banks (ie. they're too big to fail because they have state guarantees).

I suspect, although I do not know, that broncofan is right that the US DoJ had insufficient evidence for criminal prosecutions, or at least for prosecutions that would net serious convictions. And I'd add a suspicion of my own that the DoJ's cost-benefit analysis concluded that it would net more (ie cash) through a DPA than through costly trials of insignificant middle managers.

Anyway, the anti-drugs laws are both asinine and wicked, so I couldn't give a damn about their enforcement.My comment about laissez faire was more about the unregulated parts of banks, which were and shockingly still are CDOs and Synthetic CDOs.

As far as the banks being too big too fail, the government had to bail the banks and AIG out after the fact because the tenants of moral hazard could not be allowed to apply without meltdown the world financial system. Now banks aren't laissez faire operations regardless and I do realize that, but they are't regulated well enough if they are too big fail and too foolish to avoid failure.

Alan Greenspan who through out his career fought for free markets and that markets would regulate themselves organically, that moral hazard would temper reckless behavior. But after the meltdown he stated he never imagined that people would be so greedy or so reckless.

As far as a cost-benefit factor, I am sure you are right that the settlement was a good move for DOJ, but I am not as sure as you are that this is all the work of middle management and not a corporate governance issue. Certainly Lehman in finance and Enron in energy trading are just two examples of senior management having knowledge of malfeasance.

As for drug laws, I have mixed feelings. I certainly think that the prohibition against marijuana is stupid and is costing us as tax payers way too much money needlessly enforcing those laws and incarcerating the users. But I have a hard time with Meth and other destructive substances that can so quickly addict and destroy the user.

[an8150]

If you're worried about moral hazard, fivekatz, then bailouts presumably do little to reassure you.

Greenspan, incidentally, may have started his career as a free market capitalist red in tooth and claw, but the very fact that he had a career as a central banker betrayed those principles: central planning for banks and money should be as anathema to us as central planning for food.

[an8150]

I should add, fivekatz, that too-big-to-fail banks have been a problem for at least fifteen years, probably longer. That situation occurred becuase of regulation and government intervention. In 19th century Britain, banks quite routinely failed. That was accepted as a normal, if for depositors regrettable, fact of life. And banks were much, much smaller than now. Moral hazard and caveat emptor came close to ruling in a market that came close to being free. And when occasionally banks failed, nobody thought this fact threatened the world, or even merely the British, financial system.

[Stavros]

In 19th century Britain, banks quite routinely failed. That was accepted as a normal, if for depositors regrettable, fact of life.

Compared to the US there were fewer bank failures in the UK in the 19th of which two were large and important -Overend, Gurney & Co in 1866, and the Bank of Glasgow in 1878. That you should dismiss the disappearance of someone's life savings as 'a normal, if regrettable, fact of life' underlines the pure hypocrisy of free market capitalists who believe the protection of private property is the protection of freedom itself -until this unnatural system robs people of that very same property, whereupon it is wished away as something to do with markets rather than the incompetence of bankers, while their 'freedom' turns out to be not worth protecting at all.

[an8150]

Compared to the US there were fewer bank failures in the UK in the 19th of which two were large and important -Overend, Gurney & Co in 1866, and the Bank of Glasgow in 1878. That you should dismiss the disappearance of someone's life savings as 'a normal, if regrettable, fact of life' underlines the pure hypocrisy of free market capitalists who believe the protection of private property is the protection of freedom itself -until this unnatural system robs people of that very same property, whereupon it is wished away as something to do with markets rather than the incompetence of bankers, while their 'freedom' turns out to be not worth protecting at all.

How, then, Stavros, should I express my regret at the consequences of bank failure the better to demonstrate just how cut up about human misery I am? Would tears and the gnashing of teeth be sufficient? Or, borrowing freely from The Sun, should I show you my grief?

Private property is certainly intrinsic to the maintenance of freedom, and intrinsic to the nature of private property is the ability to lose it. Remove that ability, and you remove one of private property's central characteristics. Freedom includes the freedom to fail and to lose: there is nothing in the belief in the essential characteristics of private property, and in their maintenance in law, which is incompatible with freedom. Your definition of freedom, on the other hand, is tantamount to decision-makers, of whom I suppose you imagine yourself one (see Kip Esquire's Law), deeming who should get what. Which of course is not freedom, it's merely an abuse of language.

But you confuse more than just that: you confuse incompetence with robbery, a subject dealt with on page 1 of Ethics for Dummies.

As for 'unnatural system', I thought you Proggies were all in favour of Natural Selection.

[broncofan]

It is difficult because allowing banks to fail creates the crowd psychology that makes them fail too frequently. You have runs on banks because investors do not feel secure and since banks run on fractional reserves, such failures would happen too often. The answer in the U.S was FDIC insurance, which is a subsidy to banks, but also encourages the moral hazard we are talking about because being insured tends to increase risk-taking behavior. The response is that by accepting the subsidy the subsidized also accepts the burdens of greater regulation.

Greater capital reserves, safer portfolio of investments, restrictions on the size of loans it can make. I don't see how banks can operate without major regulatory oversight. This is imo one of the weakest arguments of the laissez faire advocates. Banks do not have incentives to play smart as they are investment vehicles run on tremendous financial leverage. They hold in cash a fraction of what they lend and even if they were not insured they would take risks they could ill afford. Why? Because when you get control over more capital than you invested in equity, you know your losses are limited to your equity investment but your upside is much greater.

The problem with letting them fail is that some would fail without even being a credit risk because of public insecurity (bank runs). There needs to be some security on people's hard earned money or people would not use banks and this would shrink the economy because who would lend money if it were not someone elses'? Too big to fail is a monster created by the regulatory system but is far better than the alternative.

[Stavros]

Your definition of freedom, on the other hand, is tantamount to decision-makers, of whom I suppose you imagine yourself one (see Kip Esquire's Law), deeming who should get what. Which of course is not freedom, it's merely an abuse of language.

As for 'unnatural system', I thought you Proggies were all in favour of Natural Selection.

I haven't volunteered a definition of freedom, and the post is not about me but about your utopian fantasy, in which the operations of the market take place in a world of risk and reward and everyone merrily agrees that you win some and you lose some. Your defence of free market capitalism is as fantastic as a Trotskyist insisting that after the revolution all these problems will be solved. What you cannot do is justify private property as the natural condition of mankind, it is an historical formation, and integral to the slavery which your free market capitalism is dependent upon, which you cheerily inform us is freedom. We have but the one earth, to share in common.

[an8150]

The problem with letting them fail is that some would fail without even being a credit risk because of public insecurity (bank runs). There needs to be some security on people's hard earned money or people would not use banks and this would shrink the economy because who would lend money if it were not someone elses'? Too big to fail is a monster created by the regulatory system but is far better than the alternative.

Just as a piece of utilitarian calculus, is it?

Go back to my example of the Victorian banks. Yes there were runs. One one occasion (in fact shortly before Victoria acceded), political activists tried to bring down the government by creating a bank run. And yes there were failures, but none that threatened economic civilisation as then conceived. Just as a piece of utilitarian calculus, then, smaller banks, greater spread of risk, fewer significant consequences when the inevitable failures occasionally happened. That's the alternative to the monster.

Couple of other points: in the early days of FRB bank reserves in England were often many orders of magnitude higher than under the Basel Regulations.

Also, if people want nothing but security for their money, as a store of value, there are always safety deposit boxes. In a fiat currency system, however and of course, constant debasement of the currency makes these less attractive than taking the risk of depositing with a bank in the hope of some slight return in % interest.

[an8150]

I haven't volunteered a definition of freedom, and the post is not about me but about your utopian fantasy, in which the operations of the market take place in a world of risk and reward and everyone merrily agrees that you win some and you lose some. Your defence of free market capitalism is as fantastic as a Trotskyist insisting that after the revolution all these problems will be solved. What you cannot do is justify private property as the natural condition of mankind, it is an historical formation, and integral to the slavery which your free market capitalism is dependent upon, which you cheerily inform us is freedom. We have but the one earth, to share in common.

Either, in my utopia, everyone merrily agrees that you win some and you lose some, or, in my utopia, all these problems will be solved. Both propositions cannot be correct. That being the case, there is nothing fantastical about my utopia.

And as for the proposition that what I call freedom is what you call slavery, well, you're talking Cantonese and I'm stuck with Spanish.

[broncofan]

Just as a piece of utilitarian calculus, is it?

Go back to my example of the Victorian banks. Yes there were runs. One one occasion (in fact shortly before Victoria acceded), political activists tried to bring down the government by creating a bank run. And yes there were failures, but none that threatened economic civilisation as then conceived. Just as a piece of utilitarian calculus, then, smaller banks, greater spread of risk, fewer significant consequences when the inevitable failures occasionally happened. That's the alternative to the monster.

Couple of other points: in the early days of FRB bank reserves in England were often many orders of magnitude higher than under the Basel Regulations.

Also, if people want nothing but security for their money, as a store of value, there are always safety deposit boxes. In a fiat currency system, however and of course, constant debasement of the currency makes these less attractive than taking the risk of depositing with a bank in the hope of some slight return in % interest.
I follow your logic (I'm fine with utilitarian calculus in this example). And yes it makes sense if you can choose between many small failures and huge conglomerates failing, you choose the former. But I don't think small banks are much less susceptible to systemic failure than the conglomerates. When people hear macroeconomic news and want their money, they want it from their regional bank just as quickly.

As you say with your reference to Basel Regulations, the bank regulators are always figuring out new metrics to test for strength because you can meet all capital requirements but hold really low quality assets. The assets can also have risk that is all positively correlated and so will tend to a credit risk at the same time. So it's incredibly tough to use rules of thumb to make sure banks are well managed.

I think the federal insurance program we have in the U.S. has on balance helped prevent calamity. There are problems with it and it does increase industry concentration and moral hazard, but public fear is too great when it comes to money already earned. If we didn't have this insurance and people really were rational they would be demanding all sorts of exorbitant interest rates on simple checking even. Lower interest rates on checking are one of the most important sources of subsidy to the banks.

With uninsured banks, I don't think there would be enough liquidity for a large scale economy. It goes without saying I could be wrong. Tell me how.

[an8150]

I follow your logic (I'm fine with utilitarian calculus in this example). And yes it makes sense if you can choose between many small failures and huge conglomerates failing, you choose the former. But I don't think small banks are much less susceptible to systemic failure than the conglomerates. When people hear macroeconomic news and want their money, they want it from their regional bank just as quickly.

As you say with your reference to Basel Regulations, the bank regulators are always figuring out new metrics to test for strength because you can meet all capital requirements but hold really low quality assets. The assets can also have risk that is all positively correlated and so will tend to a credit risk at the same time. So it's incredibly tough to use rules of thumb to make sure banks are well managed.

I think the federal insurance program we have in the U.S. has on balance helped prevent calamity. There are problems with it and it does increase industry concentration and moral hazard, but public fear is too great when it comes to money already earned. If we didn't have this insurance and people really were rational they would be demanding all sorts of exorbitant interest rates on simple checking even. Lower interest rates on checking are one of the most important sources of subsidy to the banks.

With uninsured banks, I don't think there would be enough liquidity for a large scale economy. It goes without saying I could be wrong. Tell me how.

I often think, broncofan, that in a libertarian world we would have had less economic development (or, if not less, then certainly different, more diffuse, with greater variety, and more opportunities to opt out and to avoid the blandishments of Big Business in governments' Big Tent; curious perhaps, but there is a hippy lurking inside most libertarians), so, without trying to pin down the meaning of 'large scale economy', to some extent I can see your point. Actually, as an aside I am sometimes amused and irritated by the fact that in the 'Progressive' and corporatist social democratic state we have the extensive motorway networks that, on other days with their Green hats one, the same 'Progressive' corporatist social democrats lament (I sometimes wonder whether, for this, Hitler, vegan pioneer of motorways and Romatic lover of unravaged forestry, is laughing at us from Hell); extensive motorway networks are, it seems to me, unlikely to have developed in a libertarian society. As another aside, talk of x (e.g. training children), y (e.g. house price inflation), z (what-you-will) as being of importance to the 'national economy' gives me the creeps. At best it's mercantilist propaganda, at worst, quasi-totalitarian dragooning. But anyway, back on topic, even if you're right that "[w]ith uninsured banks, I don't think there would be enough liquidity for a large scale economy", arguably the greatest periods of economic growth known to either your nation or mine were in the 18th and 19th centuries. With uninsured banks.

So, who knows what might have happened in an alternative universe? Certainly not I, although I'd be prepared to offer a few generalised predictive hostages to fortune. But actually, as always, that's the Big Argument for Big Government: stick with us, we'll see you right. I can understand why that appeals to the craven, the cowardly, the lazy, and even to those merely lacking self-confidence. I just happen to think it's a shame that entire populations, and particularly those of our two great nations, have been engulfed by this enervation. And, while I'm in full flow, that the Tribunes of this passivity trumpet their abasement as virtue.

A final though occurs, broncofan. Does your monster have a name? Is it Leviathan?

[fivekatz]

I am not sure what libertarian world we would look like if it was pure but IMHO you sure as heck can't have a standing army and taxation to support that army in times of peace and call that society libertarian. That alone means the USA has gone so far down the 'rabbit hole" that it can never be a pure libertarian society, because the society as constructed would take such a body blow between the death of the corporations that sell products to that standing military and all the members of the military that find themselves out of work that it might take the society a generation to dig out from under it.

There is in theory a lot that is great about Libertarian philosophy. I believe many laws regulating personal choice (drugs etc) are dumb. But the leap from here (where capitalism is today) and there is too far.

Just as on the flip side universal single payer health care in the US is too far a leap in economy that is loaded with private insurance, hospitals etc. And while such health care (universal single payer) is so anti-libertrian, if a country is going to spend whole ton of taxpayer dollars on something, should it be an army 8X's larger than anybody else's defending American business interests or should it be on defending America's citizens from disease?

At any rate the US has gone to far down the road to be pure, so the government can choose between making life better for everyone or making life better for the 1% because government is far too intrusive at this point to ever get back to pure libertarian ideals.

And on balance in IMHO the government in US needs to move center-left. Argue as they might about the greatness of the Reagan revolution the life of the vast of majority of Americans is not better in 2012 than it was in 1980.

[an8150]

I am not sure what libertarian world we would look like if it was pure but IMHO you sure as heck can't have a standing army and taxation to support that army in times of peace and call that society libertarian. That alone means the USA has gone so far down the 'rabbit hole" that it can never be a pure libertarian society, because the society as constructed would take such a body blow between the death of the corporations that sell products to that standing military and all the members of the military that find themselves out of work that it might take the society a generation to dig out from under it.

There is in theory a lot that is great about Libertarian philosophy. I believe many laws regulating personal choice (drugs etc) are dumb. But the leap from here (where capitalism is today) and there is too far.

Just as on the flip side universal single payer health care in the US is too far a leap in economy that is loaded with private insurance, hospitals etc. And while such health care (universal single payer) is so anti-libertrian, if a country is going to spend whole ton of taxpayer dollars on something, should it be an army 8X's larger than anybody else's defending American business interests or should it be on defending America's citizens from disease?

At any rate the US has gone to far down the road to be pure, so the government can choose between making life better for everyone or making life better for the 1% because government is far too intrusive at this point to ever get back to pure libertarian ideals.

And on balance in IMHO the government in US needs to move center-left. Argue as they might about the greatness of the Reagan revolution the life of the vast of majority of Americans is not better in 2012 than it was in 1980.

You are right that hooking large numbers of people up to the dripfeed of state largesse makes it almost impossible, in ordinary political terms, to turn around. And it's not just the military which is a client. In certain parts of Europe, including in my own country, if you remove the bulk of state spending then most people would, at least in the short term, be left without income or means to support themselves. Blood would be spilled, as it has been in Greece. Which reminds me of a story about Napoleon who, when arriving at the scene of a battle in the process of being lost by one of his marshalls, was asked by that marshall how to get out of the mess he was in. "I would not have got into this position in the first place", replied Boney. Which is not a terribly helpful answer, but I suppose it is what a libertarian would say to the dilemma you've described. The problem with your prescription, fivekatz, is that, quite aside from its lack of principle ("we might as well be hung for a sheep as for a lamb"), eventually economic reality will catch up with us all: the nations of the western world are spending more than they can afford. Your own government spends $4 trillion for every $2 trillion it raises in taxes. The difference is your national debt. In two years' time the interest payments on that debt will be financing the Chinese People's Army. Eventually you will not be able to service the debt. You will default. There will be blood. So in the final analysis, it doesn't matter what I think, or what any of the 'progressives' and 'liberals' think. When the money's gone, it's gone. And the more sheep feeding from the trough when that happens, the more blood will be spilled when the trough is empty (I know, the idea of ravening sheep is difficult to imagine :)).

The irony is that the drive to create the New Jerusalem here on earth - government making life better for everyone, as you put it - is what will create a hell more vicious and devastating than any libertarian society so brutal as to lack government healthcare and welfare, yet apparently I'm the utopian.

[hippifried]

Well, I don't know about y'all, but I'm still waiting for any kind of evidence that supports the egoist philosophy. If anything even remotely resembling a successful individualist society has ever existed, give me the where & when.

As for the ability to afford all this mythical "government largesse": All monies are coined by the state, & always have been. Money is merely an artificial concept to simplify barter. Nowadays it's nothing but numbers in a ledger, with a little bit of pocket change. We can crunch the numbers & afford anything we want. That's WE. Collectively.

[Stavros]

You are right that hooking large numbers of people up to the dripfeed of state largesse makes it almost impossible, in ordinary political terms, to turn around. And it's not just the military which is a client. In certain parts of Europe, including in my own country, if you remove the bulk of state spending then most people would, at least in the short term, be left without income or means to support themselves. Blood would be spilled, as it has been in Greece. Which reminds me of a story about Napoleon who, when arriving at the scene of a battle in the process of being lost by one of his marshalls, was asked by that marshall how to get out of the mess he was in. "I would not have got into this position in the first place", replied Boney. Which is not a terribly helpful answer, but I suppose it is what a libertarian would say to the dilemma you've described. The problem with your prescription, fivekatz, is that, quite aside from its lack of principle ("we might as well be hung for a sheep as for a lamb"), eventually economic reality will catch up with us all: the nations of the western world are spending more than they can afford. Your own government spends $4 trillion for every $2 trillion it raises in taxes. The difference is your national debt. In two years' time the interest payments on that debt will be financing the Chinese People's Army. Eventually you will not be able to service the debt. You will default. There will be blood. So in the final analysis, it doesn't matter what I think, or what any of the 'progressives' and 'liberals' think. When the money's gone, it's gone. And the more sheep feeding from the trough when that happens, the more blood will be spilled when the trough is empty (I know, the idea of ravening sheep is difficult to imagine :)).

The irony is that the drive to create the New Jerusalem here on earth - government making life better for everyone, as you put it - is what will create a hell more vicious and devastating than any libertarian society so brutal as to lack government healthcare and welfare, yet apparently I'm the utopian.

Free market capitalism is a liberation ideology; without the state as it is today, your arguments lack a target -you are dependent on the critique of contemporary capitalism to enable you to constantly say what is wrong without having to tell us what life will be like after the revolution. You refer to violence in Greece knowing full well that it is extremist neo-Nazis attacking immigrants from North Africa, the Middle East and the Indian sub-continent, and is part of the unresolved ideological fractures of the Balkans that date back to the dissolution of Ottoman rule there and which have shaped the garganuan mess that modern Greek politics has collapsed into.

As a free market capitalist I know you think all immigration controls are wicked and deplorable, but the simple truth is that you cannot conceive of a free market capitalist alternative to what we have now without getting all confused about what role in your Eden will be played by nationalism, globalisation, climate change, modern technology and its impact on jobs -like the Trotskyist waiting for the transition you wish it all away with the pie-in-the-sky fantasy of a politics free of government and taxation, economic relations regulated by markets, social relations shaped by individual self-interest, the majority of people living in the sunlit uplands of prosperity and bliss.

Or, politics in which democratically elected governments are replaced by the tyranny of market forces; in which economic relations are not controlled by any regulations so that 'meat manufacturers' can sell diseased rats as 'chicken burgers' and respond to customer complaints -nobody is forcing you to buy my burgers! And social relations shaped by violence, slavery and contempt for human rights.

Free market capitalism is a utopian fantasy in which privilege and wealth replaces the Nazi party as the arbiter of life and death. In this system, if your father's business goes bankrupt taking your inheritance with it, you force your father to his knees, and order him to open his mouth while you piss in it, just as Ayn Rand would expect you to deal with such a loser. Better still, lock him and the rest of the losers in your family into a barn, and set fire to it -why should the world carry this extra, surplus-to-requirements, breadcrumb begging extra bagagge?

An Idaho senator has introduced a bill that would require all high school students in the state to read Atlas Shrugged -evidence of the controlling mentality, the venal hostility to freedom that free market capitalists are addicted to. The fact that he doesn't even take it seriously underlines the contempt with which free market capitalists treats democracy. Or maybe he is just one of capitalsm's useful idiots? And in such a crowded market...

http://www.huffingtonpost.com/2013/02/06/ayn-rand-idaho_n_2631414.html

[broncofan]

So, who knows what might have happened in an alternative universe? Certainly not I, although I'd be prepared to offer a few generalised predictive hostages to fortune. But actually, as always, that's the Big Argument for Big Government: stick with us, we'll see you right. I can understand why that appeals to the craven, the cowardly, the lazy, and even to those merely lacking self-confidence. I just happen to think it's a shame that entire populations, and particularly those of our two great nations, have been engulfed by this enervation. And, while I'm in full flow, that the Tribunes of this passivity trumpet their abasement as virtue.

A final though occurs, broncofan. Does your monster have a name? Is it Leviathan?
Libertarianism does tend to be efficient. I have pointed to market failures in such systems but they're not easy to correct. However, I point to these market failures not just to show challenges to the efficiency of pure free markets but also individual inequities suffered in the process.

To say that a market system is efficient says nothing about how capital is acquired. It says nothing about how it is distributed. It says nothing about what happens to individuals who are victims of a market failure, say through lack of information, and end up serving as a cautionary tale for others heeding their signals in the marketplace in furtherance of this sought after efficiency.

We have to consider in this calculus what happens to the person who has his money deposited at a bank when there's a bank run. The reason the government insures these banks, even if it is inefficient in the long run because of the costs we've talked about, is because it is unfair for any one individual to pay for a failure with his life's savings. In free market ideology, we might assume that individuals would be able to pick the more responsible banks and so the person who loses his money does so because he was seeking a higher return by taking on more risk. The truth is, this risk is not priced very efficiently by the market and someone could lose everything through no fault of his own. Credit risk is notoriously difficult to value.

When it comes down to it, Libertarians want a competitive system and they strive for efficiency (an aggregate number), but they forget about the people who through no fault of their own lose out in the process. There are basic things people are unable to live without. In a free market system, economic losers would be forced to go without for the benefit of some aggregate utility function. Life is not so easily reducible to mathematical abstractions. A hands off system avoids unintended consequences, but accepts all of the easily foreseen and avoidable misery. To me, this is a pessimistic ideology that says let the losers lose because helping them share in the economic success might involve some waste.

[Ben]

Gangster Bankers: Too Big to Jail

How HSBC hooked up with drug traffickers and terrorists. And got away with it

http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214

[fivekatz]

Elizabeth Warren 1 - US Fed Regulators 0

The best argument the regulators could come up with is cost-benefit, but the problem with cost - benefit is if Jamie Dimon had to do 12 months maybe Goldman-Sachs and a few others may operate differently then you would have a true moral hazard in a world where financial institutions have become so big that world recession is the aftermath of their excessive gambles and quasi legal to illegal activities.

Forget Utopia, the world is what it is. Huge banks aren't the product of the FDIC, they were the product of repeal of regulation. Now I am not so naive that the repeal of Glass-Seaguall caused the all the issues of the meltdown, but it made it so much broader when players like Chase and Citi and an B of A could come to the party as players with FDIC insured deposits and drunken bets on sub-primes.

These people knew what they were doing. The fact that they leave the devastation richer for the experience as opposed to crushed, while individuals and institution investors got fucked is just wrong.

The philosophical arguments about pure capitalism is all well in good but that is not the world we live in. And in the world we live in companies like Goldman-Sachs, JP Morgan-Chase, Lehman Brothers, HSBC should be taken to the wood shed and the CEO's who either lead so poorly they hadn't a clue what was happening or led the charge, those dudes should spend some time in minimum security incarceration and that will create moral hazard.

What actually happened is bullshit and for all I am all for Obama his adminsitration let these guys walk away having earned a lot and learned nothing except the world can't live without them.

[broncofan]

I'm not saying only fdic caused industry conglomeration but it may have been a factor because it helps enable banks to get deposits easily and for lower interest rates. Also, regulators have not applied Sherman anti-trust principles well enough to industry mergers. They've allowed too much concentration when many established methods for measuring industry concentration (HHI) have specifically contraindicated it. Other issues include loosening of interstate banking regulations, loose regulations respecting both bank holding companies and financial holding companies that allow companies to create a broader corporate umbrella and operate many different financial services companies such as securities brokerage, insurance brokerage as subsidiaries.

I'm for more regulation. I'm just saying that all regulation changes incentives in the marketplace. Providing insurance makes people take on more risk, but that's not a good enough reason for withdrawing it. It's a good reason to provide MORE regulation so that their new incentives are properly checked by bank regulators.

[fivekatz]

IMHO the real issue with the 2008 crash was a lack of regulation. There wasn't any regulation of CDO's or Synthetic CDOs. By calling the insurance of CDO synthetic it allowed insurance to be written without any oversight.

None of the banks who were "insuring" their CDO's with AIG had any idea how much money AIG had committed to insuring and AIG did not have to hold reserves for it. But AIG allowed the cover for the CDOs to be Triple AAA rated by Moody's and S&P. Besides the banks not seeing that AIG had inadequate capital reserves to back up the bundles of sub-primes, the government could not see it either thanks largely to the key players in the Clinton Administration (Ruben, Summers and Greenpan).

The other deregulatory gap that caused things to get really bad was the repeal of Glass-Seageall. It allowed Travelers (broker and insurance co.) to merge with a commercial bank (Citi Bank). Once the walls went down between investments banks and commercial banks the amount of activity in CDO's grew tremendously. The fact that the commercial operations had depositor insurance wasn't as much a factor as was the shear greed of the banks.

Now IMHO sub-prime was bound to happen, but if the wall had been kept to investment banks, all of sudden Merrill-Lynch, Lehman Brothers and Goldman Sachs aren't the same body blow to the world economy that JP Morgan-Chase, B of A, HSBC, Well Fargo etc were.

I would agree that weakening of interstate banking regulations contributed and will contribute to fuel the reality of too big to fail. My personal opinion is that if a bank is too big fail it is too big to exist as is and should be broken into individual units or seperate regional units. The efficency of scale of big banks is dwarfed by the risks to the public if the institutions failure can trigger a world recession if the taxpayers bail it out and a depression if they don't.

Whilst I understand and applaud the Obama administration's decision to take on the issues of health care reform in the US, I personally think that it was in some ways an easy out versus taking on the basic structure of Wall Street and reeling in the damage done from Reagan to Clinton to Bush and the natural tendency of a capitalist to find the loopholes and run through them.

Unbridled greed is at the core of capitalism and regulation is the bridle that allows it to survive without either it's taking itself down or the 99% toppling it.

[an8150]

Well, I don't know about y'all, but I'm still waiting for any kind of evidence that supports the egoist philosophy. If anything even remotely resembling a successful individualist society has ever existed, give me the where & when.

As for the ability to afford all this mythical "government largesse": All monies are coined by the state, & always have been. Money is merely an artificial concept to simplify barter. Nowadays it's nothing but numbers in a ledger, with a little bit of pocket change. We can crunch the numbers & afford anything we want. That's WE. Collectively.

So government can print as much money as it likes, with no ill effects?

Good grief. Doing my damndest to avoid an ad hominem reply, and realising that I'll probably regret asking you this, but, um, have you considered why, if your proposition is correct, your government doesn't just print enough money to make you all billionaires?

[an8150]

Free market capitalism is a liberation ideology; without the state as it is today, your arguments lack a target -you are dependent on the critique of contemporary capitalism to enable you to constantly say what is wrong without having to tell us what life will be like after the revolution. You refer to violence in Greece knowing full well that it is extremist neo-Nazis attacking immigrants from North Africa, the Middle East and the Indian sub-continent, and is part of the unresolved ideological fractures of the Balkans that date back to the dissolution of Ottoman rule there and which have shaped the garganuan mess that modern Greek politics has collapsed into.

As a free market capitalist I know you think all immigration controls are wicked and deplorable, but the simple truth is that you cannot conceive of a free market capitalist alternative to what we have now without getting all confused about what role in your Eden will be played by nationalism, globalisation, climate change, modern technology and its impact on jobs -like the Trotskyist waiting for the transition you wish it all away with the pie-in-the-sky fantasy of a politics free of government and taxation, economic relations regulated by markets, social relations shaped by individual self-interest, the majority of people living in the sunlit uplands of prosperity and bliss.

Or, politics in which democratically elected governments are replaced by the tyranny of market forces; in which economic relations are not controlled by any regulations so that 'meat manufacturers' can sell diseased rats as 'chicken burgers' and respond to customer complaints -nobody is forcing you to buy my burgers! And social relations shaped by violence, slavery and contempt for human rights.

Free market capitalism is a utopian fantasy in which privilege and wealth replaces the Nazi party as the arbiter of life and death. In this system, if your father's business goes bankrupt taking your inheritance with it, you force your father to his knees, and order him to open his mouth while you piss in it, just as Ayn Rand would expect you to deal with such a loser. Better still, lock him and the rest of the losers in your family into a barn, and set fire to it -why should the world carry this extra, surplus-to-requirements, breadcrumb begging extra bagagge?

An Idaho senator has introduced a bill that would require all high school students in the state to read Atlas Shrugged -evidence of the controlling mentality, the venal hostility to freedom that free market capitalists are addicted to. The fact that he doesn't even take it seriously underlines the contempt with which free market capitalists treats democracy. Or maybe he is just one of capitalsm's useful idiots? And in such a crowded market...

http://www.huffingtonpost.com/2013/02/06/ayn-rand-idaho_n_2631414.html

Free market capitalism is a liberation ideology? Er, is that a bad thing thing?

But ok, I'll bite. You think we're like the IRA or the PLO, and we believe once our enemy disappears all will be well. Not at all. As I wrote in an earlier thread, I don't dismiss the concerns of social democrats, I merely say that their (your?) cure is worse than the disease. And as for the comparison with a dreaming Trot, I suspect you're confusing the well-known inability of communists to agree on how to implement Marx's vision. Granted, there are disagreements between libertarians, but most of us either fall into the category of anarcho-capitalists or minarchists, and within those two brackets, we are generally agreed on the big things, in terms of practical constitutional and political arrangements. But that is not the same thing as being unable to describe how the world would be different were people freer. Indeed, in terms of mass population predictions, unpredictability is intrinsic to greater freedom. Jolly good, I say. Yes, there are predictions I'd venture, and maybe will if I have the time, but the absence of planning for entire populations necessarily makes such predictions speculative.

As to your claims about Greece, you'll have to refer me to a link in support of them. Otherwise I'll admit to being brainwashed by TV footage of general strikes, with petrol bombs being thrown and policemens' heads being cracked. Oh, and weren't some bank employees arsoned to death? Or were they merely Indian?

The stuff about Nazis and pissing is baby talk. And the Idaho senator seems rather to have missed the point about Rand's teachings.

[an8150]

Libertarianism does tend to be efficient. I have pointed to market failures in such systems but they're not easy to correct. However, I point to these market failures not just to show challenges to the efficiency of pure free markets but also individual inequities suffered in the process.

To say that a market system is efficient says nothing about how capital is acquired. It says nothing about how it is distributed. It says nothing about what happens to individuals who are victims of a market failure, say through lack of information, and end up serving as a cautionary tale for others heeding their signals in the marketplace in furtherance of this sought after efficiency.

We have to consider in this calculus what happens to the person who has his money deposited at a bank when there's a bank run. The reason the government insures these banks, even if it is inefficient in the long run because of the costs we've talked about, is because it is unfair for any one individual to pay for a failure with his life's savings. In free market ideology, we might assume that individuals would be able to pick the more responsible banks and so the person who loses his money does so because he was seeking a higher return by taking on more risk. The truth is, this risk is not priced very efficiently by the market and someone could lose everything through no fault of his own. Credit risk is notoriously difficult to value.

When it comes down to it, Libertarians want a competitive system and they strive for efficiency (an aggregate number), but they forget about the people who through no fault of their own lose out in the process. There are basic things people are unable to live without. In a free market system, economic losers would be forced to go without for the benefit of some aggregate utility function. Life is not so easily reducible to mathematical abstractions. A hands off system avoids unintended consequences, but accepts all of the easily foreseen and avoidable misery. To me, this is a pessimistic ideology that says let the losers lose because helping them share in the economic success might involve some waste.

We don't strive for efficiency, we strive for freedom. Efficiency is a by-product, a secondary effect. That's the difference between, say, a Randian and a Hayekian. It's because we value freedom above wealth, because wealth is acquired but freedom inheres to us, that we accept financial losers in a free society are more desirable than slaves in a wealthy society. And I think most of us have greater faith in the willingness and ability of man, left unmolested, to tend to his own needs than is suggested by your label of 'pessimistic' which, it seems to me, is more properly applied
to those schools of thought emphasising man's helplessness in the face of the universe.

[an8150]

And in the world we live in companies like Goldman-Sachs, JP Morgan-Chase, Lehman Brothers, HSBC should be taken to the wood shed and the CEO's who either lead so poorly they hadn't a clue what was happening or led the charge, those dudes should spend some time in minimum security incarceration and that will create moral hazard.



What would you have them convicted of?

Serious question. I know little of your law, but am struck by your use of the word 'quasi' to describe the legality of their actions. Either they were legal or illegal.

[an8150]

I'm for more regulation. I'm just saying that all regulation changes incentives in the marketplace. Providing insurance makes people take on more risk, but that's not a good enough reason for withdrawing it. It's a good reason to provide MORE regulation so that their new incentives are properly checked by bank regulators.

Trouble is, you'll have to keep regulating to correct more regulatory failures, ad infinitum. You will never get it right.

[an8150]

Unbridled greed is at the core of capitalism and regulation is the bridle that allows it to survive without either it's taking itself down or the 99% toppling it.

The people must be shackled for their own good.

[trish]

In engines, motors, any system designed to perform repeatable cycles, including market systems, regulators are required to make systematic corrections on each cycle ad infinitum in order to maintain a proper balance of feedback and control.

Absolute freedom is absolute anarchy. Real and useful freedoms can only exist within a context of social restraints.

[Prospero]

The current horsemeat scandal in Europe shows the need for proper regulation of business. Without that what might they try to get away with.

And regulation of the sales of weapons to terrorist groups? Not for the free market dreamers.

That way madness and the law of the jungle lies.

[an8150]

The current horsemeat scandal in Europe shows the need for proper regulation of business. Without that what might they try to get away with.

And regulation of the sales of weapons to terrorist groups? Not for the free market dreamers.

That way madness and the law of the jungle lies.


Um, "The Government knew last summer that a sudden ban on cheap British beef and lamb meant it was “inevitable” that unlawful meat would be imported from Europe. " (http://www.thetimes.co.uk/tto/news/politics/article3687703.ece).

In other words, regulation caused the problem. Now more regulation is demanded to solve it.

There's no need to regulate sales of weapons to terrorists: a gun seller who sells a gun to a man whom he knows or suspects will use it for causing harm is aiding and abetting that terrorist and therefore already subject to the criminal law.

[trish]

If the thermostat in your home malfunctions, you have it adjusted or replaced. You don't remove all thermostats from every home. Similarly with governors on steam engines and other sorts of regulators. Proper tuning and proper calibration keeps systems balanced and running smooth. A poorly regulated engine won't run at all.

A person who is not afforded the economic opportunity to succeed, lacks the freedom to succeed.

[Prospero]

And when this religion fails you An8150, what next? Catholicism or Islam?

[an8150]

And when this religion fails you An8150, what next? Catholicism or Islam?

I confront you with facts which don't fit your narrative, and you accuse me of cleaving to articles of faith?

[Prospero]

No your worship of the ludicrous ayn rand and the impossility of your creed manifest all the characteristics of blind faith

[an8150]

No your worship of the ludicrous ayn rand and the impossility of your creed manifest all the characteristics of blind faith

Okay, let's take it as a given that I'm some kind of nutter kneeling at the Randian altar. You can even imagine me sacrificing virgins thereon, if it makes you happy.

Now we've got that out of our system, let's go back to your narrative and my facts.

How do you reconcile the two?

[Prospero]

I am bemused tHat you accuse me of doing what is a habit for you which is ignoring the acres of reason offered by many other folk here to pursue your idealistic agenda. For weeks I have ignored your postings as so much idealistic irrelevancy and will resume that position. Carry on without me. Sweet dreams..

[an8150]

I am bemused tHat you accuse me of doing what is a habit for you which is ignoring the acres of reason offered by many other folk here to pursue your idealistic agenda. For weeks I have ignored your postings as so much idealistic irrelevancy and will resume that position. Carry on without me. Sweet dreams..


Childish. Come on, give me an example of my having been offered facts that do not fit my narrative and where I have failed to address that issue.

[trish]

Libertarians assert the market seeks an equilibrium that maximizes freedom. Yet they never define what it means to maximize freedom nor do they provide a proof that free market systems seek any sort of equilibrium. Anecdotes that suggest the obvious, that regulatory systems require constant adjustment, do not constitute proof that a system without regulation will do just fine; the persistent assumption that it will is tantamount to religious faith.

[an8150]

Libertarians assert the market seeks an equilibrium that maximizes freedom. Yet they never define what it means to maximize freedom nor do they provide a proof that free market systems seek any sort of equilibrium. Anecdotes that suggest the obvious, that regulatory systems require constant adjustment, do not constitute proof that a system without regulation will do just fine; the persistent assumption that it will is tantamount to religious faith.

We don't assert the market seeks an equilibrium that maximises freedom. That is precisely backwards. We assert that a free market tends to find equilibrium or, when unbalanced, that it seeks out equilibrium more efficiently than any other model. In other words, the freedom maximises equilbrium, not the other way around. I would go so far as to say there is no such thing as maximised freedom. There is only freedom, or degrees of servitude. I have defined freedom, on that previous thread. It is the absence of coercion ('coercion' as properly meant in English, not in some mangled and politically-motivated use of the language which equates working for a living with coercion). If you require proof that free market systems seek out equilibrium, you need only consider the law of supply and demand. You're right, however, logically that criticism of regulation does not necessarily mean that it's absence will work better; I have made no such persistent assumption. Indeed, my arguments have tended to shy away from the utilitarian in favour of the purely moral, because I happen to think that even if central planning, regulation and all the rest of it could be made to work in its own terms, it would still be undesirable. The reason I say that is because I believe freedom has greater moral value than utility, in terms of human happiness.

[trish]

We assert that a free market tends to find equilibrium or, when unbalanced, that it seeks out equilibrium more efficiently than any other model.Where is your proof? Von Neuman and Morganstern refute this claim.


In other words, the freedom maximises equilbrium,This is of course the converse of what you claimed in prior posts. But never mind that, tell us instead what a "maximized equilibrium" is.


It is the absence of coercionThis is a ridiculous notion of freedom. What happens to a person who infringes upon your legally assured freedom if he is not coerced to recompense you in some way?


the law of supply and demand.This law has nothing whatsoever to do with any sort of equilibrium. It merely asserts that demand diminishes with price.

[Stavros]

Free market capitalism is a liberation ideology? Er, is that a bad thing thing?

But ok, I'll bite. You think we're like the IRA or the PLO, and we believe once our enemy disappears all will be well. Not at all. As I wrote in an earlier thread, I don't dismiss the concerns of social democrats, I merely say that their (your?) cure is worse than the disease. And as for the comparison with a dreaming Trot, I suspect you're confusing the well-known inability of communists to agree on how to implement Marx's vision. Granted, there are disagreements between libertarians, but most of us either fall into the category of anarcho-capitalists or minarchists, and within those two brackets, we are generally agreed on the big things, in terms of practical constitutional and political arrangements. But that is not the same thing as being unable to describe how the world would be different were people freer. Indeed, in terms of mass population predictions, unpredictability is intrinsic to greater freedom. Jolly good, I say. Yes, there are predictions I'd venture, and maybe will if I have the time, but the absence of planning for entire populations necessarily makes such predictions speculative.

As to your claims about Greece, you'll have to refer me to a link in support of them. Otherwise I'll admit to being brainwashed by TV footage of general strikes, with petrol bombs being thrown and policemens' heads being cracked. Oh, and weren't some bank employees arsoned to death? Or were they merely Indian?

The stuff about Nazis and pissing is baby talk. And the Idaho senator seems rather to have missed the point about Rand's teachings.

Setting aside my colourful use of language, the point is that you claim fidelity to a system that when it has been applied more closely to your principles -if not entirely- has not resulted in either economic equilibrium or greater freedom -the late 19th century in the US and the 1990s in Russia were symptomatic of the tendency of capitalism to monopolise the means pf production, anything rather than sharing it out -you can wish it away as 'the unacceptable face of capitalism' if you want to, but the evidence of dirty dealings amongst the railroad bosses, the bankers, the Rockefellers and Mellons of this/that world are well documented, and resulted in the haven of free markets, the USA introducing an Act in 1890 to prevent the dominance by single individuals and their firms of industrial sectors -ie the Sherman Act, even if not implemented until 1911. Your faith in the honest intentions of free market capitalists is as absurd as the belief of a Communist Party cadre in the wisdom of the Central Committee. And as for Russia, it was called The Sale of the Century for good reason, only the average consumer wasn't involved, merely screwed.

Perhaps we can agree that communism is the natural condition of mankind, that private property emerged historically as a consequence of the process of accumulation that began during the Neolithic revolution, and which combined with the division of labour to enable a minority of the population to dupe the majority into thinking they were superior, aided and abetted by religious/mythological systems of belief. Industrial capitalism is the private appropriation of publicly produced wealth -the capitalist who puts say £100,000 of capital into a shirt-making business and collects say, £1 million on that investment pays the people who actually make the shirts their equivalent share - £10, thereby proving that capitalism is immoral, and that private property is theft. Moreover, as Marx pointed out in Capital the workers are so completely subsumed by capitalism that they are both producers and consumers, and simultaneously exploited at work and in the market-place, bridging the gap between the natural price of a commodity and its market price -(viz Capital, Vol 1: Appendix: Results of the Immediate Process of Production, esp pp1019-1025 in the Pelican Marx Library, Capital, Vol 1; and same series, Capital Vol 2, Chapters 1-2; and Chapters 20-21).

This pseudo-debate however is going round in circles -perhaps you can explain how free market capitalism will produce economic growth and full employment in the UK, and crucially -what happens to the losers who fail at business, who can't hold down a job, don't have the education or whatever their problem is?

On xenophobic violence in Greece, I provide a link from HRW.
http://www.hrw.org/news/2012/12/30/xenophobic-violence-greece

[an8150]

Quote:
We assert that a free market tends to find equilibrium or, when unbalanced, that it seeks out equilibrium more efficiently than any other model.
Where is your proof? Von Neuman and Morganstern refute this claim.

[Bully for them; criticism has, in my view rightly, been levelled already in this thread at appeals to authority. Proof is in the eye of the beholder. I made an assertion, I supported it by reference to the law of supply and demand. It's up to you whether you consider that law amounts to proof, although given your apparent incomprehension of the law of supply and demand, I don't expect miracles any time soon].

Quote:
In other words, the freedom maximises equilbrium,
This is of course the converse of what you claimed in prior posts [you'll have to throw a quote of mine back at me for me to know what you're talking about]. But never mind that, tell us instead what a "maximized equilibrium" is. [Oh, all right, Miss Nitpicky, equilibrium, then (although I was basically adopting your language), not 'maximised equilibrium'. I assume you're an engineer of some sort, but much as I admire the hard sciences I find your application of physical laws to government and human behaviour verges, bizarrely, on the metaphysical]

Quote:
It is the absence of coercion
This is a ridiculous notion of freedom. What happens to a person who infringes upon your legally assured freedom if he is not coerced to recompense you in some way? [oh, dear God.]

Quote:
the law of supply and demand.
This law has nothing whatsoever to do with any sort of equilibrium [Sorry, you're just wrong]. It merely asserts that demand diminishes with price.

[trish]

Not surprised by your response. Religious fanatics do eventually resort to shouting.

Look, demand (at price p) is defined as the number of sells you can make if the price of an item is set equal to p. It's practically a built into the definition that demand diminishes with price. If you fix the price at p of course you don't want to produce more than the demand at price p because it'll cost you to produce items you can't sell. And of course you don't want to produce less than the demand at price p because you can make more profit by producing and selling more. But this is not the market seeking an equilibrium point. There is no predetermined demand for a product that the market miraculously meets. It's merely of matter of determining the profit function given an estimate of the demand function, setting the price to maximize the profit and supply what would be the demand at that price.

[trish]

There's no equilibrium seeking involved. Just maximizing profit.

[broncofan]

In engines, motors, any system designed to perform repeatable cycles, including market systems, regulators are required to make systematic corrections on each cycle ad infinitum in order to maintain a proper balance of feedback and control.

Absolute freedom is absolute anarchy. Real and useful freedoms can only exist within a context of social restraints.

I like this post. You are regulating markets by having any system of enforcement. When you have strict liability for product defects instead of negligence you are regulating products, but just using the private litigation system. If you had a no liability regime you would simply have a different set of incentives; in that case the incentive to use no care whatsoever in production practices.

In the context of banks, the entire system of bankruptcy creates a regulatory regime that encourages excessive risk. The fact that we have limited liability of any sort encourages people to take risk knowing their downside is limited. When libertarians talk about de-regulation they are not talking about getting rid of the corporate structure or of making bankers personally responsible for their financial losses. They are talking about eliminating consumer protections and availing themselves of our liberal bankruptcy laws. But you cannot claim you are against regulation when you support the use of the corporate structure (a legal artifact) and allow companies to be run by CEO's who are not really accountable to the owners. It is the structure of the corporation that has created (or made more prominent) the principal-agent problem and necessitates heightened scrutiny.

[buttslinger]

In a fair fight the guy with the money will always win.

[fivekatz]

I like this post. You are regulating markets by having any system of enforcement. When you have strict liability for product defects instead of negligence you are regulating products, but just using the private litigation system. If you had a no liability regime you would simply have a different set of incentives; in that case the incentive to use no care whatsoever in production practices.

In the context of banks, the entire system of bankruptcy creates a regulatory regime that encourages excessive risk. The fact that we have limited liability of any sort encourages people to take risk knowing their downside is limited. When libertarians talk about de-regulation they are not talking about getting rid of the corporate structure or of making bankers personally responsible for their financial losses. They are talking about eliminating consumer protections and availing themselves of our liberal bankruptcy laws. But you cannot claim you are against regulation when you support the use of the corporate structure (a legal artifact) and allow companies to be run by CEO's who are not really accountable to the owners. It is the structure of the corporation that has created (or made more prominent) the principal-agent problem and necessitates heightened scrutiny.Simply put if a guy can make money selling rancid meat or throw it out at a loss, the meat will be sold unless some higher authority tells him not to. And once it is a corporation selling that meat, it is their charter and sole mission to enhance shareholder investment so by charter they should never throw away the rancid meat unless some regulating body says they have to.

Regulation and oversight happened not because of some conspiracy it happened because in its absence greed will make people do really bad stuff.

[hippifried]

Libertarians assert the market seeks an equilibrium that maximizes freedom. Yet they never define what it means to maximize freedom nor do they provide a proof that free market systems seek any sort of equilibrium. Anecdotes that suggest the obvious, that regulatory systems require constant adjustment, do not constitute proof that a system without regulation will do just fine; the persistent assumption that it will is tantamount to religious faith.

Hence my reference to the egoist "cult". I don't say that about libertarians though. The distinction needs to be made between libertarian philosophical thought (since thought is involved) & the faith based ramblings of the various Ayn Rand institutions.

[an8150]

Not surprised by your response. Religious fanatics do eventually resort to shouting.

Look, demand (at price p) is defined as the number of sells you can make if the price of an item is set equal to p. It's practically a built into the definition that demand diminishes with price. If you fix the price at p of course you don't want to produce more than the demand at price p because it'll cost you to produce items you can't sell. And of course you don't want to produce less than the demand at price p because you can make more profit by producing and selling more. But this is not the market seeking an equilibrium point. There is no predetermined demand for a product that the market miraculously meets. It's merely of matter of determining the profit function given an estimate of the demand function, setting the price to maximize the profit and supply what would be the demand at that price.

What shouting?

If you try to sell your house for U$D200k, and it's on the market for six months with no buyers, then you've got the price wrong. Most likely the price is too high. Lower it, and you will find your buyer. Your ability to do so, and the result of finding that buyer, is the point of equilibrium.

[an8150]

There's no equilibrium seeking involved. Just maximizing profit.

They're not mutually exclusive.

[an8150]

Hence my reference to the egoist "cult". I don't say that about libertarians though. The distinction needs to be made between libertarian philosophical thought (since thought is involved) & the faith based ramblings of the various Ayn Rand institutions.

Talking about thought being involved, have you given any to my question?

[an8150]

Simply put if a guy can make money selling rancid meat or throw it out at a loss, the meat will be sold unless some higher authority tells him not to. And once it is a corporation selling that meat, it is their charter and sole mission to enhance shareholder investment so by charter they should never throw away the rancid meat unless some regulating body says they have to.

Regulation and oversight happened not because of some conspiracy it happened because in its absence greed will make people do really bad stuff.

Depends if the guy finds a willing buyer for the rancid meat, fivekatz. If he does, they're both happy, they both got what they want. Who are you to say otherwise?

[an8150]

In engines, motors, any system designed to perform repeatable cycles, including market systems, regulators are required to make systematic corrections on each cycle ad infinitum in order to maintain a proper balance of feedback and control.

Absolute freedom is absolute anarchy. Real and useful freedoms can only exist within a context of social restraints.

A free market is not a system designed to perform in a particular way. Indeed it merits the designation of 'system' only in the loosest sense. Metaphorically, the comparison with a motor is flawed.

I suspect the word 'anarchy' is being used here, broncofan, to mean 'chaos'. They are not the same thing necessarily.

And social restraints are not the same as legal restraints. I'm a big fan of social restraints where they help condition our good behaviour.

[Prospero]

A buyer clearly won't find a marketfor rancid meat undr normal circumstanes. Ony if he emloys duplicitous means to disguise it (ie packaging it in meat pies or disguising its state). So that is why we need regulations - health checks etc. A voluntary system will not and does not work when people are out to make a buck.

An the reason i didn't not respond to you was that i frankly can't be bothered to burrow into the details of your arguments when i know that your starting point is fallacious. You remind me, sadly, of the Trots who dominated Trade unions when i was younger and who tried to make their point of view prevail by endlessly debating protocols, rules, details rather than ever allowing the bigger issues be examined. In meetings which required a vote they often won because everyone else left or fell asleep.

[an8150]

Setting aside my colourful use of language , the point is that you claim fidelity to a system that when it has been applied more closely to your principles -if not entirely- has not resulted in either economic equilibrium or greater freedom [for one thing, we work to different definitions of 'freedom', so I'm not sure how we'd measure this] -the late 19th century in the US and the 1990s in Russia were symptomatic of the tendency of capitalism [the same old sleight of-hand: you may feel nothing when repeating the words 'free market capitalism', it's up to you, all I ask is that you give words their plain meaning; the Russian oligarchs, to take one of your examples, were crony capitalists] to monopolise the means pf production, anything rather than sharing it out -you can wish it away as 'the unacceptable face of capitalism' if you want to, but the evidence of dirty dealings amongst the railroad bosses, the bankers, the Rockefellers and Mellons of this/that world are well documented [I seem to recall Rand wrote an interesting essay on this, possibly with Greenspan; if you're interested it's in [I]Capitalism: the Unknown Ideal, which I don't have to hand], and resulted in the haven of free markets [interesting word that, 'haven', isn't it?], the USA introducing an Act in 1890 to prevent the dominance by single individuals and their firms of industrial sectors -ie the Sherman Act, even if not implemented until 1911. Your faith in the honest intentions of free market capitalists [I claim no such faith. I've said that I accept there will of course be sharp practitioners; they can be dealt with by the laws of fraud; what I do say is that rational self-interest means that party A maximises his needs or desires by fulfilling those of party B and I happen to believe that most people tend to act in good faith] is as absurd as the belief of a Communist Party cadre in the wisdom of the Central Committee [yet what is the difference between your planners and regulators, on the one hand, and the central committee, on the other? democratic legitimacy? maybe, but that says nothing of the efficacity of their decision-making, which is what we're talking about]. And as for Russia, it was called The Sale of the Century for good reason, only the average consumer wasn't involved, merely screwed.

Perhaps we can agree that communism is the natural condition of mankind [you mean that when Ugg and Grunt first crawled out of the primordial ooze feeling peckish and Ugg snared a frog for dinner, he noticed Grunt looking at him enviously and was confronted by the choice of sharing or not, realising that if he didn't then Grunt might try and take the frog from him by force, or that Grunt might starve and then he'd be left alone, or that by sharing on this occasion then Grunt might share the fruits of his labour subsequently, or that by sharing neither would have enough and they would both starve? Well the frog is Ugg's property. It is the fruit of his labour, although there is no rule of law to uphold property rights, and the land on which it was found has presumably not been claimed by Ugg. So I suppose I'd say that at this stage, we have a sort of hybrid, where property is literally up for grabs, but sharing, or perhaps bartering (part of a frog now, in the hope of a return favour later) is on the radar; but what if they both find a frog? if their frogs are of equal plumpness then all we have is the acquisition of property rights by each, absent the application of force by either to denude the other of his frog. The scenario can be sliced and diced a number of ways, but I rather doubt that Ugg, if he is initially the most successful scavenger, is going for any length of time to apply the principle of 'from each according to his abilities, to each according to his needs'], that private property emerged historically [I think the fact of private property emerged as described above, although of course the language would not have existed to describe it] as a consequence of the process of accumulation that began during the Neolithic revolution, and which combined with the division of labour to enable a minority of the population to dupe the majority into thinking they were superior, aided and abetted by religious/mythological systems of belief. Industrial capitalism is the private appropriation of publicly produced wealth -the capitalist who puts say £100,000 of capital into a shirt-making business and collects say, £1 million on that investment pays the people who actually make the shirts their equivalent share - £10, thereby proving that capitalism is immoral, and that private property is theft [everything belongs to everyone? so if we were in the same room together right now, and I walked over to you and started to remove your watch and car keys, you wouldn't stop me?]. Moreover, as Marx pointed out in Capital the workers are so completely subsumed by capitalism that they are both producers and consumers, and simultaneously exploited at work and in the market-place, bridging the gap between the natural price of a commodity and its market price -(viz Capital, Vol 1: Appendix: Results of the Immediate Process of Production, esp pp1019-1025 in the Pelican Marx Library, Capital, Vol 1; and same series, Capital Vol 2, Chapters 1-2; and Chapters 20-21).

This pseudo-debate however is going round in circles -perhaps you can explain how free market capitalism will produce economic growth and full employment in the UK, and crucially -what happens to the losers who fail at business, who can't hold down a job, don't have the education or whatever their problem is?

[That's a vast subject, and I don't have sufficient time to do it justice, but I'll make the obvious point that regulation raises barriers to entry in any sector of an economy. That means fewer people can start businesses.]

On xenophobic violence in Greece, I provide a link from HRW.

http://www.hrw.org/news/2012/12/30/xenophobic-violence-greece

[Putting it politely, this link does not support your prior claim]


an8150

[an8150]

A buyer clearly won't find a marketfor rancid meat undr normal circumstanes. Ony if he emloys duplicitous means to disguise it (ie packaging it in meat pies or disguising its state). So that is why we need regulations - health checks etc. A voluntary system will not and does not work when people are out to make a buck.

An the reason i didn't not respond to you was that i frankly can't be bothered to burrow into the details of your arguments when i know that your starting point is fallacious. You remind me, sadly, of the Trots who dominated Trade unions when i was younger and who tried to make their point of view prevail by endlessly debating protocols, rules, details rather than ever allowing the bigger issues be examined. In meetings which required a vote they often won because everyone else left or fell asleep.


If you mean that a seller won't find a buyer for his rancid meat under normal circumstances, except by duplicitous means, you may well be right. That's why we have laws against fraud. Have a look at some of broncofan's comments (esp. in the thread called 'Democracy'): he understands that what, in utilitarian terms, is at issue is whether regulation upfront is more effective than the deterrent of subsequent prosecution. I would add that in my view upfront regulation is, in any event, ultimately always reactive - as with the beef/horsemeat story: the failure of one regulation leads to calls for another.

You can't be bothered to deal with my details because my starting point is fallacious, yet I am the religious fanatic. Well, I'm content to stand by the record of my comments. I suspect I've answered a great many more points that have been thrown at me than any of my interlocutors have ever deigned or been able to respond to, and I've dealt with subjects on both macro and micro scales. Basically, you want a quiet life. You want people like me to go away and shut up so that you can carry on reinforcing your prejudices with others who broadly agree with you, and although you purport to take an interest in the affairs of the world, you don't want to have to think too much about them.

[Prospero]

An - you are simply an idealist with no toehold on the reality of the world. I certainly DO deal with the reality of the world - and elements of it far darker and more dangerous than you have probably ever encountered. So stop being an irritating little fellow, please.

Laws but no regulations? Ha.

I will not be discussing anything with you anymore. Sorry. You are, by turn, insulting and foolish.

[trish]

They're not mutually exclusive.in this case they are and I explained exactly why. If the market supplies exactly what can be sold at the price set to optimize profit, then demand is truncated by that price to meet the supply. That's not an equilibrium point the market optimally meets every ones's demands and everyone live in libertarian utopia.

[an8150]

An - you are simply an idealist with no toehold on the reality of the world. I certainly DO deal with the reality of the world - and elements of it far darker and more dangerous than you have probably ever encountered. So stop being an irritating little fellow, please.

Laws but no regulations? Ha.

I will not be discussing anything with you anymore. Sorry. You are, by turn, insulting and foolish.

In reply to your first paragraph, I'm tempted to tell you my height and occupation, but that would be indiscreet of me. I haven't begun to insult you, Prospero, not least because I am inclined to think it weakens the force of rational argument.

[an8150]

in this case they are and I explained exactly why. If the market supplies exactly what can be sold at the price set to optimize profit, then demand is truncated by that price to meet the supply. That's not an equilibrium point the market optimally meets every ones's demands and everyone live in libertarian utopia.

Call me a dullard, but I don't understand what "...demand is truncated by that price to meet the supply. That's not an equilibrium point the market optimally meets every ones's demands and everyone live in libertarian utopia."

The final sentence is almost certainly missing punctuation, but I am fairly sure that, even appropriately punctuated, what I assume is the contingent clause is a non sequitur. And I simply don't understand, in the first sentence, how demand can be truncated if the market has supplied exactly what can be sold. Another non sequitur, I suppose.

[an8150]

An - you are simply an idealist with no toehold on the reality of the world.

I know that it is run by people who agree with you. And I know that you know that, because you have said previously that my views are unlikely ever to see practical implementation.

[trish]

The collection of people who demand bread is effectively truncated by the price at which bread is sold. The higher the price the smaller the subcollection (i.e. the truncated collection) that "demands" it at that price. [If you imagine a graph of the derivative of the demand function relative to the price p, then the demand at price p is the area under the curve to the left of the vertical through p; i.e. the total area is truncated by the vertical through p].

It is often said by utopian libertarians that supply rises to meet demand, as if some sort of happy equilibrium is thereby attained. Rather, the most profitable price truncates demand and supply only rises only to meet the truncated demand. That's neither a system equilibrium nor is it always happy situation (especially in the case of necessary goods).

[an8150]

The collection of people who demand bread is effectively truncated by the price at which bread is sold. The higher the price the smaller the subcollection (i.e. the truncated collection) that "demands" it at that price. [If you imagine a graph of the derivative of the demand function relative to the price p, then the demand at price p is the area under the curve to the left of the vertical through p; i.e. the total area is truncated by the vertical through p].

It is often said by utopian libertarians that supply rises to meet demand, as if some sort of happy equilibrium is thereby attained. Rather, the most profitable price truncates demand and supply only rises only to meet the truncated demand. That's neither a system equilibrium nor is it always happy situation (especially in the case of necessary goods).

The snowy season apparently having now passed, I was given a free car snow scraper last weekend at the station where I bought petrol. A few weeks ago I suppose it would have retailed at about £9.99.

If I understand you correctly, your complaint is that a certain price may be too high for some to pay, and in the case of an essential like bread some people will go hungry.

The free market response is that prices are signals to the market. If 100 loafs of bread sell for £1 each then 100 people have £1 worth of value and the baker has £100 for his efforts. If there are are 20 people who couldn't afford the bread at £1, the baker has to calculate the value to him (risk/reward) of selling at, say, £0.90, in order to satisfy all 120 potential customers, against the possibility that another baker will enter the market and do the same, or similar, thereby nabbing all 120 bread purchasers.

Alternatively, let's say the baker made 120 loafs and tried to sell them for £1, but found only 100 customers at that price. Come the end of the day, with the bread approaching the point where he will either have to dump it, or sell it for less, he will, if he is rational, lower the price to the point where it can be afforded, even if that is only £0.10. Or he may give it away, so as not to have to store it. Either way, he now has more information with which to plan his price for the next day's batch.

We do not say that these or similar processes will inevitably happen in a free market. We merely say it is the most efficient system for meeting want by allocating resources, because in essence only 121 people are involved rather than the tens of millions who are prey to central planning. However this is a pragmatic argument and not the principled one most libertarians would deploy in favour of a free market.

[trish]

Yet what we actually see in the market is corporations underselling their competitors, buying them up, raiding their coffers and jacking the prices back up once they’ve captured the market. The work by Von Neumann and Oskar Morganstern which I referenced in an earlier post (The Theory of Games and Economic Behavior) establishes (with near mathematical certainty) that this observed behavior is exactly what should be expected in an unregulated, poorly regulated or under-regulated market. Through coalitions, mergers and raids, a game that began with a multitude of rational players will be reduced to handful of players who rule effective market monopolies. Without regulatory devices in place to break them up (or better yet, prevent their formation), the quaint equilibrium which you depict is never realized.

[an8150]

Yet what we actually see in the market is corporations underselling their competitors, buying them up, raiding their coffers and jacking the prices back up once they’ve captured the market. The work by Von Neumann and Oskar Morganstern which I referenced in an earlier post (The Theory of Games and Economic Behavior) establishes (with near mathematical certainty) that this observed behavior is exactly what should be expected in an unregulated, poorly regulated or under-regulated market. Through coalitions, mergers and raids, a game that began with a multitude of rational players will be reduced to handful of players who rule effective market monopolies. Without regulatory devices in place to break them up (or better yet, prevent their formation), the quaint equilibrium which you depict is never realized.

Although it is a generalisation, I wouldn't dispute your characterisation of some corporations' behaviour, but I say that regulations suit the Big Boys down to the ground, because they're the ones who can afford compliance departments and lawyers to make sure they keep their noses clean. Regulations create barriers to entry which make it more difficult for other participants to enter the market to break up the monopolistic tendencies of the Big Boys. I've said before, and I'll say it again, in the world in which we live, many and perhaps most business people are not free marketeers but, in a regulated environment, they act rationally to protect their own interests. The most efficient mechanism to keep them on their toes is the constant threat someone else will come along and do the same thing, better and cheaper. The purest competition.

It's a long time since I studied Game Theory, so I won't bite off more than I can chew. Suffice to say, we have a regulated market. In almost everything, in your country and in mine. Hell, I gather in the US nowadays you can't even sell lemonade outside your house without a permit (was it not, incidentally, for a similar obscenity that the Arab Spring got going?). And yet the position you describe above still obtains. So we're not in that position of overbearing corporations protecting their own positions because of a free market. It may be that we're in that position because the regulation currently is inadequate in terms of solving these problems but, aside from the implications for liberty of ever-increasing regulation, it seems to me you're chasing a fool's gold, because in a land of laws, which both our countries still purport to be, the regulators will always be playing catch-up, introducing new regulations to deal with the latest deemed abuses where the old regulations are powerless. The only way around this, and this is in fact increasingly what is happening, is to frame legislation in terms of its aspirations, leaving legal compliance a matter for quasi-official 'guidance' the result of which is that, in point of fact, we are no longer a land of laws so much as we are governed arbitrarily according to bureaucratic whim. So I suppose we always get back to the principle of the thing: are we, or are we not to be dictated to?

Where, btw, do you stand on government monopolies?

[trish]

You have several times alluded to a problem with which I sympathize. Unlike systems composed of inanimate parts (like a steam engine which is regulated by a governor) nations and markets are systems composed of people and the regulators are also people. Too often regulators fail in their duties, either because they have misunderstood the situation over which they were to preside, they overcompensated or undercompensated or they are just plain corrupt. The same complaint can be made of the legislators who write regulations into law. The law is often written by committees who suffer under a misunderstanding, or a regulation can be the result of a poor compromise or it might simply written by parties with an interest in subverting the purpose of the regulation. All these are valid complaints. But a demonstration that regulation is difficult, can be corrupted and needs constant monitoring is not a demonstration that unregulated markets will fairly and efficiently distribute goods at reasonable prices to all who require them. For that we need a separate proof that demonstrates exactly those libertarian claims.

The failings alluded to above are also failings of self-rule in general. We are not unacquainted with the necessity for checks and balance in democratic government, and we are not unacquainted with the failings of the system of checks and balances and the need for constant monitoring, yet we do not take this to be a reason to abandon self-rule in the form of a democratic republic.

Not sure exactly where I stand on government monopolies. Depends on how they're defined, implemented, the services they provide etc. In the U.S. various government entities run state and national parks, wetlands etc. and most citizens are pretty happy with the service. We understand ourselves to be custodians of those lands and we care for them through governance. Of course the lumber industry and others would prefer free reign in those areas. I'm not sure if that counts as a government monopoly, but if it does I think it works fine. The interstate highway system is another example that I and others (imo) are happy with (if you want to call it a government monopoly). At one time telephone communication in the U.S. was a public/private monopoly. Bell had one of the best research institutions in the world until the monopoly was broken up. When it existed technology was such that it made sense to have one entity coordinate all national service. But with advanced technology those services can be rendered on a individual bases by different entities. The moral being a monopoly might make sense at one stage of an evolving industry and not at another stage.

[an8150]

You have several times alluded to a problem with which I sympathize. Unlike systems composed of inanimate parts (like a steam engine which is regulated by a governor) nations and markets are systems composed of people and the regulators are also people. Too often regulators fail in their duties, either because they have misunderstood the situation over which they were to preside, they overcompensated or undercompensated or they are just plain corrupt. The same complaint can be made of the legislators who write regulations into law. The law is often written by committees who suffer under a misunderstanding, or a regulation can be the result of a poor compromise or it might simply written by parties with an interest in subverting the purpose of the regulation. All these are valid complaints. But a demonstration that regulation is difficult, can be corrupted and needs constant monitoring is not a demonstration that unregulated markets will fairly [you and I probably mean different things by this word: to me, it is a process; you, I suspect, it is an outcome] and efficiently distribute goods at reasonable prices [reasonable? the value of something is what someone is willing to pay for it. Intervention by planners to set a 'reasonable' or 'fair' price will warp the market and make it less efficient] to all who require them. For that we need a separate proof that demonstrates exactly those libertarian claims [the claims you say we make are, I think, rather different from those we actually make, because we use different definitions, but it is certainly logically correct to say that the failure of a particular regulated system no more means that a free market will succeed than it means greater and/or different regulation will succeed, although when the failures of regulation develop a family tree we might begin to suspect that those failures are a feature not a glitch].

The failings alluded to above are also failings of self-rule in general [but regulation is not self-rule, it is the opposite of self-rule]. We are not unacquainted with the necessity for checks and balance in democratic government, and we are not unacquainted with the failings of the system of checks and balances and the need for constant monitoring, yet we do not take this to be a reason to abandon self-rule in the form of a democratic republic [quis custodiet ipsos custodes? I have never heard an answer, much less a satisfactory answer, to this question].

Not sure exactly where I stand on government monopolies. Depends on how they're defined, implemented, the services they provide etc. In the U.S. various government entities run state and national parks, wetlands etc. and most citizens are pretty happy with the service. We understand ourselves to be custodians of those lands and we care for them through governance. Of course the lumber industry and others would prefer free reign in those areas. I'm not sure if that counts as a government monopoly, but if it does I think it works fine. The interstate highway system is another example that I and others (imo) are happy with (if you want to call it a government monopoly). At one time telephone communication in the U.S. was a public/private monopoly. Bell had one of the best research institutions in the world until the monopoly was broken up. When it existed technology was such that it made sense to have one entity coordinate all national service. But with advanced technology those services can be rendered on a individual bases by different entities. The moral being a monopoly might make sense at one stage of an evolving industry and not at another stage.

[so a monopoly is ok if people like it, for whatever reason? thus a company selling chocolate bars at an undervalue in order to drive out a new competitor is desirable if its chocolate bars remain popular?]

[Stavros]

an8150
Perhaps we can agree that communism is the natural condition of mankind [you mean that when Ugg and Grunt first crawled out of the primordial ooze feeling peckish and Ugg snared a frog for dinner, he noticed Grunt looking at him enviously and was confronted by the choice of sharing or not, realising that if he didn't then Grunt might try and take the frog from him by force, or that Grunt might starve and then he'd be left alone, or that by sharing on this occasion then Grunt might share the fruits of his labour subsequently, or that by sharing neither would have enough and they would both starve? Well the frog is Ugg's property. It is the fruit of his labour, although there is no rule of law to uphold property rights, and the land on which it was found has presumably not been claimed by Ugg. So I suppose I'd say that at this stage, we have a sort of hybrid, where property is literally up for grabs, but sharing, or perhaps bartering (part of a frog now, in the hope of a return favour later) is on the radar; but what if they both find a frog? if their frogs are of equal plumpness then all we have is the acquisition of property rights by each, absent the application of force by either to denude the other of his frog. The scenario can be sliced and diced a number of ways, but I rather doubt that Ugg, if he is initially the most successful scavenger, is going for any length of time to apply the principle of 'from each according to his abilities, to each according to his needs'],...[everything belongs to everyone? so if we were in the same room together right now, and I walked over to you and started to remove your watch and car keys, you wouldn't stop me?].

I am puzzled by your ignorance, as you do reveal yourself to have a sound intellectual background -there is a wealth of evidence on the lives of others for whom private property has little or no meaning, not all of them pre-literate 'stone age' tribes in the Amazon basin -island communities in the South Pacific were led astray/corrupted by missionaries, merchants and traders, by the military -yet the evidence shows they did not covet belongings and shared -I was even told by someone from Tonga a few years ago that they still help each other to other peoples things -cigarettes, to take one trivial example. In the Middle East, there was a mis-conception by early European and American travellers who complained they were being robbed by the Bedouin when the bedouin merely took what they believed was theirs, not sharing the European concept of private property -even the rustling of sheep/horses/goats/camels is seen as part of economic recycling rather than theft. As in A hustles goats from B, C hustles goats from B, A hustles goats from C... Marx was not the first to argue that capitalism has turned everything into a commodity that can be bought and sold, and which must therefore have an owner, but he did describe in withering detail how men and women who had once owned their own tools and even in the harsh conditions of feudal production had their own plot of land to farm, end up centuries later owing nothing, tied to a machine performing tasks that could be and these days often are being performed by robots. The point being that it was difficult for merchants and traders to deal with non-capitalist societies until they integrated them into the 'modern world system' to borrow Wallerstein's term -in some cases the local people were exploited by traders precisely because the concept of ownership was not strong, and barter appeared to be a good deal; this seems both the positive and negavtive pivot on which early relations between traders and first nations in North America turned, until the only 'solution' to people who did not want to become part of a market-led society was genocide.

I don't wear a watch, and would not be pleased if you entered my home helped yourself to the things I value most, but that is not what the debate on private property is concerned with.

[trish]

[so a monopoly is ok if people like it, for whatever reason? thus a company selling chocolate bars at an undervalue in order to drive out a new competitor is desirable if its chocolate bars remain popular?]what the monopoles I listed have in common is not that people liked them but that the people run them. National parks, the interstate highway system, for example, are not out to make a profit. We regard their maintenance as our duty and we maintain them through governance.

[trish]

Regulation is indeed self-rule when it is legislated into law by a democratic republic.

[buttslinger]

This is old news.

[an8150]

Perhaps we can agree that communism is the natural condition of mankind [you mean that when Ugg and Grunt first crawled out of the primordial ooze feeling peckish and Ugg snared a frog for dinner, he noticed Grunt looking at him enviously and was confronted by the choice of sharing or not, realising that if he didn't then Grunt might try and take the frog from him by force, or that Grunt might starve and then he'd be left alone, or that by sharing on this occasion then Grunt might share the fruits of his labour subsequently, or that by sharing neither would have enough and they would both starve? Well the frog is Ugg's property. It is the fruit of his labour, although there is no rule of law to uphold property rights, and the land on which it was found has presumably not been claimed by Ugg. So I suppose I'd say that at this stage, we have a sort of hybrid, where property is literally up for grabs, but sharing, or perhaps bartering (part of a frog now, in the hope of a return favour later) is on the radar; but what if they both find a frog? if their frogs are of equal plumpness then all we have is the acquisition of property rights by each, absent the application of force by either to denude the other of his frog. The scenario can be sliced and diced a number of ways, but I rather doubt that Ugg, if he is initially the most successful scavenger, is going for any length of time to apply the principle of 'from each according to his abilities, to each according to his needs'],...[everything belongs to everyone? so if we were in the same room together right now, and I walked over to you and started to remove your watch and car keys, you wouldn't stop me?].

I am puzzled by your ignorance, as you do reveal yourself to have a sound intellectual background -there is a wealth of evidence on the lives of others for whom private property has little or no meaning, not all of them pre-literate 'stone age' tribes in the Amazon basin -island communities in the South Pacific were led astray/corrupted by missionaries, merchants and traders, by the military -yet the evidence shows they did not covet belongings and shared -I was even told by someone from Tonga a few years ago that they still help each other to other peoples things -cigarettes, to take one trivial example. In the Middle East, there was a mis-conception by early European and American travellers who complained they were being robbed by the Bedouin when the bedouin merely took what they believed was theirs, not sharing the European concept of private property -even the rustling of sheep/horses/goats/camels is seen as part of economic recycling rather than theft. As in A hustles goats from B, C hustles goats from B, A hustles goats from C... Marx was not the first to argue that capitalism has turned everything into a commodity that can be bought and sold, and which must therefore have an owner, but he did describe in withering detail how men and women who had once owned their own tools and even in the harsh conditions of feudal production had their own plot of land to farm, end up centuries later owing nothing, tied to a machine performing tasks that could be and these days often are being performed by robots. The point being that it was difficult for merchants and traders to deal with non-capitalist societies until they integrated them into the 'modern world system' to borrow Wallerstein's term -in some cases the local people were exploited by traders precisely because the concept of ownership was not strong, and barter appeared to be a good deal; this seems both the positive and negavtive pivot on which early relations between traders and first nations in North America turned, until the only 'solution' to people who did not want to become part of a market-led society was genocide.

[You are too kind, but I don't see why your descriptions of Bedouin, etc. are any closer to the State of Nature - the natural condition of mankind, as you put it - than are mine. They're just different ways that different societies developed. So when you say that 'communism is the natural condition of mankind', I take you to mean that in the State of Nature everything is held in common. I agree that there are societies where that has happened, but I cannot see why that is any more natural a development upon climbing out of the primordial sludge than Ugg deciding that the frog he found is his. Take another example: studies of very young children suggesting that they sometimes share when there is no obvious gain to them in doing so. On the other hand, any parent of young children has witnessed in them the urge to acquire and to accumulate. I'd suggest that urge is even stronger where fundamentals such as hunger are at stake: if Ugg reckons he'll starve if he shares even a morsel with Grunt, then Grunt is on his own. A little further down the evolutionary tree, Ugg might start to consider the benefit to him of delaying satisfaction of his hunger by giving Grunt some frog, in return for Grunt's assistance slaying a sabre-tooth tiger. A primitive trade, if you will. Or maybe they'll Bedouin it up, who knows? ]

I don't wear a watch, and would not be pleased if you entered my home helped yourself to the things I value most, but that is not what the debate on private property is concerned with.

[Oh, but I think it is when you say, 'private property is theft'. As it happens, that's long seemed to me a non-sensical formulation because it recognises the status and attributes of property - that ability to have it stolen - whilst presupposing property held in common, which by definition cannot be stolen. But that's incidental: if you believe private property is theft, then those items you 'value most' are either things you've stolen, in which case there's no moral bar to my taking them, or they're private property, properly meant, and I should get my hands of them.]

[an8150]

what the monopoles I listed have in common is not that people liked them but that the people run them. National parks, the interstate highway system, for example, are not out to make a profit. We regard their maintenance as our duty and we maintain them through governance.

Then your earlier complaints about monopolistic behaviour by big firms in fact have nothing to do with their behaviour, and everything to do with who runs them. Thus bad behaviour is fine, if it's the state doing the running.

[an8150]

Regulation is indeed self-rule when it is legislated into law by a democratic republic.

But that's sophistry, trish: were it materially true, then the legislation of a democratic republic to the effect that everyone must keep a diary every second of every day for the rest of their lives would still mean that we were self-ruling. Yet obviously we would not be.

[trish]

Then your earlier complaints about monopolistic behaviour by big firms in fact have nothing to do with their behaviour, and everything to do with who runs them. Thus bad behaviour is fine, if it's the state doing the running.

I believe, if you read back over what I said, that profit motive distinguishes the two. It has everything to do with behavior.

[trish]

But that's sophistry, trish: were it materially true, then the legislation of a democratic republic to the effect that everyone must keep a diary every second of every day for the rest of their lives would still mean that we were self-ruling. Yet obviously we would not be.
Now that's sophistry!

[an8150]

Now that's sophistry!

No, it's a reductio ad absurdum...

[an8150]

I believe, if you read back over what I said, that profit motive distinguishes the two. It has everything to do with behavior.

OK, bad behaviour is fine if a) it's done by the state, and b) there is no profit motive? (setting public choice theory aside, of course).

Actually, let's not set aside public choice theory. Have a look at: http://www.guardian.co.uk/society/video/2013/feb/06/robert-francis-qc-appalling-unnecessary-suffering-video

[trish]

What bad behavior? Saving our wetlands and forests?

[trish]

No, it's a reductio ad absurdum...It's absurd, but no reduction.

[an8150]

What bad behavior? Saving our wetlands and forests?

Or even "saving peoples' lives". Go on, have a look at the link I provided in comment #97, I dare you.

[hippifried]

Talking about thought being involved, have you given any to my question?

What question? You don't really expect me to dig through all your off topic blatherings in order to find a question mark, do ya? You & your antisocial church of the fuck everybody else just aren't interesting enough to exert any effort trying to be a mindreader. Got a question? Ask it. I'm sure it won't be hard to find a 4 year old who can explain the stupidity of your demigod.

[trish]

In my post #85 I already mentioned the necessity for checks, balances, oversight and persistent monitoring that is inherent in all significant systems composed of human beings. In that same post you may remember that my approval of government monopolies was contingent on a number of factors...implementation being one of them. Once again, in any system, human or otherwise, regulators will fail. That doesn't prove they aren't necessary. Indeed Von Neumann and Morganstern have demonstrated to near mathematical certainty the necessity of regulatory devices in market systems. Similarly government programs fail and even governments fail. Even democratic ones. That doesn't prove that government programs (such as the NHS) nor that democratic governments should not exist.

[an8150]

In my post #85 I already mentioned the necessity for checks, balances, oversight and persistent monitoring that is inherent in all significant systems composed of human beings. In that same post you may remember that my approval of government monopolies was contingent on a number of factors...implementation being one of them. Once again, in any system, human or otherwise, regulators will fail. That doesn't prove they aren't necessary. Indeed Von Neumann and Morganstern have demonstrated to near mathematical certainty the necessity of regulatory devices in market systems. Similarly government programs fail and even governments fail. Even democratic ones. That doesn't prove that government programs (such as the NHS) nor that democratic governments should not exist.

Ho, boy. trish, the blood and treasure that has been expended on getting the NHS right. Now there's a religion we Brits almost all get behind. Except those of kneeling at the Randian altar, of course.

I wonder if a private company could have survived if it had done what the angels of the NHS did in Staffordshire. Just kidding, I don't really.

[an8150]

What question? You don't really expect me to dig through all your off topic blatherings in order to find a question mark, do ya? You & your antisocial church of the fuck everybody else just aren't interesting enough to exert any effort trying to be a mindreader. Got a question? Ask it. I'm sure it won't be hard to find a 4 year old who can explain the stupidity of your demigod.


And here was my question: "So government can print as much money as it likes, with no ill effects?

Good grief. Doing my damndest to avoid an ad hominem reply, and realising that I'll probably regret asking you this, but, um, have you considered why, if your proposition is correct, your government doesn't just print enough money to make you all billionaires? "

Which was in response to your comment, "As for the ability to afford all this mythical "government largesse": All monies are coined by the state, & always have been. Money is merely an artificial concept to simplify barter. Nowadays it's nothing but numbers in a ledger, with a little bit of pocket change. We can crunch the numbers & afford anything we want. That's WE. Collectively."


I don't enjoy tormenting you because you're extremely stupid, I enjoy it because you're a boor.

[trish]

Ho, boy. trish, the blood and treasure that has been expended on getting the NHS right. Now there's a religion we Brits almost all get behind. Except those of kneeling at the Randian altar, of course.

I wonder if a private company could have survived if it had done what the angels of the NHS did in Staffordshire. Just kidding, I don't really.Of course they would have survived. Bhopal, for just one example.

[Stavros]

[QUOTE=an8150;1279748]
but I don't see why your descriptions of Bedouin, etc. are any closer to the State of Nature - the natural condition of mankind, as you put it - than are mine. They're just different ways that different societies developed. So when you say that 'communism is the natural condition of mankind', I take you to mean that in the State of Nature everything is held in common. I agree that there are societies where that has happened, but I cannot see why that is any more natural a development upon climbing out of the primordial sludge than Ugg deciding that the frog he found is his. Take another example: studies of very young children suggesting that they sometimes share when there is no obvious gain to them in doing so. On the other hand, any parent of young children has witnessed in them the urge to acquire and to accumulate. I'd suggest that urge is even stronger where fundamentals such as hunger are at stake: if Ugg reckons he'll starve if he shares even a morsel with Grunt, then Grunt is on his own. A little further down the evolutionary tree, Ugg might start to consider the benefit to him of delaying satisfaction of his hunger by giving Grunt some frog, in return for Grunt's assistance slaying a sabre-tooth tiger. A primitive trade, if you will. Or maybe they'll Bedouin it up, who knows? ]

--You don't seem to be following my argument, in which the invention of private property as the foundation of modern socio-economic relations is an historical development. Within that concept are modes of behaviour such as competition, financial transactions, rent, debt and credit and so on. These were not common to human societies universally, and still today there are formal prohibitions on usury in some countries (whether they are held to or not is another matter). It is profoundly wrong to think that either Bedouin societies or South Pacific islanders lived in a 'state of nature' -the Hobbesian concept was derived from his experience of civil war, and the absence of government -there is no evidence that in the absence of government societies collapse into an orgy of violence, which is ironic given that your own dreamland has an absence of government, but you don't call it a 'state of nature'.

In fact, in the absence of government, societies will normally devise rules that seek to maintain peace. Amongst the Bedouin, for example, the practice of 'blood revenge' is viewed as pointless if every time someone from clan A is killed someone from the offending clan or tribe must also be killed -so property, usually in the form of camels, wheat etc are traded instead on the advice of tribal elders, as the property belongs to the tribe in common. You have also not considered the widespread existence in the Middle East and East Africa, of the 'moral economy' where, again in the absence of government, land was farmed for the benefit of the community rather than for markets. It was a way of ensuring that everyone participated in production, and received their fair share of the results. Indeed, the conflict between the moral economy of say, Kenya, was at the core of the Mau Mau conflict, just as both the Ottoman and later the British governments sought to replace the moral economy of Palestine and TransJordan with a market economy, which had already emerged in some parts of Palestine anyway; it was also common in parts of Lebanon and Syria. Critical to the transition are notions of efficiency, which the free marketeers argued was enhanced by market relations, and ownership, in which land farmed in common became private property, enriching some, impoverishing others: not all fields are as productive as others, and what once benefited all now benefited only a few. In Syria and Iraq, the commercialisation of agriculture through the creation of estates impoverished thousands and enriched a few, and was the source of much conflict both before the end of Ottoman rule and after it.

This means that in the absence of government, human societies will find ways of managing their relations to minimise violence and social disorder, which must be part of your Eden to Come; the problematic element has been the introduction of competition and market-led relations: on the one hand a driver of progress and change; on the other the cause of much misery, poverty and alienation -but you yourself admit there will be losers as well as winners; but you won't say what you will do with the losers.

[Oh, but I think it is when you say, 'private property is theft'. As it happens, that's long seemed to me a non-sensical formulation because it recognises the status and attributes of property - that ability to have it stolen - whilst presupposing property held in common, which by definition cannot be stolen. But that's incidental: if you believe private property is theft, then those items you 'value most' are either things you've stolen, in which case there's no moral bar to my taking them, or they're private property, properly meant, and I should get my hands of them.
--Marx's most radical challenge: money is the acme of private property, there can be no freedom until money is abolished -even the Bolsheviks couldn't handle that one.

[an8150]

[QUOTE=an8150;1279748]
but I don't see why your descriptions of Bedouin, etc. are any closer to the State of Nature - the natural condition of mankind, as you put it - than are mine. They're just different ways that different societies developed. So when you say that 'communism is the natural condition of mankind', I take you to mean that in the State of Nature everything is held in common. I agree that there are societies where that has happened, but I cannot see why that is any more natural a development upon climbing out of the primordial sludge than Ugg deciding that the frog he found is his. Take another example: studies of very young children suggesting that they sometimes share when there is no obvious gain to them in doing so. On the other hand, any parent of young children has witnessed in them the urge to acquire and to accumulate. I'd suggest that urge is even stronger where fundamentals such as hunger are at stake: if Ugg reckons he'll starve if he shares even a morsel with Grunt, then Grunt is on his own. A little further down the evolutionary tree, Ugg might start to consider the benefit to him of delaying satisfaction of his hunger by giving Grunt some frog, in return for Grunt's assistance slaying a sabre-tooth tiger. A primitive trade, if you will. Or maybe they'll Bedouin it up, who knows? ]

--You don't seem to be following my argument, in which the invention of private property as the foundation of modern socio-economic relations is an historical development. Within that concept are modes of behaviour such as competition, financial transactions, rent, debt and credit and so on. These were not common to human societies universally, and still today there are formal prohibitions on usury in some countries (whether they are held to or not is another matter). It is profoundly wrong to think that either Bedouin societies or South Pacific islanders lived in a 'state of nature' -the Hobbesian concept was derived from his experience of civil war, and the absence of government -there is no evidence that in the absence of government societies collapse into an orgy of violence, which is ironic given that your own dreamland has an absence of government, but you don't call it a 'state of nature'.

In fact, in the absence of government, societies will normally devise rules that seek to maintain peace. Amongst the Bedouin, for example, the practice of 'blood revenge' is viewed as pointless if every time someone from clan A is killed someone from the offending clan or tribe must also be killed -so property, usually in the form of camels, wheat etc are traded instead on the advice of tribal elders, as the property belongs to the tribe in common. You have also not considered the widespread existence in the Middle East and East Africa, of the 'moral economy' where, again in the absence of government, land was farmed for the benefit of the community rather than for markets. It was a way of ensuring that everyone participated in production, and received their fair share of the results. Indeed, the conflict between the moral economy of say, Kenya, was at the core of the Mau Mau conflict, just as both the Ottoman and later the British governments sought to replace the moral economy of Palestine and TransJordan with a market economy, which had already emerged in some parts of Palestine anyway; it was also common in parts of Lebanon and Syria. Critical to the transition are notions of efficiency, which the free marketeers argued was enhanced by market relations, and ownership, in which land farmed in common became private property, enriching some, impoverishing others: not all fields are as productive as others, and what once benefited all now benefited only a few. In Syria and Iraq, the commercialisation of agriculture through the creation of estates impoverished thousands and enriched a few, and was the source of much conflict both before the end of Ottoman rule and after it.

This means that in the absence of government, human societies will find ways of managing their relations to minimise violence and social disorder, which must be part of your Eden to Come; the problematic element has been the introduction of competition and market-led relations: on the one hand a driver of progress and change; on the other the cause of much misery, poverty and alienation -but you yourself admit there will be losers as well as winners; but you won't say what you will do with the losers.

[Oh, but I think it is when you say, 'private property is theft'. As it happens, that's long seemed to me a non-sensical formulation because it recognises the status and attributes of property - that ability to have it stolen - whilst presupposing property held in common, which by definition cannot be stolen. But that's incidental: if you believe private property is theft, then those items you 'value most' are either things you've stolen, in which case there's no moral bar to my taking them, or they're private property, properly meant, and I should get my hands of them.
--Marx's most radical challenge: money is the acme of private property, there can be no freedom until money is abolished -even the Bolsheviks couldn't handle that one.

You don't seem to be following mine. Ships in the night, etc.

Couple of other points:

1. I don't argue for the absence of government.
2. As to what I personally would do with the losers, that would depend upon my means and my assessment of whether they deserved to be assisted.

[an8150]

Of course they would have survived. Bhopal, for just one example.

According to wikipedia, the plant was 49% owned by the Indian government, and the disaster has given rise to criminal prosecutions.

But more specifically, I meant: what would have happened to a private company in Britain, or the US, in 2013, had it been responsible for what occurred at Staffs NHS.

[trish]

Obviously the size, wealth and power of the company determines how well it can ride out disasters.

So as a libertarian, how do you feel about copyright and patent protections?

[Stavros]

[quote=Stavros;1280028]

You don't seem to be following mine. Ships in the night, etc.

Couple of other points:

1. I don't argue for the absence of government.
2. As to what I personally would do with the losers, that would depend upon my means and my assessment of whether they deserved to be assisted.

We are on the same ship, its called SS Capitalism, a system that has grown to global dominance since evolving along with (perhaps because of) the city states of Europe in the late medieval age. The moral economy tends to produce indifference in advocates of free market solutions precisely because it offers a verifiable alternative -in fact in many cases the option of a moral economy is deployed in a crisis -extended drought, famine, floods, etc, as a means of minimising the impact of such events; it is in fact a rational way of spreading risk and reward, but does require the prior belief that a village/community is such an entity and shares its values. Capitalists who promote individual self-interest enter this arena with a bag of tricks called lending, borrowing, rent, debt and in some cases have lent money to poor farmers in bad times, only to foreclose on the debt before it can be paid back, so that someone who subsisted on his produce must now pay rent on his own land to an absentee landlord. Free marketeers cannot understand how anyone would find this objectionable, regarding it as a transaction that both parties entered into knowing the risk even though one party was exploiting the downside of the other.

Rothbard, Hoppe, von Mises, only discuss morality when it is on their side, justifying rent, debt and credit; their historical interest may be in the value of currency, money supply, interest rates, industrial production and state intervention, but suggest that there is another moral dimension to economics and their eyes glaze over...as you wish, but you don't offer much insight into your brave new world.

[hippifried]

And here was my question: "So government can print as much money as it likes, with no ill effects?[?QUOTE]
Yes. I'll explain it one more time, since you & others have such a problem grasping the idea that money is just a barter simplification. Money's an abstract. It ain't real. It's created by whatever powers that be need to keep track of trade values of various merchandise that aren't directly related. For example: How many tons of sand is needed to trade for that cow, so you can swap it for the iron ore you need to make yourself a new knife? I, for one, am glad I don't have to go through that kind of BS anymore instead of just going to the knife store. Money can be anything. It could be gold, if people could be talked into carrying all that excess weight. It can be cigarettes in prison (Yes, money can be a consumable & still be stable.). Currency can be no more than slips of paper scrip & numbers in a ledger, which is what almost all money is today, worldwide. Money is created by debt, destroyed by payoff or charge off, & grows by the interest added. Yup, right out of thin air. The only reason to think that lending institutions don't need regulation is not understanding money in the first place.

[QUOTE=an8150;1279941]I don't enjoy tormenting you because you're extremely stupid, I enjoy it because you're a boor.
Even though I'm not a farmer, I'm sure I could seem boorish to know-nothing upper class wannabes. It's probably just because I find the egoist cult, its demigod, & its followers so extremely stupid.

[buttslinger]

Should our Escort friends here in the USA go to jail?

It depends on which lawyer you ask.

[trish]

Should our Escort friends here in the USA go to jail?

It depends on which lawyer you ask.
And which judge you pull.

[broncofan]

And which judge you pull.
Oh that's cute:tongue:

[Ben]

Obviously the size, wealth and power of the company determines how well it can ride out disasters.

So as a libertarian, how do you feel about copyright and patent protections?

Great point. Patents and copyright are indeed government intervention in the economy. So is a minimum wage law. And, well, child labor laws. I mean, a libertarian/fully free market paradise would consist of 10 year olds working down the coal mines.
Or we could go back to the 1880s where people worked 7 days a week and 10 to 15 hrs. a day.... I mean, would, say, the Kochs really have a problem with that???
I mean, that's a fully free market.... No restrictions, no government intruding on corporate space, as it were.

History of Child Labor:

http://www.scholastic.com/teachers/article/history-child-labor

[fivekatz]

Great point. Patents and copyright are indeed government intervention in the economy. So is a minimum wage law. And, well, child labor laws. I mean, a libertarian/fully free market paradise would consist of 10 year olds working down the coal mines.
Or we could go back to the 1880s where people worked 7 days a week and 10 to 15 hrs. a day.... I mean, would, say, the Kochs really have a problem with that???
I mean, that's a fully free market.... No restrictions, no government intruding on corporate space, as it were.

History of Child Labor:

http://www.scholastic.com/teachers/article/history-child-laborStanding Ovation!

If US businesses really believe that the government is intruding on their rights so badly why don't they start by refusing to accept the subsides, tax exemptions and deals to harvest public lands of their resources so that corporate America can really show that they don't believe in government intervention?

The biggest problem capitalists have is also their greatest gift. Their greed knows no bounds and their ambition to win is all encompassing. There are of course exceptions and those who once they have gained great wealth engage in great philanthropy. But the need to win at the game is greater than the money itself, which is why humans will do things as stupid as the whole housing bubble was and to spend so much money trying to unseat a President who did not send a one of their asses to jail when so many deserved to be convicted of fraud.

[Prospero]

Succinctly put Ben. Thank you.

[hippifried]

No need to try & tie copyrights to child exploitation in what's left of this conversation (a stretch at best). The egoist cult is already the loudest bunch of crybabies when it comes to protection of intellectual "property". The whine remains the same: "Please government... Protect my property for me, but don't interfere with me taking someone else's."

The egoist cult are NOT libertarians.

[trish]

Was reading Richard Fortey's Horseshoe Crabs and Velvet Worms this morning and ran across this quote,

"As with bluefin tuna right now, when an animal finally gets rare, the price goes up, and those same market forces push ever onward towards extinction. The very last one will be the most valuable."

The capitalistic mechanism behind this one example underlies numerous tragedies, old and modern, and not just tragedies for flora and fauna but ourselves as well.

If we continue to give free reign to our greed and the greed of those who would exploit our resources for their benefit and ours, then we have no right to act surprised when we wake up and find our resources are polluted and depleted.

No system of oversight and regulation will be free of error and corruption, but certainly regulation and oversight are indispensable for our future survival.

[Stavros]

Fair points, Trish, which also apply to a range of amimals who, year on year find humans taking up their space -bears in some parts of the USA and Canada, various primates and also big cats and Rhinos in Africa -it isn't just illegal hunting for skins and horns, but population growth and urban sprawl that may doom some animals, like Tigers and Rhinos to complete extinction, although we will always have wildlife tv programmes as a record. How one saves Polar Bears if the warming of the Arctic takes place over an extended period of time removing their habitat, I don't know -round them up and re-locate them to Siberia? Zoos?

But crucially, it is not just regulation and oversight, but planning that is problematic -real change on a range of issues needs long term planning, and while corporations that rely on natural resources can plan 50 years ahead, politicians are always worried about being re-elected: Obama might be free to act because he doesn't face re-election, but enough Democrats and Republicans are hedged in by their re-election prospects, and their forward thinking often doesn't extent beyond the next election which is also the case in the UK.

On issues like climate change, where the 'sceptics' are doing all they can to prevent long term policy changes becoming law, it results in disappointing decision making, if any. In the case of renewable sources of energy, because the frackers are convinced they will make the USA self-sufficient in hydrocarbons for 'years to come' the next wave of capital investment is more likely to be in unconventional hydrocarbons rather than renewables who need it most precisely because of the technological obstacles to realising its potential as a mass energy source, if it ever is likely to be one. But how long will unconventional hydrocarbons meet US demand? And then what? Can any government make policy now that will be relevant 50 or 100 years from now? After all, someone who is 25 years old, and can expect to live until they are 85 is in this mix for the next 60 years, it is policy making for the rest of their lives.

I believe that it is the case that the science, at its best, is not a core problem, but that the politics is -because it impacts investment decisions where science can improve what we have while creating something new.

Can we afford not to make long term decisions on the environment, on energy, on water resources? It is curious that in Mitchell's Cloud Atlas, a substantial part of the world is ruined/destroyed by nuclear war or accident, he doesn't seem to be interested in the potential impact of climate change evern though the book was published in 2003.

And, if we do go for long term planning, how can we be sure it will turn out to have been the right policy option that was taken -as it were, the road we decided to travel on....?

[trish]

It certainly seems these days that corporations are capable of attaining longer term goals than politicians who survive one campaign only to immediately glad hand for the next. Unfortunately for us, neither corporations nor politicians seem to be planning for our benefit.

That aside, suppose once again we could achieve a government that is capable of initiating and persuing long term projects with aims to improve and sustain quality of life, health care, transportation, clean air, viable energy. What projects and policies should we pursue? Can we know the road we choose to follow is the right one? How do we know too late that we chose the wrong road? Specifics are hard? But waiting and doing nothing is also chosing a road that may also become one-way.

Specifics are hard. In science there are calculable margins of error, but there is no absolute certainty. In policy matters, however, it is absolutely certain that you will have to tack and adjust your course as you go along. Yet, I think some general goals are easy to choose. If in some future U.S. the citizens enjoy clean air, have sufficient food and energy for their needs, have cheap and expert medical care for everyone who needs it, still thrive within a world that’s alive and teaming with biodiversity and not dying etc. etc., only future assholes will complain, “There’s not enough filth in the air and there’s too much food on my table!” I’m hoping our children, grandchildren and great grandchildren have reason to say, “Thank heavens they finally got it together to do something before civilization went over the edge! Let’s drink to our ancestors (clink).”

Informed legislation. Science. A little less greed and a little more empathy. A little less animosity and a little more goodwill. A lot less paranoia and a lot more reason. These are the things the U.S. (and I suspect the world) chiefly needs.

[fivekatz]

Trish, while corporations are able to survive longer than politicians most corporations and their leaders have incredibly short goals, they are committed to the next quarterly report and what that means to shareholder equity. If corporations had longer term goals, the largest financial corporations would have approached CDO and Synthetic CDO with far greater caution. The corporations that fed them shit mortgage paper never would have done it if they truly had 5 year - 10 year plans. But the shit paper made Countrywide and the like a lot of money every quarter. In the US shareholders expect not only consistent return but want it to double digit and have little interest in 5 year plans. It is capitalism's achilles heel and the core of what creates the boom - bust continuum that has marked the history of free market economies.

Our government is built upon a system of checks and balances and as it has grown it became a two party system.

At this point one party tries to create policy which balances the needs of business with the needs of the people and progressive thinking.

And one that focuses on the needs of business up to and including their quarterly results and builds policy that will gain them enough support to get elected to pursue that goal.

Both parties at the end of the day need a lot of corporate money to relevant and nothing the SCOTUS has done recently has made that issue less problematic, Citizens United may have failed to unseat Obama but there is no greater risk to republic as we have known it than the dual assumptions that money is speech and corporations are persons.

So while many of things that the current POTUS talks about like improving infrastructure, power grids and moving away from oil are in the long term interest of business as well as the nation, most of business stands against it because it will f'up next quarters report to the street. Even though their paying slightly higher taxes businesses would likely gain in the long run from the increased consumer spending that government jobs and government stimulus create, they stand against because it would f'up next quarters earnings report after tax.

So while it may appear that corporations have clear long term goals, the only goals that are really long term are those of influencing public policy so that their actions fro quarter to quarter will remain unfettered by any barriers even if those happen to be crash barriers on a windy road at the edge of a cliff.

[Stavros]

I agree with some but not all of the posts by Trish and fivekatz. I don't know about financial corporations, but in the extractive industries -petroleum, diamonds, gold, timber, base metals, phosphates, uranium etc, the need to maintan a healthy resources to reserves ratio means these businesses plan 50-100 years ahead and develop the technology to make exploration and production more efficient, but they still need a 'licence to operate' in foreign countries, which is where political obstacles can obstruct their progress; while reputation issues, particularly after accidents, can affect the share price. But if you look at the wave of mergers in the oil industry in the late 1990s and early 2000s, the targets were firms who had not planned well enough for the forthcoming decades, undermining the share price.
In the chemicals industry, forward planning is based in part on finding a new generation of drugs for known illnesses and diseases like cancer, and on copyright issues that aim to prevent the creation of 'generic' drugs at cheaper prices. These days, with advanced health care practitioners and health systems outside Europe and North America, the market for drugs has become fantastically lucrative given the relatively few firms that dominate the market.
In computing, where the pace of change seems to be at its fastest, cloud computing storage and the internet are planning for an entirely individualistic world in which you access your data and purchase products online -the collapse of HMV was due in part to it opening too many shops in the UK, but that is because a generation of people are not using shops to buy things -town planning in this context could become meaningless in the sense that Main St/the High St could be transformed into merely a string of restaurants and coffee shops. I don't know much about computing really, but I wonder how far the forward thinking of computing giants is away from what used to be sci-fi.

I was told the other day that within 50 years people will not own cars, but have 'users rights' and if they need a car go to a pick-up point to find a car for their journey and then return it afterwards, like the bicycles you can rent in London and other cities for a single journey.

In these instances, long-term planning for survival is more important than quarterly reports if the investors can see where the latest figures relate to the long term strategy; it is the reason they invest. On the other side of the coin, as I suggested, legislators are capable of wise long term decision making on those issues with long term significance, like the environment, but are more obsessed with short term opportunity than some in business.

I would feel more confident about the future if the contemporary class of elected politicians inspired me; they don't; in fact I think in the UK we have, intellectually, the weakest crop of politicians in my lifetime, and the weakest at the leadership level. I don't think any of them have a clue what science even does other than make the car and the fridge and the internet work. That may sound cynical but I think there is an absence of vision, although it is always true that the issues we face are urgent, and will always be urgent. But here we are with virtually no tigers and Rhinos left as naturalists warned decades ago; the mismanagement of water resources in parts of the world where reports were written on precisely this issue in the 1930s; and so on. But I agree also that sometimes the road taken leads nowhere. Perhaps we are doomed.

[Prospero]

Sadly I find myself wholeheartedly in agreement with the statement below by Stavros.

Gloomy for first thing on a Sunday morning.

"I would feel more confident about the future if the contemporary class of elected politicians inspired me; they don't; in fact I think in the UK we have, intellectually, the weakest crop of politicians in my lifetime, and the weakest at the leadership level. I don't think any of them have a clue what science even does other than make the car and the fridge and the internet work. That may sound cynical but I think there is an absence of vision, although it is always true that the issues we face are urgent, and will always be urgent. But here we are with virtually no tigers and Rhinos left as naturalists warned decades ago; the mismanagement of water resources in parts of the world where reports were written on precisely this issue in the 1930s; and so on. But I agree also that sometimes the road taken leads nowhere. Perhaps we are doomed."

[fivekatz]

The corporations have long term sketches but not plans.

The culture in the last quarter of the 20th Century literally created a culture within Western corporations openly called "pump and dump". The goal of CEOs and their fellows stakeholders is to pump the stocks value up as high as they can with short term positive financial indicators and then dump the stock at its peak.

The compensation paradigms of base salary plus large chunks of stock options sounds so theoretical appealing but in reality it creates pump and dump, whether it is Enron, Lehman Bros or BP we are talking about.

The politicians who have so little command of science and ask yourself how does a person achieve power in a capitalist system? If your entire business model was based on a non-renewable product that will cost more and more in the coming years and destroy the planet as we know it after you are dead, would you support an idiot who thought there really was something called clean coal and that trees made air pollution?

While Obama in the US is an outlier because he was able to raise so much money on his own, he is still very much in the pockets of the ruling elite and the ruling elite will tell their government sponsors when and if they are ready to stop selling technologies as futures (while we pollute in the meantime) and when to talk about more than cars and refrigerators.

[an8150]

[QUOTE=an8150;1279748]
but I don't see why your descriptions of Bedouin, etc. are any closer to the State of Nature - the natural condition of mankind, as you put it - than are mine. They're just different ways that different societies developed. So when you say that 'communism is the natural condition of mankind', I take you to mean that in the State of Nature everything is held in common. I agree that there are societies where that has happened, but I cannot see why that is any more natural a development upon climbing out of the primordial sludge than Ugg deciding that the frog he found is his. Take another example: studies of very young children suggesting that they sometimes share when there is no obvious gain to them in doing so. On the other hand, any parent of young children has witnessed in them the urge to acquire and to accumulate. I'd suggest that urge is even stronger where fundamentals such as hunger are at stake: if Ugg reckons he'll starve if he shares even a morsel with Grunt, then Grunt is on his own. A little further down the evolutionary tree, Ugg might start to consider the benefit to him of delaying satisfaction of his hunger by giving Grunt some frog, in return for Grunt's assistance slaying a sabre-tooth tiger. A primitive trade, if you will. Or maybe they'll Bedouin it up, who knows? ]

--You don't seem to be following my argument, in which the invention of private property as the foundation of modern socio-economic relations is an historical development. Within that concept are modes of behaviour such as competition, financial transactions, rent, debt and credit and so on. These were not common to human societies universally, and still today there are formal prohibitions on usury in some countries (whether they are held to or not is another matter). It is profoundly wrong to think that either Bedouin societies or South Pacific islanders lived in a 'state of nature' -the Hobbesian concept was derived from his experience of civil war, and the absence of government -there is no evidence that in the absence of government societies collapse into an orgy of violence, which is ironic given that your own dreamland has an absence of government, but you don't call it a 'state of nature'.

In fact, in the absence of government, societies will normally devise rules that seek to maintain peace. Amongst the Bedouin, for example, the practice of 'blood revenge' is viewed as pointless if every time someone from clan A is killed someone from the offending clan or tribe must also be killed -so property, usually in the form of camels, wheat etc are traded instead on the advice of tribal elders, as the property belongs to the tribe in common. You have also not considered the widespread existence in the Middle East and East Africa, of the 'moral economy' where, again in the absence of government, land was farmed for the benefit of the community rather than for markets. It was a way of ensuring that everyone participated in production, and received their fair share of the results. Indeed, the conflict between the moral economy of say, Kenya, was at the core of the Mau Mau conflict, just as both the Ottoman and later the British governments sought to replace the moral economy of Palestine and TransJordan with a market economy, which had already emerged in some parts of Palestine anyway; it was also common in parts of Lebanon and Syria. Critical to the transition are notions of efficiency, which the free marketeers argued was enhanced by market relations, and ownership, in which land farmed in common became private property, enriching some, impoverishing others: not all fields are as productive as others, and what once benefited all now benefited only a few. In Syria and Iraq, the commercialisation of agriculture through the creation of estates impoverished thousands and enriched a few, and was the source of much conflict both before the end of Ottoman rule and after it.

This means that in the absence of government, human societies will find ways of managing their relations to minimise violence and social disorder, which must be part of your Eden to Come; the problematic element has been the introduction of competition and market-led relations: on the one hand a driver of progress and change; on the other the cause of much misery, poverty and alienation -but you yourself admit there will be losers as well as winners; but you won't say what you will do with the losers.

[Oh, but I think it is when you say, 'private property is theft'. As it happens, that's long seemed to me a non-sensical formulation because it recognises the status and attributes of property - that ability to have it stolen - whilst presupposing property held in common, which by definition cannot be stolen. But that's incidental: if you believe private property is theft, then those items you 'value most' are either things you've stolen, in which case there's no moral bar to my taking them, or they're private property, properly meant, and I should get my hands of them.
--Marx's most radical challenge: money is the acme of private property, there can be no freedom until money is abolished -even the Bolsheviks couldn't handle that one.

How will you pay for welfare and other so-called entitlements, if you abolish money?

[an8150]

Obviously the size, wealth and power of the company determines how well it can ride out disasters.

So as a libertarian, how do you feel about copyright and patent protections?

I have no fixed views on copyright and patent protections. It's a subject hotly debated among libertarians, and I haven't arrived at a conclusion.

[an8150]

[quote=an8150;1279941]And here was my question: "So government can print as much money as it likes, with no ill effects?[?QUOTE]
Yes. I'll explain it one more time, since you & others have such a problem grasping the idea that money is just a barter simplification. Money's an abstract. It ain't real. It's created by whatever powers that be need to keep track of trade values of various merchandise that aren't directly related. For example: How many tons of sand is needed to trade for that cow, so you can swap it for the iron ore you need to make yourself a new knife? I, for one, am glad I don't have to go through that kind of BS anymore instead of just going to the knife store. Money can be anything. It could be gold, if people could be talked into carrying all that excess weight. It can be cigarettes in prison (Yes, money can be a consumable & still be stable.). Currency can be no more than slips of paper scrip & numbers in a ledger, which is what almost all money is today, worldwide. Money is created by debt, destroyed by payoff or charge off, & grows by the interest added. Yup, right out of thin air. The only reason to think that lending institutions don't need regulation is not understanding money in the first place.


Even though I'm not a farmer, I'm sure I could seem boorish to know-nothing upper class wannabes. It's probably just because I find the egoist cult, its demigod, & its followers so extremely stupid.

Actually, my question was whether you had asked yourself why, if as you say governments can just print money with no ill effects, your government doesn't just turn you all into billionaires overnight?

[an8150]

[quote=an8150;1280142]

We are on the same ship, its called SS Capitalism, a system that has grown to global dominance since evolving along with (perhaps because of) the city states of Europe in the late medieval age. The moral economy tends to produce indifference in advocates of free market solutions precisely because it offers a verifiable alternative -in fact in many cases the option of a moral economy is deployed in a crisis -extended drought, famine, floods, etc, as a means of minimising the impact of such events; it is in fact a rational way of spreading risk and reward, but does require the prior belief that a village/community is such an entity and shares its values. Capitalists who promote individual self-interest enter this arena with a bag of tricks called lending, borrowing, rent, debt and in some cases have lent money to poor farmers in bad times, only to foreclose on the debt before it can be paid back, so that someone who subsisted on his produce must now pay rent on his own land to an absentee landlord. Free marketeers cannot understand how anyone would find this objectionable, regarding it as a transaction that both parties entered into knowing the risk even though one party was exploiting the downside of the other.

Rothbard, Hoppe, von Mises, only discuss morality when it is on their side, justifying rent, debt and credit; their historical interest may be in the value of currency, money supply, interest rates, industrial production and state intervention, but suggest that there is another moral dimension to economics and their eyes glaze over...as you wish, but you don't offer much insight into your brave new world.

Another dimension to economics? Are you coming over all Flat Earth Society on me?

Sure, you can order economic affairs on the primitive model of bedouin, and a variety of others but, and it's a big but, you'll have to do it a) by taking away those things I value most, and b) be willing to condemn humanity to poverty, starvation and the vicissitudes of a barter economy. Not that it hasn't been tried, but the body count racked up over the last century by your fellow travellers acting on the same impulse inspires confidence neither in your prescription nor in your much-vaunted concern for your fellow man.

[an8150]

Great point. Patents and copyright are indeed government intervention in the economy. So is a minimum wage law. And, well, child labor laws. I mean, a libertarian/fully free market paradise would consist of 10 year olds working down the coal mines.
Or we could go back to the 1880s where people worked 7 days a week and 10 to 15 hrs. a day.... I mean, would, say, the Kochs really have a problem with that???
I mean, that's a fully free market.... No restrictions, no government intruding on corporate space, as it were.

History of Child Labor:

http://www.scholastic.com/teachers/article/history-child-labor

You must then be aghast whenever you hear a politician talk of preparing school children for their role in the 'national economy'. Those good little worker bees.

[hippifried]

[quote=hippifried;1280344]

Actually, my question was whether you had asked yourself why, if as you say governments can just print money with no ill effects, your government doesn't just turn you all into billionaires overnight?

Oh? Actually? You can actually quote yourself & then claim that it's actually different? Oh well... I'll just assume this is another failed attempt to be snide.

Every day, the Mint "prints" the necessary currency to keep enough in circulation for making change. Everything else is numbers in a ledger. Money is an exchange medium. It's not a commodity. Therefore, its "value" is not affected by supply & demand. It doesn't have to be tangible at all. One more time: Money is created by debt, destroyed by payoff or charge off, & the interest grows the "money supply".

[Stavros]

The corporations have long term sketches but not plans.


Fivekatz this is nonsense, the strategic plans to develop the Arctic are not just plans as offshore production from the North Slope of Alaska shows; these are not 'sketches' at all; same with chemicals and computing which in the latter case is developing products for the next generation for whom online connectivity is not the novelty that it has been for my generation but as natural as taking a bus to work.

[Stavros]

[quote=Stavros;1280028]

How will you pay for welfare and other so-called entitlements, if you abolish money?

If you read the source -and I think you are familiar with the arguments even if you have avoided reading Marx for yourself- you ought to realise that in Marx's vision, human society is destined to pass through capitalism and socialism to arrive at an ideal state of being called communism; money represents as private property the degradation and enslavement of human society under capuitalism, the abolition of money is thus the supreme abolition of private property which guarantees human freedom, or so the man says. Predicting the future was never one of Marx's strongest points, but that's not my fault.

[Stavros]

[quote=Stavros;1280285]

Another dimension to economics? Are you coming over all Flat Earth Society on me?

Sure, you can order economic affairs on the primitive model of bedouin, and a variety of others but, and it's a big but, you'll have to do it a) by taking away those things I value most, and b) be willing to condemn humanity to poverty, starvation and the vicissitudes of a barter economy. Not that it hasn't been tried, but the body count racked up over the last century by your fellow travellers acting on the same impulse inspires confidence neither in your prescription nor in your much-vaunted concern for your fellow man.

You really have missed the point -I don't believe in a processional or Whiggish view of history that sees primitive communism being succeeded by feudalism, feudalism being succeeded by capitalism, capitalism by socialism and so on -or that every stage of history has been an improvement on the last one. My point was that Hobbes was wrong about the State of Nature, just as the Whigs have been wrong about history-- I was giving you examples of what happens when people lose out from a market based economy: they find alternatives that emphasise sharing as a means of handling scarce resources, which doesn't prevent them from returning to a market based system when the rains return and crops are good, when they have a surplus product to sell -because no one system necessarily dominates to the exclusion of all others. It also means that it is pure vanity to speak of 'What I value most' if you live in an economy in which scarce products mean your values are gained at the expense of others, in which case you don't have values in the real sense, but expropriate them from others, as it is mostly others who produce the food you eat, the clothes you wear and the dwelling in which you live, unless you are going to transform yourself into a hippy and live in the woods on your own initiative. You start from the basic premise that free markets are the foundation of a free society, thereby demonising government, taxes, regulations, and so on, without ever bothering to ask how we got where we are today, without taking an interest in actually functioning societies which contradict your religious adherence to the gospel of free markets because they don't believe in it, and are not primitives living in the trees and eating bananas.
As for the body count in history, do you really want to reduce humanity to a numbers game to suit your smug ideology?

[fivekatz]

Fivekatz this is nonsense, the strategic plans to develop the Arctic are not just plans as offshore production from the North Slope of Alaska shows; these are not 'sketches' at all; same with chemicals and computing which in the latter case is developing products for the next generation for whom online connectivity is not the novelty that it has been for my generation but as natural as taking a bus to work.But my point is that this a sketch. The production from the North Slope and off shore and additional development will be put on hold in a heartbeat if the US market goes on a consumption slow dow for any extended period of time. Big oil would not bring additional supply to the market in the face reduced demand cause by austerity or other phenomena that was not forecast.

The sketch is to milk the remaining reserves for maximum profit by creating a supply side shortage in the face of growing demand. The plan also calls for getting as many controversial leases (federal lands etc) during times of low supply - high demand.

But the oil companies will jump the shark any quarter, mid-quater to ensure that there is not a huge event which would have catastrophic consequence on their short term market capitalization.

Naturally they have divisions dedicated to the development of alternative products but are the efforts any more focused than what Microsoft's were in the face of "cloud"? Looking at Microsoft's history they were short on R&D when it came to IE and related products, long on attempting to use their near monopoly and shear enormity to kill the competitors they could see changing the paradigm from code on plastic to cloud computing.

They not only saw the wrong competitor (Netscape) but did have plans sufficient vision to see what the next generation of mass computing would look like. They had what I call a sketch, with the only thing being hardwired was the need to show consistent quarterly return for shareholders.

These long term plans that petrol chemical companies have are no different than what government has IMO, the difference is that government in many cases over the last four years in the US has been split by the extreme contrasts in the administrative branch and the other two branches, where as corporations guidance appears more constant with the drive being quarterly control of market cap.

There are few if any corporations in the US willing to post 3 consecutive bad quarters intentionally to build a great 5 year performance.

Just my take

[an8150]

[quote=an8150;1282471]

You really have missed the point -I don't believe in a processional or Whiggish view of history that sees primitive communism being succeeded by feudalism, feudalism being succeeded by capitalism, capitalism by socialism and so on -or that every stage of history has been an improvement on the last one. My point was that Hobbes was wrong about the State of Nature, just as the Whigs have been wrong about history-- I was giving you examples of what happens when people lose out from a market based economy: they find alternatives that emphasise sharing as a means of handling scarce resources, which doesn't prevent them from returning to a market based system when the rains return and crops are good, when they have a surplus product to sell -because no one system necessarily dominates to the exclusion of all others. It also means that it is pure vanity to speak of 'What I value most' if you live in an economy in which scarce products mean your values are gained at the expense of others, in which case you don't have values in the real sense, but expropriate them from others, as it is mostly others who produce the food you eat, the clothes you wear and the dwelling in which you live, unless you are going to transform yourself into a hippy and live in the woods on your own initiative. You start from the basic premise that free markets are the foundation of a free society, thereby demonising government, taxes, regulations, and so on, without ever bothering to ask how we got where we are today, without taking an interest in actually functioning societies which contradict your religious adherence to the gospel of free markets because they don't believe in it, and are not primitives living in the trees and eating bananas.
As for the body count in history, do you really want to reduce humanity to a numbers game to suit your smug ideology?

Let's face it, Stavros, I can afford to be smug given that between 94m and 149m people have not been killed in the name of that which I espouse (The Black Book of Communism - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/The_Black_Book_of_Communism), and http://www.scottmanning.com/content/communist-body-count/)

Indeed, if I were in your shoes, I'd be wondering what was wrong with me that, nearly fifty years after Conquest started definitively to confirm what anyone with eyes to see had been telling the likes of Bernard Shaw for decades, I persisted in proselytising what is by far the political creed most destructive of human life in the whole of our history.

Or is the 20th century history of communism a statistic rather than a tragedy?

[an8150]

[quote=an8150;1282464]

If you read the source -and I think you are familiar with the arguments even if you have avoided reading Marx for yourself- you ought to realise that in Marx's vision, human society is destined to pass through capitalism and socialism to arrive at an ideal state of being called communism; money represents as private property the degradation and enslavement of human society under capuitalism, the abolition of money is thus the supreme abolition of private property which guarantees human freedom, or so the man says. Predicting the future was never one of Marx's strongest points, but that's not my fault.

I wasn't asking Marx, I was asking you.

[an8150]

[quote=an8150;1282466]

Oh? Actually? You can actually quote yourself & then claim that it's actually different? Oh well... I'll just assume this is another failed attempt to be snide.

Every day, the Mint "prints" the necessary currency to keep enough in circulation for making change. Everything else is numbers in a ledger. Money is an exchange medium. It's not a commodity. Therefore, its "value" is not affected by supply & demand. It doesn't have to be tangible at all. One more time: Money is created by debt, destroyed by payoff or charge off, & the interest grows the "money supply".

I originally posed the question at comment #41. I then repeated it at your request at #104.

And since the question implies the absurdity of your contention, you'd do well to answer it or be left with an absurd contention for which you have no answer.

On the other hand, it is better to stay silent be thought stupid than to open your mouth and remove all reasonable doubt. Actually, yes it is. Actually.

[hippifried]

[quote=hippifried;1282574]

I originally posed the question at comment #41. I then repeated it at your request at #104.

And since the question implies the absurdity of your contention, you'd do well to answer it or be left with an absurd contention for which you have no answer.

On the other hand, it is better to stay silent be thought stupid than to open your mouth and remove all reasonable doubt. Actually, yes it is. Actually.

I don't care when you posed anything. There was no question, & still isn't. Your memetic assumptions don't mean anything to me. The only implication is the absurdity of your contention that you have a clue. I'm not impressed. But hang in there. I'm already old. Maybe some day I'll start getting senile & you can try again to convince me that "printing" has something to do with the money supply.

[fivekatz]

There are lots of philosophical takes on economic realities. Whether it is guys like Marx or the wonder of the last score of the 20th Century, Alan Greenspan they never live their philosophical realties of their views.

Unfettered capitalism seems always bubble and burst and the working class always seem to take the hit not those who "took" the risk. There never has been a true socialistic society because men of greed will always game the system hoping to feed the hopes of the masses while lining their own pockets.

The middle of the road has been the invention of the 30's to avoid either a dictatorship or a communist take over which was a taxation system that was redistributive and provided some passive action that would stop the 99% from eating 1% alive which easily could have happened.

US politics have been trying to undo this redistributive taxation and spending policy since 1936. What those trying to undo it have never figured out is that if you do not offer the 99% a Fair Deal it is only a matter of time before they say NO DEAL.

Now American politics since the end of WW2 have walked the final line between the return to laissez-faire economics, American capitalism with its redistributive taxation and policies to smooth out the differences between extreme success and everyone else.

What the 1% never have accepted is that 99% won't accept that inequity. The 1% find comfort in the fact that they can bankroll movements like the Tea Party, make American citizens feel there is something wrong with the idea that every citizen has an equal right to full health care and that there are many sexist, racial, ethic and orientation strings they can pull to distract the 99% from the fact that they are getting the short end of the stick and that there is a lot of shit in their end of that short stick.

But it is folly to think that any system which primarily calls on 99% of the populations to get screwed, to die younger due to the absence of health care and to doomed by class distinction due to the cost of higher education for their children will indefinitely accept that situation simply because 20th Century Communism failed.

At some point this American/Western system of economics has to work. It would not take long IMHO for a pure Libertarian system to cause the masses to turn on the few even if you left their opiates literally unregulated. And as best we can tell from China, communisim is a almost hard to separate form of capitalism from the Western practice of the economic system.

So at some point these giants are going to have to accept playing a fair game, paying their fair share and really playing for the benefit of both their shareholders, stakeholders and customers.

If they don't history suggests that a world movement will take place that will change everything and with the wild card of nuclear weapons that is a very scary option. But the present screw the masses continuum will not sustain itself long enough to prove those that deny climate change wrong.

[Stavros]

[quote=Stavros;1282599]

Let's face it, Stavros, I can afford to be smug given that between 94m and 149m people have not been killed in the name of that which I espouse (The Black Book of Communism - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/The_Black_Book_of_Communism), and http://www.scottmanning.com/content/communist-body-count/)

Indeed, if I were in your shoes, I'd be wondering what was wrong with me that, nearly fifty years after Conquest started definitively to confirm what anyone with eyes to see had been telling the likes of Bernard Shaw for decades, I persisted in proselytising what is by far the political creed most destructive of human life in the whole of our history.

Or is the 20th century history of communism a statistic rather than a tragedy?

I note that you have not answered my point about the alternatives to find to free markets, when free markets fail them.

As for mass murder, this could become mere sophistry, if, for example, I was to argue that there never was socialism or communism in the USSR but a form of 'state capitalism' as argued by Tony Cliff and others -you should also know that the Second World War in the USSR is known as the 'Great Patriotic War' which in itself is a reflection of the Nationalism that dominated the USSR from Stalin onwards -why wasn't it called the 'Great Communist War'?? Leonard Shapiro wasn't the only scholar to point out that one autocracy in Russia was replaced by another -indeed, the Autocracy, Orthodoxy and Nationalism of the late Imperial state -the Autocracy of the Tsar, the Orthodoxy of the Church, and the Nationalism of the Russians -was replaced with the Autocracy of the Communist Party, the Orthodoxy of 'Marxism-Leninism' (which is intellectually a fig-leaf for a system called 'democratic centralism' on which basis you have a centrally planned economy), and the Nationalism which is the same as it was before.

On this basis, all the deaths that were caused by Stalin and Mao were due to deformed forms of Capitalism, of which system you occupy but another lunatic fringe.

So just because your lunatic fringe can claim to be smug because you have never occuped a position of power from which to slaughter millions, does not let you off the hook with regard to the history of capitalism, and the invasions that took place from North America to South America and the Caribbean, all in the name of Capitalism: if you take a more moderate figure of 90 million first nations in present day Canada and the USA, and add in those who lived in the Caribbean Islands and the Inca, Maya and other civilisations living in the Central and Southern Americas you exceed 100 million without breaking a sweat, not a record to proud of, but integral to the growth of free markets.

As with the Middle East and the Pacific Islands, with British rule in the Indian sub-Continent and particularly eastern and Southern Africa, moral economies where land ownership and land use was for the use and enjoyment of communities, had to be replaced by individual land ownership for the benefit of markets. This was not a voluntary transition -the Iroquois, the Algonquin, the Apache, the Sioux (like the Kikuyu and the Maasai) lived lives that prevented the emergence of free markets -how many westerns that concern the 'rights' of white settlers to build their homesteads in the west are predicated on the presentation of the 'Indians' as 'savages' who threaten this free market capitalism? And how were they dealt with? They were murdered.

Land owership as private property in the Northern Americas is integral to the history of mass murder and slavery. Deal with it.

We have lived in a modern world system since at least 1400, mass murder has been caused by Religion, Politics, Economics, Resentment and so on, and for you to create a hierarchy based on nothing more than your own prejudice is a desperate attempt to pretend that regimes claiming to be Communist were worse than any other, with the dishonourable exception of Nationalism Socialism -unless you see Hitler's ideology as a deformed form of Socialism in which case...

[Stavros]

[quote=Stavros;1282595]

I wasn't asking Marx, I was asking you.

I don't have an opinion on the abolition of private property 200 years, 2,000 years from now -I live in a capitalist economy, I am one person who could in theory abandon money for many transcations under the LETS system, but I don't. I am stuck with it as are you.

[Stavros]

But my point is that this a sketch. The production from the North Slope and off shore and additional development will be put on hold in a heartbeat if the US market goes on a consumption slow dow for any extended period of time. Big oil would not bring additional supply to the market in the face reduced demand cause by austerity or other phenomena that was not forecast.

The sketch is to milk the remaining reserves for maximum profit by creating a supply side shortage in the face of growing demand. The plan also calls for getting as many controversial leases (federal lands etc) during times of low supply - high demand.

But the oil companies will jump the shark any quarter, mid-quater to ensure that there is not a huge event which would have catastrophic consequence on their short term market capitalization.

Naturally they have divisions dedicated to the development of alternative products but are the efforts any more focused than what Microsoft's were in the face of "cloud"? Looking at Microsoft's history they were short on R&D when it came to IE and related products, long on attempting to use their near monopoly and shear enormity to kill the competitors they could see changing the paradigm from code on plastic to cloud computing.

They not only saw the wrong competitor (Netscape) but did have plans sufficient vision to see what the next generation of mass computing would look like. They had what I call a sketch, with the only thing being hardwired was the need to show consistent quarterly return for shareholders.

These long term plans that petrol chemical companies have are no different than what government has IMO, the difference is that government in many cases over the last four years in the US has been split by the extreme contrasts in the administrative branch and the other two branches, where as corporations guidance appears more constant with the drive being quarterly control of market cap.

There are few if any corporations in the US willing to post 3 consecutive bad quarters intentionally to build a great 5 year performance.

Just my take

We disagree on the differences between strategic planning, and sketches...just my take!

[Prospero]

Interesting. My god daughter, who lives in a far away country, lives by barter. She produces wonderful food and trades it for things of an equivalent value. Obviously a little real money has to change hands (for rent for instance) but most of her life is untouched by it. But as with hippies in days of yore it is not a practical solution nor a liveable life for more than a tiny minority

[broncofan]

I think Stavros does an excellent job of rebutting the claim about the death toll of communism. I'd like to try another tack. I mean another tack, at least insofar as I understand the first part of Stavros' argument to be partly that the system in the Soviet Union was not pure Communism. Even if it were, is there something intrinsic to Communism that would enable a dictator such as Stalin to kill millions of people? Or was it the fact that his was an autocratic regime where one man had the power to do so and there were no legal or democratic mechanisms to check this power? Could this not happen in any dictatorship, be it either capitalistic or with shared ownership of the means of production? If the death toll did not flow directly from the manner in which property was owned, it is opportunistic to indicate that the number of deaths under Stalin was a failure of Communism. It is not an empirical example unless you can attribute those deaths to the economic arrangement. The examples Stavros provides you with all tie the economic arrangement to the murder of indigenous people.

At least when one points to the exploitation of individuals in capitalistic societies they are referencing some of the incentives provided by private ownership of goods and unchecked free markets. Child labor, sweatshop wages, slavery, adulterated goods, positive externalities, negative externalities. Capture of political parties through campaign finance. Private monopolies created by unscupulous legislators. Monopolies created by anti-competitive behavior. These are all problems inherent in capitalism. Warfare can even be understood based on the profit motive in a system that allows one to gain at another person's expense, be it in land or through pillaging.

If you discuss the reduced incentives for production in socialism or how redistributive policies infringe upon certain liberty interests, at least you will be discussing something associated with that economic arrangement and not just a political correlate.

BTW, if it would be sophistry to claim that the system in the Soviet Union was not paradigmatic communism, then it would be sophistry to say the United States does not have free markets. Of course you can argue that incentives are distorted by various tax incentives, by bankruptcy, by regulation. This just argues against using any one country as the paradigm for a certain organizational structure when it in fact deviates from the pure form of the ideology being discussed.

[fivekatz]

We disagree on the differences between strategic planning, and sketches...just my take!Would you agree that cap and trade, financing improved infrastructure are strategic plans? I believe that the Obama Administration actual has a very thoughtful strategic plan.

The difference right now is that US government suffers from gridlock, between a House of Representatives that has a GOP majority whose sole plan is the disproven Laffer Theory and a Senate where the GOP have abused the filibuster to the extreme.

As for most of corporate America, I don't deny that they have strategic planning but if there is any challenge to quarterly statements, they historically have very quickly drop there strategic plan in favor of improved quarterly results.

It is a bad habit actually and privately held firms have the advantage of not having to hop through hoops for shareholders so they can instead hop through hoops for customers/clients and can take a longer view of their business, meaning they can truly have strategic plans that they can stick to.

[Stavros]

Fivekatz -you do have a point as Shell have suspended their operations in the Arctic for the rest of the year...guess that wasn't part of the plan...

[Stavros]

I think Stavros does an excellent job of rebutting the claim about the death toll of communism. I'd like to try another tack. I mean another tack, at least insofar as I understand the first part of Stavros' argument to be partly that the system in the Soviet Union was not pure Communism. Even if it were, is there something intrinsic to Communism that would enable a dictator such as Stalin to kill millions of people? Or was it the fact that his was an autocratic regime where one man had the power to do so and there were no legal or democratic mechanisms to check this power? Could this not happen in any dictatorship, be it either capitalistic or with shared ownership of the means of production? If the death toll did not flow directly from the manner in which property was owned, it is opportunistic to indicate that the number of deaths under Stalin was a failure of Communism. It is not an empirical example unless you can attribute those deaths to the economic arrangement. The examples Stavros provides you with all tie the economic arrangement to the murder of indigenous people.

At least when one points to the exploitation of individuals in capitalistic societies they are referencing some of the incentives provided by private ownership of goods and unchecked free markets. Child labor, sweatshop wages, slavery, adulterated goods, positive externalities, negative externalities. Capture of political parties through campaign finance. Private monopolies created by unscupulous legislators. Monopolies created by anti-competitive behavior. These are all problems inherent in capitalism. Warfare can even be understood based on the profit motive in a system that allows one to gain at another person's expense, be it in land or through pillaging.

If you discuss the reduced incentives for production in socialism or how redistributive policies infringe upon certain liberty interests, at least you will be discussing something associated with that economic arrangement and not just a political correlate.

BTW, if it would be sophistry to claim that the system in the Soviet Union was not paradigmatic communism, then it would be sophistry to say the United States does not have free markets. Of course you can argue that incentives are distorted by various tax incentives, by bankruptcy, by regulation. This just argues against using any one country as the paradigm for a certain organizational structure when it in fact deviates from the pure form of the ideology being discussed.

Interesting points -if you go back to Marx then Communism was the ultimate condition of man after the 'transition' from Capitalism to Socialism and the exhaustion of the class conflict that would take place - a sort of Hegelian dialectic working its way through what Marx called the 'muck of contradictions'. On this pure basis no society has ever been communist, and for Orwell it was not so much the ideology of 'Marxism-Leninism' that scared him in the USSR as much as the creation of a huge bureaucracy which survived through obedient observance of the directives from above. Stalin, like Hitler and Mao, first made himself indispensable to a variety of interests (the military, politicians, the economy etc) then played one off against the other, weakening the opposition to him personally but in the process destroying anyone who stood in the way -in fact in the 1930s Terror many dedicated Communists with impeccable revolutionary credentials were wiped out precisely because their commitment to a 'cause' was viewed as being less reliable than their commitment to the Party and its Leader -on this Orwellian basis the leader(ship) can invent any reason for an event and the Party faithful must follow it, which is how the CP justified the anti-fascist struggle one year, then changed it to attacking social democrats the next. Solzhenitsyn in the Gulag Archipelago has many stories of people who were war heroes, dedicated communists, and so on, whose lives were ruined because of personal vendettas, because their 'commitment' was seen as a problem -thus the key survivors were often bland, relatively unintelligent people who knew their place and knew how to obey and blend in with the machine.
I cannot deny the vast numbers of people whose lives were rubbed out because of the way the regimes we know and detest behaved; the systematic nature of much of the killing gives it a profile which is more compact than the consequence of invading the Americas as it unfolded over several centuries, yet the end result, with the extinction in some places of 100% of the indigenous population (in the Caribbean islands) and up to 90% elsewhere cannot let the pioneers of capitalism off the hook. It merely proves there is no perfect system, that there are winners and losers throughout history.

[broncofan]

One of the interesting features of capitalism is that it is not a system to live and let live. If others do not want to play, sooner or later they are seen as the enemy, antagonized and forced to participate. One of the critiques of the black book of Communism in the link posted by an8150 is that the death toll put at the feet of the Communists does not take into account the number of deaths caused by the West's forceful opposition to Communism, by proxy or otherwise.

Reading your post made me think back to Animal Farm and how little of that brilliant book I remember. But I think some of the critique of Communism has been that if people will not accept true equality, this leads to a special class of elites who will seize power and then act with impunity. So maybe some would argue that authoritarianism is the inevitable consequence of imposed equality, where people can only actualize themselves by attaining power within the party. I think many of the more communal societies you reference are a good counterpoint. The highly centralized, scary bureaucracy in the Soviet Union was not an inevitable result of lack of private ownership. It was but one manifestation.

[Stavros]

The trend that Orwell first noticed when he was in Spain in the 1930s, which emerges in Homage to Catalonia and which led him to abandon party politics, was the primary importance to the Communist Party of the Party over everything else. Orwell mingled with people who called themselves anarchists, communists, socialists, Trotskyists, syndicalists, and so on, but for Moscow this was unacceptable -the simple message was derived from Lenin's What Is To Be Done (1902) and The State and Revolution (1917) in which one single party is the only mechanism which can deliver a proletarian revolution and the transition to communism; the working class are not very bright, they need leadership, and only trained cadres can do this, cadres who will be locked into a democratic centralist system in the same way as a cog in a wheel (as Lenin once descibed it); and thus enact whatever directive comes from above, repeat the party line whatever it is, regardless as to their own thoughts -because they don't really have their own thoughts.

This meant in the inter-war period that it didn't matter ideologically if Stalin ordered a change in policy to first support social-democrats against fascists, or attack social-democrats as 'social fascists', because the only issue that mattered was to obey the party line. Solzhenitsyn wrote a story called 'We Never Make Mistakes' which sums up the history of the party. In Barcelona and the front-line of the Civil War, this meant that the CP regarded most of the left as its enemies, as well as Franco, and it was this that disgusted Orwell so much. Later, he saw how the USSR was becoming a 'managerial' state in which the recruitment of obedient clerks was capable of the most idiotic things, such as the promotion of Stalin as a major figure in linguistics. There had already been signs of this in Koestler's book Darkness at Noon, which Orwell admired.

In a broader sense, however, geography may play a role as the vast size of Russia, and also China, has been used to justify authoritarian rule as the only way to 'unite' so vast a space, although the USA and Canada are also very large and prefer a federal model, and the voluntary commitment to their respective political systems, and which seems to work.

And sometimes Russians will tell you they are fated to live under Tsarist regimes, while Chinese people will express anxiety at the thought of the Communist Party or some effective body not being 'in charge' -but that may be a reflection of a century of dictatorial rule and a fear of freedom that people can have that authoritarian personalities thrive on.

Michael Mann's most interesting thesis about The Sources of Social Power (Vol 1, 1986) sees it in historical terms as comprised of politics, ideology, economics, and the military, and is one of the most intelligent analysis of power I can think of -Foucalt also has interesting things to say about power when he wants to be serious.

[brickcitybrother]

To add insult to injury... Here is an interesting article from alternet.org

Are Big Banks a Bunch of Organized Criminal Conspiracies?

February 27, 2013
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn't we seize their assets, just like we do to drug cartels?

Let's examine their sorry record of deceit and deception that has surfaced in just the past two months:

Loan Sharking

You want to get really, really pissed off? Then read "Major Banks Aid in Payday Loans Banned by States [3]" by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list [4].)

The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.

Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent [5]of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations [6] limiting fees on debit and credit cards have cost banks billions of dollars.

Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury. Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com [7] and a $700 loan from Advancemetoday.com [8] in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding, abetting and profiting from screwing loanshark victims.

What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit. Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary, dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit that precise scam again.

(Update: After the publication of Jessica Silver-Greenberg's devastating article, Jamie Dimon "vowed on Tuesday to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers’ checking accounts," according to the New York Times [9]. Dimon called the practices "terrible." In a statement, the bank said, it was “taking a thorough look at all of our policies related to these issues and plan to make meaningful changes.”)

Money Laundering for the Mexican Drug Cartels and Rogue Nations

HSBC, the giant British-based bank with a large American subsidiary, agreed on Dec. 11, 2012 to pay $1.9 billion in fines for laundering $881 million for Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel. The operation was so blatant that "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis," reports Reuters [10]. They also facilitated "hundreds of millions more in transactions with sanctioned countries," according to the Justice Department [11].

Our banks got nailed as well. "In the United States, JPMorgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for anti-money laundering lapses or sanctions violations," continues the Reuters report. My, my, JPMorgan Chase, the biggest bank in the U.S. sure does get around.

And the penalty? A fine (paid by the HSBC shareholders, of course, that amounts to 5.5 weeks of the bank's earnings) and we promise – honest -- never to do it again.

Too Big to Indict?

Wait, it gets worse. Why weren't criminal charges filed against the bank itself? After all, the bank overtly violated money laundering laws. This was no clerical error. The answer is simple: "Too big to Indict," [12] screams the NYT editorial headline. You see federal authorities are worried that if they indict, the bank would fail, which in turn would lead to tens of thousands of lost jobs, just like what happened to Arthur Anderson after its Enron caper, or like the financial hurricane that followed the failure of Lehman Brothers. So if you're a small fish running $10,000 in drug money, you serve time. But if you're a big fish moving nearing a billion dollars, you can laugh all the way to your too-big-to-jail bank.

Fleecing Distressed Homeowners

The big banks, in collusion with hedge funds and the rating agencies, puffed up the housing bubble and then burst it. Nine million workers, due to no fault of their own, lost their jobs in a matter of months. Entire neighborhoods saw their home values crash. Tens of millions faced foreclosure.

The big banks, which were bailed out and survived the crash, sought to foreclose on as many homes as possible, as fast as possible. Hey, that's where the money was. In doing so they resorted to many unsavory practices including illegal robo-signing of foreclosure documents. When nailed by the government, the big banks agreed to provide billions in aid for distressed homeowners. Were they finally forced to do the right thing? Not a chance. (See "Homeowners still face foreclosure despite billion in aid" NYT 2/22 [13].)

The big banks, despite what they say in their press statements, found a convenient loophole in the government settlement. The banks began forgiving second mortgages, and then foreclosing on the first mortgage. That's a cute maneuver because in a foreclosure, the bank rarely can collect on the second mortgage anyway. So they're giving away something of no value to distressed sellers and getting government credit for it. Just another day at the office for our favorite banksters.

The Indictments Go On...

I could write a book about all the ways in which banks and their hedge fund cousins have turned cheating into a way of life. (In fact, I just did: "How to Earn a Million Dollars an Hour: Why Hedge Funds Get Away With Siphoning off America's Wealth [14]. Here's the AlterNet interview [15]. )

JPMorgan Chase, Citigroup and Goldman Sachs have been fined over a billion dollars for creating and selling mortgage-related securities that were designed to fail so their hedge fund buddies could make billions. And then we've got the recent LIBOR scandal where the biggest banks colluded to manipulate interest rates for fun and profit.

It's not about good people or bad people running these banks and hedge funds. It's the very nature of these institutions. That's what they do. They make big money by doing what the rest of us would call cheating. As the record clearly shows, they cheat the second they get the chance.

What kind of institution would loanshark, money launder, fix rates, game mortgage relief programs, and produce products designed to fail? Answer: An institution that should not exist.

Nationalize Now and Create State Banks

There are about 20 too-big-to fail banks which have been designated "systematically significant." These should be immediately nationalized. Shareholder value should be wiped out because these banks are repeatedly violating the law, including aiding and abetting criminal enterprises. All employees should be placed on the federal civil service scale, where the top salary is approximately $130,000.

Can the government run banks? Yes, if we break up the big banks and turn them over to state governments so that each state would have at least one public bank. (North Dakota has a strong working model.) The larger states would have several public state banks. But never again would we allow banks to grow so large as to threaten our financial system and violate the public trust. Let FDIC regulate the state banks. They're actually good at it.

(We'd also have to do something about the shadow banking industry -- the large hedge funds and private equity firms. Eliminating their carried-interest tax loophole and slapping on a strong financial transaction tax would go a long way toward reining them in.)

Won't the most talented bankers leave the industry?

Hurray! It can't happen soon enough. It's time for the best and the brightest to rejoin the human race and help produce value for their fellow citizens. Let them become doctors, research scientists, teachers or even wealthy entrepreneurs who produce tangible goods and services that we want and need. What we don't need are more banksters.

Isn't This Socialism?

We already have socialism for rich financiers. They get to keep all of the upside of their shady machinations and we get to bail them out when they fail. This billionaire bailout society is now so entrenched that our nascent economic recovery of the last two years has been entirely captured by the top 1 percent. Meanwhile the rest of have received nothing. Nada. (See "Why Is the Entire Recovery Going to the Top One Percent? [16]")

I know, I know, people say, "Next time, just don't bail them out!" Meanwhile, they get to rip us off, day in and day out, until the next crash? No thanks. Put them out of business now. If you have a better idea, let's hear it.
Source URL: http://www.alternet.org/corporate-accountability-and-workplace/are-big-banks-bunch-organized-criminal-conspiracies
Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/les-leopold-0
[3] http://www.nytimes.com/2013/02/24/business/major-banks-aid-in-payday-loans-banned-by-states.html?hp&_r=0
[4] http://www.lectlaw.com/files/ban02.htm
[5] http://www.pewstates.org/research/reports/how-borrowers-choose-and-repay-payday-loans-85899452131
[6] http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/financial_regulatory_reform/index.html?inline=nyt-classifier
[7] http://loanshoponline.com/
[8] http://advancemetoday.com/
[9] http://www.nytimes.com/2013/02/27/business/jpmorgan-chase-vows-to-fix-payday-loan-practices.html?ref=business
[10] http://www.reuters.com/article/2012/12/11/us-hsbc-probe-idUSBRE8BA05M20121211
[11] http://www.justice.gov/criminal/pr/speeches/2012/crm-speech-1212111.html
[12] http://www.nytimes.com/2012/12/12/opinion/hsbc-too-big-to-indict.html
[13] http://www.nytimes.com/2013/02/22/business/homeowners-still-face-foreclosure-despite-billions-in-aid.html?pagewanted=all
[14] Amazon.com: How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (9781118239247): Les Leopold: Books@@AMEPARAM@@http://ecx.images-amazon.com/images/I/51XoYZA-6dL.@@AMEPARAM@@51XoYZA-6dL (http://www.amazon.com/How-Make-Million-Dollars-Hour/dp/1118239245/ref=tmm_hrd_title_0?ie=UTF8&qid=1358022645&sr=1-1)
[15] http://www.alternet.org/just-what-do-hedge-fund-honchos-do-million-bucks-hour
[16] http://www.huffingtonpost.com/les-leopold/economic-inequality_b_2742092.html

[robertlouis]

I agree. What I don't understand is that if a private citizen was engaged in similar activities, he or she would be arraigned before a court, and if found guilty, sentenced to a considerable jail term, and possibly have your assets seized, but if you're a bank, you pay a fine - which affects your shareholders, not you - and everyone's happy.

Corporations are treated differently, banks indulged even more than others.

But hey, that's capitalism for ya.

[fivekatz]

I agree. What I don't understand is that if a private citizen was engaged in similar activities, he or she would be arraigned before a court, and if found guilty, sentenced to a considerable jail term, and possibly have your assets seized, but if you're a bank, you pay a fine - which affects your shareholders, not you - and everyone's happy.

Corporations are treated differently, banks indulged even more than others.

But hey, that's capitalism for ya.It is quite ironic that corporations want to be treated as though they were individuals where it suits them but work to insure that they aren't held to that standard when it does not suit them.

This week while not as splashy as the filibuster over drone policy between testimony from the AGOUS and the head of SEC and the under-Secretary of Treasury the government basically admitted that they were afraid to prosecute HSBC not because they did not have a case but because they felt that a prosecution could lead to chaos in the financial markets.

So now we have Too Big to Jail along with Too Big to Fail. And honestly the regulation of finance is greater in the US than the UK, so this is not just a US problem by any means.

[robertlouis]

It is quite ironic that corporations want to be treated as though they were individuals where it suits them but work to insure that they aren't held to that standard when it does not suit them.

This week while not as splashy as the filibuster over drone policy between testimony from the AGOUS and the head of SEC and the under-Secretary of Treasury the government basically admitted that they were afraid to prosecute HSBC not because they did not have a case but because they felt that a prosecution could lead to chaos in the financial markets.

So now we have Too Big to Jail along with Too Big to Fail. And honestly the regulation of finance is greater in the US than the UK, so this is not just a US problem by any means.

Meanwhile in the UK, Cammo the Clown and Smug Git of the Year Osborne are trying to preserve bankers' obscene bonuses. Heaven help us all. Wish we had an Elizabeth Warren here in the UK.

[an8150]

[quote=an8150;1283259]

I don't care when you posed anything. There was no question, & still isn't. Your memetic assumptions don't mean anything to me. The only implication is the absurdity of your contention that you have a clue. I'm not impressed. But hang in there. I'm already old. Maybe some day I'll start getting senile & you can try again to convince me that "printing" has something to do with the money supply.

You're funny.

[an8150]

[quote=an8150;1283251]

I note that you have not answered my point about the alternatives to find to free markets, when free markets fail them.

As for mass murder, this could become mere sophistry, if, for example, I was to argue that there never was socialism or communism in the USSR but a form of 'state capitalism' as argued by Tony Cliff and others -you should also know that the Second World War in the USSR is known as the 'Great Patriotic War' which in itself is a reflection of the Nationalism that dominated the USSR from Stalin onwards -why wasn't it called the 'Great Communist War'?? Leonard Shapiro wasn't the only scholar to point out that one autocracy in Russia was replaced by another -indeed, the Autocracy, Orthodoxy and Nationalism of the late Imperial state -the Autocracy of the Tsar, the Orthodoxy of the Church, and the Nationalism of the Russians -was replaced with the Autocracy of the Communist Party, the Orthodoxy of 'Marxism-Leninism' (which is intellectually a fig-leaf for a system called 'democratic centralism' on which basis you have a centrally planned economy), and the Nationalism which is the same as it was before.

On this basis, all the deaths that were caused by Stalin and Mao were due to deformed forms of Capitalism, of which system you occupy but another lunatic fringe.

So just because your lunatic fringe can claim to be smug because you have never occuped a position of power from which to slaughter millions, does not let you off the hook with regard to the history of capitalism, and the invasions that took place from North America to South America and the Caribbean, all in the name of Capitalism: if you take a more moderate figure of 90 million first nations in present day Canada and the USA, and add in those who lived in the Caribbean Islands and the Inca, Maya and other civilisations living in the Central and Southern Americas you exceed 100 million without breaking a sweat, not a record to proud of, but integral to the growth of free markets.

As with the Middle East and the Pacific Islands, with British rule in the Indian sub-Continent and particularly eastern and Southern Africa, moral economies where land ownership and land use was for the use and enjoyment of communities, had to be replaced by individual land ownership for the benefit of markets. This was not a voluntary transition -the Iroquois, the Algonquin, the Apache, the Sioux (like the Kikuyu and the Maasai) lived lives that prevented the emergence of free markets -how many westerns that concern the 'rights' of white settlers to build their homesteads in the west are predicated on the presentation of the 'Indians' as 'savages' who threaten this free market capitalism? And how were they dealt with? They were murdered.

Land owership as private property in the Northern Americas is integral to the history of mass murder and slavery. Deal with it.

We have lived in a modern world system since at least 1400, mass murder has been caused by Religion, Politics, Economics, Resentment and so on, and for you to create a hierarchy based on nothing more than your own prejudice is a desperate attempt to pretend that regimes claiming to be Communist were worse than any other, with the dishonourable exception of Nationalism Socialism -unless you see Hitler's ideology as a deformed form of Socialism in which case...


Well you learn something new every day. I had no idea that the privateers and freebooters of the early modern Spanish kings, much less Victorian gringo imperialists, were in fact righteous practitioners of the libertarian non-aggression principle.

On the other hand, I'd thought you were right with your earlier observation, that in fact people like me have never been in a position from which to slaughter millions. I'd go further, and observe that it would be anathema to libertarian feeling. Omelettes and eggs form no part of our moral compass.

I liked your idea that Stalin and Mao killing millions people is also down to free market capitalists. That took balls and, I should imagine, a straight face. It's the sort of claim that'll get half way round the world before the truth gets its boots on, so well done (btw, I refer you to your earlier comments directed at what you perceived to be my refusal to see that the world is closer than I imagine to the way I might wish; physician heal thyself, if your claim is that Soviet Russia or Maoist China weren't really communist).

The notion of 'market failure', incidentally, is in my view a disingenuous name for economic egalitarianism.

[an8150]

Meanwhile in the UK, Cammo the Clown and Smug Git of the Year Osborne are trying to preserve bankers' obscene bonuses. Heaven help us all. Wish we had an Elizabeth Warren here in the UK.

It would be ironic if our rulers decided to shut down one of these supposedly all-important arteries of (inter)national economies not because they were bust and because bailouts are wrong in principle, but instead because they are said to have handled money on behalf of those who deal in illicit substances. On the other hand, on our rulers' internal logic, not altogether inconsistent.

[an8150]

To add insult to injury... Here is an interesting article from alternet.org

Are Big Banks a Bunch of Organized Criminal Conspiracies?

February 27, 2013
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn't we seize their assets, just like we do to drug cartels?

Let's examine their sorry record of deceit and deception that has surfaced in just the past two months:

Loan Sharking

You want to get really, really pissed off? Then read "Major Banks Aid in Payday Loans Banned by States [3]" by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list [4].)

The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.

Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent [5]of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations [6] limiting fees on debit and credit cards have cost banks billions of dollars.

Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury. Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com [7] and a $700 loan from Advancemetoday.com [8] in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding, abetting and profiting from screwing loanshark victims.

What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit. Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary, dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit that precise scam again.

(Update: After the publication of Jessica Silver-Greenberg's devastating article, Jamie Dimon "vowed on Tuesday to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers’ checking accounts," according to the New York Times [9]. Dimon called the practices "terrible." In a statement, the bank said, it was “taking a thorough look at all of our policies related to these issues and plan to make meaningful changes.”)

Money Laundering for the Mexican Drug Cartels and Rogue Nations

HSBC, the giant British-based bank with a large American subsidiary, agreed on Dec. 11, 2012 to pay $1.9 billion in fines for laundering $881 million for Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel. The operation was so blatant that "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis," reports Reuters [10]. They also facilitated "hundreds of millions more in transactions with sanctioned countries," according to the Justice Department [11].

Our banks got nailed as well. "In the United States, JPMorgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for anti-money laundering lapses or sanctions violations," continues the Reuters report. My, my, JPMorgan Chase, the biggest bank in the U.S. sure does get around.

And the penalty? A fine (paid by the HSBC shareholders, of course, that amounts to 5.5 weeks of the bank's earnings) and we promise – honest -- never to do it again.

Too Big to Indict?

Wait, it gets worse. Why weren't criminal charges filed against the bank itself? After all, the bank overtly violated money laundering laws. This was no clerical error. The answer is simple: "Too big to Indict," [12] screams the NYT editorial headline. You see federal authorities are worried that if they indict, the bank would fail, which in turn would lead to tens of thousands of lost jobs, just like what happened to Arthur Anderson after its Enron caper, or like the financial hurricane that followed the failure of Lehman Brothers. So if you're a small fish running $10,000 in drug money, you serve time. But if you're a big fish moving nearing a billion dollars, you can laugh all the way to your too-big-to-jail bank.

Fleecing Distressed Homeowners

The big banks, in collusion with hedge funds and the rating agencies, puffed up the housing bubble and then burst it. Nine million workers, due to no fault of their own, lost their jobs in a matter of months. Entire neighborhoods saw their home values crash. Tens of millions faced foreclosure.

The big banks, which were bailed out and survived the crash, sought to foreclose on as many homes as possible, as fast as possible. Hey, that's where the money was. In doing so they resorted to many unsavory practices including illegal robo-signing of foreclosure documents. When nailed by the government, the big banks agreed to provide billions in aid for distressed homeowners. Were they finally forced to do the right thing? Not a chance. (See "Homeowners still face foreclosure despite billion in aid" NYT 2/22 [13].)

The big banks, despite what they say in their press statements, found a convenient loophole in the government settlement. The banks began forgiving second mortgages, and then foreclosing on the first mortgage. That's a cute maneuver because in a foreclosure, the bank rarely can collect on the second mortgage anyway. So they're giving away something of no value to distressed sellers and getting government credit for it. Just another day at the office for our favorite banksters.

The Indictments Go On...

I could write a book about all the ways in which banks and their hedge fund cousins have turned cheating into a way of life. (In fact, I just did: "How to Earn a Million Dollars an Hour: Why Hedge Funds Get Away With Siphoning off America's Wealth [14]. Here's the AlterNet interview [15]. )

JPMorgan Chase, Citigroup and Goldman Sachs have been fined over a billion dollars for creating and selling mortgage-related securities that were designed to fail so their hedge fund buddies could make billions. And then we've got the recent LIBOR scandal where the biggest banks colluded to manipulate interest rates for fun and profit.

It's not about good people or bad people running these banks and hedge funds. It's the very nature of these institutions. That's what they do. They make big money by doing what the rest of us would call cheating. As the record clearly shows, they cheat the second they get the chance.

What kind of institution would loanshark, money launder, fix rates, game mortgage relief programs, and produce products designed to fail? Answer: An institution that should not exist.

Nationalize Now and Create State Banks

There are about 20 too-big-to fail banks which have been designated "systematically significant." These should be immediately nationalized. Shareholder value should be wiped out because these banks are repeatedly violating the law, including aiding and abetting criminal enterprises. All employees should be placed on the federal civil service scale, where the top salary is approximately $130,000.

Can the government run banks? Yes, if we break up the big banks and turn them over to state governments so that each state would have at least one public bank. (North Dakota has a strong working model.) The larger states would have several public state banks. But never again would we allow banks to grow so large as to threaten our financial system and violate the public trust. Let FDIC regulate the state banks. They're actually good at it.

(We'd also have to do something about the shadow banking industry -- the large hedge funds and private equity firms. Eliminating their carried-interest tax loophole and slapping on a strong financial transaction tax would go a long way toward reining them in.)

Won't the most talented bankers leave the industry?

Hurray! It can't happen soon enough. It's time for the best and the brightest to rejoin the human race and help produce value for their fellow citizens. Let them become doctors, research scientists, teachers or even wealthy entrepreneurs who produce tangible goods and services that we want and need. What we don't need are more banksters.

Isn't This Socialism?

We already have socialism for rich financiers. They get to keep all of the upside of their shady machinations and we get to bail them out when they fail. This billionaire bailout society is now so entrenched that our nascent economic recovery of the last two years has been entirely captured by the top 1 percent. Meanwhile the rest of have received nothing. Nada. (See "Why Is the Entire Recovery Going to the Top One Percent? [16]")

I know, I know, people say, "Next time, just don't bail them out!" Meanwhile, they get to rip us off, day in and day out, until the next crash? No thanks. Put them out of business now. If you have a better idea, let's hear it.
Source URL: http://www.alternet.org/corporate-accountability-and-workplace/are-big-banks-bunch-organized-criminal-conspiracies
Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/les-leopold-0
[3] http://www.nytimes.com/2013/02/24/business/major-banks-aid-in-payday-loans-banned-by-states.html?hp&_r=0
[4] http://www.lectlaw.com/files/ban02.htm
[5] http://www.pewstates.org/research/reports/how-borrowers-choose-and-repay-payday-loans-85899452131
[6] http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/financial_regulatory_reform/index.html?inline=nyt-classifier
[7] http://loanshoponline.com/
[8] http://advancemetoday.com/
[9] http://www.nytimes.com/2013/02/27/business/jpmorgan-chase-vows-to-fix-payday-loan-practices.html?ref=business
[10] http://www.reuters.com/article/2012/12/11/us-hsbc-probe-idUSBRE8BA05M20121211
[11] http://www.justice.gov/criminal/pr/speeches/2012/crm-speech-1212111.html
[12] http://www.nytimes.com/2012/12/12/opinion/hsbc-too-big-to-indict.html
[13] http://www.nytimes.com/2013/02/22/business/homeowners-still-face-foreclosure-despite-billions-in-aid.html?pagewanted=all
[14] Amazon.com: How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (9781118239247): Les Leopold: Books (http://www.amazon.com/How-Make-Million-Dollars-Hour/dp/1118239245/ref=tmm_hrd_title_0?ie=UTF8&qid=1358022645&sr=1-1)
[15] http://www.alternet.org/just-what-do-hedge-fund-honchos-do-million-bucks-hour
[16] http://www.huffingtonpost.com/les-leopold/economic-inequality_b_2742092.html

On a website dedicated to sybaritic enjoyment of a rare and venal pleasure, I am surprised to see so many commenters exercised by the ingestion of narcotics.

[an8150]

One of the interesting features of capitalism is that it is not a system to live and let live. If others do not want to play, sooner or later they are seen as the enemy, antagonized and forced to participate. One of the critiques of the black book of Communism in the link posted by an8150 is that the death toll put at the feet of the Communists does not take into account the number of deaths caused by the West's forceful opposition to Communism, by proxy or otherwise.

Reading your post made me think back to Animal Farm and how little of that brilliant book I remember. But I think some of the critique of Communism has been that if people will not accept true equality, this leads to a special class of elites who will seize power and then act with impunity. So maybe some would argue that authoritarianism is the inevitable consequence of imposed equality, where people can only actualize themselves by attaining power within the party. I think many of the more communal societies you reference are a good counterpoint. The highly centralized, scary bureaucracy in the Soviet Union was not an inevitable result of lack of private ownership. It was but one manifestation.

A propos your claim that capitalism isn't a system to live and let live, weren't you arguing, a comment or two back, that in a system of pure free markets, the 99% of losers would gang up on the winners?

[fivekatz]

No shock here, JP Morgan kept shareholders in the dark regarding losses from reckless gambling according to Senate committee. Of course they are too big to fail, too big to jail and even too big to prosecute. The mind boggling part of this is that it all took place well after the 2008 meltdown...


WASHINGTON — A Senate panel on Thursday issued a scathing assessment of JPMorgan's $6.2 billion trading loss last year. The investigation found that bank officials ignored growing risks and hid losses from investors and federal regulators.

Officials at JPMorgan understated the trading losses to federal examiners by hundreds of millions of dollars and dismissed questions raised about the trading risks, according to the report from the Senate Permanent Subcommittee on Investigations.

The report suggests that key executives, including CEO Jamie Dimon, were aware of huge losses at the bank, even while they were downplaying the risks publicly. The report also blames federal regulators for lax oversight that allowed the nation's largest bank to pile up risky bets.

On Thursday, JPMorgan acknowledged it made mistakes but rejected any assertions that it concealed losses or risks. A spokesman declined to comment directly on the accusation that Dimon knew of the trading loss in April.

"While we have repeatedly acknowledged mistakes, our senior management acted in good faith and never had any intent to mislead anyone," JPMorgan said in a statement Thursday. "We know we have made many mistakes ... . We have taken significant steps to remediate these issues and to learn from them."

Sen. Carl Levin, D-Mich., the subcommittee's chairman, said the probe showed "many, many failures" at the bank, some of them "serious and indeed egregious."

The committee will question bank officials and regulators Friday at a hearing on the trading loss.


In April, news reports said a trader in JPMorgan's London office known as "the whale" had taken huge risks that were roiling the markets. Dimon immediately dismissed the reports as a "tempest in a teapot" during a conference call with analysts.

But in May, Dimon acknowledged that the bank had lost roughly $2 billon. And during testimony to a separate Senate panel in June, Dimon said the bank showed "bad judgment," was "stupid" and "took far too much risk."

The figure was later revised to more than $6 billion.

JPMorgan executives said publicly that the trades were made for the purpose of hedging against risk. An internal report at the bank blamed traders in the London unit for trying to hide the size of the loss and not keeping bank executives informed.

But the Senate report says executives inaccurately said the trading decisions were based on a long-term strategy and that the trading positions were fully transparent to regulators. And, it says there is evidence that Dimon and other key executives had information in April about the operation's huge and complex portfolio, as well as its losses for three straight months.

The bank "gambled away billions of dollars through risky and exotic trades, then intentionally hid its losses from investors and the public, showing complete disregard for risk management procedures and regulatory oversight," Sen. John McCain of Arizona, the subcommittee's senior Republican, said Thursday.

The loss came less than four years after the 2008 financial crisis and hurt the reputation of bank that had come through the crisis know for taking fewer risks than its competitors. Three employees in the London office were fired – two senior managers and a trader. And Ina Drew, the chief investment officer overseeing the bank's trading strategy, resigned.

Drew will be among several witnesses Friday. So will former Chief Financial Officer Douglas Braunstein, who is accused in the Senate report of misleading investors during the April conference call.

[Stavros]

[quote=Stavros;1283494]
Well you learn something new every day. I had no idea that the privateers and freebooters of the early modern Spanish kings, much less Victorian gringo imperialists, were in fact righteous practitioners of the libertarian non-aggression principle.

On the other hand, I'd thought you were right with your earlier observation, that in fact people like me have never been in a position from which to slaughter millions. I'd go further, and observe that it would be anathema to libertarian feeling. Omelettes and eggs form no part of our moral compass.

I liked your idea that Stalin and Mao killing millions people is also down to free market capitalists. That took balls and, I should imagine, a straight face. It's the sort of claim that'll get half way round the world before the truth gets its boots on, so well done (btw, I refer you to your earlier comments directed at what you perceived to be my refusal to see that the world is closer than I imagine to the way I might wish; physician heal thyself, if your claim is that Soviet Russia or Maoist China weren't really communist).

The notion of 'market failure', incidentally, is in my view a disingenuous name for economic egalitarianism.

As usual you avoid addressing the point, so that when I linked the early experience of empire to capitalism you replied:
I had no idea that the privateers and freebooters of the early modern Spanish kings, much less Victorian gringo imperialists, were in fact righteous practitioners of the libertarian non-aggression principle -the what principle? In the pre-Victorian phase of capitalism, I don't think libertarian ideas were that common; the Victorians did give is Amritsar, I suppose, if you want to start selecting your massacres.
Capitalism was not invented by Hoppe or Rothbard, its not my fault if you occupy one fringe of it and don't want to acknowledge the capitalist element in imperialism, Spanish, Dutch, British and so on. If people take the view that the USSR operated a form of state capitalism, then it does lodge that political cuckoo in your nest as well, its up to you to debate with people to show that the free market capitalism of your age is different from the earlier versions, just as there are Marxists who deny any responsibility for what they call the perversion of their ideas for political purposes. I did not equate Mao and Stalin with free market capitalists, but people do make a relationship between Soviet and Chinese communism and 'state capitalism', it was a sophisticated argument. There was a time when the English Kings used to murder their opponents, when the Catholic Church slaughtered over a million Cathars, and so on, and so on. You can preen your feathers in your isolated nest, but for me the uncomfortable reality of history is that very few innocents were ever abroad, but as I also said in another post, it is also unhelpful to try and measure the worth of one or the other through statistics.

This sentence:
The notion of 'market failure', incidentally, is in my view a disingenuous name for economic egalitarianism
Is an excellent summary of a core idea in free market capitalism, and one of the reasons why we can only hope that society avoids it...like the plague...it is also a perverse definition of equality.

[Ben]

It isn't just HSBC, it's the whole criminal [big] banking system... as Abby Martin and Max Keiser discuss (and, too, we ARE STILL bailing them out... and what does that have do with with unfettered markets?):

Wall Street Mafia Extorts Washington | Interview with Max Keiser - YouTube (http://www.youtube.com/watch?v=nJB4dnBShX8)

[fivekatz]

If the government in either the US or UK (two of the greatest business havens for Banksters) was willing to attack them as they have other forms of organized crime some big names within those corporations would fall fast.

What I mean is that if you work a bottoms up prosecution (start with middle managers) and squeeze them hard like law enforcement would a "wise guy" and offer immunity they would crack, until you get to the desk of a guy like Jamie Dimon.

The government then stops shareholder and market panic by arranging and overseeing the logical break-up and equity market sale of the units of the criminal bank.

If the government had the nerve to do this once, the fear of too big jail would go away, there would be one less bank that was too big fail, the world would discover that parts of any bank broken up and sold are worth more than the sum total of a super bank and there would be true moral hazard for reckless gambling with others money. And perhaps most important for the ruling elite of these institutions that break laws to pump up personal bonuses and stock prices to further their own enrichment that there are real consequences for immoral and illegal behavior.

This would be so much better than what currently happens which is the institutions these banksters lead pay off government fines which are nothing more than a DUI ticket would be to a working class citizen and move forward knowing that undue risk has few downsides with a safety net and the possibility of getting even wealthier is the upside.

The GOP is right about the problem is takers, they just aren't looking in the right place because there are too many political contributions coming from there.

[an8150]

[quote=an8150;1291751]

As usual you avoid addressing the point, so that when I linked the early experience of empire to capitalism you replied:
I had no idea that the privateers and freebooters of the early modern Spanish kings, much less Victorian gringo imperialists, were in fact righteous practitioners of the libertarian non-aggression principle -the what principle? In the pre-Victorian phase of capitalism, I don't think libertarian ideas were that common; the Victorians did give is Amritsar, I suppose, if you want to start selecting your massacres.
Capitalism was not invented by Hoppe or Rothbard, its not my fault if you occupy one fringe of it and don't want to acknowledge the capitalist element in imperialism, Spanish, Dutch, British and so on. If people take the view that the USSR operated a form of state capitalism, then it does lodge that political cuckoo in your nest as well, its up to you to debate with people to show that the free market capitalism of your age is different from the earlier versions, just as there are Marxists who deny any responsibility for what they call the perversion of their ideas for political purposes. I did not equate Mao and Stalin with free market capitalists, but people do make a relationship between Soviet and Chinese communism and 'state capitalism', it was a sophisticated argument. There was a time when the English Kings used to murder their opponents, when the Catholic Church slaughtered over a million Cathars, and so on, and so on. You can preen your feathers in your isolated nest, but for me the uncomfortable reality of history is that very few innocents were ever abroad, but as I also said in another post, it is also unhelpful to try and measure the worth of one or the other through statistics.

This sentence:
The notion of 'market failure', incidentally, is in my view a disingenuous name for economic egalitarianism
Is an excellent summary of a core idea in free market capitalism, and one of the reasons why we can only hope that society avoids it...like the plague...it is also a perverse definition of equality.


Stavros, as to what the point is, isn't it this: you're a communist (not, as I previously supposed, a social democrat) not unnaturally embarrassed by the body count racked up over the last century by other communists. You say, "Ah, but they weren't real communists, and anyway, they only killed millions because anti-communists forced them to do so. Moreover you, an8150, as a libertarian are tainted by association in the same way because pirates and imperialists were driven to make money in the same way as free market libertarians are". Yet you also, and quite rightly, concede that free market libertarians like me have never been in a position to kill millions.

And the fact remains, that you could not implement your world-view without imposing it by force (which is the real reason why communists have killed so many), whereas my world-view requires only free men freely associating with one another within the rule of criminal law, so no force is required. Indeed, quite the opposite. In my world-view, you would be free to live as a communist, refusing to deal in money and property should you so wish.

As to whether it is unhelpful to try to measure the worth of one [system?] or another through statistics, you, the communist whose namesakes have killed millions in the name of communism, have a vested interest in denying the value of such comparisons, just as I have a vested interest in making them. And it's not as if you are immune to the value of such calculus, since you seek to damn free market capitalism by association with, say, imperialism on precisely the same basis.

Lots of people being killed by a political system is a pretty good reason for rejecting that system.

[Prospero]

In my view the catastrophe of communism, which you rightly say led to the death of millions was inspired by a desire and impulse to make the world a better place. That it failed was a disaster - in part one whose integuments reach into our modern age. The death of a profound form of idealism and hope.

The free market's victims, and those of capitalism, are less visible or easily numbered. They suffer not in labour camps or behind barbed wire, but in sweat shops and factories around the world where capital finds way to employ children and others on poverty wages. They suffer where those in need, the old, the sick and the unemployed, are forced out of any social safety nets because free market capitalism demands all social services and things such as the NHS come under the sway of business rather than the state.

So lots of people being killed is, indeed, a good reason to reject a system, but so too should we reject a philosophy that leads to an increase in the poor and wretched of the world, and a callous creed that makes profit and money the prime and central totem of its vision - along with the so-called freedoms of the free market philosophy.

[Stavros]

[quote=Stavros;1292256]


Stavros, as to what the point is, isn't it this: you're a communist (not, as I previously supposed, a social democrat) not unnaturally embarrassed by the body count racked up over the last century by other communists. You say, "Ah, but they weren't real communists, and anyway, they only killed millions because anti-communists forced them to do so. Moreover you, an8150, as a libertarian are tainted by association in the same way because pirates and imperialists were driven to make money in the same way as free market libertarians are". Yet you also, and quite rightly, concede that free market libertarians like me have never been in a position to kill millions.

And the fact remains, that you could not implement your world-view without imposing it by force (which is the real reason why communists have killed so many), whereas my world-view requires only free men freely associating with one another within the rule of criminal law, so no force is required. Indeed, quite the opposite. In my world-view, you would be free to live as a communist, refusing to deal in money and property should you so wish.

As to whether it is unhelpful to try to measure the worth of one [system?] or another through statistics, you, the communist whose namesakes have killed millions in the name of communism, have a vested interest in denying the value of such comparisons, just as I have a vested interest in making them. And it's not as if you are immune to the value of such calculus, since you seek to damn free market capitalism by association with, say, imperialism on precisely the same basis.

Lots of people being killed by a political system is a pretty good reason for rejecting that system.

a) I am not a Communist;
b) blame by association is a difficult one, you disavow a connection to the worst excesses of capitalism, yet you think you can attach blame to me for the excesses of the Russian Revolution, the mass murder in the Ukraine in the 1930s, Pol Pot, the Great Proletarian Cultural Revolution and presumably the 'Troubles' in Northern Ireland; name your atrocity. To the extent that we did not completely detach ourselves from the UK in the last 50 years or so, how innocent and guilty are we of the deaths that occurred -in Northern Ireland, in Iraq, Afghanistan? I didn't vote for Thatcher, so am I free of blame for the atrocities committed by British soldiers against Argentinians captured in the Falklands in 1982? There were many Germans who fought against the Nazis throughout the Third Reich, yet German responsibility cannot be undone by the heroics of a few, it is the fact that Germans have had to reconcile themselves to; otherwise an adherence to Adorno's judgement would be collective and permanent silence:
After Auschwitz, all European culture is garbage.
c) Truth and Reconciliation -the painful process of admitting the facts that hurt, in the hope of moving on. I supported some causes in the 1980s I regret now, but I did it and I am the one who has to live with that memory.
d) your indifference to the impact of poverty on those who fail is frankly unworthy of a civilised society.
e) and there was an extreme nationalism in the ideology of both the USSR and the People's Republic of China, incompatible with international socialism -you surely must have heard of the risible concept of 'Socialism in one country'??

[hippifried]

What's goin' on here? The resident commies are calling each other commies while denying that they're commies? Well get this straight. Unless you fall into the Reaganesque supply side interventionist camp, you don't even qualify as commies.

[fivekatz]

To me the funny part is that perhaps the most successful "capitalist" country today is China and for all the Western world feared that communism would infect their societies and destroy the capital elite through nationalization, once the Soviet Empire fell, the capitalists were tripping over themselves to use cheap Chinese labor, import their products, when allowed sell in their markets and borrow their money.

No doubt their less freedom of speech in China but their government even if it is paying the issue lip service seems more focused on closing the income inequity gap than the US government is.

[Stavros]

What's goin' on here? The resident commies are calling each other commies while denying that they're commies? Well get this straight. Unless you fall into the Reaganesque supply side interventionist camp, you don't even qualify as commies.

It is like one of those doctrinal disputes that split the Communist movement in the USA about whether not Cuba is communist (hence the emergence of the Sparts), or whether or not America is capitalist. My past associations with the 'left' makes me culpable for every death since the Russian Revolution, if not before that; and it doesn't matter what I say. For his part, an8150 wants to be recognised as a 'free market capitalist' which means being of such an elite band of misunderstood visionaries, he is thereby exempt from all the associations with mass murder linked to the spread of capitalism since 1400 -which is why with such intrusive government and taxes, the USA, with or without Reagan, is not a capitalist country....

[Prospero]

Did you shoot the Czar and his family too then, Stavros?

[hippifried]

Capitalism = exclusionary Socialism

Pooling resources is pooling resources, irrespective of the designer label that's supposed to make specific thoughts on methodology into the work of the deified or the damned. The whole argument is over who gets to bark orders at everybody else. You don't have to do that if you have a better (or just good) idea to start with.

We need a complete rethink!

[fivekatz]

While we wait for that complete rethink of how we organize as societies, we still should hold corporations as accountable as we do individuals in society when they break laws and game the system to detriment of society.

Take JP Morgan for those that think HSBC's laundering of drug money is not worthy of prosecution rather than a fine, that for this bank was a speeding ticket.

JP Morgan's recent history of deception and fraud is a decade long. JP Morgan was responsible for helping Enron as far back as 2000 in defrauding Enron shareholders and most recently their CEO LIED to shareholders about the Whale transactions to keep his stock price pumped. And the Whale transactions took place after the great meltdown, removing any doubt that the bank knew that these were super risky transactions.

Why take such risk? Because there is virtually no recourse when you do. Your too big to fail, too big jail and it seems in Jamie Dimon's case, too big to fire no matter how badly you mismanage risk. And if Dimon did get fired he'd likely get a $30M parachute.

The system is broken and for all Timothy Geithner wanted no part of what he called Old Testament Justice, until some of these banksters and their institutions are held legally accountable for breaking laws they will continue to do so because there is virtually no risk and incredible reward.

[an8150]

[quote=an8150;1298383]

a) I am not a Communist;
b) blame by association is a difficult one, you disavow a connection to the worst excesses of capitalism, yet you think you can attach blame to me for the excesses of the Russian Revolution, the mass murder in the Ukraine in the 1930s, Pol Pot, the Great Proletarian Cultural Revolution and presumably the 'Troubles' in Northern Ireland; name your atrocity. To the extent that we did not completely detach ourselves from the UK in the last 50 years or so, how innocent and guilty are we of the deaths that occurred -in Northern Ireland, in Iraq, Afghanistan? I didn't vote for Thatcher, so am I free of blame for the atrocities committed by British soldiers against Argentinians captured in the Falklands in 1982? There were many Germans who fought against the Nazis throughout the Third Reich, yet German responsibility cannot be undone by the heroics of a few, it is the fact that Germans have had to reconcile themselves to; otherwise an adherence to Adorno's judgement would be collective and permanent silence:
After Auschwitz, all European culture is garbage.
c) Truth and Reconciliation -the painful process of admitting the facts that hurt, in the hope of moving on. I supported some causes in the 1980s I regret now, but I did it and I am the one who has to live with that memory.
d) your indifference to the impact of poverty on those who fail is frankly unworthy of a civilised society.
e) and there was an extreme nationalism in the ideology of both the USSR and the People's Republic of China, incompatible with international socialism -you surely must have heard of the risible concept of 'Socialism in one country'??


Just out of curiosity, how, then, do you define yourself (assuming you do so at all)?

And where have I expressed indifference to poverty? Did I not say, in one of my earliest posts that I was not dismissing such concerns, rather that I was arguing that the statist and collectivist cure is worse than the disease?

[an8150]

[quote=an8150;1298383]

a) I am not a Communist;
b) blame by association is a difficult one, you disavow a connection to the worst excesses of capitalism, yet you think you can attach blame to me for the excesses of the Russian Revolution, the mass murder in the Ukraine in the 1930s, Pol Pot, the Great Proletarian Cultural Revolution and presumably the 'Troubles' in Northern Ireland; name your atrocity. To the extent that we did not completely detach ourselves from the UK in the last 50 years or so, how innocent and guilty are we of the deaths that occurred -in Northern Ireland, in Iraq, Afghanistan? I didn't vote for Thatcher, so am I free of blame for the atrocities committed by British soldiers against Argentinians captured in the Falklands in 1982? There were many Germans who fought against the Nazis throughout the Third Reich, yet German responsibility cannot be undone by the heroics of a few, it is the fact that Germans have had to reconcile themselves to; otherwise an adherence to Adorno's judgement would be collective and permanent silence:
After Auschwitz, all European culture is garbage.
c) Truth and Reconciliation -the painful process of admitting the facts that hurt, in the hope of moving on. I supported some causes in the 1980s I regret now, but I did it and I am the one who has to live with that memory.
d) your indifference to the impact of poverty on those who fail is frankly unworthy of a civilised society.
e) and there was an extreme nationalism in the ideology of both the USSR and the People's Republic of China, incompatible with international socialism -you surely must have heard of the risible concept of 'Socialism in one country'??

And as to your response on blame by association, you're comparing apples and oranges. A blood libel (as David Irving [sometimes I like being provocative; attaboy!] would call it) is different from an allegation against co-believers, for the obvious reason that we can choose our beliefs but we cannot choose our relatives: you can dissociate yourself from the communism that killed tens of millions, you are, however, in some way related to those Britons whose acts you disapprove of.

[an8150]

In my view the catastrophe of communism, which you rightly say led to the death of millions was inspired by a desire and impulse to make the world a better place. That it failed was a disaster - in part one whose integuments reach into our modern age. The death of a profound form of idealism and hope.

The free market's victims, and those of capitalism, are less visible or easily numbered. They suffer not in labour camps or behind barbed wire, but in sweat shops and factories around the world where capital finds way to employ children and others on poverty wages. They suffer where those in need, the old, the sick and the unemployed, are forced out of any social safety nets because free market capitalism demands all social services and things such as the NHS come under the sway of business rather than the state.

So lots of people being killed is, indeed, a good reason to reject a system, but so too should we reject a philosophy that leads to an increase in the poor and wretched of the world, and a callous creed that makes profit and money the prime and central totem of its vision - along with the so-called freedoms of the free market philosophy.

If your concern is for the poor and wretched of the world, then deprecating the best system yet devised for lifting them out of their benighted condition seems, to me at least, an odd thing to do. Bleed all you like about children on poverty wages (whatever that may mean), but take away those wages and you have... starvation.

[an8150]

It is like one of those doctrinal disputes that split the Communist movement in the USA about whether not Cuba is communist (hence the emergence of the Sparts), or whether or not America is capitalist. My past associations with the 'left' makes me culpable for every death since the Russian Revolution, if not before that; and it doesn't matter what I say. For his part, an8150 wants to be recognised as a 'free market capitalist' which means being of such an elite band of misunderstood visionaries, he is thereby exempt from all the associations with mass murder linked to the spread of capitalism since 1400 -which is why with such intrusive government and taxes, the USA, with or without Reagan, is not a capitalist country....

A neat reply, up till the point (not for the first time) you subtly exchange 'free market capitalist' for 'capitalist'.

I wish to be recognised as a free market capitalist. Nothing else (at least, not in the present debate).

And in our simplicity, we're not nearly as interesting all those spartacists and mensheviks and anarcho-syndicalist and wotnot. Sure, we have differences of opinion, and some are significant, but once you get on board with the non-aggression principle everything else pretty much falls into place.

[fivekatz]

"Free markets" have created some of the worst scams and economic destruction of the many for the benefit of the few through out modern history.

"Free markets" allowed Goldman-Sachs to sell toxic bundles of debt to their customers as though they were AAA bonds and then bet against those same bundles. Because it was "free" / unregulated, opaque activity investors had no idea that investment was shit, that AIG had insured so much of the shit that if it failed they could not payoff and that Goldman has invested in SCDOs that bet that the product they sold to that investor was shit.

That is typical of dark, unregulated markets. Unregulated markets will sell rancid meat as fresh, employ 10 year olds, manipulate markets and do anything they can to make a buck with as much concern for the victims as a serial killer has for his victims.

Private enterprise is good but in absence of rules it can and has historical done great harm to the masses. And few examples are greater than what the financial industry has done to the world economy through credit default swaps in an opaque unregulated market. They have injured millions of people and even nation states. They are far more dangerous and criminal than the pot smokers incarcerated through out America in privatized prisons.

[Stavros]

[quote=Stavros;1298418]


Just out of curiosity, how, then, do you define yourself (assuming you do so at all)?

And where have I expressed indifference to poverty? Did I not say, in one of my earliest posts that I was not dismissing such concerns, rather that I was arguing that the statist and collectivist cure is worse than the disease?

I am not like you: I am not comfortable in slots; and I don't wear badges.

[Prospero]

I find myself in firm agreement with Stavros regarding self definition.

[an8150]

[quote=an8150;1308503]

I am not like you: I am not comfortable in slots; and I don't wear badges.

I see. You're a moving target.

[an8150]

"Free markets" have created some of the worst scams and economic destruction of the many for the benefit of the few through out modern history.

"Free markets" allowed Goldman-Sachs to sell toxic bundles of debt to their customers as though they were AAA bonds and then bet against those same bundles. Because it was "free" / unregulated, opaque activity investors had no idea that investment was shit, that AIG had insured so much of the shit that if it failed they could not payoff and that Goldman has invested in SCDOs that bet that the product they sold to that investor was shit.

That is typical of dark, unregulated markets. Unregulated markets will sell rancid meat as fresh, employ 10 year olds, manipulate markets and do anything they can to make a buck with as much concern for the victims as a serial killer has for his victims.

Private enterprise is good but in absence of rules it can and has historical done great harm to the masses. And few examples are greater than what the financial industry has done to the world economy through credit default swaps in an opaque unregulated market. They have injured millions of people and even nation states. They are far more dangerous and criminal than the pot smokers incarcerated through out America in privatized prisons.

And yet Goldman's name remains untarnished and it remains in business. Well, at least you and I know not to do business with it.

[buttslinger]

short and sweet:

BUSH INC had an eight year party and we got stuck with the bill

while Bush and Cheney rode out of town with only their reputations scathed.

UN -doing that damage is not so easy, Big Business is an important part of the economy, and they are calculating to make sure the recovery recovers them first. I think my Savings are going to keep earning <1%
until Hillary has her party.

[hippifried]

Wow! Mine was blue, but that looks just like the car that won me a 1st place trophy in the Pinewood Derby, back in '59.

[fivekatz]

And yet Goldman's name remains untarnished and it remains in business. Well, at least you and I know not to do business with it.If it were only that easy. JP Morgan, HSBC the list goes on and on.

These are smart folks and they'd figure out how to make reasonable profits within reasonable regulatory constraint. But once you create an opaque market, historical folks have figured out how to game the system to arbitrage which is a nice word for creating excessive profit through extraordinary circumstance.

The sheer volume of scandals from the dawn of the Reagan-Thatcher movement forward is stunning. We had the S and L crisis in the US, followed illegal market manipulations by firms like Tyco and Enron and the on going banksterism with the London Whales just being the most recent exposed rip-off.

It is criminal what these people do but unregulated free markets are the moral equal of leaving the doors of a pawn shop wide open in a economic repressed neighborhood with cash pilled on the counters. Difference is the common man that roams into that shop and takes the money gets 10 years in a privatized prison with annual returns of 15% for its shareholders. Meanwhile, the bankster gets a federal bailout since the downfall of his institution would be the downfall of all. The lobbyists of these bankster then enrage Americans about the market interference, throw around words like freedom, add a few wedge issues like the President's race, gun control and abortion and collect their $25M bonuses and repeat at will.

It is about time some high level white collar criminals do some time IMHO!

[fivekatz]

To put personal face on the damage, for those who have access HBO's American Winter is a must see.

It personalizes through the lives of a few families in Oregon the impact the Great Recession has had on every day folks who work hard and play by the rules. The pain and humbling of the human spirit no longer becomes an intellectual argument but instead becomes the end result of what happens when a society prioritizes military defense over the defense of its most vulnerable citizens and allows a small group of elite plutocrats bring the modern economy to brink, while paying a fraction of their fair share of taxes, destroying housing markets and becoming all the richer for the poor behavior.

It is all very academic until you see how good people get ruined by the likes of Jamie Dimon and the Koch Brothers.

[fivekatz]

PS.

Dimon's sentence for his part in the London Whale in a perfect world would be that all his assets would be frozen and he would do 5 years as a Wal Mart greeter as his sole income. And he should be held exempt from the provisions of Obama Care and ineligible for Medicaid.

That would be justice.

[buttslinger]

I watched about 10 minutes of the Dick Cheney cable interview before I got sick to my stomach and had to turn it off, If they had a Federal Prosecutor doing the interview, now that would be a show. I think it's good that American businesses try and make all the money they can, but having Federal Regulators answer to the likes of Dick Cheney is worse than cheating at Monopoly, the only way I can swallow it is to hope it's just one more test for us to take, this nation needs glasses.

My Cub Scout car was blue with red firebolts, we did experiment with weights and special axles, the guy who won had a real ugly car.

[fivekatz]

I watched about 10 minutes of the Dick Cheney cable interview before I got sick to my stomach and had to turn it off, If they had a Federal Prosecutor doing the interview, now that would be a show. I think it's good that American businesses try and make all the money they can, but having Federal Regulators answer to the likes of Dick Cheney is worse than cheating at Monopoly, the only way I can swallow it is to hope it's just one more test for us to take, this nation needs glasses.

My Cub Scout car was blue with red firebolts, we did experiment with weights and special axles, the guy who won had a real ugly car.I thought that the World According to Dick Cheney was pretty wonderful because RJ Cutler did not press Cheney too much. In the process Cheney demonstrated not just a lack of remorse but a lack of self reflection that was stunning.

In one of the most stunning moments Cheney defends torture by saying "are you going to stand on honor..."

He got more than his share of free passes like his and Bush's connections to Enron and the California electricity heist and all those no bid contracts to Halliburton. Like to one to do laundry because no bid assumes no other providers could provide and everybody knows that only Halliburton can wash uniforms in the desert. Or his involvement in writing regulations where Halliburton does not have disclose what leathal chemicals are used in its fraking solutions and can't be held liable for any damages they may cause.

While points like these and greater picture of Cheney as war criminal were glossed over in Cutler's work, I doubt if he had tried to "nail" Cheney that the documentary ever could have come together.

As it was it gave a portrait of a cold, immoral man, who was not just comfortable in his lies and participation in a deceptive war, but defiantly proud of that role and man who can see no faults in spite of his many flaws.

I thought Cutler did a brilliant job of standing back and letting Cheney be the DICK he is in front of an unbiased lens.

[hippifried]

My Cub Scout car was blue with red firebolts, we did experiment with weights and special axles, the guy who won had a real ugly car.
Mine was bright blue with black (magic marker) grill & pipes. Managed to have the weight at exactly 5 oz @ race time (2 washers if memory serves), but the real trick was getting the axles (nails) lined up precisely.

By the way: The head of the driver on the trophy made a perfect night time chewing gum resting place for years. Mom hated it of course, but the job of pre-teens is to give their parents gray hair. I was a journeyman @ the craft, without need of apprenticeship.

[yodajazz]

And yet Goldman's name remains untarnished and it remains in business. Well, at least you and I know not to do business with it.

They did have to pay a 500+ million dollar fine to the SEC, yet they paid it on the condition that they did not have to reveal exactly what the fine was for. I can tell you that it was not for stealing bicycles. The names of convicted bicycles are published in some of our local papers.

Some of GS's actions, along with others, resulted in people losing a majority of their life savings for retirement. Yet many consider gay marriage to be a bigger sign of the world's moral decline. I know someone who was directly affected by the financial crisis. Meanwhile gay couple's relationships, have absolutely none.

[fivekatz]

They did have to pay a 500+ million dollar fine to the SEC, yet they paid it on the condition that they did not have to reveal exactly what the fine was for. I can tell you that it was not for stealing bicycles. The names of convicted bicycles are published in some of our local papers.

Some of GS's actions, along with others, resulted in people losing a majority of their life savings for retirement. Yet many consider gay marriage to be a bigger sign of the world's moral decline. I know someone who was directly affected by the financial crisis. Meanwhile gay couple's relationships, have absolutely none.THe point of needless laws governing the behavior of thers that has no adverse impact on society.

The fines and no contest continuum that industry goes through with government is joke on so many levels.

Using the Goldman example the fine itself was far lower than the profit from the default swaps that were backed by the government since AIG was going down.

The fines are simply a cost of doing business, a game with a complicated chessboard of deny, delay to cost the AG tons of hours. Then when the AG wears out you cut you best deal, you stock takes a hit for a day and you move on, profit in hand.

For the corporation one of the most important judical understanding/interpertation is that corporations are people. And corporations use this when it best serves them, liability for corporate actions being the key. When it doesn't fit like the 2005 Bankruptcy Laws, corporations become exempt, so in essence they get to be person under the law when it suits them.

It is sad to say but all indictions are that markets will not police themselves as Greenspan naively thought they would. We have gone from the S and L crisis, to a partner of pumping stock/ giving false q reports and insider trading in the for of Tyco and Enro, And then the CDOs etc nearly took down the world and caused huge pain to millions of human beings around the world.

It is time to take a criminal corporation all the way through the justice system and name as many key individuals as possible.

This is where IMHO Timothy Geithner blew was he saw holding banksters accountable would hurt the markets and he saw it as Old Testament Justice.

It is simply the moral hazard of a system with banks too big to fail. Corporations get broken up into pieces (often good for shareholders) and a handful of executives that have so much greed, hubris and disregard for others peoples money that they break the law for profit should spend 3-5 years of incarceration.

That would make the next head of Goldman-Sachs think twice about having your organization sell CDOs as being as good as bonds w/ 8% return, while calling AGI to bet against what they sold their customer via a credit default swap.

But a $500M parking ticket?