Keith, If I read you correctly, you are saying that greed is a motivating force in economic and political behaviour. I can't disagree, but would point out that it is one of several motivating forces. Greed (not called that, of course) and the entitlements that emerged from it were powerful forces during the medieval period, when the nobility owned everything and the peasants were left to starve. Much more recent times have been characterized by growing social equality, leading the peasants to raise questions about why those guys in the mansions on the hill should have everything and they should have nothing. In the west, industrial development, market growth, and social programs resulted in large redistributions of income and enabled many people to afford things they could never have had in earlier times. Were they being greedy? I think not. They were simply behaving in accordance with the new economic and social rules that had come into being. Democratic governments, responding to the people that keep them elected, tend to respond by giving people what they want even if they had to go into debt to do it.
They also had to respond to fluctuations in the business cycle. Initially, responding to economists like Hayek, they tended to leave the market to solve its own problems even if the result was mass unemployment. However, during the Great Depression the Keynesian idea that if business couldn't restore full employment then government had to do it via public spending emerged and gathered strength. That is still about where we are now. Massive government debt has been a result. However, now something relatively new has emerged: the electronic age and finance driven capitalism. A new class, hidden behind places like Wall Street walls and instantaneously connected by the Internet has found ways to manipulate financial markets, become very wealthy and put global systems into loaded with government debt into jeopardy. As you argue, greed is undoubtedly a motivating factor, but I'd suggest that the real problem is the absence of rules and regulations to control that greed. There is now a near global rush to formulate (or reformulate - e.g. rules under Glass-Steagall in the US) new rules and regulations, but whether they will be strong and timely enough is a major question. Ed ----- Original Message ----- From: Keith Hudson To: RE-DESIGNING WORK, INCOME DISTRIBUTION, ,EDUCATION Sent: Thursday, May 27, 2010 2:59 AM Subject: [Futurework] Imperialistic greed Let's forget about the "greed" of bankers or hedge funders in the present financial fiasco. They are just as greedy as the rest of us. Given the same opportunities, almost any other group of people would act exactly the same as they have done and will continue to do. Bankers are just as greedy as the early industrialists of the early 19th century. They are just as greedy as the trade unions which destroyed eight automotive industries in my home town of Coventry and threw it into recession for 15 years -- with not much better health since. Choosing the greed which must take first place as the main cause of our present misery, today's bankers are just as greedy as the politicians of Western Europe were more than a century ago -- British, German, Belgian, French, Dutch, Portuguese, Spanish, Italian -- who saw opportunities for rich pickings in much of Asia, Africa and South America. (Not North America, however. The Brits had already received a bloody nose there and the other European politicians paid due attention.) Oh! and we must also mention the rapidly industrialising Japan which had designs on Russia and China. Some of the Western European countries (and Japan) were surging ahead in a wave of unparalleled prosperity and also a fast-developing series of military inventions such as machine guns and artillery and monster battleships which could easily subdue "backward" and "primitive" people elsewhere. However, it was when the West Europeans started turning their weaponry on each other in the 1914-18 war, that the fatal self-inflicted mistake was made. Despite the fantastic prosperity of the industrial revolution and the increasing ease of raising lumps of taxation from year to year, the cost of military weaponry raced forward at an even faster rate. So European governments had to go into debt. But then they discovered that it was becoming difficult to pay those debts out of taxation, so they hit on another dodge. They had very deferential, manipulable electorates (after all, they had been willing to die in their millions on jingoistic pretexts) so it was a relatively easy matter to pretend that printing more and more bank-notes (nowadays called Quantitative Easing) was doing no harm even though they no longer had any underlying value. Politicians even conned many economists (from the time of Keynes onwards). Some of the latter even began to make ridiculous comments such as: "A country has to have debt. Otherwise, how can its central bank set basic interest rates for the rest of the economy?". These economists obviously knew no history, when interest rates (and other things such as credits and simple futures derivatives) had been used for at least 5,500 years already. Well, that's where we are now. For about a century, Western governments (and now all governments) played fast and loose with bank-note printing, not only for their own immediate purposes (their civil services also becoming increasingly greedy) but also to devalue the debts they had already incurred. But then, round about the 1980s, banks and other financial groupies discovered a wonderful thing. They, too, could print a variety of new paper documents -- sophisticated derivatives -- which they could pretend to be money among themselves and their customers. Some of these paper documents, such as Credit Default Swaps (CDSs), didn't need to be based on anything one owned (or were indebted for) or indeed any amount of money that had any connection at all with reality. A bank or a hedge fund could insure themselves for anybody's else's transactions for any amount of money, far beyond the value of the transactions involved. So that's where we are. We -- starting with the European Monetary Union -- are now on the verge of chaos and also with every single advanced government in debt. Japan is leading the way with a debt that's twice its total annual economy. There's not a hope of Japan's debt or any of the rest ever being paid off without a massive bouts of hyperinflation to follow at some stage. It's about time economists started teaching themselves some basic history and, then, maybe, telling politicians that it's time to start all over again with sensible currencies that always existed until imperialistic greed took over a century ago. Keith Keith Hudson, Saltford, England ------------------------------------------------------------------------------ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
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