----- Forwarded Message -----
From: Ed Weick <ewe...@rogers.com>
To: Keith Hudson <keithhudso...@googlemail.com>
Sent: Wednesday, August 14, 2013 5:32:47 PM
Subject: Re: [Futurework] Some further thoughts on economists and physicists
Thank you for jumping in, Keith. It's been awhile since I knew anything about
Bretton Woods or the gold standard, and even then I didn't know very much.
However, I still feel that common currency arrangements tend to favor the most
powerful and work against the interests of lesser nations. As you point out,
the US dominated the most recent gold standard and, as I said in my earlier
posting, Germany and France dominate the European Union. From what I've read,
Greece would be far better off with its own currency, as would Portugal and
Spain.
So China is mining gold and buying it wherever it can. But surely this isn't
because it expects a return to the gold standard. It's probably because gold is
a store of wealth. Its value may go up and down but it remains valuable.
Ed
________________________________
From: Keith Hudson <keithhudso...@googlemail.com>
To: "RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION"
<futurework@lists.uwaterloo.ca>; Ed Weick <ewe...@rogers.com>; D & N
<darna...@shaw.ca>
Sent: Wednesday, August 14, 2013 3:26:31 PM
Subject: Re: [Futurework] Some further thoughts on economists and physicists
I'll come in on this only on the gold standard.
At 17:51 14/08/2013, Ed wrote:
Thank you for the further
explanation, Natalia. You have me thinking.
>
>skip to ------>
>
>(EW) Personally, I doubt that a stabilized international monetary system
like the gold standard would work anymore.
(KH) It's because our present world monetary system is such a mess that
we need some other system as never before.
(EW) The last time the gold
standard was used ended in 1971, when Richard Nixon put an end to basing
the value of currencies on a fixed amount of gold.
(KH) In 1944, at the Bretton Woods 'Agreement', America forced 43 other
countries to accept the dollar as the standard for their
currencies. America could do this because it was the only country
that wasn't bankrupt. The USFed was, in fact, the only Central Bank CB)
with gold in its vaults when the war ended in 1945. America laid it down
(with Keynes' agreement) that only the US$ would be standardized against
gold (at $35 per ounce). In the years after the 1950s and '60s when the
43 countries started trading again any balances in their favour would end
up as US$s in their CBs. They (UK, Germany and France particularly)
started exchanging their export-won dollars for America's gold. By
1971, US gold was leaving the New York Fed in a torrent. 20,000odd tonnes
had gone down to 8,000 or thereabouts. Nixon , the could have raised
interest rates in order for countries to lend gold but the US domestic
economy could stand that or he could have changed the official price of
gold from $35 per ounce to about $400, the free market price but
then that would mean that the gold standard would come back. Nixon didn't
want that, of course. He wanted the US$ to retain its top spot in world
finance. So he disconnected the link between the US$ and gold. That
enabled him and his successors to start inflating the dollar like a man
with no arms. By saving the gold in the NYFed (and also Fort Knox)
Nixon committed the Freudian slip of revealing that gold was still a
precious currency.
(EW) Since then, the global
monetary system has probably become too complex to permit a return to a
common value system. Money is used strategically by countries. China, for
example, has kept the Yuan artificially low to promote exports.
(KH) China has the largest gold mines on the planet and is at maximum
production. China is also buying gold mines in Brazil, Peru, Canada (and
possibly in the US, but I'm not sure whether they'd be accepted).
China bought 1,000 tonnes in 2012 (and possibly almost as much in
2011). This is almost half of all new production world wide. China
has said quite openly that it wants the renminbi (yuan) to become a world
trading currency alongside the dollar, and several Western banks have
renminbi accounts. But there can be little doubt that the Chinese will
want the world grading currency to be gold-backed in order to stamp out
inflation and rein back economic booms before they get too far.
(EW) The Eurozone uses a common
currency. This has worked well for countries like Germany and France but
badly for Greece, Spain and Portugal.
(KH) It strikes me as doubtful that the euro will ever become a permanent
trading currency. For two or three years, the eurobugs in Brussells
have not been able to persuade the 17 member-countries to place their
commercial banks under ECB regulations. In the last year they
haven't been able to persuade its members that their CBs need to be taken
over by the ECB. Thinking of gold again, the ECB got slapped in the
face when it proposed that Greece should sell its 160 tonnes of gold in
order to pay its debts.
Keith
atters, the rich have been
rising and the middle class has been sinking, but there is now some
indication that unions may begin to rebuild and help to restore the
middle class, at least somewhat. Even though politicians promise a
million dollars and deliver a penny, we still have the right to vote them
in or kick them out. And things that happen out in nature, like global
warming, do make us think about the state of our planet and the variety
of species that depend on it, even if we haven't done much about it
yet.
>
>Whether we can do anything or not, we can at least try. In many parts of
the world, this isn't as possible as it is here. We do have to give far
more attention to our impact on other species, our fellow inhabitants of
the Earth. And I do agree that something needs to be done about the Wall
and Bay streets of our world. Doors need to be kept open and commercial
and investment banks need to be kept separate. That their separation
ended in the US in the late 1990's played a large role in the financial
crisis of 2008.
>
>We do have to keep thinking and doing.
>
>Ed
>
>
>
>
>From: D & N <darna...@shaw.ca>
>To: futurework@lists.uwaterloo.ca
>Sent: Tuesday, August 13, 2013 9:39:41 PM
>Subject: Re: [Futurework] Some further thoughts on economists and
physicists
>
>Ed,
>
>I'll attempt to be less general.
>
>What I'm saying is that if people adhered to patently good policies, we
>wouldn't have chronic revisions which invariably allow
greed to ruin them.
>
>We were watching the film about the US National Parks last night. Great
idea. Set aside some wilderness to preserve it and the animals. Then the
feds had to improve the idea, to make the parks viable. They allowed
hunting to extinction levels. They ended up leasing to more lumber
companies. Little remains that is pristine, and far fewer animals are at
preservation number levels because no one stuck to the original idea or
policy of preservation.
>
>Democratic thinking is too often the excuse for destroying a good thing.
We should not be divisive on important issues. The current state of the
economy is a blazing example of chronic revisions of what was once a
functioning monetary system under the abandoned gold standard. We all
should agree on sustainable environment, and how important that is to our
well being, current and future.Pension funds were pillaged, where once
they were designed to be inviolate. It is around these matters that I
believe we can't afford to let Wall Street in, but policy makers do for
the sake of "improvements" to our economies, which in recent
decades have ended in disaster. Investment was scarcely in people and
environment, it was in corporate concerns, concerns for the wealth of
those who promote the arms industries, rather than building for a better
world.
>
>What is so complicated about the assured continuity of the world's
natural resources? It's already been inventoried and evaluated. The
complication is in ownership and entitlement. But with sound policy, this
could be overcome--like eminent domain often has been exercised for the
good of us all. But today's plans could put the displaced people in the
roles of employed guardians, and compensate them properly for their
respective losses. Industry based upon renewables is working soundly for
hundreds of thousands in various parts of the globe today. It
unfortunately needs to spread to the greediest areas. The biggest
obstacles are laws assuring greed, again, because sustainability will
curb sky high profits and war and defence for profit.
>
>If we capped CEO and board member salaries to more fairly compensate
workers, profits would still be there for the share holder.
>
>Getting around to human worth and costs of maintaining health and
happiness through sound social and environmental policies, it's a matter
of overcoming greed to ensure relatively equal distribution of goods,
services, and happy and healthy housing. We can do that, too, and reduce
the world population with better education for all. I don't see that the
new economic policies have done much to improve the world in this broad
respect. Some things like inoculation and school lunches, maybe. But
Pharma and Nike and the fertilizer companies and the fracking companies
have all been given free reign and cart blanch to exploit and pillage
anywhere. In the US, social programmes are being shut down, while the
military enjoys the addition of countless new golf clubs, and Walll
Street criminals remain free to steal and deceive. Some things got better
because of public movements, but economists did too many destructive
things to allow the rest to happen.
>
>Sorry, Ed, I know you've done some wonderful work as an economist, that
many have, and I can understand that you believe there should be a system
of flexible policies. Individual cases outside of policy description
often must be addressed on an individual basis. But I am talking about
matters in which the Wall Street ilk continuously has a hand--and it's
never for the good of anyone but the sleazy. These we could curb by
capping salaries, offering no bonuses, and changing laws around banking,
investment and currency exchanges. They could also prosecute the guilty
suits and jail them like they would do of any welfare fraud cases,
because their crimes, though far worse because of repercussions, were and
continue to be deception for personal gain. Tax dollars bailed out the
banksters and preserved the jobs of their minions, still free to perform
deception as usual.
>
>I do hope that was more clear.
>
>Natalia
>
>On 13/08/2013 7:07 AM, Ed Weick wrote:
>
>
>>Natalia:
>>
>>
>>Following policy to reflect genuine value. Decisions would be
straight
>>
>>forward then, rather than continuously modified without thought to
>>
>>affordability, viability, or social benefits.
>>
>>
>>and
>>
>>
>>Getting back to a system reflective of true worth, which must
includes
>>
>>our wealth of culture and natural resources, is the only way to
go.
>>
>>
>>Well yes, that might be nice. But how would we do it? Given that we and
many other inhabitants of our planet tend to live and think
democratically, we would somehow have to develop a uniformity of thinking
about how we should do things, of what should be allowable and what
should not. What I see you suggesting is that we go well beyond simply
having laws on the books that proscribe certain behaviors and tolerate
others. You seem to want people to think in much the same way about worth
and value and not to make up their own minds on what these things are and
how they should be measured. To this, I'd say a resounding 'no thank
you'. We've gone that way too many times and I don't want us to go there
again.
>>
>>Ed
>>
>>
>>
>>From: D & N <darna...@shaw.ca>
>>To: futurework@lists.uwaterloo.ca
>>Sent: Monday, August 12, 2013 9:23:42 PM
>>Subject: Re: [Futurework] Some further thoughts on economists and
physicists
>>
>>Alternative:
>>
>>Following policy to reflect genuine value. Decisions would be straight
>>forward then, rather than continuously modified without thought to
>>affordability, viability, or social benefits.
>>
>>That "best economic theory possible", always requiring
expensive tweaks
>>because of its inherent flaws, has driven us down a destructive path of
>>dubious return in just a few greedy decades. I agree we need a policy,
>>but I doubt we really want most of today's policies working for us
tomorrow.
>>
>>How much lending power has a deposited dollar got for a bank today? How
>>long are we going to give out charity to the homeless, when housing them
>>is so much cheaper (and more humane) in the long run? How long must we
>>endure corporate welfare, only to read of their individual billion
>>dollar quarterly profits? When will Wall Street salaries be capped to
>>curtail corruption?
>>
>>Economics of derivatives was and still is being sold to everyone as
>>quite sound. How's that working for us? Better not to have a crooked
>>system than no system, considering where the current bankster economy
>>has landed us. Well, the war economy, too. Policies that have allowed
>>such institutions that are above the law, able to control tax dollars
>>towards secret activities which secure only the image of functioning
>>nations at the expense of everything else. The whole system needs
>>overhauling.
>>
>>The more expensive the expertise, the more deceptive policy becomes.
>>Getting back to a system reflective of true worth, which must includes
>>our wealth of culture and natural resources, is the only way to go. Many
>>disagree, but Keith's words about gold being the standard we need
>>returned has proved to be correct--things got really screwy since it was
>>abandoned, and the chaotic policy has grown exponentially, while
>>allowing any new seductive form of digitized scheme to supplant
>>rationality. What ever greedy idea can be disguised as a benefit flies.
>>Gold standard is but a correction, though. We can do much better, and
>>must do so before all our natural resources are laid to waste. Once that
>>happens there will be no need for an economy of any sort.
>>
>>Natalia
>>
>>
>>
>>
>>On 12/08/2013 5:45 AM, Arthur Cordell wrote:
>>> Science or not, someone, somewhere, somehow has to make some
decisions on
>>> economic policy. So they take the best the theory has to
offer, modify it
>>> to suit political realities and make policy.
>>>
>>> Not ideal. Not science. But what's the alternative?
>>>
>>> -----Original Message-----
>>> From: futurework-boun...@lists.uwaterloo.ca
>>>
[mailto:futurework-boun...@lists.uwaterloo.ca] On Behalf Of Mike
Spencer
>>> Sent: Monday, August 12, 2013 12:07 AM
>>> To: futurework@lists.uwaterloo.ca
>>> Cc: ottawadissent...@yahoogroups.com
>>> Subject: [Futurework] Re: Some further thoughts on economists and
physicists
>>>
>>>
>>> Ed Weick wrote:
>>>
>>>> In my opinion, economics, like physics, is a science.
>>> Yes, but it's in an awkward, possibly hopeless position. Physics,
from
>>> Newton to Maxwell to Bohr to the present, has been so very
successful
>>> because big lumps of stuff do behave predictably and smaller lumps
of stuff
>>> -- molecules, atoms, crystal lattices etc. -- do so
collectively. Viz.,
>>> large numbers of molecules, treated as a statistical ensemble,
are
>>> collectively predictable.
>>>
>>> Even though any one molecule may be a deviant -- say, a molecule of
protein
>>> may fold in an unusual way -- physicists are have been fortunate
that (what
>>> we call) the "laws of physics" emerge more or less
magically from the
>>> observation of large numbers molecules.
>>>
>>> But as Ed observes,
>>>
>>>> People can be assumed to behave in their own interests and to
operate
>>>> via the market system, but history has been full of people,
mendicant
>>>> monks for example, that have not done that. There may not even
be a
>>>> "market system". There are many different types and
methods of
>>>> economic interaction depending on whether people are rich or
poor,
>>>> geographically concentrated or spread out over large areas,
etc.
>>> Molecules don't have minds of their own, can't be deceived, have
no
>>> opinions, compulsions or yearnings, do not develop psychopathic
personality
>>> disorders nor contrive to conceal such behind social graces.
In general,
>>> atoms and molecules aren't themselves aware (in any but a
spurious,
>>> anthropomorphically metaphorical sense) of gravity, electrical
attraction,
>>> temperature gradients, steric hindrance or any of the other
"laws" that
>>> govern their behavior.
>>>
>>> And of course, people are deceived and deceive, do have opinions and
all the
>>> other qualities mentioned above and in Ed's piece. It follows
>>> -- IMNSHO, follows obviously -- that it is folly to look for laws
of
>>> economics that are similar to, say, the laws of thermodynamics.
>>> Yes, in the short run, [1] or locally (fsvo local) or within
carefully
>>> chosen parameters (we'll only look, say, at interactions involving
a
>>> monetary transaction) or for selected populations or samples of
populations
>>> or....whatever, we can treat people as molecules and derive
statistics that
>>> approximate their collective behavior.
>>>
>>> But in the broad case, no steam engine ever tried, on its own hook,
to
>>> outsmart the 2nd law; no electron ever decided that attraction to
the
>>> opposite charge, however compelling, was sinful and took holy
orders; no
>>> nucleus has ever devoted itself to accumulating and hoarding all
the
>>> neutrons on the planet [2]; no pendulum ever decided to
experiment with
>>> syncopation because it became bored with the repetitive tedium of
sin(t).
>>>
>>> Ed again:
>>>
>>>> Recently, much of what has happened to the western economy
has
>>>> reflected what has gone on behind closed doors on Wall Street or
other
>>>> secretive locations. The sub-prime mortgage debacle is an
example.
>>> Right. And behind those doors they had, or had on tap, economists
and
>>> related financial/economic experts who could tell them how the best
minds of
>>> the day understood the system presently to operate. And then
they could,
>>> deliberately, calculatedly, devise a strategy to outsmart that
system.
>>> Evidence for such efforts appears daily in the language of the biz
and
>>> financial pages of major newspapers, not least among such evidence,
the
>>> casual reference to biz, finance and economic policy as a
"game" and to
>>> investment decisions a "bets" anticipated to be good ones
when someone has,
>>> in some sense, outsmarted someone else.
>>>
>>> Economics will continue to shingle off onto the fog until it bases
its
>>> theory on an understanding of the operation of the human
brain. But it's
>>> widely opined that the human brain is the most complex thing known
to exist
>>> and we're as yet a long way from the kind of understanding that
would allow
>>> a theoretical replacement for the wobbly (or Procrustean! [3])
notion of the
>>> "market system".
>>>
>>>> Enough already,
>>> Same.
>>>
>>> - Mike
>>>
>>>
>>> [1] "In the short run", Maxwell's Demon may, in a sense,
exist. But it
>>> isn't the basis for a law of mind or
enzymatic activity. Keywork
>>> here (infra) is
"metastable".
>>>
>>> ...there may
be a quite appreciable interval of time...so
>>> prolonged that
we may speak of the active phase of the demon
>>> as metastable.
There is no reason to suppose that metastable
>>> demons do not
in fact exist: indeed it may be that enzymes are
>>> metastable
Maxwell demons....We may regard living organisms,
>>> such as Man
himself, in this light. -- Norbert Wiener
>>>
>>>
>>> [2] The existence of Administratium remains controversial:
>>>
>>> http://www.lhup.edu/~dsimanek/administ.htm
>>>
>>> [3] We have plenty of evidence that, given the present sanctity of
the
>>> "market" notion rivaling
that of the Church in the middle ages,
>>> there is a constant bias/pressure to
subject everything to "market
>>> discipline" and, in each case, to
ignore, subvert, suppress or
>>> extirpate any aspects that fail to
conform to the rubric.
>>>
>>
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>>
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