JTaylor

Well, I'll take more convincing than some catchphrases.

Whichever way we look at it the banks are running the show. I understand they reward their followers very well.

tony de wonderful

Capitalism has had crisis in the past, it has survived.

Without trying to sound glib, a lot of the great depression was caused by bad government action rather than no government action.

Trout

iTrader: (1)

Some observers would argue that most of the financial crises in the past 35 years were directly caused by the action/deliberate inaction of Alan Greenspan. Hindsight is a valuable tool - however he always seemed to take the wrong turn - whilst at the same time aggressively liberating markets and directing them with the worlds most arcane speeches.


The bank that was allowed to fail, Lehman, triggered the crash. Few, if any, predicted the wildfire of the weeks after the Lehman failure - it was much more devastating than forecast.

If an RBS, Barclays or LBG had gone - the run on Northern Rock would look like a school fair. Personal liquidity would have been frozen at best, lost at worst.

The likelihood is that it would have been a very bad thing.


Tony does make a good point in that the long term effects of bailout could be just as damaging, just over a longer period of time. If it happens again then ain't no more money.

Too big to fail is really too big to save and too intertwined to understand.

JTaylor

I've talked about Greenspan in a couple of other threads (usually with GlasgaKiss) and I'll repeat his philosophy on this thread - he was an Objectivist; best mates with Ayn Rand. People really need to understand what that means to get a glimpse of the man's soul, and then bare in mind that he was Master of the Universe.

hodgy0_2

is that a serious question?

I hope you don't work in Banking/Finance -- but somehow suspect you do

lets just keep it simple and say by "magic"

jonc

In other words you don't know.

Trout

iTrader: (1)

Indeed it is an interesting question - I see a pattern of provocation but not any answers to these fundamental questions.

tony de wonderful

I thought the idea was commercial banks take in deposits from you and me (a form of borrowing), and then lend it out many times as debt money to whoever wants to borrow it. They can do this because of the requirements of fractional reserve banking to only have to hold a small % of deposit as cash. So they create liquidity through a multiplier function of those original deposits.

So banking is literally a license to print money.

Of course it would tip over if then lent too much money out to people who could not repay, so they fulfill a risk management function of only giving credit/liquidity to 'deserving projects/people'.

Which didn't work too well a few years ago.

It is kind of overlaps with the idea of a stock market being a way for capital to be allocated/given to 'deserving projects' through floatation etc and issuing of equity. The stock market has so many Capitalist actors it is assumed that this means on the whole good decisions are made on a kind of democratic fallacy argument.

But with the rise and rise of banking we see debt more and more being used to enable (finance) this or that 'project'....the 'Capitalist' is bypassed and we just have banks on one side and Entrepreneurs on the other.

JTaylor

How can finance work independently of the state? GK, TdW? I'm giving headspace to your ideas here - what does the free market look like, specifically the money market, without interference from the state. Do we close down the BoE and the Fed'? How does it work, please?

Trout

iTrader: (1)

Tony - your summary is of course correct but it is not what lies behind the question put to Hodgy.

He said banks should get back to basics - indeed in itself a good idea.

What is behind the question is not how liquidity is created - it is how liquidity is commercially profitable.

The tension is that the consumers of capital will always pursue capital at the lowest cost. Markets that are highly liquid.

The purveyors of capital will always want the highest margin (interest rate).

Betwixt the two lies risk - the likelihood that capital is repaid.

All very straightforward - but these basic principles create a the complexity we see in the market - the combination of maintaining liquidity, minimising risk and maximising profit makes maintaining basics a very difficult task - especially with shareholders to please.

Nationwide can do it as they have no shareholders. Mutual customers benefit from lower rates.

At the opposite end of the scale Goldman Sachs take advantage of the risk factor to maximise margin - at the expense of every capital consumer in the marketplace!!


Suddenly it isn't so simple.

Luan Pra bang

I never knew this, now I hate him with a surprising amount of passion.

JTaylor

I've mentioned it in several threads, the last being the socialism thread:

https://www.scoobynet.com/non-scooby...highlight=Rand

Post 60. In fact you posted either side and went on to correct my mis-titling of one of Rand's books. You really ought to pay more attention to the content, youngman.

https://www.scoobynet.com/non-scooby...highlight=Rand

Post 16 - Just Rand in this one. ^

And here:

https://www.scoobynet.com/non-scooby...highlight=Rand

Post 356 -

https://www.scoobynet.com/showpost.p...&postcount=356

Looking back over the three threads you can see how I arrived at my thoughts around Christian capitalism (one could equally replace Christian with Buddhist or ethical, any system or philosophy that caters for the subjective). Everything in life requires balance, Taoist (YinYang) philosophy describes this well. Objectivism needs subjectivism and verse versa, one cannot survive on its own without some kind of apocalypse occurring. Greenspan, objectivist, has been running the show; all the rest is incidental.

Luan Pra bang

Now I can remember reading the the thread first time, for some reason I did not realise the significance of someone as powerful as Greenspan, being one of Rand's lunatic brigade. I guess between Rand and Friedman the USA was always going to head down a dark path.

tony de wonderful

What is so great about the subjective? Could easily lead to an aesethic-politics, loss of individuality, masses roiling in emotion etc.

Western metaphysics has been denying the subjective nature of existence and the self since Judaism, now you have science and a monism of physicalism which gives itself a monopoly on truth/reality. I haven't read much of Rand but don't see her as that important to metaphysics or ontology.

JTaylor

The realisation certainly opened my eyes. It's getting that balance I'm interested in from a sociological perspective and it's why I came out with this from 15 onwards on this thread:

https://www.scoobynet.com/non-scooby...-hitchens.html

The real headwork is trying to workout where the balance between subjective and objective is and I was thinking out loud about that on the same thread. It leads you to Hegel and Kirkegaard and an outcome of the necessity of a God's eye view. The risk with post-modernist anti-theism is that it throws out a very important part of the puzzle from a philosophical perspective. From a sociological perspective it's engineered a mass-exodus from the churches and replaced Jesus with Mammon. Jesus is free. Mammon very much isn't.

I guess the balance is found in a threefold system which, in this country, would see Christianity as the dominant spiritual and philosophical guide within the cultural sphere working alongside other compatible traditions.

GlesgaKiss

Closing down the BoE and the Fed at this stage - at least over night - would be pretty catastrophic; I'd hope you wouldn't accuse me of wanting that. But yes, the country would ideally be without a central bank. It should be something to work towards, taking little steps at a time. We don't want people to start dropping like flies in the street. It would be an awful inconvenience having to step over them all.

JTaylor

Doesn't have to be one or the other. Within an integral framework it can be both.

Only post Marx and Nietzsche. Although the totalitarian systems that arose from that thinking both encompassed pseudo-religious frameworks. North Korea's the modern incarnation - people like leadership and structure and a world view and a pattern. I say Jesus is better than Kim Il-Sung or 50 Cent.

That's because she isn't. I'd recommend reading her before wading in.

tony de wonderful

I don't agree although I'm not that well read on this stuff, but objectivism in philosophy starts with Plato's realism, he says real ideas and objects exist beyond our subjective experience, and Christianity transfers that into a religious narrative of sorts; there is a truth beyond what we experience and it is God in heaven. Monothesim = one truth regardless of the experience of the self, and that is further refined by the enlightenment thinkers etc with their reason and humanism all built upon what you might call an objective metaphysics, and now our dominant philosophy is what you might call logical positivism and science rests on this.

Neitzche otoh is perhaps the first real heavyweight to challenge enlightenment thinking and objectivism, he is hard to summarise but he promoted perpectivism and nihilsm, he kind of questions everything basically w/out finding all the answers. Blame him for post-modernism and doubt if you want bht not logical positivism, no scientists ever dug Neitsche.

Marx otoh promotes a materialist metaphysics with his dialectical materialsm. It is an objectivism and says everything subjective (our consciousness) is a result of material (economic arrangements), so culture, science, morality, arts all the result of class economic circumstance...these even feeds through to ontology even I suppose with the individuals consciousness determined by the degree of alienation caused by economic relationships.

It is a very complicated subject and I fear I wouldn't get through an A level philosophy exam, but IMHO logical positivism dominates our world of science and technology in the west, and a mixture of pragmatism and enlightenment thinking dominates the political sphere...with the idea of individual human rights etc and belief that reason and dialogue can solve conflicts.

So really the assault on the subjective starts with Plato and Christianity is what I am saying. Eastern philosophies with their dualism are a bit different.

I've got Atlas shrugged but have other stuff to read too.

JTaylor

No, this isn't where I am. Think Kierkegaard's Subjectivism v Rand's Objectivism. Spiritual v Material if you'd prefer - I'm aware of the current zeitgeist and how we got here, my hypothesis is that the rational self interest of the kind found in Rand's Objectivism has it's place in the economic sphere and that it needs to be tempered by re-invigorating the selfless ethics and introspection of Christianity in the cultural sphere. We're lacking equilibrium and I'm proposing this as a regulatory measure to restore that equilibrium.

tony de wonderful

Metaphysics regulated by what the law?

Believe me I think logical positivism and enlightenment thinking is flawed but how else can a government be set up. At least it sets out a supposed commonality (reason based on objective criteria) as something to judge things with, and accepts that utopia is impossible. Various political movements have tried to control human nature like you would a river and each time it doesn't work.

jonc

A balance like there is a position of holders on both sides, that where there is a buyer and there is a seller, one representing gain and the other representing loss; you mean a "zero sum game".

JTaylor

No, ffs. By re-packaging it as a unit of cultural information that will successfully propagate and disseminate through society; a ground swell. And if Dave wants to chip in as he has done, then that's no big deal. And if leaders of men choose to behave in a way that's more Christian than Anti-Christian then that'll certainly help and if people want to pitch a tent outside St.Paul's and stick a banner up saying 'what would Jesus do' then I'm with that, too. In essence, I think and feel there needs to be some light amongst the darkness.

JTaylor

No.

tony de wonderful

I'm not sure what you think 'it' actually is no offense, maybe a vague commitment to be nice or something to each other?

Anyway that is kind of Hegelist, that the spirit can change the material in a significant way etc...it is very idealistic.

Ideology has failed many times. Soviets, *****, Mao, New Labour

Really I see no evidence that appeals to morality can significantly change political-economy, so I suppose I would rather go with Marx than Hegel. At risk of sounding like a pretentious ***.

JTaylor

Ok. What about the Competition Commission, are they staying?

JTaylor

'It' was metaphysics*, responding to the highlighted part of your post.

Ok, have a look Ken Wilber's Integral Theory and maybe, earlier, Rudolf Steiner. I'm interested in synthesis and balance, not ideology. Moff to bed.

Eta: Actually reading back through it was where I used the word 'regulatory' that led you to believe I meant metaphysics regulated by the law. I meant regulate in the more general sense. Self-regulating rather than coercive external regulation.

*Christianity, more specifically.

JTaylor

Again, why either/or? Why is it not possible for the cultural realm to cater for the ideal? By so doing it would off-set the all pervading, all encompassing materialism of the free market. I'm saying our society is off balance and that is why we've crashed so dramatically.