Krugman wrote an editorial claiming the "rule by rentiers". I guess that is less controversial than "rule by Pluto". However, Krugman describes "rule by wealth", the usual, non philosophical, meaning of "plutocracy":
"America’s job drought... has already gone on so long that the average unemployed American has been out of work for almost 40 weeks. Yet there is no political will to do anything about the situation. Far from being ready to spend more on job creation, both parties agree that it’s time to slash spending — destroying jobs in the process — with the only difference being one of degree.
Nor is the Federal Reserve riding to the rescue. On Tuesday, Ben Bernanke, the Fed chairman, acknowledged the grimness of the economic picture but indicated that he will do nothing about it.
... similar in Europe, but arguably even worse: European Central Bank’s hard-money, anti-debt-relief rhetoric... What lies behind this trans-Atlantic policy paralysis? I’m increasingly convinced that it’s a response to interest-group pressure. Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.
Of course, that’s not the way what I call the Pain Caucus makes its case. Instead, the argument against helping the unemployed is framed in terms of economic risks: Do anything to create jobs and interest rates will soar, runaway inflation will break out, and so on. But these risks keep not materializing... The reality is that both small businesses and workers are hurt far more by the weak economy than they would be by, say, modest inflation that helps promote recovery.
No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios.
And that explains why creditor interests bulk so large in policy; not only is this the class that makes big campaign contributions, it’s the class that has personal access to policy makers — many of whom go to work for these people when they exit government through the revolving door. The process of influence doesn’t have to involve raw corruption (although that happens, too). All it requires is the tendency to assume that what’s good for the people you hang out with, the people who seem so impressive in meetings — hey, they’re rich, they’re smart, and they have great tailors — must be good for the economy as a whole.
But the reality is just the opposite: creditor-friendly policies are crippling the economy. This is a negative-sum game, in which the attempt to protect the rentiers from any losses is inflicting much larger losses on everyone else. And the only way to get a real recovery is to stop playing that game. "
I have been saying this, for quite a while. So I will not disagree in first order. However, Krugman's semantics is conflating small rentiers, who typically live off interest from savings, and enormous plutocrats, who he metions, in so many words.
Moreover, as usual, Krugman is short on solutions. I commented the following, and the NYT published it:
4% inflation is best, 2% is too low. 2% is so low that there is not enough reserve, in case of recession. (If inflation becomes negative, durably so, lowering interest rates does not help, because they cannot be lowered below zero.)
Germany has led the pain caucus in Europe, and it has worked pretty well. So now the Germans (and the hard Franc architect Trichet, head of ECB) have the upper hand morally, intellectually, economically.
In any case none of this will not solve the globalization crisis. Which is the emigration of jobs to emerging countries. This is the underlying problem, and plutocracy has a direct hand in it, and it's hard to resist when equivalent jobs cost 5% overseas. What is the plan to invert that globalization, that flight of jobs, overseas, far away?
Well, let me answer it myself: no more speculation on finance by financiers, and massive investments in high tech, accompanied by tough IP protection, and a carbon trade tax, plus tough anti-slavery codes, worldwide.
http://patriceayme.wordpress.com/
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Friday, June 10, 2011
Monday, January 10, 2011
How Economics & Morality Relate
AS CIVILIZATION BLOSSOMS SO DO FASCISM AND PLUTOCRACY.
Economics is house management. Morality is what endures. Yes, that's the origin of the word! Better: it has got to be the origin of the concept: what is right is what endures. If it were not right, it would not endure, indeed. Thus morality contains the concept of sustainability.
Best house management would have to be the one that endures. Indeed, if the economy does not endure, it collapses, thus so does the food production system, and part of the population will not survive.
Hence the best economy is moral, in other words. And redistribution of riches sufficient to prevent accumulation of riches caused by mathematics rather than merit is necessary.
Those who do not believe in redistribution in riches are more primitive that the Neolithics who produced sustainable societies on the scale of centuries. The Neolithics understood the exponential intuitively, and realized that riches brought ever more riches to the very top of society, the more they grew, and that had nothing to do with the merit of the individuals, families, groups or classes thus advantaged.
Piling up riches at the top made society, overall, poorer. Poorer in riches, poorer in culture, intelligence, mind stuff.
The great ages of Athens and Rome, and the Franks, were preceded by revolutions, forced income redistribution, and the destruction of plutocracies. Crete had no extravagant plutocracy (just significant oligarchies). The assassinations (Athens), rebellion (Rome), full war (Franks) turned society upside down, like the plow allows the rich soil down below to come to light.
It was violent, but the best society sprang forth, and made more advanced philosophy the law of the land. All sorts of goodness came out, from superlative economics and military, to excellent poetry, science, and further philosophy and law.
Why such goodness? Democracy blossoms minds in parallel. It is not just the "Open Society" Pericles and his philosophical advisers vaunted, it is the open minds of multitude of minds exchanging thoughts and feeling in an immense eco system of consciousness.
Plutocracy, and its associated fascism is all about a few taking all the decisions. Fascism is not new: it is the number one trick of primate defense. Baboons are expert fascist, when threats appear: they group up behind their most powerful leaders, female with the young hidden inside the group. Then the group does what the most powerful, most decisive males, the Golos, decide to do, and follow them as one: E PLURIBUS UNUM.
A chimpanzee variant of fascism occurs when chimps form a file, behind their leader, stop talking, and stealthily invade another group territory, in the hope of surprising an individual, and killing it. So fascism is so old, at least 40 million years, since there are the likes of baboons, and they thrive, that it has got to have become an instinct.
Plutocracy however is new, it's not in our biological inheritance, but an emerging property: it needed capital to exist. Long ago, capital was a harem, and a territory. But then the genus Homo appeared, and tools became capital too. When the Neolithic started, and the first cities appeared, capital became potentially gigantic: it could be a city, and extend over a country.
Some individuals, families, groups and finally classes were able to exploit the fascist instinct and the exponential, to create the new phenomenon of plutocracy.
The Neolithic was a total success: man took control of the planet. Capital and populations exploded by a factor of 10,000 for population, and much greater for capital.
Both fascism and the exponential exponentiate themselves to ever more tremendous heights as they grow (the growth of exponential is proportional to itself, just as capital and population do before disaster strikes). Thus they have become the nemeses of civilization, the more civilization grows.
Fascism exerts its seduction always. A case in point is what happens in democratic revolutions. They are born out of the desire by the People to redistribute riches. However, as adversity arises, fascism has to come to their defense.
An example is a Corsican artillery captain. Under the vengeful leadership of the British leader Pitt, anxious that France would not become more of a competitor to London after having a successful revolution, as Britain had a century earlier, the plan was conceived to invade France from Provence. Toulon and its two bays were conquered by an army and navy of British, Spanish and French royalists. The commanding republican generals were incompetent. Napoleon schemed to have them replace, then implemented his own plan, and attacked. He was seriously wounded by a bayonet , but the victory was total, and the British fleet, now exposed to French artillery, sailed away the next day. Napoleon was made into a general directly. He would soon lead French armies to great victories (other French generals did too, because, at that point France was republic fighting an obvious coalition of fascists, it was Greece versus Persia, all over again).
Napoleon was a military genius, thus everybody deduced, and especially himself, that he was a genius in all ways: the monkeys, when threatened, love to group up behind a smart, bold warrior. And when not threatened, it is easier to have just one guy doing all the thinking. In the end, Napoleon turned into a bloody tyrant who was still talking to his soldiers as if they were all "comrades" (a trick from Alexander and his "companions").
In the end, intellectual and political fascism led directly to Napoleon's disastrous campaign of 1812, the attempted submission of Russia. Napoleon a giant multinational European army of 700,000 in 5 months, because he was alone to take all the decisions, and thus took a lot of stupid ones. By then he did not have peers to put him back to sanity. That does not mean that plutocracy and fascism can always be corrected for the best. The Mayas collapsed, all by themselves, and stayed 98% collapsed by the time the Spanish showed up, six centuries later.
Right now, as relatively fewer and fewer Americans, go to state of the art schools, American society is ever becoming, relatively speaking, less of a state of the art society. Plutocracy does not mind; they always have India and China to invest in. But beware the history of Germany!
http://patriceayme.wordpress.com/
Economics is house management. Morality is what endures. Yes, that's the origin of the word! Better: it has got to be the origin of the concept: what is right is what endures. If it were not right, it would not endure, indeed. Thus morality contains the concept of sustainability.
Best house management would have to be the one that endures. Indeed, if the economy does not endure, it collapses, thus so does the food production system, and part of the population will not survive.
Hence the best economy is moral, in other words. And redistribution of riches sufficient to prevent accumulation of riches caused by mathematics rather than merit is necessary.
Those who do not believe in redistribution in riches are more primitive that the Neolithics who produced sustainable societies on the scale of centuries. The Neolithics understood the exponential intuitively, and realized that riches brought ever more riches to the very top of society, the more they grew, and that had nothing to do with the merit of the individuals, families, groups or classes thus advantaged.
Piling up riches at the top made society, overall, poorer. Poorer in riches, poorer in culture, intelligence, mind stuff.
The great ages of Athens and Rome, and the Franks, were preceded by revolutions, forced income redistribution, and the destruction of plutocracies. Crete had no extravagant plutocracy (just significant oligarchies). The assassinations (Athens), rebellion (Rome), full war (Franks) turned society upside down, like the plow allows the rich soil down below to come to light.
It was violent, but the best society sprang forth, and made more advanced philosophy the law of the land. All sorts of goodness came out, from superlative economics and military, to excellent poetry, science, and further philosophy and law.
Why such goodness? Democracy blossoms minds in parallel. It is not just the "Open Society" Pericles and his philosophical advisers vaunted, it is the open minds of multitude of minds exchanging thoughts and feeling in an immense eco system of consciousness.
Plutocracy, and its associated fascism is all about a few taking all the decisions. Fascism is not new: it is the number one trick of primate defense. Baboons are expert fascist, when threats appear: they group up behind their most powerful leaders, female with the young hidden inside the group. Then the group does what the most powerful, most decisive males, the Golos, decide to do, and follow them as one: E PLURIBUS UNUM.
A chimpanzee variant of fascism occurs when chimps form a file, behind their leader, stop talking, and stealthily invade another group territory, in the hope of surprising an individual, and killing it. So fascism is so old, at least 40 million years, since there are the likes of baboons, and they thrive, that it has got to have become an instinct.
Plutocracy however is new, it's not in our biological inheritance, but an emerging property: it needed capital to exist. Long ago, capital was a harem, and a territory. But then the genus Homo appeared, and tools became capital too. When the Neolithic started, and the first cities appeared, capital became potentially gigantic: it could be a city, and extend over a country.
Some individuals, families, groups and finally classes were able to exploit the fascist instinct and the exponential, to create the new phenomenon of plutocracy.
The Neolithic was a total success: man took control of the planet. Capital and populations exploded by a factor of 10,000 for population, and much greater for capital.
Both fascism and the exponential exponentiate themselves to ever more tremendous heights as they grow (the growth of exponential is proportional to itself, just as capital and population do before disaster strikes). Thus they have become the nemeses of civilization, the more civilization grows.
Fascism exerts its seduction always. A case in point is what happens in democratic revolutions. They are born out of the desire by the People to redistribute riches. However, as adversity arises, fascism has to come to their defense.
An example is a Corsican artillery captain. Under the vengeful leadership of the British leader Pitt, anxious that France would not become more of a competitor to London after having a successful revolution, as Britain had a century earlier, the plan was conceived to invade France from Provence. Toulon and its two bays were conquered by an army and navy of British, Spanish and French royalists. The commanding republican generals were incompetent. Napoleon schemed to have them replace, then implemented his own plan, and attacked. He was seriously wounded by a bayonet , but the victory was total, and the British fleet, now exposed to French artillery, sailed away the next day. Napoleon was made into a general directly. He would soon lead French armies to great victories (other French generals did too, because, at that point France was republic fighting an obvious coalition of fascists, it was Greece versus Persia, all over again).
Napoleon was a military genius, thus everybody deduced, and especially himself, that he was a genius in all ways: the monkeys, when threatened, love to group up behind a smart, bold warrior. And when not threatened, it is easier to have just one guy doing all the thinking. In the end, Napoleon turned into a bloody tyrant who was still talking to his soldiers as if they were all "comrades" (a trick from Alexander and his "companions").
In the end, intellectual and political fascism led directly to Napoleon's disastrous campaign of 1812, the attempted submission of Russia. Napoleon a giant multinational European army of 700,000 in 5 months, because he was alone to take all the decisions, and thus took a lot of stupid ones. By then he did not have peers to put him back to sanity. That does not mean that plutocracy and fascism can always be corrected for the best. The Mayas collapsed, all by themselves, and stayed 98% collapsed by the time the Spanish showed up, six centuries later.
Right now, as relatively fewer and fewer Americans, go to state of the art schools, American society is ever becoming, relatively speaking, less of a state of the art society. Plutocracy does not mind; they always have India and China to invest in. But beware the history of Germany!
http://patriceayme.wordpress.com/
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