Guided by an invisible hand

Published 16 October 2008

The bank meltdown marks a turning point in our thinking about how the world works writes the Nobel Laureate. In some ways this is the biggest crisis in 80 years

Make no mistake: we are witnessing the biggest crisis since the Great Depression. In some ways it is worse than the Great Depression, because the latter did not involve these very complicated instruments - the derivatives that Warren Buffett has referred to as financial weapons of mass destruction; and we did not have anything close to the magnitude of today's cross-border finance.

The events of these weeks will be to market fundamentalism what the fall of the Berlin Wall was to communism. Last month in the United States almost 160,000 jobs were shed - making more than three-quarters of a million this year. My guess is that things will get considerably worse. I have been predicting this for some time, and so far, unfortunately, I have been right.

There are several reasons for my pessimism. The extreme credit crunch is a result of the banks having lost a lot of capital. And there is still uncertainty about the value of the toxic mortgages and other complex products on their balance sheets. The US economy has been fuelled by a consumption binge. With average savings at zero, many people borrowed to live beyond their means. When you cut off that credit you reduce consumption. This, in turn, will dampen the US economy, which helps keep the global economy growing. The American consumer has not only sustained the US economy, he has sustained the global economy. The richest country in the world has been living beyond its means and telling the rest of the world it should be thankful because America fuelled global economic growth.

There are further reasons for my pessimism about short-term economic prospects, in America and Europe. In the second quarter of this year, growth in the US would have been negative were it not for the growth in exports. But with the slowdown in Europe and problems in Asia it is difficult to see how we can maintain net export growth. The strengthening of the dollar - due not to greater confidence in the US but to reduced confidence in Europe - will make matters worse. The fall of energy prices will help a little, but not enough.

Treasury Secretary Hank Paulson has now come up with a new bailout scheme. The original plan - buying up the thousands of "troubled assets" (read: bad loans and complex products based on them that Wall Street created) - was badly designed and rife with problems. How would they have been priced? Call in the same Wall Street experts who got us into the mess and mispriced risk before? It is a heads I win, tails you lose situation.

The worry is that the taxpayer will be left holding the short end of the stick.

The British approach, which Paulson seems to be following, is far better, involving capital injections into banks, with preferred shares to protect against losses and warrants to share in some of the upside potential. This is the approach that I - along with most US economists and people with good street sense, like George Soros - had been saying America should adopt.

Ironically, though Paulson wouldn't listen to us, he seems to have listened to Gordon Brown.

Many of the problems our economy faces today are the result of the use of misguided models. Unfortunately, too many took the overly simplistic models of courses in the principles of economics (which typically assume perfect information) and assumed they could use them as a basis for economic policy. Many central banks use the notion of inflation targeting - that they should focus exclusively on inflation, raising interest rates when inflation increases. But I would argue that central banks have a broader responsibility; they are supposed to ensure the stability of a country's economy. While monetary authorities in the US and elsewhere focused on price stability, they allowed the financial system to undertake risks that put the whole economy in jeopardy.

This crisis is a turning point, not only in the economy, but in our thinking about economics. Adam Smith, the father of modern economists, argued that the pursuit of self-interest (profit-making by competitive firms) would lead, as if by an invisible hand, to general well-being. But for over a quarter of a century, we have known that Smith's conclusions do not hold when there is imperfect information - and all markets, especially financial markets, are characterised by information imperfections. The reason the invisible hand often seems invisible is that it is not there. The pursuit of self-interest by Enron and WorldCom did not lead to societal well-being; and the pursuit of self-interest by those in the financial industry has brought our economy to the brink of the abyss.

No modern economy can function well without the government playing an important role. Even free marketeers are now turning to the government. But would it not have been better to have taken action to prevent this meltdown? This is a new kind of public-private partnership - the financial sector walked off with the profits, the public was left with the losses. We need a new balance between market and government.

Professor Joseph E Stiglitz is chair of the Brooks World Poverty Institute at the University of Manchester and a 2001 Nobel prizewinner

Post this article to

69 comments from readers

taghioff.info
16 October 2008 at 10:30

Those are mild words indeed Joe. You are one of the grand-daddy's of the new institutionalism, you went to the forum, you said another world is possible.

So should the financial institutions look in this new world. Is this a case of making globalisation work, or more a case of starting to admit we have global governance, and actually making it democratic?

Come on Joe, you can say more than this.

taghioff.info
16 October 2008 at 10:34

Oh, silly me, you did:

http://www.guardian.co.uk/commentisfree/2008/oct/16/useconom...

Carl Jones
16 October 2008 at 11:34

I think this is a weak article. The line peddled by the MSM that "old men didn`t understand what the young cocks on the floor were doing", this is pure tripe.

The money supply has been galloping along for the last 15 years. In 2001 Bush and Greenspan poured petrol on the fire so the US (global) economy world appear to be SWEET, .so they could ramp up millitary spending and carryout their policy of imperial expansion in Iraq and Afghanistan.

I know for a FACT that investment banks were having problems moving debt in 2005/6 and this became critical in early 2007....now I`m just a regular guy on the street, so please don`t believe this bull---- that a bit of everything was to blame as the owner of the NS said on Newsnight.LOL

General Motors has a junk status rating. S&P believes that GM could go bust......GM has over $1trillion CDS.LOL Ford isn`t that far behind.LOL

I think this entire economic meltdown was planned by the NWO.....the elite families, the same families who have been running the world for the last 300/400 years. Value has been lost, but this is notional, the financial sector is and will continue to shrink....there is an asset grab going on, just look a JP Morgan, for they are NWO prirates. The Fed and the BoE now have, or soon will have staggering control. already, shareholders are waking up to their fate. But we must remember that the US federal Reserve Bank and the Bank of England are privately owned banks....owned by the elite families. Now I know the BoE was alledgedly nationalised in 1946, but I simply don`t buy this. The British government weren`t in a position to aquire the BoE in 1946.

The elite are playing their merry games, the question we now have to try and work out, is what do they have planned next?

1929....1939 and we were in the second World War, yes, it took just ten years, 10 hard economic years, so ANYTHING is possible.

Gavin Kennedy
16 October 2008 at 11:58

Adam Smith did not say that ‘competitive firms’ pursuing self-interest would be led ‘as if by an invisible hand to general well-being’.

In Book IV – the only place in Wealth Of Nations he mentions the popular 18th-century literary metaphor of ‘an invisible hand’, he was referring to merchants choosing between investing locally or abroad (the American colonies) and, because most (not all) of them were risk-averse to the dangers and uncertainties of foreign trade and foreign investment, they naturally preferred the relative security of their home market and, by the arithmetical law of the whole being the sum of its parts, thereby domestic investment would he higher and more local people would be employed. (WN IV.ii.9: page 456).

The ‘invisible hand’ metaphor had nothing to do with markets, the behaviour of firms, supply and demand, nor price theory which are all covered in Books I and II with no mention of invisible hands. Nor, incidentally, was the invisible hand metaphor prefaced with ‘as if’; that’s another myth!

Hence, ‘the reason the invisible hand often seems invisible is’ because its alleged association with Adam Smith on markets and firms’ behaviours is wholly fictitious.

The myth was created by mid-20th century neoclassical economists, including Nobel Prize Winners, and gives a misleading aura of a mystical force at work, though markets were thoroughly analysed by Adam Smith without mentioning invisible hands.

However, Adam Smith gives over 50 instances in Books I and II of Wealth Of Nations (Book III and IV are replete with such instances) of self-interested individuals acting against the interests of society generally; this is ignored (most economists do not read Wealth Of Nations) in favour of associating Adam Smith with ideas he never had to purvey ideas that should stand on their own and be judged as such.

writeon
16 October 2008 at 16:04

Gavin,

You're correct, but, alas, such is the world! As much as I'm tempted to launch myself into a discussion of Adam Smith, whose ideas have passed into legend, and that's not meant positively; it wasn't Smith's fault that his work has been turned into propaganda and prostituted; poor old Marx has suffered a far worse fate, even in his own lifetime, leading him to exclaim in frustration - I am not a Marxist!

Still, isn't that an academic debate, far removed from the rude world we live in? Such debates begin to resemble theology and arcane disputes about the lives of the saints and their 'holy' words.

The 'Adam Smith' most people know about is the one Stiglitz mentioned and the invisible hand is a highly flexable device designed to 'explain' the complexity of the economy and simultaneously 'hide' the gapping hole at the centre of our understanding, a clever trick, if one can pull it off, and of course, lots of people had and have an interest in facilitating this conjuring trick, without it the entire carefully contructed house of cards might been seen for what it really is, and then it begins to totter and sway... and... collapse.

And all the king's horses and all the king's men and even Gordon Brown can't put it together again.

writeon
16 October 2008 at 16:57

The Big Question is what the hell do we do now, as bail-out after bail-out fails and the debt vortex grows bigger and bigger and threatens to swallow everything in its path.

Will the next solution be a massive programme of public works in a desparate attempt to save the economy from grinding to a hault? Will even this succeed? I have my doubts. Though this means I'm questioning the essence of the New Deal and Keynes.

I'm beginning to wonder whether Keynes and the New Deal really worked and dragged us out of the Great Depression at all? Looking at rates of unemployment and the stockmarket leads one to doubt it, or at least question this 'legend'.

If it was really WW2 that got us out of the Depression, that is; war and massive destruction on an almost unimaginable scale, followed by reconstruction, then we have a great deal to reflect and consider, both theoretically and morally. If true, Capitalism would appear to be an incredibly dangerous and destructive system, with something like an in-built, self-destruct mechanism to ensure its survival.

taghioff.info
16 October 2008 at 19:47

The new scientist just came out saying that growth is impossible in the long term, so that's another set of radical anti-capitalists out there...

writeon
16 October 2008 at 20:18

Capitalism was a European construction, intimately connected to the age of European expansionism, call it imperialism if you like, starting in the sixteenth century. The world became our oyster, our plaything, simply ours.

We 'found' , invaded and conquered 'new worlds', turned their people into virtual slaves, broke them and dragged out every bit of wealth we possibly could.

We made entire continents subservient to our needs and disires and interests. This system continues almost unaltered up to the present day, though European hegemony is breaking down, finally.

Four hundred years of expansion, abundance, growth, freedom, development, progress; remaking the world in our image, we were demi-gods, blessed by providence, or at least that what we thought, it made the slaughter and destruction seem less barbaric, more natural. There were no limits. The possibilities were limitless, close to infinite, on the eternal frontier, always moving forward towards new opportunities waiting over the horizon. It was perpetual dawn in the Whiteman's world. We made our own reality.

However, this was, in fact, merely an elaborate illusion.

In reality we lived on a small, overcrowded planet with limited resources, which we are stretching to the absolute limit and more. We have created an economic system that's based on the premise of infinite growth on a planet that is not growing, that is of a finite size. Not only that, it is actually shrinking, getting smaller, as the resources we require and the flaura and fauna are being destroyed at a frightening rate.

The European, capitalist, limitless growth, model; is doomed in the long run, there is no way it can survive more than a few more decades. And we shouldn't allow it to, because if we do, it'll drag not just human civilization, but everything else down with it, turning our unique and beutiful planet into something resembling the surface of the Moon; sterile, dead, and lifeless.

1920
16 October 2008 at 21:03

I imagine that it has been clear to most people that the various theories advanced by economists had little , if a y empirical evidence to back them, They either seem to be justifications for the elites to make more money, for financial affairs to be conducted without attention to morality or indeed the feelings of others and/or to display someone's creativity in dealing with doubtful material. In the last 60 years it has become more and more difficult to state the above without being mocked--it is as though the "West" had become enamoured of a Cargo Cult so distanced from the real ,everyday, human dealings with material things that rational discussion was impossible. The main problem in economics is the same as in other spheres of enquiry i.e. the exclusive use of left brain thinking , a macho approach which is as useful as only seeing the world with one eye. We need a return to a more balanced way of seeing that includes the feminine particularly in it's ability to see the motives behind rational- just "get real"sations . It is so simple

taghioff.info
16 October 2008 at 22:28

@1920

"imagine that it has been clear to most people that the various theories advanced by economists had little , if a y empirical evidence to back them,"

Yes, there is a fairly lively academic debate on this one:

http://www.bepress.com/ev/vol4/iss2/art2

It is particularly satisfying as an Anthropologist to see that the human decision-making element is what is seen as left out, and that ethnography is understood as a good method for approaching that.

Economists have broadened a bit, and are starting to take in methods from psychology, there was a debate on this at the prospect:

http://www.prospect-magazine.co.uk/article_details.php?id=10...

But good ethnography has not really shaped the profession much yet, even though books like Freakonomics effectively demonstrate how that could work.

To be fair to Joe, his ideas about information are doing a lot to make economics somewhat more realistic (and he got a prize for it, though his real achievement was getting pig-headed economists to listen, though I am sure the math was brilliant.)

But these ideas still do leave out a lot an awful lot of what it is to be a human decision-maker rather than a rational cognitive machine. The problem is that macro-analysis is very very hard without economics, and simplification is the name of the game with macro-analysis.

Having said that, the profession needs to get a bit more distance from power, and raise its game a lot, with a bit more evidence, a bit more history, and a lot less trust in abstract models on their own.

This is hardly radical though, its pretty much what Joe says, but there are others like Ha-Joon Chang and Ben Fine who have a lot more stuff to say on this also. There are also the Post-Autistic Economics people, so the profession is actually in a period of rapid change.

And with food going up the agenda, people outside the profession will also start noticing what Sen said about efficient markets being able to cause famines.

Interesting times...

antileft
17 October 2008 at 09:17

"The European, capitalist, limitless growth, model; is doomed in the long run, there is no way it can survive more than a few more decades."

Oh what an idiot. From the economist:

http://www.economist.com/opinion/displayStory.cfm?source=hpt...

"Even allowing for the credit crunch, this decade may well see the fastest growth in global income per person in history."

Oooh capitalism- it's failed, hasnt it?

Cybertiger
17 October 2008 at 10:17

"Oooh capitalism- it's failed, hasnt it?"

Capitalism certainly works for "useless eaters" like Lehman Brothers CEO Dick Fuld who "earned" around $38 million per year in the last few years. I would guess that not a lot of that "fat cat" growth has trickled down to the ordinary Joe.

taghioff.info
17 October 2008 at 11:05

@antileft

Why do you believe so unquestioningly in the Economist, they are more of a party-political broadcast than a serious source of news.

Take this crucial paragraph from the article you cited:

"In fact, far from failing, the overall lowering of “barriers to intercourse” over the past 25 years has delivered wealth and freedom on a dramatic scale. Hundreds of millions of people have been dragged out of absolute poverty. Even allowing for the credit crunch, this decade may well see the fastest growth in global income per person in history. The free movement of non-financial goods and services should not be dragged into the argument—as they were, to disastrous effect, in the 1930s."

The growth in global per capita income they site is calculated in aggregate and gives no sense of the distribution of income. This means that the argument that this growth is lifting large sections of the poorest out of poverty is very weak. This decade has also seen massively rising inequality. The upshot of this is that you need an awful lot of economic growth to lift people out of poverty, since the poor see so little of those income increases. So much so that at current levels of inequality it is ecologically unfeasible to solve poverty.

Andrew Simms of the New Economics Foundation deals with this in the latest New Scientist,

http://www.newscientist.com/channel/opinion/mg20026786.600-s...

which is actually the far more economically informative publication at present:

http://www.newscientist.com/channel/opinion/mg20026786.000-s...

So much for another politically-motivated, broad-brush bit of analysis from the Economist.

Douglas Chalmers
17 October 2008 at 15:54

"...financial weapons of mass destruction..."

It was not only that but contrived fantasies such as the Yen carry trade which existed and functioned solely as a result of interest rate differentials between Japan and other stable economies in the West. Although it was said to be a US$ trillion market, the extent to which it was manipulated is another issue and it has been estimated to have been far larger at over $5 trillion as it involved investment in the US sub-prime mortgage fiasco http://business.timesonline.co.uk/tol/business/markets/japan...

But then that is rather like the derivatives CDS market which is varyingly estimated as US$55 trillion or $500 trillion or $1 quadrillion plus. Nobody is fully ready to admit the full extent of the game. Perhaps someone like "Another" will come forward eventually and anonymously explain it all to us on some money market form as happened with the 1990's crisis? Then again, the fact that Warren Buffett could explain CDS as financial WMD's also means that a lot of people in the financial world already knew all about the impending disaster

Douglas Chalmers
17 October 2008 at 15:54

Although as Joseph Stiglitz stated, "Many of the problems our economy faces today are the result of the use of misguided models...", that may well also apply to the buy-out formula being applied now across the globe by desperate governments. The reason is that they are actually more concerned about both investor and voter confidence haing evaporated than the correectness of their rescue modus operandii. In years to come, the government control of banks may just as likely turn out to be almost as disastrous as the current predicament, though.

In the end, the real reason for the US governemnt and treasury policies was to (a) create an illusion that all was well, and more significantly (b) to underwrite the military-industrial complex for the imagined goal of never-ending world domination by the Neocons with their PNAC philosophy. Both ahve fallen down rather badly as realty kicked in and overturned their insane fantasies of a master race based upon lies and hypocrisy and force.

Thus the age-old concepts of imperialism are at last at an end and yet we find ourselves largely devoid of a workable philosophy to carry us into the future. The Americans have had one last attempt at turning back the clock on mankind's progress. Resurrecting NATO, a cold war monster, has left Europe implicated to its own self-deserved disadvantage. Eventually, China will become the free market leader and we will hear how Confucianism was ever superior as as a philosophy than the disgusting legalism of the imperialists who wanted to rule us all in perpetual debt slavery.

amanfromMars
17 October 2008 at 18:03

http://blog.wired.com/defense/2008/10/spies-worry-hac.html#c...

I think it is Naive to Imagine that the Old Guard are pulling the Strings, although they are Invited to Dance and Finance the New Gig. It is the least that they can do for the Future if they wish to remain Instrumental

Pencils
17 October 2008 at 20:39

"Many of the problems our economy faces today are the result of the use of misguided models...",

He could have said that it was the 'deliberate' use of misguided models, and that it was the public who were misguided, rather misled, also deliberately. I suspect that those above who believe this whole fiasco was deliberately engineered are correct; the unreality of the financial system has been common wisdom for years even among MSM commentators like Stiglitz and Krugman. This was long anticipated, so why didn't government do anything about it? And the answer is blatantly obvious but rarely gets a mention : the US and UK governments work for the bankers. Did the major shareholders of Lehman's and Bear Sterns etc really lose anything? I doubt it; they extracted all the capital they could get away with, then walked away from the liabilities. And they will no doubt get their hands on a healthy dollop of the gift the governments have just given the banks. The US and UK governments are rotten through with members who only got their through the backing of the financial elites, and/or need their goodwill to secure after-office careers. This is blatant corruption, and is well-known to everyone; but alternatives are rarely, if ever discussed. If we don't start discussing, and implementing, ways of getting competent representatives who aren't corruptible by private centres of wealth, then I'm afraid the most pessimistic prognoses in this thread will be inevitable. I think Douglas Chalmers is too optimistic when he sees power moving too China. The elites still have the US military machine - all they need America for - and I can see them pursuing a more blatant version of their current policy, which is basically extraction of tribute by force. I see them moving on to tactical nukings to discipline the rest of the world, and if it's a choice between capitalism and mass death through global warming - well, I think they could lose billions of people rather than bucks

Carl Jones
18 October 2008 at 00:49

They aren`t "problems", the are control mechanisms, but Pencils is correct, the elite will clear up when all is said and done.

Just who are the ""new guard""? The old guard are both old and NEW....they are the elite families.

The losses today are notional, but the elite will aquire many more notional assets....its not the value, but the control.

DC does well, until he mentions "the age old concepts of imperialisum.....just a few hours ago I was taking with a banker who`s bank might be aquired by BoAmerika....he agreed that AMERIKA holds a big baseball bat and forces none compliant nations to send their SAVINGS to the US....

...the US requires....receives over $3 billion of global savings every day of the week....this is over 90% of global savings......sure, things look bleak, but the US employs a very sofhisticated system of extortion and if you don`t pay up, things will be much worse as Norway nearly found out over backing the illegal invasion of Iraq....

...the idea that imperialism is old hat, is rediculous....you simply don`t understand the mechanisms of CONTROL.

amanfromMars
18 October 2008 at 07:42

CJ,

Here is a new kind of elite controller model, and a working class hero, no less ...... http://tiny.cc/CsBU0

And whilst I agree with you that it will be elite families which will resolve and profit immensely from this Systemic Meltdown of the Usury Banking System, it will not be any of the Usual Suspects. They have had their fifteen minutes of fame and are burnt out. It is high time for them to retire gracefully from the scene with, if they are as smart as their families need them to be, a new regime benefacted with funds to create Value and Wealth for Systems Virtually via Other Means, which obviously they have no knowledge of and have no need to have knowledge of, .... as the Face and will Experience Certain Financial Ruin, which may be the least of their Worries if the Mob unleashes its Anger and Pain.

In the Present Global Readjustment, because of Past Sub-Prime Fluffed Performances in All Fields, and their Continuing Intelligence Failures, is Uncle Sam being Relegated to being just a Bit Player, Fluffing for New Stars in Order to Survive and Remain in Touch with the New neuReal Power Control Paradigm. The Hope is that they can Learn to Beta Follow with Benign Astute Leadership rather than Sink and Slink into Third Rate XSS.

And it is as well for them to Realise that their financial assistance/benefaction is not a Requirement of the NeuReal Power Control Paradigm, it is merely Offered to them as a Common Courtesy to Ease their Pain as IT Assists them in the Readjustment ... Great Game Change.

Imperialism isn't Dead, IT just has Wiser Heads distributing Global Largesse and signing off Debt.

And Baseball bat is Absolutely Useless in a Game of Cricket, as I'm sure you will agree, Old Bean.

Carl Jones
18 October 2008 at 12:53

Quite, why has the corporate/political and SILLY greeeens ignored hemp/flax?LOL

He may have made a mint, but he`s hardly on a par with the Rothschilds who have financed every major war since Waterloo.

There are plenty of players/comentators operating on verious levels...these are all withn the visable horizon. When Congressmen aren`t allowd to sit in on Washington meetings, when banks are sold quickly so regulators are out of the loop, you KNOW there are high crimes going on.

People who I talk to in the financial world are starting to entertain my theory that financial systems were HACKED and traders saw false targetted falling prices. I would suggest that high ranking financial security people would be embedded into the SIS.....who could investigate this....were there any really big trades in HBOS that Monday morning which could trigger this run? I doubt it, someone hacked the system....9/11 & 7/7, it another NWO inside job.LOL

writeon
18 October 2008 at 13:32

there's also enormous opportunity in this 'crisis' for the consolidation of monopoly capitalism on a truly stupendous scale.

In the United States it looks like three huge banks will emerge backed by the 'unlimited' reserves of the state. Not only that, it appears that the Fed is now going to intervene to support US corporations in the 'real economy' with massive loans.

This is the corporate state model of capitalism emerging from, and pushing aside the old-fashioned 'free-market' version at extraordinary speed.

What this means is that the people, their taxes, pensïons, savings, assets, labour; the entire country's resources, are placed openly at the disposal and service of the capitalist corporations. The 'market' is no longer the servant of the people, if it ever was, and the people effectively become slaves to the marketplace.

My feeling is that the old-fashioned version of capitalism is definitvely gone. It simply couldn't continue without massive injections of capital, one way or another. The 'financial bubble' was one method to conjure capital and profits out of more or less thin air, but a very risky strategy over long term. That's bust. Now, the state, using taxes, will be forced to step in with collosal transfers of wealth to support the so-called 'free market'. Only the people will be paying without any real control. This is like taxation without representation, a highly unstable and immoral situation.

Nilsey105
18 October 2008 at 14:17

Douglas Chalmers

17 October 2008 at 15:54

"...the age-old concepts of imperialism are at last at an end ...."

Oh dear me. I have considered the Iraq war as precisely an act of American Imperialism aided and abeted by Britain. Thanks for pointing out imperialism is now no longer applicable in any analysis of world events.

Carl Jones
18 October 2008 at 14:33

Yes "writeon" and in reallity, this end to globalisation has come about, because it no longer benefits the elite families. what you have outlined in your comment, is that DEMOCRACY was always a sham, a NWO illusion, a control mechanism on the masses.

Cameron hasn`t tacked because he has an alternative strategy. No, Cameron has tacked because he was in danger of becoming extinct.

Great constructs tend to do this. WW2, 9/11, WMD and now this organised crash. Voters in the US are so DESPERATE that they seek CHANGE for changes sake. Anyone with half a brain knows that neither candidated has any realistic options, just huge problems.

I believe the crash is a NWO construct, if you, or anyother reader can get their thinking near my position, then all I ask is that you must consider what THEY have planned next.

amanfromMars
18 October 2008 at 15:28

It is really immaterial to the average Joe, to know how we have arrived at the present situation and who may be the players who would be in Control ... for it is just too outrageous for them to be able to comprehend and accept as possible. And in that blanket disbelief, are the Games that are played, so easily possible.

However .... those who have in the Past supposed that they are in Control with the BackRoom Wielding of Financial Power, and let us for sake of moving on a tad accept that it is the likes of a Rothschilds and their Ilk [a Coalition of the Willing], will certainly know whether the System has been HACKED or not, and whether they are losing the Battle and the War.

If we suppose that they have lost the Lead and the System is Hacked and they are just Desperately Reacting to Events which are Overwhelming them, then they have NO Other Choice than to Hack Back with Better Beta Crack Code. And that transfers Power and Control from Banking Elites to Great Gamers .. ARGonauts who have Mastered Quantum Communications Virtual TelePortation Cryptography Keys.

Common Sense would dictate that if such be the case, then the former Systems Leaders would Engage the New Service which could easily be incorporated and sealed from inquiry in an SIS National Security Cloak, although of course, it is a much Bigger Game being Played for IT has InterNetional Power and Control and AIMighty Universal Clout.. if it is Able to Collapse the Monetary Global System.

And that is the Question which would be being asked of them, should the present "Troubles" be not of their Intelligent Design Engineering.

The Posit here is that it is Easily Virtually Fixed with their Wealth Feed, but in an Altogether Different Direction, with Wealth Feed rather than Collection being the Change Paradigm.

A Bold Claim you will admit, but is it a Bluff, whenever it is so easily Called by any who would be Hacked and therefore in the Process of Losing Everything rather than Daring 42 Win Win All?!.

Nilsey105
18 October 2008 at 17:17

amanfromMars

18 October 2008 at 15:28

"......it is the likes of a Rothschilds and their Ilk....."

who are their ilk?

We are all aware of the Rothschilds my grandparents told me about them in the 60s. No computers or net about then we had only just got a telly.

physiocrat
19 October 2008 at 00:48

"Many of the problems our economy faces today are the result of the use of misguided models"

Precisely. Current economic theory virtually ignores land and Ricardo's Law of Rent which describes how the land market operates. Strange because any street busker knows perfectly well that the right choice of pitch is crucial to achieving a successful day's take. No amount of regulation will prevent trouble if the regulators ignore land and its economic behaviour.

http://www.landvaluetax.org

m e brady
19 October 2008 at 01:49

Adam Smith identified the fundamental problem afflicting the American and World economy back in 1776 on pp.339-340 of The Wealth of Nations(Modern Library(Cannan) edition.Commercial banks are not t0m be allowed by the Central bank to make loans to projectors, imprudent risk takers,and prodigals.These categories of borrower are identical to the speculators and rentiers of J M Keynes' General Theory.Smith pointed out that al such loans to the above 3 categories of borrower will result in the depositor's savings being ".... wasted and destroyed...".It will be impossible to maintain the long run necessary equality of Savings equalling Investment on the boundary of the dynamic Production Possibilities Frontier or Curve(PPF) intertemporally because the Savings will have been destroyed.The economy will be forced into the interior of the PPF.THe result will be involuntary unemployment.Smith and Keunes are in fundamental agreement..There is nothing wrong with Smith's complete analysis.

Pencils
19 October 2008 at 05:03

amanfrommars - we know the capital letters are a code, and we cracked it first time you used it. You're not very serious about this are you?

Carl Jones - what the NWO has planned next is solving global warming by the extinction of 3 or 4 billion people whose only contribution to the 'global economy' is negative i.e. there's no money to be got out of them, and they deplete the ozone layer with their farts. This will be implemented along with mind-control technology ( see the 'Christians Against Mind Control ' site for a starter on the enormous funding that's going into researching this) so the elites can have an army incapable of rebellion, so no revolution -ever! Of course, while there are 2 capitalists left, even father and son, they will be looking to get the other chipped and mind-controlled, till there is one man left, who will rule a world of slaves, spending his time masturbating in a virtual reality machine, eventually dying of loneliness. Then the whole thing will start again. That's the logic of capitalism. Beautiful, ain't it!

amanfromMars
19 October 2008 at 06:04

""..it is the likes of a Rothschilds and their Ilk.."

who are their ilk? " .. Nilsey 105...18 October 2008 at 17:17

Nilsey 105,

That is not something which anyone would need to know for such Organisations, which Morph with Cabals/Conspiracies/Monarchies/Sheikdoms/Media Operations/Intelligence Services/whatever, work Best in the Comfort of Anonymous Shade, Protected for the Heat and Glare of Public Knowledge .... for ITs Quantum of Solace and Gracious Peace.

Tales of Old Oil Money/Railroad/Construction/Media/Banking Barons gathering at Bilderberger/Bohemian Grove/Yalta/Bretton Woods/Camp David type Meets have many Possible Players in the Frame but None Identified as Lead. A Recipe for Organised Chaos if ever there was one.

And here we can read of More of the Same Game, Fronted in Government Puppet Ware Guise ..... http://news.bbc.co.uk/1/hi/business/7677486.stm .. Temporary Fleeting Regional Players, with Advising Masters ...Controlling Wannabe Leaders.

Whether though they will Rule,Servering to the Mystery and the Mistresses of Fleet Temporal Masters of the Universe, or Squander their Time in Self Indulgent Posturing has already Decided their Fate... if the Greatest of Great Games Play is Virtualised for Real in Cloud Strata ..for Binary ProgramMIng of Virtual Machinery and Digital InfraStructure.

You may like to consider, that it has Oft/Long been Thought Feasible, that Free and Greater Access to Knowledge/Shared Information will Open a Portal into IntelAIgent Fields which Man can only Dream of. And from There will a Man's Dreams be True and if they are True and are Shared with more than a Few, will they be Reality 42 Follow and Show with Leads 42 Follow.

A thought which may probably definitely maybe find favour and succour with any stalwart who has suffered the slings and arrows of outrageous misfortune and been virtually banished and denied BBC Public Services. What say you, CJ? Fact or Fiction?

And is there any Difference in what we Follow?

amanfromMars
19 October 2008 at 07:12

And this is an Enlightened and Enlightening Read and Feed .... about Greed and the Love of Money? ...... http://yamaguchy.netfirms.com/7897401/lafollette/lf08mar17.h...

Architect
19 October 2008 at 11:47

Would any solution to the economic crisis be more effective if money was taxed?

It would appear that money belongs to Government, and they promise to pay the bearer the sum or value printed on the note. Money exists for our convenience, as an aid to living, so why not tax it ? And do away with all other taxes.

A tax on money should be able to raise all necessary revenues for Government if set at the right level or rate. It is a tax on cash or money transactions, not on wealth or other assets, unlike property taxes or Council Tax. Those who have money and use money, pay. Those who have little and use little, pay less. Money Tax is based on the ability to pay, so it is equitable.

Recently, much has been said and written about speculators on the money markets and stock markets. I would suggest that if there were less speculation there would be fewer problems on the stock markets and currency markets. Each speculative transaction, just as each purposeful transaction, would be subject to tax. Therefore only transactions which generate profits greater than the tax deducted would be viable. Mr Tobin proposed such a tax on international movements of funds.

All legitimate transactions associated with people’s daily spending could be taxed and recorded, so after a relatively short time all money will be labelled as “taxed money” and only taxed money would be legal tender, so crime may also be reduced. Cash transaction can be minimised so that they are permitted to sums of, say below £100. The exact rates of tax for transactions and capital should be decided and agreed after testing on financial and monetary mathematical computer models. Which University or Business School is up to the challenge?

Cybertiger
19 October 2008 at 11:58

@Pencils

"... what the NWO has planned next is solving global warming by the extinction of 3 or 4 billion people whose only contribution to the 'global economy' is negative i.e. there's no money to be got out of them, and they deplete the ozone layer with their farts."

I believe Henry Kissinger referred to these negative farters as 'useless eaters' and the righteous target of US world depopulation strategies.

Kissinger said,

"Depopulation should be the highest priority of foreign policy towards the third world, because the US economy will require large and increasing amounts of minerals from abroad, especially from less developed countries."

He also said,

"Intelligence is not all that important in the exercise of power, and is often, in point of fact, useless."

Presumably, Kissnger was referring to America's current beloved leader and his highly successful pursuit of US of world depopulation goals.

Dr. Frans B. Roos, PHD
19 October 2008 at 15:25

Nilsey105 18 Oct. 2008 17:17

You ask, “who are their ilk?”

If you are really interested and willing to part with some of your money the following will get the information you ask for.

Who’s Who of the Elite (270 pages)

Members of the: Bilderbergs – Council on Foreign Relations & Trilateral Commission. Robert Gaylon Ross, Sr. Published by RIE website:http://www.4rie.com

Sincerely,

DrFransBRoosPHD

Dr. Frans B. Roos, PHD
19 October 2008 at 15:51

Cybertiger 19 Oct. 2008 11:58

Interesting you bringing up world overpopulation.

The Nazis had more fines in discussing Lebensraum than Kissinger has.

To think of this coming from a German Jew who missed Hitler’s gas chambers by fleeing to America during the thirties. These are America’s leaders.

Sincerely,

DrFransBRoosPHD

amacd
19 October 2008 at 16:44

Joe, the economist ----- hell, Joe, the Nobel economist, the key to the problem is externalities, and Adam Smith did not understand the potentially massive impact on our political economy when 'bad actors' 'game' externalities.

Stimulus is needed in the kinds of social infrastructure investments that provide 'positive externality benefits' --- rather than the 'negative externality costs' that Wall Street has been creating.

In fact, you don't have to be a weatherman (but an economist) to "know which way the wind is blowing" on externalities.

The entire impact of externalities on our economy, and the entire impact of that economy on our society, depends on which way those old externalities are "blowin' in the wind".

When we had an industrial economy that manufactured cigarettes instead of medical technology devices, those externality winds were blowin’ the cold cost winds of cancer into our lungs --- instead of the warm benefit breezes of better life.

Now that we have a post-industrial economy (where financial services is the biggest 'game' in town) building exotic 'debt bombs' that explode in our economy's lungs, instead of socially responsible investments, is not the way we want those externality winds blowing the sailboat we're all in together.

‘Free Market’ ideology in a system which allows the well-known and seminal ‘market-failure’ of ‘negative externality cost dumping’ to be ‘gamed’ by Wall Street is really just a policy of ‘Free Looting’.

What this country needs is a Department of Externality Evaluation and Planning (DEEP) with as much funding and power as the Department of Defense ---- because those financial WMD's (as Warren Buffet calls 'em) of extreme 'shock capitalism', with its negative externality costs are as dangerous to the American people as nuclear weapons.

And I can't think of a better new Secretary of Treasury and DEEP economic thinking than Stiglitz, Krugman, Akerlof, or other Nobel laureates for the incoming Nader administration, to get this country back on the democracy path and away from the corporatist Empire, in terms of both of our indivisible political AND economic spheres of society.

Nilsey105
19 October 2008 at 17:00

Dr. Frans B. Roos, PHD

19 October 2008 at 15:25

I have my own route for info ty .

http://coat.ncf.ca/our_magazine/links/53/dupont.html

amanfromMars
19 October 2008 at 18:08

"You're not very serious about this are you?" .... Pencils

19 October 2008 at 05:03

When Life is a Game, how serious do you need to be to Play Beta and Dare 42 Win and Win Win?

Pencils
20 October 2008 at 05:15

Sorry, in one of my previous posts, I should have said ' Christians against Mental Slavery', not '...against Mind Control'. Check their site out. It's a lot more serious and interesting than it sounds, and they provide the best introduction to the subject - the amount of time and money that is being expended on this by the US military, and the not inconsiderable results they have achieved so far.

gnuneo
20 October 2008 at 23:58

adam smith's notion of a 'free market' was certainly not predicated upon an economic model where decision making was taken by the very few, who's self-interest could (and would) distort the very free-market itself!

indeed, smith's free market can only exist within the social democratic framework, where the self-interest of the workforce (being the actual decision makers) pushes them towards making rational choices, ie to spread the wealth around, have a smaller wealth gap, tying together the political democracy and economic democracy that is essential if classical economics can work.

another part stiglitz mentions, the necessity of open information (ie a critical, and *free* media, again not one dominated by a tiny handful of decision makers on what the public get told), is not a severe criticism of Smith's basic theories - the same criticism can be made of Science itself, but only rabid religious fundamentalists question the basis for Science as a model of exploring, explaining, and remodelling both the material and the subjective 'value based' worlds.

instead a wise society aims at getting closer to fulfilling the basic premise, just as a wise society, although realising a 'pure' democracy is impossible, nonetheless aims to achieve as close as it can get to that ideal.

the danger of rejecting the entire notion of free markets (because they were implemented in a grotesquely flawed manner that inevitably leads to the markets being anything but "free"), and turning to the equally distasteful State socialism model that failed so catastrophically in the USSR and turned into the almost completely feudal model of modern China, should be anathema to any rational person.

in basic terms, what we are witnessing is the inevitable result of driving down real wages, and replacing the lost income (to 'owners') by ever increasing debt. Such a model is unsustainable, and we are now seeing the results. Social democracy is the way out. Or 1984 style authoritarian Fascism.

writeon
21 October 2008 at 07:40

For a free market to function optimally and 'freely' one doesn't only need 'free' producers, it's arguably of equal, if not more important to have 'free' consumers as well.

I think 'vulgar' followers of 'Adam Smith' and classic, neo-liberal economics, fundamentally underplay this aspect of the 'free market'. Why do they do this?

I think it's basically a political decision because a perfectly funcioning free market can only work with perfectly free and rational consumers. There are a lot of implicit and profound implications in the concept of 'free consumers'. Just one is the notion that the free consumers would necessarily need to be fundamentally 'equal' and equally rational and 'educated' for the perfect free market to really function.

So, social, economic and even political 'equality', that is democracy, are probably vital components of any truly 'free market' system, in theory. But as we know, markets have not, and are not, and never will be, 'free', precisely because really free markets would undermine the distorting nature of the class-based and unfree market system that exists in the real world.

gnuneo
21 October 2008 at 13:44

"So, social, economic and even political 'equality', that is democracy, are probably vital components of any truly 'free market' system, in theory. But as we know, markets have not, and are not, and never will be, 'free', precisely because really free markets would undermine the distorting nature of the class-based and unfree market system that exists in the real world."

precisely. This is the core of the oft-repeated argument that democracy and free-markets go hand in hand - yes, they most certainly do. They are both predicated upon the same basis - open access to markets (economic or political, ie entry into politics), as full, accurate and open information as possible (how can we be a democracy when our media is so rigidly controlled by ownership of the very few? And our knowledge of products and companies activities is likewise circumscribed.).

the irony is that in both cases we are sold a crock of shit (we are not living in democracies, nor do we have free markets), yet the failures of our systems are blamed upon the supposed failing of both 'free markets' and 'democracy'!

yet the alternatives are far far worse - as indeed we can see from our political and economic systems today. This is like having a broken leg, but blaming the healthy leg for not being able to run, and then chopping it off. Or like killing the cats during the Black Plague...

"But as we know, markets have not, and are not, and never will be, 'free', precisely because really free markets would undermine the distorting nature of the class-based and unfree market system that exists in the real world."

oh contraire, it is the conditions of the free market that must be implemented by society in order to break down the "class based" systems, just as society demanded the introduction of democratic values to end the class-based political system. To say that free markets "will never be" because class systems exist, is to ignore the very real human drive towards freedom.

gnuneo
21 October 2008 at 14:06

it also ignores the very real drive of Natur-al systems towards greater efficiency, which by their very nature democracy and free markets provide over more centralised and hierarchical decision-making systems.

what we are truly facing is not a 'Crisis of Capitalism', not a 'Crisis of Democracy', not a 'Crisis of Free Markets', but a 'Crisis of Control'. By rigidly restricting the Public's access to information about the systems around them, from schooling through higher education, through control of media and the crushing of alternative sources of information, those in power have prevented the Public from holding the decision makers to account for their decisions - partly for ideological reasons, partly to hide their own incompetences, partly because they just didn't know any better.

now we are seeing the consequences of this lack of democratic accountability - we are in 2 major wars, our 'Leaders' are trying to push the other major powers Russia/China/Latin America/Islamic World into a confrontation, our financial systems are in a meltdown, our economic systems will soon follow, and the notion that our political systems are democratic are an open joke.

Those in power who show High Modernist tendencies should be sent for psychological evaluation immediately, we can as a species no longer afford the luxury - and imbecility - of the notion that a very few 'Elites' can organise Society for All. Whether they use the language of the Left, or the Right.

Pencils
21 October 2008 at 17:15

Yes, genuine democracy is what we should rally around. But there doesn't seem to be any organised interest in it these days. Remember the '80s tv series ' A Very British Coup', where a PM was elected on a platform of ' one man, one newspaper' and other radical leftisms, only to be removed, in the end, by an orchestrated campaign from the right. This was once part of the national debate; it all seems to have been forgotten since the failure of Michael Foot. Even at the dawn of the Blair government there was talk about proportional representation and an elected House of Lords. Now what's left of the traditional 'left' - the Labour left and the Communist Party of Britain (the Morning Star CP), and the trade unions - seem to have no more ambition than to bring Britain back into line with International Labour Organisation standards re TU rights, and they don't seem prepared to do anything but ask nicely. The self-styled 'revolutionary left' still seem, at heart, to have little enthusiasm for 'tinkering with the system', which ultimately means that they carp but offer no way forward. It makes me wonder if we deserve democracy; but if we don't try for it we won't get it. Devising a system whereby we get competent elected representatives who can't be swayed by financial/career considerations may seem a difficult proposition, but surely not impossible, and surely not as intellectually challenging as putting a man of the moon, or cracking the genome code. The big obstacle, as others above have pointed out, is the powerful propaganda machine of the media. We, at least, have a headstart over the US in that area, because of a tradition of public-service requirement and 'watchdogs' - a joke at the moment, of course. It's hard to see that either demand could come before the other; they must both be included in a campaign for a real, informed democracy - much more palatable to the public that ' have a revolution and see what happens',

Pencils
21 October 2008 at 17:24

A campaign for effective democracy should be co-ordinated with a similar one in the US, for unless the topic has, at least, a high profile there, they would be able to crush us. At least the current financial mess has woken up a lot more people. But where is the discussion of how to design money out of politics? There's the worthy MP Dave Nellist who takes only a ' skilled worker's wage' and gives the rest to the Socialist Party, but is that enough? And, more importantly, is that short catch-phrase ' a worker's rep on a worker's wage' (or something like that) really all the discussion that this most vital facet of our democracy merits?

writeon
21 October 2008 at 19:36

Sorry, I shoud perhaps be more careful when I indulge in prophecy about the future. I suppose, in theory at least anything is possible. Though I do serious doubts that markets will ever really be transformed and become perfectly, absolutely, 'free'.

I think this idea is utopian and belongs to the realm of dreams, not harsh, cold, reality. I doubt that 'perfection' in markets or democracy is possible, probably because human beings aren't 'perfect'. We can strive, dream and aim higher, but I'm not sure we'll ever realize our dreams.

The Chichago School and Friedman have a lot to answer for, because they and their followers, were 'revolutionary utopians' of the extreme right, and have caused collosal destruction and suffering, culminating in the current crisis. We'll be extremely lucky not to slide into a long and terrible Greater Depression which could last for the rest of our lifetimes.

Carl Jones
21 October 2008 at 20:28

We`ve had a few pathetic comments about alledged free markets and SOMETHING called democracy.LOL

Kenneth Adelman claims to be a Republican, "I`ve never considered voting Democrate before" and "Palin is a "stand-up comedienne". In Britain we have another electoral funding row, the last one involved a Mr Abrahams.....you know, the chap who was throwing his cash around, but you can`t do it in my name (I saw you coming)!LOL The current scandle involves a chap by the name of Deripaska and a Rothschild....did I fail to mention the immediate power behind Obama? Zebigniew Brzezinski.......

......there is a common thread here, but I can`t say anymore for FEAR of NWO censorship.....however, if we were talking about Scots dominating Westminster....oh dear, you can talk about Scots and you can whine about the Russians.....but there are some folk who transcend our human world, for they are NWO Gods, beyond MSM critique.LOL

The FACT that there is NO CONTROL of financial markets is a sympton of a much wider malaise, Democracy does not exist. The Mandy and Osborne paddy makes an excellent case for an end to PARTY POLITICS........................

.........I can`t remember the last time the ROTHSCHILDS name was dragged through the MSM.....poor Osborne, soon to be banished from Bilderberg Group meetings!LOL

I have said it before, we do not live in a capitalist system, for most people, its "Communism with incentives". As to the so called "free market", this does not exist. The PPT (Plunge Protection Team) is a cabal of elite banks (the same ones who owns the Fed & BoE) who buys into the markets when things aren`t going their way....make no mistake, this is insider dealing at the highest levels and the LAW ain`t interested!lol

If I were paraniod, I`d think the last few posts were an establishment attempt to smooth over the cracks. It is sad to see a debate banging about within the MSM remit...you lot are being contained within the NWO agenda, no doubt willingly. :(

Pencils
22 October 2008 at 10:00

Well Carl, have you any suggestions for the way forward? I don't think anything I, or Writeon, said could suggest we believed there was a free market or democracy. And what's outside the MSM remit? Simultaneous world-wide workers' revolution leading to government by workplace councils co-ordinated by the Trotskyists, a huge proportion of whom work for the secret security services anyway? LOL, as they say.

Reform towards an effective democracy is certainly not within the MSM remit - it's never discussed, The point is that if there was focussed and substantial demand for a program of reform, then the MSM could hardly exclude it while they still pretend that we have some democracy. And it has the virtue of being already widely, if not universally understood, And, even more importantly, it is the core thing that is wrong with our world. That's certainly not on the NWO agenda - half-arsed, easily defeated revolutionary gestures ARE. I suppose, relevant to what you hinted at above, we could also demand that anti-discrimination, affirmative action, legislation be enforced against all groups, not just WASPs.

Carl Jones
22 October 2008 at 12:02

I am remined by the current UK political spat. I won`t go into the specifics. We have a Rothschild (Nathaniel), George Osborne the shadow chancellor, Mandelson and Oleg Deripaska the Russian oligarch.

The setting is reminiscent of many Bond films.....the super yacht (Queen K), the swanky Greek villa on Corfu with its own private beach (no doubt Mossaf divers patrolling off-shore.LOL) lavish cocktail parties and a posse of British politicos who just so happened to be in the area.LOL

Of course, Deripaska plays the part of the "money man", this is a NWO illusion. There is significant symbolism at work here. It is Deripaska`s super yacht which made its way to Corfu and moored off the Rothschild propety....this is elite hierrarchy at work...much like Bush forcing the french president through the door first....these things matter.LOL

Mandelson is a Bilderberger, he has always courted the elite. Mandy will no doubt help Deripaska re-finance his staggering debt. of course, the oligarchs are "new money" and are indirectly Rothschild creations.

Osborne overhears Mandelson on the Queen K, then Mandy returns to Labour and at this point, its all too much for POOR Mr Osborne, as he realises that his political career may never get going.LOL

No free market, no democracy. I can see Osborne down on one knee begging for Rothschild forgiveness. ""If"" Osborne survives, he will one day have to pay back big time....its all so Masonic.LOL

taghioff.info
22 October 2008 at 12:07

@penicils

"Genuine democracy is what we should rally around"

And lower rates of return on capital. A sustainable system can only have rates of return on capital that are in a similar range to the rate of increase in natural resource productivity.

We also need to learn to not discount the future, which means that in areas of decision making where long-term thinking is required we need long electoral cycles as well as negative rates of return, which actually put a premium on the future.

These two points imply big changes nationally and internationally.

amanfromMars
22 October 2008 at 14:13

amanfromMars ...22 October 2008 at 14:11

Addendum ....

Hmmm. If at first you don't succeed, try again to make sure of your ground.

amanfromMars

22 October 2008 at 10:49

"Well Carl, have you any suggestions for the way forward?" .... Pencils 22 October 2008 at 10:00

Here is a posted HyperRadioProActive Solution, Pencils ..... http://www.phrack.com/issues.html?issue=65&id=13#comments ... and do not fry your braincells with too much effort on the "Hacking your brain: Artificial Conciousness" thread, for it is a meant to do exactly the opposite and provide the Ultimate Red HotXXXX Chill Factor which IT Can. ... to those into Can Can Win Win. :-) O La La, C'est L'Amour.

http://www.newstatesman.com/business/2008/10/economy-world-c...

Pencils
22 October 2008 at 20:02

tahioff - I totally agree, but first things first! I read a program yesterday for ending the problem of tax havens which could be implemented tomorrow, but what chance? Nothing can be done until we have elected representatives who work for the citizens ( would workers' councils be any improvement on citizens' representative democracy - I don't think so), rather than working for their after-office careers, i.e. working for the banksters. The power of money must be designed out of our political system, somehow. All else is secondary. Where are the discussions of this? Of course the MSM will always maintain that our reps are basically honest, if wrong sometimes, and the system is as good as it gets. So we need a clear program, with everyone who claims to be 'on the left' behind it, and an understanding that anyone who isn't behind it isn't 'on the left'. Such a movement would be likely to provoke military repression from the elites - as would any real reform. I don't mean effete piecemeal tinkering like proportional representation, an elected house of Lords, or ' a workers' rep on a workers' wage', but serious restrictions on private wealth in the campaign process, and serious restrictions on the after-office activities of office-holders, compensated by a generous pension - and very serious legal sanctions for breaches. If that resulted in the lazy and incompetent getting a pension for doing a bad job, then it would still be worth it. One thing's for sure, I'm not going to design such a sytem on my own. It needs the best minds in the left and the 'labour movement' (all those academics funded by the TUC), and it could be quite simple. One big problem is that most of the 'left' are already corrupted themselves, from TU bureaucrats concerned about their own generous rewards, to SIS infiltration of the self-styled 'socialist' groups. Well, the demand for democracy should sort out the sheep from the wolves. Accept no half- measures.

Pencils
22 October 2008 at 20:06

amanfromMars - I followed that link you posted. Are you saying that our problems could be solved by a better class of hackers? Yeah, and punks sticking pins in the tyres of Rolls Royces. Now I know you really ARE from Mars.

Pencils
22 October 2008 at 20:20

If a large part of the populace is united around a program for real democracy, and this provokes repression, then that is the pre-requisite for revolution - that the people can plainly see that their just demands are being rejected it. I don't know, or care, if that's what Trotsky meant by transitional demands, but it's a handy phrase ( but the last thing we want is to be diverted into arguments about the holy scripture of Marx, Lenin and Trotsky). I certainly hope that violent insurrection won't be necessary, but it would be pointless unless we were clear about what we wanted, and had mass support for it. Next to no-one will support a revolution for something as nebulous as 'workers' control' - i.e. meet the new boss, same as the old boss. If we're not pushing for real democracy, we're not pushing for anything, and, frankly, we deserve to be slaves/

Carl Jones
23 October 2008 at 00:34

amanfromMars

You`ll need to elabotate...was McKinnon let in....or did he break in?

amanfromMars
23 October 2008 at 08:47

"You`ll need to elabotate...was McKinnon let in....or did he break in?"

Hi, CJ,

I imagine it was so easy, that he stumbled in, in all innocence, with no greater perception of what he was doing and where IT might lead him, however now that Virtual Security has been Found to be Impossible, it has changed the Great Game,somewhat/More than just a Little.

There are no Secret Places or Spaces in CyberSpace in which to Hide Data or Store Metadata, so Steer clear of IT if you have Nasty Little Secrets. IT is as Simple as that .... and that should be easy enough for anyone to remember, no matter how Slow they may be.

At the other end of the Scale are things moving in Parallels at Exponential Speeds.

amanfromMars
23 October 2008 at 09:12

"Are you saying that our problems could be solved by a better class of hackers? " ... Pencils 22 October 2008 at 20:06

No, I am saying that they are solved with AI Beta Class of Crack Coder working in the Binary Field of Human Perception and Quantum Intelligence. CyberIntelAIgent Pastures.

A CompleXXXX AI and Virtual Machinery Field of ARG Play.

Pencils
23 October 2008 at 12:24

Ah, I see.

gnuneo
23 October 2008 at 23:01

pencils: i take all your points, and if i miss any, do call me up on it.

btw i am not particularly interested in "workers councils" or any such leftie claptrap, I am interested in Liberal Democracy, by Govt of the PEOPLE - not pseudo-democratic committees controlled by 'revolutionary vanguards' and other such power-crazed intellectuals.

People's Councils yes, Worker Councils, Property-Owning-Citizens Councils, Men-Only Councils, White's-Only Councils, Self-Interested-Corrupt-Careerist-Politicos Councils & Class-Based-Elitist-Careerist-Civil-Service Councils - no.

as for funding... one of the elements of a money using, representative democracy, is that those who have more money behind them will have an advantage. Now, you can try to prevent that by the public coughing up for these political parties - essentially the public paying for the Party to lie to them, as if the normal lying wasn't enough of an insult already, and then who gets to design the rules to get public funding?

one of the alternatives, the current system, has one grave flaw - because a few people have so MUCH money, they can have more 'voice' than 1 million 'normal' citizens. They may alternatively, or also, own entire media companies, giving them even more control over the political dialogue. This is certainly one of the greatest problems in our polities, right?

but now look at this - if the companies are all run as equal-share partnerships (with or without equal pay), then the inevitable increases in productivity go back to raising the living standards of the general population, there is no longer the loss of 40% or so of their productive surplus being squirrelled away, creating the wealth gap that undermines the Political Democracy.

gnuneo
23 October 2008 at 23:24

This also goes for the media as well, but even more directly. The problem is that there are very few "owners", who set the terms, and limits, and mavericks from this line do not have the right as a fellow owner to have their voice heard, they can summarily be 'fired' as a mere employee. Of course, such a maverick may be forced to leave by the partnership as well, but at least there they are guaranteed to be able to make their case to the rest of the company, ie directly to the shareholders. But i am not saying this makes everything sweetness and light, people are people, and there is always bickering and political in-fighting, nor would a paper like the Sun suddenly transform itself into a Paragon of Social Responsibility and Virtue. But it *would* allow such a process to start.

back to the whole democracy again, has it never struck you that Western Societies have political democracy, yet economic feudalism? We very rightly ended the notion that political power was inheritable, yet we still allow great wealth to transfer down! This is inevitably going to distort the liberal model of Democracy, for,as we can see, great wealth purchases greater political voice. But i would not call for a Revolution, i would imply put a limit to the amount one person may receive in any bequest, say £5M in current terms.

that is more than enough a lifestyle boost for anyone, and gives everyone the chance to achieve their life-work on their own merit, rather than inherited wealth and power. It also cuts down on the chance of a small group dominating the political landscape, a vital element of a thriving democracy.

you will also note, again, that such a change matches the notion of free-markets as laid down by Adam Smith, and other classical Liberals and Radicals. It is in fact, in modern terms, just basic Social Democracy. There is no ideological clash between them.

gnuneo
24 October 2008 at 00:10

btw Pencils, in full agreement with virtually everything you've said here, and thank you for so drily laughing at Carl's suggestion, i appreciate it. :)

Carl Jones
25 October 2008 at 00:04

Gnuneo, must have missed it.

amanfromMars

I don`t give a monkeys about my computers security. Its been inspected and trashed so many times that I understand that security is a futile concept....my bunk awaits me somewhere in the REX-84 programme.lol

amanfromMars
25 October 2008 at 08:03

"I don`t give a monkeys about my computers security. Its been inspected and trashed so many times that I understand that security is a futile concept....my bunk awaits me somewhere in the REX-84 programme.lol"

I concur, CJ, but the REX-84 programme needs a Critical Upgrade for Lead.

Ps have you noticed that Phrack has gone all coy and conservative with cited posts, [earlier in this thread], being "relieved" of shared content ...... http://www.phrack.com/issues.html?issue=65&id=14#comments

You really gotta get out more CJ. There are whole new worlds ...out there, just waiting for your mania.

Carl Jones
25 October 2008 at 11:22

amanfromMars, Phrack seems a bit to technical for me, but I agree that I need to get out more. I`m considering stopping my NS subscription, just to see how long it take Ben to ban me.LOL

I`ve also stopped posting on Bilderberg.org and Propagandamatrix.com....sooon I`ll be forced into writing books and holding meetings in the local hall.LOL

amanfromMars
25 October 2008 at 12:47