My fascination with soul started in my teenage years with soul music, specifically black music. When I was eighteen I met a Sufi in Kashmir and asked him “do you understand the soul in music?”. He was playing a recording of what he described as ‘Kashmiri soul music’. His response was to read the ‘book’ in my heart and reveal an instruction to me. Through this revelation my felt need to develop soul was confirmed and made explicit, along with an instruction related to politics (hence the name of my blog).

Politics can be understood as the balancing and harmonising factor of soul. However, nowadays when people hear the word ‘politics’ they inevitably think of its shadow qualities. In the context of soul these represent the struggle of the soul to reconcile inner and outer conflicts and competing interests, and sometimes the corruption which results from such enormous challenges.

I was drawn to soul music because of its rawness, authenticity and spirituality. All of these were a relief and medicine for me as a teenager, growing up in a middle-class London environment where the mainstream culture was more repressed and my father had recently died. I loved the way soul music came from the heart - as someone whose education and milieu was all about coming from the head. I wanted to develop and embody soul qualities myself.

Following my meeting with the Sufi and some initiatory experiences soon after, my quest for soul took a more Eastern turn and I started to try techniques such as t’ai chi, yoga and meditation. At the time I had no concept of Sufism and I wasn’t drawn to Islam.

After leaving university I lived in a Buddhist retreat centre for a period and gained experience of meditation, which confirmed my belief in a soul imbued with imaginative properties, also characterised by compassion and connectedness. These are key aspects of the soul’s ‘politics’: it has transpersonal, expansive qualities and should not be considered narrowly individual.

Nowadays I experience my soul through Sufi meditation practices such as Dhikr and Sama’a and also through 5 Rhythms dance where I allow my soul to rip!

Political faultlines are determined by the limits of love. When analysing politics we typically focus on the areas beyond those limits, where the absence of love can be interpreted as hate. But no one wants to be identified as a hater because we like to see ourselves as lovers. In the aftermath of the Brexit referendum, despite the upswell of racism, Brexiteers deeply resented being identified with racism because they felt their own motivation to be love: love for their country as they understand it; love for Britishness as they know it; love for their community; love for people like them.

It is of course our own likeness that we vote for, that we see reflected in the political mirror. We want to vote for and with people like us. This is the meaning of identity politics, and it is much more powerful than any rational debate about policy. We are like, and we love a certain group of people and because we are voting for their interests we feel our intentions to be noble. Therefore we feel offended if people disparage or criticise us for our voting decision.

But what we forget about is people outside our circle of love, whether they be Muslims, Jews, homosexuals, immigrants, trade unionists, single mums etc. And whereas billionaires own the media in order to continually remind us of the importance of their interests, some other groups can do little more than mew plaintively when they find themselves outside the circle of love.

It is warm and cozy inside, but bleak and lonely outside. Inside the circle of political love, contented voters warm themselves on the log fire of steadily-rising asset prices and well-paid jobs. Outside, through the window, the working poor try to peer in, as the step-ladder is chopped up beneath their feet for firewood. The fat and contented voters inside just can’t see the poor outside the window, so consumed are they by the love and admiration they feel for each other, and by their concentration and chumminess as they observe the etiquettes of hospitality and pass round the canapés, with such refined manners!

This is my remembrance / reworking of some of the many ideas in Prof Milbank’s paper.

Prof. Milbank started by stating that the soul (psyche) is what makes us human, it is the human realm par excellence. He cited Aristotle’s ideas from De Anima, talking about the bodies of humans and animals being the nature of their souls, and yet the soul as transcending mere matter.

He then moved on (or back) to Plato, citing the ‘Gorgias’ where Plato relates politics to the soul, saying that politics is to the soul as medicine is to the body, and that the politician’s function is to make people’s soul’s good just as the doctor’s function is to make people’s bodies well. Politics is therefore psychological, but it is about collective psychology and the collective good, so the politician does not correspond to the modern psychologist who treats individuals.

Plato warned against the possibility of a type of personal political narcissism in which the individual learns too well to govern himself and subdue his passions, just for its own sake. Plato compares this to a general who undertakes unnecessary battles for the sake of glory.

Plato prefers to look upwards and outwards, locating the individual soul as an active participant in the polis (city), with the political function helping to minister to the individual’s soul just as the individual enriches collective life. Psychology is therefore political.

Plato talked about the importance of ritual, myth and liturgy in connecting the polis to the Divine, and of the necessity of a religious community within the polis. In Plato’s case this was the class of religious philosophers, but Prof. Milbank said it could be the Sangha, the Ummah, or the Ecclesia depending on the culture. This religious community performs a public function and is neither secret nor elite.

Prof. Milbank provided an extensive critique of liberalism. He argued that 17th century liberalism was a reaction to the European religious wars of the preceding centuries. These had been wars over ’the truth’, with different Christian sects fighting for their own versions. Liberalism sought to create a neutral metaphysical space as a basis for public life, replacing feudalism which had based itself on a particular view of the human soul in relation to God. But liberalism’s neutrality has degenerated into a materialist metaphysics and is no longer a neutral space, and my displacing the soul from public life it has displace humans. Liberalism is therefore anti-humanistic.

Within the modern and post-modern world the human has become debased or at least marginalised from public life. Classical economics, with doctrines such as diminishing marginal utility, does not take account of truly human phenomena pertaining to the soul such as sentiment and virtue (whose utility does not diminish as they increase). Instead it emphases the trivial functions of human base matter such as food, shelter and copulation. Materialist ideologies appeal to base human instincts such as hatred of the other (immigrants, classes, races, religions). On the other hand the individual is disempowered from political involvement through liberal doctrines such as Adam Smith’s ‘invisible hand’ which pretends that these occasionalist, individual consumption patterns have some aggregated force. Even when liberalism attempts transcendence it debases humans further in its search for a soulless ‘brave new world’ of augmented bio-technological humans. Milbank calls these two modes of liberalism disenchanted immanence and transcendence.

Milbank characterised as ‘optimistic’ the pre-liberal Christian idea that people are fundamentally good even though this goodness is obscured by sin. He characterised as ‘pessimistic’ the Hobbesian liberal idea that people are fundamentally bad and must be restrained if we are to avoid the natural state of the ‘war of all against all’. He noted that Rousseau painted a more optimistic liberal picture of isolated people being good in the state of nature. However, following Rousseau, liberalism tends to rely on a system of contracts to bring about good behaviour once people are placed together, whereas non-liberal traditions like anarchism and socialism point to natural existing societies as manifesting harmony without the need for contracts.

Milbank promotes an ’enchanted transcendence’ which he believes is the message of William Blake and other Romantics. He contrasts this with the ’enchanted immanence’ of Spinoza and Goethe which he suggests compromises the (Western) monotheistic tradition. However Milbank’s vision is Christo-centric.

Aristotle defines politics as the master art with the other arts and sciences its servants. Politics is responsible for prioritising the other arts and sciences and allocating resources to them. In recent years the political structures of the state have abdicated this role to ’the market’. In effect, political power has been transferred to the market, meaning the banks and global financial institutions.

The financial markets allocate resources to the most financially lucrative trades, those with the highest rates of return. They prefer to pay no attention to the human or environmental effects of these trades. Our political system is the rule of money, where money chases ever more money with little regard for anything else, and all other ends are subservient to this. Money has incorrectly become an end in itself.

We need to replace this pathological system with an alternative politics which allocates resources where they will benefit people and the environment. To accomplish this we need alternative definitions of wealth, based around human well-being and the true value of the natural world.

The fetishisation of the private sector knows no bounds. The current Neoliberal Party government is being warned that withdrawing investment from the public sector too quickly will deepen the recession, because the private sector is not ready to take up the slack. One reason for this is because the banks are failing to lend. The proposed solution is more ‘quantitative easing’ - increasing the money supply so that the banks have more money to lend. But the evidence so far shows that banks use any additional money in the system to fatten their own balance sheets and pay bonuses, not to lend, no matter how many times Vince Cable ticks them off.

Wouldn’t it make more sense to miss out the middle-man? If the Bank of England has money to pump into the system, the best way to bring us out of recession is to invest directly in public infrastructure projects such as schools, hospitals, and public transport. The banks don’t need to stand in the middle, taking a cut through interest payments. This model of investment is different from PFI, the Neoliberal Party’s preferred mode of infrastructure ‘investment’ since the time of John Major, but why should the private sector sit in the middle of transactions between the government and the people, syphoning off our wealth and adding no value? The banking system in this country is just an organised form of corruption, and the government is entirely complicit.

Accepting moral responsibility does not entail taking control of every aspect of the economy. We can accept that, in some areas, properly regulated markets work reasonably well. However, the provision of universal public services should not be left to the market but should be performed by the public sector. Natural resources such as oil and metals belong to us all, and should not be left to small cabals to exploit and profiteer. We need to consume only as much oil as we need to create new renewable energy systems - the rest should be left in the ground if we want to have a future.

In a moral economy we should not be afraid to make qualitative as well as quantitative judgments: just because gambling and pornography are lucrative doesn’t mean they are useful parts of the economy. There needs to be clear understanding of the relationship between business good and public good: there are areas where they overlap and areas where they are mutually exclusive. Where business goes against the public interest it should be discouraged through regulation and taxation, and in some cases banned.

Manipulative technologies such as genetic modification are too dangerous to be left in the private sector. The trivial profit motive should not be involved in decisions which affect thousands of future generations. Harvesting and enclosing genes through patents is something that the public can have no truck with - how can it ever be in our interest? Amartya Sen’s research shows that small-scale farming by peasants is the most productive use of land and resources. We can feed the world with land reform, micro-finance and education. Genetic modification is an unnecessary, greedy innovation.

As Derek Wall discusses in his book ‘Beyond Babylon’ there is a range of alternatives to neo-liberalism, ranging through Keynesian, regulatory, localist, eco-feminist, socialist and anarchist approaches, to name a few. They all have positive contributions to make, and all of us need to unite to slay the neo-liberal dragon.

I watched Ken Loach debate with Michael Heseltine on Newsnight last night. Loach attacked the Thatcher government’s record on unemployment and Hezza retorted that unemployment had also been high under Labour. Loach said that he should not be associated with the Blair and Brown government, but the exchange showed how the current political system hinges on the pretence that different factions within the Neoliberal Party offer genuine choice. The message is that once you have tried another faction (to no effect) you may as well lie back and let the Tories shaft you - which is where the British public is currently at.

Unless the Greens clearly articulate the message that we oppose the single Neoliberal Party with its blue, orange and red livery we will always be squeezed at general elections. Last time the political establishment was able to trick the voters that the orange faction offered some change, next time it will be the red faction etc etc ad infinitum (but Babylon must fall!).

* working with the poor * challenging authority * seeking liberation in this life as well as the next * favouring activism over contemplation

CHRISTIANITY Liberation theology focuses on the needs of the poor and, in their interest, is prepared to challenge political and ecclesiastical hierarchies. In Latin America, the prototype was Bartolomé De Las Casas (1484 - 1566), a Dominican priest who became Bishop of Chiapas (the area which in recent times gave birth to the Zapatista movement). Against the grain of Spanish colonialism, De Las Casas envisioned a just society where indigenous people would co-exist peacefully and freely with the colonists instead of as slaves.

In the 20th Century, an important figure was Archbishop Oscar Romero of San Salvador, assasinated in 1980. Previously a conservative, Romero inclined to liberation theology after a Jesuit colleague was killed for creating self-reliant groups among poor peasants. When the government refused to investigate, Romero spoke out against poverty, social injustice, assasinations and torture, until the death squads killed him too.

HINDUISM Within Hinduism, Gandhi pioneered liberation theology. He successfully challenged the colonial power, and he also challenged the orthodox Hindu authorities, particularly with regard to untouchability, which led to his assasination by a Hindu extremist in 1948. Gandhi practiced karma yoga, the path to liberation through work, which in his case meant social and political activism. Gandhi combined the traditional Indian ideal of non-violence (ahimsa) with the Christian ideal of active love, to produce satyagraha, the theory and practice of non-violent direct action. Later, satyagraha was successfully adopted by Martin Luther King, another major figure in the history of liberation theology.

ISLAM Sheikh Amadou Bamba of Senegal (1853 - 1927) offers a great example of liberation theology in an Islamic context. Founder of the Mouride Sufi movement, Bamba led a non-violent struggle against French colonialism. The French exiled and tortured him, which only strengthened his movement. Notably, Bamba emphasised work as a spiritual practice, and his followers are renowned for their industriousness, being involved in many economic enterprises throughout Senegal, such as groundnut cultivation.

BUDDHISM In Sri Lanka the Sarvodaya Shramadana movement uses traditional Buddhist teachings such as the Four Noble Truths and the Wheel of Life to improve worldly conditions such as sanitation and food cultivation.

At the start of the opera we see Gandhi inhabiting the mythical battlefield between the Pandava and Kaurava clans, together with the hero Arjuna and the god Krishna. Just as Arjuna is caught between the competing claims of the two clans, towards both of whom he feels loyalty, so Gandhi is caught between the rival claims of the British empire and the Indian people, towards both of who he feels loyalty. Just as Arjuna’s soul (Atman) is activated by Krishna’s wise counsel that he must have the courage to do his duty in the face of life’s conflicts, so too is Gandhi’s. The scene ends with the solemn vow of Brahmacarya, as Gandhi / Arjuna promises to dedicate his life to courageous service.

Mobilising the soul as an active force in human politics and the affairs of the world is no easy task, and Gandhi draws hostility, ridicule and even violence upon himself as he adopts the dress and lifestyle of a renunciate. Yet the ways of the spirit are subtle, and profoundly affect the human sphere through what appear, on the surface, to be simple acts, but which are imbued with great symbolism and resonance. We see this played out  as Gandhi and his followers burn their identity cards (‘passes’) to protest against the racist laws of the time. This simple act is incredibly liberating, both spiritually and politically, and lifts them to a new plane of existence.

Satyagraha is ’the surgery of the soul’, because it is a method for bringing about a profound change of heart in ourselves and others which leads to political and social change. The Satyagrahi must be courageous and willing to sacrifice his or her own well-being in order to demonstrate truth. It is only the courageous demonstration of truth that can touch the soul of the oppressor, and cause him to change or at least relent. This, finally, is the meaning of Satyagraha - that profound, long-lasting change, whether personal or political, must originate from within, and the only method that ultimately works is one based on understanding and harnessing the soul.

Sheikh Aly asked us to consider the choice that Martin Luther King made when he decided not to opt for a comfortable lifestyle in Chicago, but to take his ministry to the South and confront the spectre of racial discrimination. On the surface, it appears that Dr. King made a fatal choice, because his ministry ended with his assasination. However, in reality he made a liberating choice, because he could have suffered spiritual death by taking the easy option of remaining in Chicago, and his sacrifice contributed to the political and social liberation of millions of African-Americans.

Next we were asked to consider Muhammad Yunus, pioneer of micro-credit and founder of the Grameen Bank in Bangladesh. A professor of economics, he became disillusioned with academic life and went to live with a group of peasants. Many people would consider this a fatal choice, at least professionally, but for Muhammad Yunus it was liberating because it showed him how small sums of money loaned on trust could yield massive results if targetted at the right people, particularly women. By 2008 the Grameen Bank had loaned US$7.8 billion to the poor.

Ian Stewart MP talked about his own difficult choice, to vote for the invasion of Iraq in 2003. He explained that his motivation had been to help the Kurds and the Marsh Arabs, but now that hundreds of thousands of people had died as a result of the war, he could not be sure if he had been right. He described the whirl of conventional political life and how politicians, caught in the maelstrom, are on auto-pilot, without time or space to connect with the spiritual dimension of life. As he is not standing in the forthcoming general election, he expressed the hope that he would now have time to learn more about what Sufism describes as the spiritual heart.

The first two books in Sheikh Aly N’Daw’s series are ‘The Initiatory Way To Peace’ and ‘Liberation Therapy’. If you would like to buy a copy, please email: contact_uk@international-sufi-school.org . The International Sufi School’s next event is a conference in Edinburgh in May entitled ‘Nonviolence Within: Peace For All’ (http://www.nonviolence-edinburgh.com/)

All systems face two principal types of threat: internal and external. External threats are many and varied: depending on the system they include strikes by meteorites, flu epidemics, bank failures and so on. A typical internal threat to a system is when one of its sub-systems predominates at the expense of the others, annexing a disproportionate share of the system’s resources and threatening the very survival of the whole, including the dominant sub-system itself.

Every viable system has a sub-system responsible for preserving the whole, and for maintaining the system’s essential organizing characteristics over time. The Chilean biologist Humberto Maturana called this sub-system ‘autopoietic’, meaning ‘self-making’ in Greek. The British cybernetician Stafford Beer coined the phrase ‘pathological autopoiesis’ to describe a situation where this sub-system malfunctions, and attempts to preserve itself at the expense of the whole. It starts to construe ‘self’ too narrowly, mistaking the welfare of the sub-system for the welfare of the whole system.

Our modern political sphere is full-to-overflowing with examples of pathological autopoiesis, where elements of government or public life which are supposed to benefit the whole merely seek to preserve or enrich themselves. Banks and MPs are two obvious examples. Typically these pathological sub-systems protest that they are acting in the interest of the whole when they are clearly not. How many times have we heard ’the national interest’ invoked to justify the crazy wars in Iraq and Afganistan, even after we explained that they are “not in our name”?

Fortunately, because all of its components have a degree of autonomy, it is possible for the system to survive even when some of its sub-systems are establishing a pathological hegemony. In the political sphere this autonomy is known as ‘democracy’, and it is a prerequisite for the long-term viability and sustainability of the human race. Democracy offers us the chance to wrest power and resources from pathological sub-systems before they destroy us, and ironically themselves too.

Stafford Beer, Think Before You Think (p203)

Humans instinctively feel that we are in this world for a purpose – it takes an extraordinary confluence of cynicism and apathy to knock this feeling out of us – and we also feel that we must cooperate with others to achieve this purpose. All of our patterns of cooperation, modes of persuasion, and our efforts to collectively agree upon goals spring from these initial political instincts.

To call our political instincts innate is to say that they are part of our nature, our soul, which means that they are basically good. Our mathematical instincts too are fundamentally good and useful, are one of the sacred endowments at the root of great human achievements. Yet unfortunately both mathematical and political instincts can be twisted and corrupted by the delusions of greed, hatred, pride etc. The opening scene of 2001 – A Space Odyssey graphically depicts the unfortunate human tendency to turn conceptual knowledge into weapons and slaughter.

One of the great challenges of our time is to rediscover our innate political instinct, before it got corrupted and became just another servant of business. This primordial political energy in our souls can bind us together through love and shared endeavour, and marry us to both ideals and reality.

Buddhism has a valid political dimension. The Buddha gives clear advice to rulers in the Kutadanta and Cakkavatti-Sihanada Suttas. Islam and Judaism have more obvious political dimensions because both Mohammed and Moses were law-givers. The Qur’an and Torah both provide the bases for legal systems to govern polities of various shapes and sizes.

The Qur’an and the Torah both combine the eternal and the temporal, and this reveals the nature of politics. God is eternal and Truth is eternal, but the actual, temporal conditions in which man finds himself are far from God. Man must find a way back to God so, through the prophets, God reveals His spiritual truths and His laws for good-living.

Politics is an aspect of humanity’s collective striving for good. In our political activity we should be guided by the religious truths to which we are the heirs, but we must not make the mistakes of over-literalism, dogmatism, sectarianism, etc. which have so bedevilled our civilisation.

Within the Islamic world the Islamist tendency over-emphasises the political dimension of Islam at the expense of the spiritual. Because it is has lost connection with the loving aspect of God it is prepared to contemplate or perform violence and terrorism to accomplish its sectarian goals. Islamism has more in common with Trotskyism than it does with Islam.

Although Islamism is a corruption of Islam, this does not mean that Muslims should withdraw entirely from the political sphere. On the contrary, it is important that Muslims who are in touch with the spiritual heart of their religion should be socially and politically engaged, in order to reduce the space available to Islamists. Muslims have an important role to play combating the ever-strengthening tide of greed, materialism, addiction, violence and environmental destruction. Organisations like Christian Aid provide an example of how religious people can make vital contributions if they engage with the key political issues of our time.

In their book The Spirit Level, Richard Wilkinson and Kate Pickett show that practically all the problems of modern societies, from child mortality to drug addiction, mental illness to obesity, murder rates to environmental pollution, have the same root cause – inequality.

“It became clear,” according to Wilkinson, “that countries such as the US, the UK and Portugal, where the top 20% earn seven, eight or nine times more than the lowest 20%, scored noticeably higher on all social problems at every level of society than in countries such as Sweden and Japan, where the differential is only two or three times higher at the top.”

We all know that the endless pursuit of economic growth is crazy, that higher GDP is a meaningless quest that does nothing to increase our collective happiness or well-being. What Wilkinson and Pickett show is that we must measure our society’s success in terms of increasing equality, because this is the only reliable recipe for “greater opportunity and prosperity for all”.

httpv://www.youtube.com/watch?v=iAScgcrXlXE

Gandhi famously said:

“I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man whom you may have seen and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it? Will it restore him to a control over his own life and destiny? In other words, will it lead to swaraj for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away.”

Tackling poverty is essential if we are to achieve an equal and just society. So is confronting greed. Although the Labour government has taken certain steps towards reducing poverty, such as introducing family tax credits, they have done nothing to restrain the rapacious behaviour of the economic elites. Peter (now Lord) Mandelson said in 1998 “we are intensely relaxed about people getting filthy rich”. We now see the damage that this laissez-faire attitude has caused, and is still causing.

So what is the answer, redistribution of wealth? In fact the first thing we need to do is STOP redistributing wealth. The current system is set up to redistribute wealth from the poor to the rich. We see this clearly in the bailout of the banking system, where we have all dug deep into our pockets to keep the bonus culture afloat. We see it evidently in the various forms of privatisation, taking property that previously belonged to us all, and handing it to a small section of the population. We see the government choose to fund public infrastructure through expensive private finance, when it could borrow the money itself at much lower rates of interest. All of this is designed to make the taxpayer fund the profits of private corporations. It is not sour grapes to say “enough is enough”, it is a sane recognition that for as long as the ever-widening gulf of inequality in our society is allowed to grow, we will become sicker, fatter, and more likely fall victim to crime and violence.

Although there is strength in wanting things to be different there is also weakness. The strength is in compassion, because nobody should remain unmoved by other people’s suffering; we should all wish that the conditions causing suffering be removed. The weakness is because there is much learning to be had from the way things are right now, so by wishing them to be different we are passing up the opportunity to learn.

If we are annoyed and unhappy should we not wish for things to be different? Not for our own sake. We should take a step back and allow ourselves to look at the annoyance and unhappiness in our mind, to experience it. We should recognise it for what it is, and we should realise that, although we are annoyed and unhappy, our mind is working. How can it be working? The mind is a system which functions according to regular principles. The fact that the current state of our mind is annoyed and unhappy does not disprove this. Rather, we should seek to investigate our own mental system to understand how these feelings are being produced. They are being produced because our mind is working. But this does not mean that the feelings of annoyance and unhappiness should be encouraged!

Take the the analogy of a political system such as a country. Sometimes the country experiences angry demonstrations on its streets. This does not mean that the political system of the country is not working. It means on the contrary that it IS working. If the leaders of a country deny its citizens fundamental rights and prevent them from leading a tolerable life they will come out onto the streets to demonstrate. This is how the political system naturally works.

It is important to distinguish between the natural political system and the formal political system. The natural political system is necessarily always working, unlike the formal. If a country’s constitution says that all people have the right to be treated equally and then it enslaves a portion of them, its formal political system is not working. However, if there is enslavement, followed by pent-up tension amongst the slaves for many years, and then finally a rebellion, then the natural political system is working.

What is the natural political system? It is part of the nature of people’s minds, collectively and individually. It governs how much suffering people can bear and how creative they are in releasing themselves from suffering. Formal political systems are expressions of the natural political system. Religions or spiritual systems are also its expressions. Siddhartha could not bear his own or others’ suffering any more so he used all his creative powers to become Buddha, to release himself and others.

When an individual feels annoyed and unhappy he is responding to suffering, however he may not be responding very creatively. This may not be his fault – he may never have learned any other way of responding. Can we say in this situation that his natural political system is working?

The natural political system functions to produce responses to suffering. Because it is a system the laws governing systems apply. In a given system at a given time a specific input will produce a specific output. What the output will be will depend upon the way the system is working at that time. If you put 10c into a bubblegum machine and the machine ejects a gum-filled plastic ball then the machine is working in one way. If it crushes the plastic ball which then blocks the ejection hole it is working in another way. Either way the system is working, insofar as it is being systematic.

Normally we would say that the machine that destroys the plastic balls is not working. This is because we are applying conventional norms to how we think things should work, and not without reason, but we can learn more from how things actually DO work than from how we think they should work! The way we think things should work comes from our conscious, conventional mind. The way things actually work comes from the depths of the universe.

What exactly is the ‘real’ economy? Can we say it is the economy where we work, the economy of production, the economy of fundamentals? As discussed previously, the global financial markets are largely divorced from the real economy insofar as 80% of trades are purely ’technical’ (e.g. arbitrage, currency speculation) while only 20% are concerned with actual ‘investment’. This is one of the reasons why Susan Strange said that money has gone “mad”.

The world’s richest and most famous fundamental investor, Warren Buffett, has also warned against the madness of a market obsessed with prices and technicalities. Following his friend Ben Graham, Buffett characterizes the market as a fellow named Mr. Market:

Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his. Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market’s quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him. Mr. Market has another endearing characteristic: he doesn’t mind being ignored. If his quotation is uninteresting to you today he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you. (The Essays of Warren Buffett, p64)

Rather than focus on the ’technical’ factors of market behavior, Buffett prefers to focus on the fundamental characteristics of the businesses in which he owns a stake. He wants to intimately understand their products, accounts, business models, and management. In this he follows the example of John Maynard Keynes, whom Buffett praises, quoting a letter that Keynes wrote in 1934:

As time goes on, I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence . . . . One’s knowledge and experience are limited and there are seldom more than two or three enterprises at any given time in which I personally feel myself entitled to put full confidence. (Essays of Warren Buffett, p82)

Although the investment philosophy of Warren Buffett compares favorably with the madness prevalent in the market, there are nevertheless many important ‘fundamentals’ which he overlooks. For example, Buffett describes Coca-Cola as a “wonderful” business (ibid. p30). This remark is very revealing about the ‘real’ economy, because the ‘real’ economy makes no distinction between those companies whose products and practices are harmful and those whose are helpful. Instead the focus is purely on the bottom line, profit and loss.

I would like to propose that we divide the ‘real’ economy into two broad categories: the productive and destructive economies. The job of investors, consumers, workers and governments should be to look beyond mere profit and loss at the actual effects which companies and their activities have on the world. We should support those which are productive, and boycott those which are destructive.

There are some companies which fall clearly into one or other of these categories, and some which are more ambiguous. Clearly we should all boycott weapons and tobacco companies, although unfortunately the British and American governments provide enormous public subsidies to weapons companies.

One ‘industry’ which is clearly destructive is gambling, yet its revenues – a frightening £55bn in the UK last year – are included in Britain’s GDP. Surely this figure should be subtracted, not added! However, the Department of Culture has gone so far as to say that it “sponsors” the gambling industry.

Government sponsorship indeed seems to be the effect of the Gambling Act 2005, which loosened the regulations applied to gambling, despite the fact that there were already 300,000 gambling addicts in this country (of whom 40% have suicidal tendencies). The act was passed in the face of a report by Professor Griffiths, professor of gambling studies at Nottingham Trent University that the effect of the bill would be to increase the number of addicts by between two and four times. As we move into recession we are likely to see gambling become more of a problem: a recent survey shows a link between gambling and urban deprivation.

The point is that notions of the ‘real’ economy are meaningless if considered in isolation from physical and mental well-being. No matter how profitable a company, if its effect is to damage well-being then its revenues and profits should not be counted as part of our national ‘product’. Instead, attempts should be made to warn people away through taxation, advertising bans, publicity compaigns, clear labelling, denial of premises and so on. This is the strategy which is now, belatedly, being pursued in the UK with regard to cigarettes. Better late than never.

Once After a hard day’s forage Two bears sat together in silence On a beautiful vista Watching the sun go down And feeling deeply grateful For life.

Though after a while A thought-provoking conversation began Which turned to the topic of Fame.

Then one bear said, “Did you hear about Rustam? He has become famous And travels from city to city In a golden cage;

He performs to hundreds of people Who laugh and applaud His carnival Stunts.”

The other bear thought for A few seconds

Then started weeping.

(‘Two Bears’ by Hafiz, trans. Daniel Ladinsky)

To whom will we bow tomorrow? I lived in England from 2003 till 2007. During that time Iceland changed a lot. In a society that used to be almost without any class distinction, all of a sudden there was a group of extremely rich people. Private jets, Elton John and 50cent at birthday parties and so forth.

It seemed half of the population wanted to work in banks (that was the great gold cage everyone wanted to get into). I found it amazing that very few seemed to ever consider whether it was a good thing to go after as much money as you could possibly get your hands on. The people who followed that maxim were hailed as heroes, courageous vikings. I think oligarchs is the modern term.

Of course not everyone thought in this way.

What has happened now is a combination of many things. A government that hasn’t been doing its job of looking after the citizens, a lack of regulation of financial businesses, naiveity and greed. Greed is probably the biggest factor.

Many people have been warning that this might happen for some time now, both in Iceland and England.  It looks as if they were hushed up (at least some reports were) so the party could go on for as long as possible. Who’s responsible for this hush up? The ones that gained from it. The 20 people or so that now are hiding outside of the country. Hanging on to their golden cages. As well as the politicians who wanted to enjoy the good times as well.

“We acted as if there was no tomorrow, so now there isn’t going to be one”

as my friend Kurt Vonnegut said when talking about the state of the planet.

The group of 20 or so people (oligarchs)  who owned the lot, seem to have left the building, taking with them as much as they can save of their billions, or trillions. Sorry I’m getting quite confused with these big numbers.

This is a very sad situation. The consequences are not yet fully known. It looks very serious. It will ruin the foundations of our society and enslave future generations to a huge debt.

You have to remember there are only about 300,000 people here to pay this bill. And this bill is huge. The bank owners had set up branches all over Europe and the Icelandic government (i.e. Icelandic tax payers) is responsible for paying the deposits back to the people of these countries. That includes England.

A lot of people in Iceland have lost all their savings, including my sister, thousands of regular folks have. Old people and young who were convinced by the bankers to put their money in bonds and funds that were perfectly safe!

We have the problem with our currency as well. You can’t buy any currency now unless you’ve got a flight ticket. Icelanders abroad can’t cash any money through foreign banks. All imports have, or are about to, come to a halt. Icelandic businesses around the world have lost all credibility and have to pay cash in all transactions.

The krona has fallen to I don’t know where – no one knows now I think.

The government is desperately trying to get a huge loan from Russia. Iceland will then probably support their efforts of gaining control of the North pole and its resources.  Well, I guess we will ‘support’ them on every matter and every whim. Maybe Canada would take us under its wing. Then we will of course ‘support’ them in all their actions and policies.

There is also the problem with Mr. Gordon Brown. He has used anti-terrorist legislation to freeze the assets of Icelandic banks. He declares the Icelandic state as bankrupt and so forth. Some people claim that with his remarks and actions he has ruined Kaupthing, the only bank which was still standing in Iceland. Kaupthing was the biggest Icelandic company and the loss because of this is tremendous.

The politicians all try to save their faces and keep themselves and their party number one. It’s so important to stay in power, to hold on to fame and the golden cage. The Icelandic PM and the British PM point their fingers and say to their people “Look at those islanders and see how they are treating you. But don’t worry, I’ll play tough and look after you. Just remember to vote for me in the next election.”

Our reputation has been ruined. That hurts all Icelanders deeply.  Honor, reputation and independence is very important to this nation.  I’m not sure if it affects the oligarchs though, they might have slightly different priorities.

I feel very sad and sick to my stomach about the way people behave. I feel for the people who are without any security now, and I feel for the people who are managing to hold on to their golden cages.

You could say that in a sense the Icelandic society has been shot right between the eyes.

It is in no way extreme to say that our independence is at stake in this situation. We might not be able to afford such a luxury any more. That breaks my heart.

I’m quite fortunate in a sense not to have any property and never to have had any. I’m also very fortunate to live among farmers and people up north who have always lived on modest means and know how to survive in this country.

This is a very basic description of the situation. The nation is in a state of shock. No one knows what will happen next.  Will we have our health care, our education system and so forth?

Will we have to bow to the East or West in the future?

“The great difference between an ordinary casino which you can go into or stay away from, and the global casino of high finance, is that in the latter we are all involuntarily engaged in the day’s play. A currency change can halve the value of a farmer’s crop before he harvests it, or drive an exporter out of business. A rise in interest rates can fatally inflate the costs of holding stocks for the shop-keeper. A takeover dictated by financial considerations can rob the factory worker of his job. From school-leavers to pensioners, what goes on in the casino in the office blocks of the big financial centres is apt to have sudden, unpredictable and unavoidable consequences for individual lives. The financial casino has everyone playing the game of Snakes and Ladders.”

Since the 1980’s, in the name of the so-called “free market”, governments around the world have made it easier for high-rollers to play in the global casino of high finance. In doing so they have argued that they are respecting the fundamental human ‘right’ to make millions, and they have claimed that the market is a force for innovation.

What we clearly understand is that there is always a trade-off between different peoples’ rights. As Susan Strange implies, the ‘right’ of certain people to play at the casino can severely impact the right of other people to eat, to afford healthcare, or to send their children to school.

There is a need to evaluate the relative importance of different people’s rights. If politics were healthy this evaluation would be performed on the basis of whose ‘right’ is more fundamental, and clearly the rights of those who wish to eat, study and get well should be considered more fundamental than the rights of those who wish to become multi-millionaires through unproductive speculation.

Unfortunately the political systems of the western democracies are not healthy. They are plagued by lobby groups representing ‘special interests’, including the financial industry which has put all of our futures in peril. They will seek to preserve their right to gamble, jeopardizing the rest of the world’s right to produce, plan, save, etc. We need to use the democratic tools at our disposal to prevent this.

The argument that deregulated financial markets are a force for innovation has been shown to be false. Their only ‘innovation’ is the creation of ever more complex financial products and derivatives, which even those who buy them fail to understand. Actual innovation, in terms of the productive ‘real’ economy, is severely stunted by these inveterate gamblers.