Category Archives: Politics
More Thoughts on the Financial Crisis
Another philosophical issue underlying the current financial crisis is the collective inability of our financial institutions to discern value. Lacking discernment they bought huge quantities of complex assets that turned out to be worthless, and now they require the tax-payer to bail them out.
One of the complex financial instruments whose actual value the banks failed to discern is Collateralized Debt Obligations (CDO’s). Sub-prime mortgages were packaged up as CDO’s and bought by the banks, creating the toxicity which the Paulson plan aims to hoover out of the US system, and which is undermining the British banking system so much that it needs to be partially nationalized at a cost of at least £50bn.
Banks were spectacularly unable to discern the actual value of CDO’s, and the risk which attached to them. With the absence of discernment, the herd mentality dominated the financial markets, first in the form of greed as banks bought and sold the toxic assets in great quantities because everyone else was doing it and earning fat bonuses, and now in the form of fear as inter-bank lending has completely dried up, with no bank trusting another.
For me, an interesting analogy is provided by the Australian aboriginal Achilpa tribe. The tribe possesses a sacred pole which connects heaven and earth:
“During their wanderings the Achilpa always carry it with them and choose the direction they are to take by the direction towards which it bends. This allows them, while being continually on the move, to be always in “their world”, and, at the same time, in communication with the sky . . . For the pole to be broken denotes catastrophe; it is like “the end of the world,” reversion to chaos. Spencer and Gillen [two anthropologists] report than when the pole was broken, the entire clan were in consternation; they wandered about aimlessly for a time, and finally lay on the ground together and waited for death to overtake them.” (from ‘The Sacred and The Profane’, Mircea Eliade, pub. Harcourt Brace (1959))”
The last sentence is an apt description of the current behaviour of financial institutions.
The human race’s unique nature is to be simultaneously in communication with the ground and the sky, earth and heaven. This is the meaning of the Taoist yin-yang symbol, where yin represents earth, yang represents heaven, and the human race’s job is to keep the two in harmony. Another way of saying the same thing is that human beings are composed of spirit and body, and that health and well-being, individually and collectively, come from correctly aligning body to spirit.
To relate such considerations to the financial crisis might invite derision from some quarters, yet it is precisely the correct alignment of spirit and body, heaven and earth, which enables us to discern value in the world. Without a spiritual axis there is no way to discern the beautiful from the ugly, the good from the bad, the valuable from the worthless. Without a spiritual axis all we are left with is the herd mentality: we blindly follow the rest of the herd and when that fails we lie on the ground waiting to die.
If any more proof were needed of financial wheeler-dealers’ inability to discern value or beauty, look at the current success of Damian Hirst, who cannily sold his remaining stock of embalmed sharks while the hedgies still had some money left. Look to the art market for the next set of ‘assets’ to be revealed as worthless, and for the next herd to lie on the ground bleating. Fortunately the tax payer won’t be required to bail them out.
Thoughts on the Financial Crisis
There are bigger ‘philosophical’ issues at stake than the systemic issues affecting the financial system. One important issue that receives little discussion within the mainstream media is ‘productivity’, and how little the global financial system, as currently organized, is concerned with maximizing human productivity and creativity. This is not a trival issue, as in fact the entire purpose of economics should be to deploy resources in the most effective way to enable and facilitate human productivity and creativity.
In her books ‘Mad Money’ and ‘Casino Capitalism’ Susan Strange (1925-1998), former Professor of Economics at Warwick University, describes the degeneration of the global financial system. As late as the 1970’s, 80% of transactions in the financial markets were concerned with actual investment, and only 20% with speculation. However, by the 1990’s the ratio had flipped, with 80% of transactions being merely speculative, and only 20% concerned with actual investment.
As an example of a merely speculative transaction, consider a hedge fund such as Long Term Capital Management (LTCM) which failed in 1998, precipitating a financial crisis. Its ‘investments’ consisted of a myriad of transactions designed to exploit minor differences in asset prices around the world, a practice known as ‘arbitrage‘. If a particular bond or security was selling a penny cheaper in Tokyo than New York then LTCM would try to exploit this difference. Although such transactions may be profitable, they are in every other respect completely useless. They are not genuine ‘investment’ in any sense. They do nothing to direct the world’s resources towards ‘production’.
The global financial markets are awash with such types of meaningless transactions. Money is racing around the world, crossing borders, fleeing across fibre-optic cables at the speed of light, solely in order to generate profits. Currency speculation is an obvious example. Neo-conservatism has deregulated international capital flows, while on the other hand the movement of people between countries is restricted (very tightly in the case of people from poor countries who want to move to rich ones. No such barriers for their money or resources). Minor tweaks to this speculative system, such as the Tobin Tax which would impose a tiny tax on currency trades, have been resisted.
The measures which we are seeing goverments adopt in the face of the current financial crisis, such as the Paulson plan in the US or the nationalization of Northern Rock and Bradford & Bingley in the UK, do nothing to address the real issue that the global financial system is fundamentally wrong and immoral, failing to direct resources where they are needed, in fact the opposite. These measures are designed merely to get the existing financial system back on its feet so that it can continue with ‘business as usual’.
What is needed of course is a sane economic system which puts people before profits. Although this may sound radical it is in fact very simple and sensible, as in fact nobody at all — not even one person — is benefitting from the system as it currently stands. Some may protest that mega-rich hedge fund traders (‘hedgies’) are benefitting, but an academic study of hedgies reveals this not to be the case. Commenting on this study psychologist Oliver James writes that the hedgies
had high levels of depersonalisation (feeling detached from one’s surroundings) and a staggering two-thirds were depressed. There were similarly high levels of anxiety and sleeplessness. The more they earned, the more likely they were to have these problems. Twice daily, they consumed both alcohol and an illegal substance (mostly cocaine). For relaxation, they chose solitary pursuits: jogging, masturbation and fishing were common.
For anyone familiar with sane theories of economics, such as the work of E. F. Schumacher or Erich Fromm, these findings are not surprising. The exercise of our productive and creative talents is at the heart of being human, and merely pushing money around in the pursuit of profit is not productive and does not contribute to human welfare. Just like an assembly line worker or a fast food server, hedgies are likely to suffer from ‘alienation’. Observing workers in the automobile industry in the 1940’s, Peter Drucker wrote:
For the great majority of automobile workers, the only meaning of the job is in the pay check, not in anything connected with the work or the product. Work appears as something unnatural, a disagreeable, meaningless and stultifying condition of getting the pay check, devoid of dignity as well as of importance. No wonder that this puts a premium on slovenly work, on slowdowns, and on other tricks to get the same pay with less work. No wonder that this results in an unhappy and discontented worker — because a pay check is not enough to base one’s self-respect on. (‘Concept of the Corporation’, The John Day Company, New York, 1946, p179, quoted ‘The Sane Society’ by Erich Fromm)
The syndrome of alienation that Drucker describes is common whether we are at the top, middle or bottom of the current economic pile. On the other hand, if the nature of work is properly appreciated and applied
it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of. It directs his free will along the proper course and disciplines the animal in him into progressive channels. It furnishes an excellent background for man to display his scale of values and develop his personality. (by J. Kumarappa, quoted ‘Buddhist Economics‘ by E. F. Schumacher)
In order to put economics back on track, to make money serve people rather than the other way around, and to help make productive work available for all, it is essential that there should be political will. To a large extent we have been duped into believing that economics is a science which follows natural laws like physics or chemistry, whereas really economics is tightly constrained by the role given to it by politics. The fact that sick economics has taken over is testament to an absence of political will and effort on all of our parts. Governments and citizens now have an opportunity to put that right.
Characteristics of Politics
Henry Kissinger said that ninety percent of politicians give the other ten percent a bad name. Of course Kissinger is one of the genuinely bad ones, implicated in violence against humanity such as the carpet-bombing of Cambodia, the invasion of East Timor by Suharto’s Indonesia, and the overthow of the democratically-elected Allende government in Chile by the brutal dictatorship of Pinochet.
Nevertheless, it is worth distinguishing between good and bad politics. Bad politics is factionalism, manipulation, Machiavellianism. It is power-based, using power to get our way, exercising power to overcome the legitimate interests of others without due process or debate. It is the politics we are used to — the politics that has given politics a bad reputation.
Good politics is more fundamental to human nature. It is about appreciating people’s talents and welding them into a whole. It is about collectively discerning the good, finding the right direction for our societies, and discovering ways to harmoniously deploy our combined attributes and resources to reach our goals. Yes, it involves prioritization and economics, because there are hard decisions to make, but it is based on respect for the weak, and the desire for wholeness.
In this article I will explore some of the characteristics of good politics under the following headings:
1. Discerning the Good
2. “The Master Art”
3. Diversity
4. Pluralism
5. Dialectic
6. Awareness
7. Pragmatism
1. Discerning the Good
Aristotle famously said that “man is a political animal”, and he distinguished mankind from other creatures such as bees who are merely social. What makes mankind political is our ability to discern the good, and to collectively strive for it. Bees are not political because although they are social they cannot reflect on their purpose nor adjust their behaviour. In the Nicomachean Ethics Aristotle writes:
“If, then, there is some end of the things we do, which we desire for its own sake (everything else being desired for the sake of this), and if we do not choose everything for the sake of something else (for at that rate the process would go on to infinity, so that our desire would be empty and vain), clearly this must be the Good and the chief Good. Will not the knowledge of it, then, have a great influence on life? Shall we not, like archers who have a mark to aim at, be more likely to hit upon what is right? If so, we must try, in outline at least, to determine what it is, and of which of the sciences or capacities it is the object. It would seem to belong to the most authoritative art and that which is most truly the master art. And politics appears to be of this nature.”
2. “The Master Art”
Politics is “the master art” because it takes all other skills and arts within a society and welds them into a coherent whole, tending towards the chief Good:
“It is [politics] that ordains which of the sciences should be studied in a state, and which each class of citizens should learn and up to what point they should learn them; and we see even the most highly esteemed of capacities to fall under this, e.g. strategy, economics, rhetoric; now, since politics uses the rest of the sciences, and since, again, it legislates as to what we are to do and what we are to abstain from, the end of this science must include those of the others, so that this end must be the Good for man.”
Each art or skill has its own particular end or ‘good’: “In medicine this is health, in strategy victory, in architecture a house, in any other sphere something else, and in every action and pursuit the end.” All these goods serve the chief Good which is happiness, just as all the arts and sciences serve the master art which is politics. Happiness is the final Good, which is pursued for its own sake and not for the sake of anything else.
3. Diversity
What is the smallest political unit? The modern state is political, the city or town is political, even the family can be thought of as political, because they are all composite social organizations made up of multiple individual human members. What about individuals ourselves? Are we political units? Is there some sort of ‘political’ process occurring within each of us individually?
In many ways the process of individual psychological development is similar to politics. We try to use our faculties such as reason and intuition to discern the good for ourselves — to find purpose and meaning in our lives — and then we try to move our lives in that direction. Often we undergo internal struggle, as visions of the good life compete with one another, or recalcitrant attitudes attached to inferior ways of living resist and protest, binding us to negative behaviors.
Is it too much of a leap to say that the process of individual self-development is truly ‘political’ rather than just a similitude of politics? Perhaps the individual does not fulfill the basic precondition for a political entity, of being a composite social organisation. Surely in order for an entity to be political it must be composed of discrete, diverse units, each with some sort of autonomy. Is it correct to say that our thoughts, emotions, dreams, unconscious tendencies and so forth have enough autonomy, diversity and discretion to make each individual a political unit?
To what extent are even the individuals within a society autonomous? To some extent individuality itself is an illusion. If we try to draw hard and fast lines between ourselves we will fail. We are all swimming in the same cultural soup and our psychological lives are the texture of that soup. Looking from above the bowl it looks like a single meal, even though from inside the bowl we are each identifying ourselves as discrete ‘chunks’!
If a political entity does not need to fulfill the strong criteria of being composed of discrete, diverse, fully autonomous units, it does at least need to fulfill the weaker criterion of being heterogenous — composed of distinguishable parts. A completely bland and homogenous entity cannot be political. Under this weaker criterion the individual could be political.
Diversity, at least in the sense of heterogeneity (i.e. distinguishable difference within an entity) is a necessary precondition for politics, along with dialectic: the possibility for resolving tension arising from difference by using individual or collective discernment of the good.
4. Pluralism
A concept which further illuminates diversity is pluralism. Pluralism is diversity-plus! Diversity is difference, and pluralism is recognizing strength in difference. Pluralism does not merely tolerate diversity, it rejoices in it.
Pluralism should not be confused with liberalism (Parekh, 2006). Liberalism espouses a particular set of values such as the importance of individual freedom and autonomy. Pluralism on the other hand espouses no values other than the appreciation of good qualities in diversity. Liberalism can be intolerant of those who do not espouse liberal values, such as members of traditional religions and pre-Enlightenment cultures. Pluralism on the other hand looks for the strengths in both liberal and traditional cultures. Therefore either liberals or conservatives can be pluralistic.
The point about pluralism is that it requires flexibility. It requires the ability to step outside our own skins and inhabit others’ space. Seeing the world through others’ eyes we come to appreciate their good qualities. This enables the resolution of tensions or conflicts between groups, the dialectic that makes politics work.
5. Dialectic
Dialectic is the resolution of difference. It takes two positions which are in tension (thesis and antithesis) and finds a third position (synthesis) which resolves the tension.
Politics is the governing element of society because it is capable of resolving tensions between different groups and moving the whole society in a particular direction. When politics is working well a society enjoys a high degree of unity. When politics is not working then the differences within a society widen into deep and painful rifts.
The unity enjoyed by a society in which politics is working should not be mistaken for uniformity. Unity is possible whether a society is culturally uniform or heterogenous (i.e. multicultural). The most dynamic harmonious societies are pluralistic.
6. Awareness
Good politics involves awareness of the larger, ‘macro’ dimension of our activities. It is lifting up our heads from the particular tasks we are engaged in to see the bigger picture. It means investing our activities with a broader awareness, thereby improving their quality. Political awareness is an uplifting experience and also poignant, because we know that many of our activities are links in a chain of suffering. For example, if we understand where our food comes from we may become aware of the poverty of many of the farmers who produce it, the pollution caused by transporting it, the difficulties of retailing it, and the compromises made in cooking it. This awareness is political and it may change our behaviour with regard to what food we buy, from where, and how we treat it. Organic food pioneer Alice Waters describes her restaurant as “a political place where people are not just engaged in the creative process of making food but they are aware of the consequences out there in the world.”
Political awareness is a form of spirituality because it invests our activities with a sense of connectedness to a bigger whole. Spirituality inbues activity with a special quality which can truly be called creativity or productivity. Political awareness means that we are deeply immersed in our activities and at the same time we transcend them. The opposite of the feeling of connectness that comes from political awareness is alienation. Activity performed in a state of alienation is devoid of any spiritual quality. It is exhausted and exhausting. It is truly unproductive.
7. Pragmatism
An important truth about the pragmatic nature of politics is captured in the saying “politics is the art of the possible”. Politics is ultimately practical: it is about implementing solutions. People can dream of many things, but if they want their dreams to become real they must get involved in the practical sphere of politics. Politics is grounded in the world.
Being idealistic on its own is not enough, but this does not mean that people should not be idealistic. Simply being pragmatic may result in policy being implemented, but it will not result in society moving forward. The good politician needs a balance between idealism and pragmatism, between heaven and earth.
Politics and mind are the same nature
Acceptance of the way things are
Although there can be strength in wanting things to be different there can also be weakness. The strength may be compassion, because nobody should remain unmoved by other people’s suffering – we should all wish that conditions causing suffering be removed. The weakness can be because, from our own point of view, there may be 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? Maybe 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.
Natural Mind
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.
Natural Politics
Take the the analogy of a political system such as a country. Sometimes the country experiences angry demonstrations in its streets. This does not mean that the political system of the country is not working. On the contrary, it means that it *is* working. If the leaders of the 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, the natural political system is working.
Mind and politics are the same nature
What is the natural political system? It is part of the nature of peoples’ minds, collectively and individually. It governs how much suffering people can bear and how creative they can be 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 longer so he used all his creative powers to become the 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 as he may have never learnt any other way of responding. His mind is working; can we say in this situation that ‘his natural political system’ is working?
Cybernetics / Systems Theory
The natural political system functions to produce responses to suffering. Because it is a system, the laws governing systems (cybernetics) apply. In a given system at a given time a specific input will produce a specific output. The exact output will depend upon the way the system is working at that time. If you put 10 cents 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 obeying cybernetic law. Normally we would say that the machine that destroys the plastic balls is not working. This is because, quite reasonably, we are applying conventional norms to how we think things should work. 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 somewhere else.
Natural Political Flatness
We normally have the idea that political power is a man-made construction, which tends to configure itself like a pyramid with those at the top having most power and those at the bottom least. However, it is possible to consider political power to be a natural phenomenon. According to this view everyone is naturally imbued with an equal amount of political power, because political power is part of the mind. Far from being a pyramid, this power structure is completely flat because everyone is fundamentally equal. From this point of view the man-made, pyramidal political system is a secondary phenomenon superimposing itself upon the natural flatness.
The man-made political system develops when people create it and invest it with their own natural political power. It is, in some sense, an illusion because no matter how much power appears to reside in it, it is nothing other than people’s natural political power in a contrived form. The awe we feel when we meet powerful people within the man-made system is in proportion to the credence we invest in the illusion. We should feel no more awe meeting one person than another, because all of us are naturally powerful and important.
compiled in September 2008 from articles on a previous ‘Politics of Soul’ website.
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