Category: Politics

In her book ‘Casino Capitalism’ (1986) the respected political economist Susan Strange wrote:

“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.”

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.

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.

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.

Acceptance of the way things areAlthough 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.