Archives for category: Money as goal

Well… Money doesn’t get spoiled as easily as bananas do…

On further consideration, money can be understood as a tool with many uses.
Hoarding, for instance. Bananas, among other things …

And, as with all other tools, the responsibility for its use falls squarely on the user, not on on the tool itself.
Tinkering with the tool won’t change that, ever.

My point being that monkeys would also hoard bananas if bananas were hoard-able.
There’s nothing wrong with that. For as long as the hoard is meant to feed the hoarder till the next crop, of course.

Hoarding is bad only when done for its own sake.

And this is something for philosophers to study, not for scientists.
The teachings of the Chicago School of Economics had been very scientific yet following them was what brought us where we are now. Into a very uncomfortable cul-de-sac…

Blindly following them… mislead precisely because of their scientific nature!

Smart enough to brag about it when attempting to become the next President of the United States…. at least according to Donald Trump… and to those who had voted for him – numerous enough for him to achieve his goal.

Smart enough or smart, period?

Let me put it differently.
You have no car. Yet you need to go to work and to shop for groceries. Hence you use public transport. Do you pay for it?
What would happen if a sizeable portion of those who use it would find a way to stop paying while still using the service? Those who continue to pay would have to pay more to keep the service going? Or the community at large would have to subsidize it?

You don’t care for my example because you do have a car… Then you need roads to drive on… hence you have to pay local taxes. And federal ones for the interstate highways…
You’d like them all to be privatized? Then you’ll pay gladly?
And how much will that be?
At this point I must remind you of Ma Bell. The telephone company which had to be dismantled, by the government, to make room for the present ‘data revolution’. If prices to move information from one place to another would have remained in the same range as in Ma Bell’s time you wouldn’t have had access to internet today. Unless you were a millionaire…

Taxes, local and federal, are ‘access fees’. If you want to operate – as a corporation or as an individual, out of a civilized place – safe and all, then you incorporate your business/set up residence in a civilized country. And pay the taxes collected by the administrators – read governments, to run those places.

Taxes are too high and or ill spent?!?
That’s a completely different subject!

Most civilized places are run as democracies.
You don’t like the way your money is spent? Or how much of it is collected to run the place?
Then what’s keeping you from voicing your concern? From holding accountable those who misspend your taxes? From doing whatever you see fit? After you pay your taxes, of course…

You feel ‘crushed’ by the majority? Whom you despise, by the way?
Then you don’t live in an actually democracy.
That’s either a ‘mob rule’ – a.k.a. populist regime, or the population is so divided that no real conversation is taking place between the various social segments. And democracy without honest conversation is nothing more than make believe.
I had chosen very carefully the word ‘population’. When something like this occurs, ‘nation’ is no longer appropriate.

Still unwilling to pay your dues?
Still convinced it’s a good thing to turn your back to what’s going on in your front yard?

Still convinced that remaining ‘sane’ is more important than finding out what’s really going on?

Further reading:

“Why arrogance is dangerously contagious”.

“Every morning, the CEO of a large bank in Manhattan walks to the corner where a shoe shine is always located.

He sits on the couch, examines the Wall Street Journal, and the shoe shine gives his shoes a shiny, excellent look.

One morning the shoeshine asks the Executive Director:

– What do you think about the situation in the stock market?

The Director asks in turn arrogantly:

– Why are you so interested in that – that topic?

“I have a million dollars in your bank,” the shoeshine says, “and I’m considering investing some of the money in the capital market.”

– What your name? –Asks the Director.

– John Smith H.

The Director arrives at the bank and asks the Manager of the Customer Department:

– Do we have a client named John Smith H.?

– Certainly –answers the Customer Service Manager–, he is a highly esteemed customer. He has a million dollars in his account.

The Director comes out, approaches the shoeshine, and says:

– Mr. Smith, I ask you this coming Monday to be the guest of honor at our board meeting and tell us the story of your life. I am sure we will have something to learn from you.

At the board meeting, the Executive Director introduces him to the board members:

– We all know Mr. Smith, who makes our shoes shine in the corner; But Mr. Smith is also our esteemed customer with a million dollars in his account. I invited him to tell us the story of his life. I am sure we can learn from him.

Mr. Smith began his story:

– I came to this country fifty years ago as a young immigrant from Europe with an unpronounceable name. I got off the ship without a penny. The first thing I did was change my name to Smith. I was hungry and exhausted. I started wandering around looking for a job but to no avail. Suddenly I found a coin on the sidewalk. I bought an apple. I had two options: eat the apple and quench my hunger or start a business. I sold the apple for two dollars and bought two apples with the money. I also sold them and continued in business. When I started accumulating dollars, I was able to buy a set of used brushes and shoe polish and started polishing shoes. I didn’t spend a penny on entertainment or clothing, I just bought bread and some cheese to survive. I saved penny by penny and after a while, I bought a new set of shoe brushes and ointments in different shades and expanded my clientele. I lived like a monk and saved penny by penny. After a while I was able to buy an armchair so that my clients could sit comfortably while cleaning their shoes, and that brought me more clients. I did not spend a penny on the joys of life. I kept saving every penny. A few years ago, when the previous shoe shine on the corner decided to retire, I had already saved enough money to buy his shoeshine location at this great place.

Finally, three months ago, my sister, who was a whore in Chicago, passed away and left me a million dollars.”

Somebody sent me this as a Whatsapp message.
I looked it up and shared it with you for a very simple reason.

We all know Mr. Smith, who makes our shoes shine in the corner; But Mr. Smith is also our esteemed customer with a million dollars in his account. I invited him to tell us the story of his life. I am sure we can learn from him.

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” Milton Friedman, 1970

Between 1776 and 1970 the world had leaped forward. Technologically, economically and socially. Not only that we’ve managed to learn so much about the world and to produce immense wealth but we’ve somehow managed to ‘spread around’ the results. The proportion of people who had improved their fortunes had grown constantly during the entire period.

The majority of Americans share in economic growth through the wages they receive for their labor, rather than through investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.” Jay Shambaugh, Ryan Nunn, HBR

Isaac Newton hadn’t invented gravitation. He only ‘noticed’ it. Put it in words.
Adam Smith hadn’t invented the free market. He had noticed how it used to work and opened our eyes about it.
For what ever reasons, enough of us had chosen to close those eyes back. And have reached the conclusion that ‘greed is good’.

Milton Friedman was both horribly wrong and exactly right.

He was right in the sense that he had gouged correctly what the ‘general public’ wanted/was ready to accept. “in accordance with their desires, which generally will be to make as much money as possible

He was horribly wrong in the sense that he had perpetuated Marx’s error. Karl’s, not Groucho’s.

Money isn’t everything. Life beats it to the post.
Profit is, indeed, essential. Only it is nothing but an indicator. About how efficient a corporation is.
Meanwhile the role of a corporation is to accomplish – as Friedman himself had dully noted, the will of the shareholders.

The problem arises from the fact that ‘near mindedness’ blinds.
If/when both shareholders and management have nothing but ‘money’ in their scopes the market actually looses its freedom.

Economic agents no longer converge towards the market to solve each-others problems – like Smith had noticed, but to ‘make money’.

Not the same thing. Not by a long shot.

Charles Darwin gave us “On the origin of Species”.

We’ve summed it up ‘the survival of the fittest’.
And behaved accordingly. Including some of those who should have known better. “The world of the selfish gene revolves around savage competition, ruthless exploitation, and deceit, and yet, Dawkins argues, acts of apparent altruism do exist in nature.

I reckon all of you know – or at least have heard of, Richard Dawkins.
Compare his celebrity with the relative absence from the public scene ‘enjoyed’ by Ernst Mayr.

And what’s so special about this Mayr guy?
‘Evolution is not as much about the ‘survival of the fittest’ as it is about the ‘demise of the unfit’ ‘

Get it?
In fact, there is no such thing as ‘the fittest’ when we speak about evolution. ‘Fit’ is relative while evolution is a process. Fit is about ‘this moment and this place’ while evolution is about the ability to adapt. To change when needed.

And what has any of these to do with “exploring the consequences of our limited conscience”?

Well, it was us who had interpreted Darwin’s ‘Origin of the Species’ as ‘the survival of the fittest’ individual. It was us who had lionized Dawkins’ ‘Selfish Gene’ and left Mayr’s ‘True’ Evolution in relative darkness…

To sum it up, it is us who are are obsessed with something we call ‘success’.

It is us who keep forgetting that the mighty dinosaurs – maybe the most ‘successful’ animals ever, had been the first to disappear when ‘shit’ had struck. And that is was a meek mammal which had inherited the Earth.

It is our success craving conscience which is highly biased. And I’m not at all sure this is a good thing. In the long run, I mean.

What do we have an economy for?

To make ends meet? To make it easier for our needs to be met?

What do we have a banking/financial system for? To mobilize capital for the economy? To make it possible for our needs to be met easier? More efficiently?

Or just for profit to be made?

“It really is possible to do two good things at once: address the abuse of the working poor by payday-loan and check-cashing outfits while expanding the range of services provided by the USPS. Media outlets have called Warren’s proposal “radical.” That’s ludicrous. She’s simply using her position and prominence to highlight the findings of a new study by the Postal Service’s Office of the Inspector General, which notes that roughly 68 million Americans are underserved by the private banking system. “With post offices and postal workers already on the ground,” says Warren, “USPS could partner with banks to make a critical difference for millions of Americans who don’t have basic banking services because there are almost no banks or bank branches in their neighborhoods.”

This is not a new idea. From 1911 to 1967, the Postal Service maintained its own banking system, allowing citizens to open small savings accounts at local post offices—actually a better approach than “partnering” with banks. The system was so successful that after World War II, it had a balance of $3 billion, roughly $30 billion in today’s dollars. Congress did away with postal banking in the 1960s, but post offices in other countries—including Japan, Germany, China and South Korea—provide banking services. Japan Post Bank is consistently ranked as one of the world’s largest financial institutions based on assets.”

Or, to put it the other way around,
‘what profit is?’

The well deserved ‘consequence’ – considered as such by the vast majority of the stakeholders, of a well-done job?
Or a self serving benchmark to be reached at all costs? Which costs are to be ‘shouldered’ by anybody else but the profiteer himself… till reality slaps us, all of us, over our faces…

About half of our manufactured goods come from China. From half-way around the world. A shipping container needs about a month to arrive to Rotterdam from Shanghai. While ordering the merchandise takes some five minutes over the internet.

Shanghai is in China. A country so far away that hourly wages are a fraction of those in Europe. Or in the US. That being the reason for so many of our manufactured goods coming from there.

China is a country so far away that it took more than a month for the rest of the world to find out that a pandemic was brewing in Wuhan.
China is a country so far away that the CDC expert embedded in China’s Disease Control Agency was deemed useless by the current American Administration.

China is a country close enough for the Chinese tourists to had been a staple for the Italian hospitality industry. “5.3 million overnight stays in 2018
China is a country far enough for an “official opening ceremony” to had been “held at the Auditorium Parco della Musica, a multicultural complex, in the Italian capital on Tuesday, at the presence of Italian Minister of Cultural Heritage, Activities and Tourism Dario Franceschini and Chinese Minister of Culture and Tourism Luo Shugang.”

The ceremony was held because “2020 has been designated the China-Italy year of culture and tourism, as the year marks the 50th anniversary of China-Italy diplomatic ties.
“Tuesday” was the 21st of January 2020.

The same day

  • United States confirms its first case in Washington state, a man who traveled to the Wuhan area.
  • China confirms two additional deaths, a sixty-six-year-old man and a forty-eight-year-old woman
  • New cases are announced in China, including in Beijing, Shenzhen, and Shanghai.
  • Chinese state media raises number of confirmed cases to 291 and confirms 15 medical workers in Wuhan have been diagnosed with pneumonia.
  • Hong Kong confirms its first case, a person in their thirties.
  • Taiwan confirms its first case, a woman in her fifties.

The above timeline was ‘borrowed’ – through the Internet, of course, yet another example for how close we are of eachother, from https://www.thinkglobalhealth.org/article/updated-timeline-coronavirus on 3/28/2020, 12:30 GMT
Which Internet pulls us together by pooling information/data while simultaneously rips us apart by feeding us a constant stream of fake news.

We are so close together that you can send/receive almost everything (from) almost everywhere.
We are so close together that everybody who has a smart phone can see their similarly equipped buddies halfway across the world.

We’re so far apart that we still have to make up our collective mind about which comes first. The Economy or the People.
We’re so far apart that we haven’t figured out yet that there’s no such thing as a running economy without enough able bodied and mentally sane people. To produce, transport, distribute and buy the things we need.
We’re so far apart that we haven’t yet figured out that the present number of people cannot survive – let alone maintain a decent living standard, without a running economy.

Let me make something clear.
Crystal clear!

Money, and its ‘derivatives’ – from ‘capital’ to ‘financial market’ and ‘stock exchange’, are the tools we used to get where we are now.
Without them we would be still foraging in the woods.

Only something rather insidious has started to eat the whole scaffolding from inside.
Same process has been happening with weapons. We invented them for hunting. Then used them for self protection. Against large beasts and fellow humans.
Finally, after using them to conquer and defend our liberty, we used them to subjugate others. To impose our will upon some other people.

In other words, we used guns to shoot ourselves in the foot.
Unwittingly.
Both as hapless individuals and as a cultural species.

Money – and its derivatives, have suffered the same degradation.
We used it, at first, to coordinate our efforts.
The Stock Exchange had been an excellent way to coordinate otherwise disparate means. Very few of the corporations who have changed the world into what it is now – for good and for bad, wouldn’t have come to life without the money which fuel them.
Nowadays, too many of those who trade on the Stock Market do it in a ‘barren’ manner.

They do not contribute anything but extract value.
The inside traders being only the visible part of the iceberg.
Which iceberg might tank the whole contemporary ‘arrangement’.

If we keep sleeping during our watch.
And there’s no one else on deck…

Why is it so hard to predict anything?
So hard that some people believe that ‘no prediction will ever be accurate’?

Which is simultaneously true and false!
First of all, it is a prediction.
Hence, it is supposed to be false.
But it’s true!

Then, if all predictions are going to be false, why bother?

Because sometimes it works.
Or, at least, it works good enough to be useful.

Hence this query.

Will economists ever be as good at forecasting as meteorologists?
I must thank Tim Harford for this excellent question.

No. For a very simple reason.

Meteorology has to do with physics. Something which doesn’t change as you learn more about it. Only the researcher’s understanding of what is going on goes deeper and deeper into the matter.

Economy has to do with both hard facts – how much coal/arable land is available at one moment, and psychological unknowns.
What people will do if/when….
The hard facts might change – just as meteorological data does. But in a rather foreseeable manner.
What people will do… is a lot harder to predict. Simply because people change their understanding of facts, based on what they learn.

Just as the meteorologists do.
And while it is relatively easy to predict that meteorology will become more and more accurate – for the foreseeable future, at least, it is a lot harder to predict what the meteorologists will do as a consequence of their increased abilities.

Specially when a lot of money is involved.

We’re in the middle of a crises.
Some people believe the crises has been only triggered by the virus. And that it has been mainly caused by ‘globalization’.

I beg to differ. In part.

The crises was indeed triggered by the virus.
But the fact that we are so fragile isn’t the consequence of globalization.
Only by what we have done in the given circumstances.

It wasn’t globalization itself which had made us fragile.
Globalization only extended the opportunity field we had at our disposal.
It was our way of developing those opportunities which had made us fragile.
We had chosen ‘financial efficiency’ over ‘resilience’.
We had chosen to increase profit instead of making it ‘more and more sure’ that we’ll be able to survive.
In a sense, we have been acting as if we’d lost touch with reality.
With the hard reality….

There is nothing to suggest that we knew what we were doing. Then.
But we won’t have any excuses left once that we will have reached the other side.

<span>%d</span> bloggers like this: