Start Thinking

“it’s easy to be just formally anti-capitalist, but what does it really mean?”

http://bigthink.com/ideas/45126

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This is why, as I always repeat, with all my sympathy for Occupy Wall Street movement, it’s result was . . . I call it a Bartleby lesson.  Bartleby, of course, Herman Melville’s Bartleby, you know, who always answered his favorite “I would prefer not to” . . . The message of Occupy Wall Street is, I would prefer not to play the existing game.  There is something fundamentally wrong with the system and the existing forms of institutionalized democracy are not strong enough to deal with problems.  Beyond this, they don't have an answer and neither do I.  For me, Occupy Wall Street is just a signal.  It’s like clearing the table.  Time to start thinking.

The other thing, you know, it’s a little bit boring to listen to this mantra of “Capitalism is in its last stage.”  When this mantra started, if you read early critics of capitalism, I’m not kidding, a couple of decades before French Revolution, in late eighteenth century.  No, the miracle of capitalism is that it’s rotting in decay, but the more it’s rotting, the more it thrives.  So, let’s confront that serious problem here. 

Also, let’s not remember--and I’m saying this as some kind of a communist--that the twentieth century alternatives to capitalism and market miserably failed. . . . Like, okay, in Soviet Union they did try to get rid of the predominance of money market economy.  The price they paid was a return to violent direct master and servant, direct domination, like you no longer will even formally flee.  You had to obey orders, a new authoritarian society. . . . And this is a serious problem: how to abolish market without regressing again into relations of servitude and domination.

My advice would be--because I don't have simple answers--two things: (a) precisely to start thinking.  Don't get caught into this pseudo-activist pressure.  Do something. Let’s do it, and so on.  So, no, the time is to think.  I even provoked some of the leftist friends when I told them that if the famous Marxist formula was, “Philosophers have only interpreted the world; the time is to change it” . . . thesis 11 . . . , that maybe today we should say, “In the twentieth century, we maybe tried to change the world too quickly.  The time is to interpret it again, to start thinking.” 

Second thing, I’m not saying people are suffering, enduring horrible things, that we should just sit and think, but we should be very careful what we do.  Here, let me give you a surprising example.  I think that, okay, it’s so fashionable today to be disappointed at President Obama, of course, but sometimes I’m a little bit shocked by this disappointment because what did the people expect, that he will introduce socialism in United States or what?  But for example, the ongoing universal health care debate is an important one.  This is a great thing.  Why?  Because, on the one hand, this debate which taxes the very roots of ordinary American ideology, you know, freedom of choice, states wants to take freedom from us and so on.  I think this freedom of choice that Republicans attacking Obama are using, its pure ideology.  But at the same time, universal health care is not some crazy, radically leftist notion.  It’s something that exists all around and functions basically relatively well--Canada, most of Western European countries. 

So the beauty is to select a topic which touches the fundamentals of our ideology, but at the same time, we cannot be accused of promoting an impossible agenda--like abolish all private property or what.  No, it’s something that can be done and is done relatively successfully and so on.  So that would be my idea, to carefully select issues like this where we do stir up public debate but we cannot be accused of being utopians in the bad sense of the term.

Joseph Stiglitz

Joseph Stiglitz: Man who ran World Bank calls for bankers to face the music

http://www.independent.co.uk/news/business/analysis-and-features/joseph-stiglitz-man-who-ran-world-bank-calls-for-bankers-to-face-the-music-7902920.html

Joseph Stiglitz tells Ben Chu that rogue financiers have proven that regulation must get tougher

By Ben Chu

The Barclays Libor scandal may have shocked the British public, but Joseph Stiglitz saw it coming decades ago. And he's convinced that jailing bankers is the best way to curb market abuses. A towering genius of economics, Stiglitz wrote a series of papers in the 1970s and 1980s explaining how when some individuals have access to privileged knowledge that others don't, free markets yield bad outcomes for wider society. That insight (known as the theory of "asymmetric information") won Stiglitz the Nobel Prize for economics in 2001.

And he has leveraged those credentials relentlessly ever since to batter at the walls of "free market fundamentalism".

It is a crusade that has taken Stiglitz from Massachusetts Institute of Technology, to the Clinton White House, to the World Bank, to the Occupy Wall Street camp and now, to London, to promote his new book The Price of Inequality.

And kind fortune has engineered it so that Stiglitz's UK trip has coincided with a perfect example of the repellent consequences of asymmetric information.

When traders working for Barclays rigged the Libor interest rate and flogged toxic financial derivatives – using their privileged position in the financial system to make profits at the expense of their customers – they were unwittingly proving Stiglitz right.

"It's a textbook illustration," Stiglitz said. "Where there are these asymmetries a lot of these activities are directed at rent seeking [appropriating resources from someone else rather than creating new wealth]. That was one of my original points. It wasn't about productivity, it was taking advantage."

Yet Stiglitz's interest in the abuses of banks extends beyond the academic. He argues that breaking the economic and political power that has been amassed by the financial sector in recent decades, especially in the US and the UK, is essential if we are to build a more just and prosperous society. The first step, he says, is sending some bankers to jail. " That ought to change. That means legislation. Banks and others have engaged in rent seeking, creating inequality, ripping off other people, and none of them have gone to jail."

Next, politicians need to stop spending so much time listening to the financial lobby, which, according to Stiglitz, demonstrates its spectacular economic ignorance whenever it claims that curbs on banks' activities will damage the broader economy.

This talk of economic ignorance brings us to the eurozone crisis and the extreme austerity policies being pursued. Stiglitz is depressed. In 2000 he resigned from the World Bank and launched an excoriating attack on the way it and its sister institution, the International Monetary Fund, handled the Asian financial crisis of the late 1990s. He condemned the IMF for imposing brutal and inappropriate adjustment policies on bailed out nations – medicine which, he argued, merely pushed nations further into crisis. "For me there's some nostalgia here," he says.

Does he see any hope for the eurozone, I ask, or is it now heading, inevitably, for a breakup? "It is a train that can still be stopped" he says. "But the relevant question is the politics in Germany. Have they created in their rhetoric a dynamic that makes it difficult to stop? In particular [German Chancellor] Angela Merkel's rhetoric that the crisis was caused by profligacy. She's framed the issue as profligacy, rather than framing it as 'the European system is fundamentally flawed' ".

The central argument of his latest oeuvre is that the huge inequalities of income and wealth that have developed in the US and elsewhere in the West over recent decades are not only unjust in themselves but are retarding growth.

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Higgs particle

http://www.versobooks.com/blogs/1050-the-stuff-of-nothing-zizek-found-higgs-particle-first

The stuff of nothing – Žižek found Higgs particle first!

By Ricardo Rato Rodrigues / 04 July 2012

Forget CERN and its cutting edge technology. Žižek single-handedly gets to the core of atoms and other microscopic particles  to find what has been  dubbed “the God particle” - needing only 943 pages!

In Less Than Nothing, Žižek reflects: 

 Are not poetic nominations of a Thing something like this? To an outside observer (reader), it appears that the Nation-Thing itself has emitted this nomination. One is tempted to go even further with this parallel and include in it the “Higgs boson,” a hypothetical elementary particle which is the quantum of the Higgs field, a paradoxical field which acquires a non-zero value in empty space. This is why the Higgs boson is also called the “God particle”: it is a “something” of which the “nothing” itself is made, literally the “stuff of nothing.

Physicists say this discovery will revolutionise the world, that this will change physics (and other sciences) forever... but Žižek goes beyond:

The Higgs field undermines the standard New Age appropriations of the quantum Void as the Nothing-All, a pure potentiality at the abyssal origin of all things, the Plotinian formless Over-One in which all determinate Ones disappear.

Recognising the importance of this discovery, he uses its power to undermine current schools of thought and goes on to analyse how the concept is discussed by and used in many literary texts, religions, etc.

What is Libor and why should we care?

http://www.youtube.com/watch?feature=player_embedded&v=CI2M1olG2Oo

http://www.euronews.com/

Libor - the London Interbank Offered Rate - is the average cost of borrowing at which Britain's banks lend each other money.

It is calculated daily, based on information supplied by those banks and is used worldwide as a benchmark for prices on trillions of euros worth of derivatives and other financial products.

After the financial crisis, the Libor rate also was seen as a guide to the health of bank's balance sheets.

Barclays manipulation alone could not have had a big effect on the final rate, but the suggestion is a lot of the big banks were doing the same thing.

And the Libor rate has an effect on the real economy as Tony Greenham, Head of Finance and Business at the New Economics Foundation, explained: "That average is what drives the interest rates paid by hundreds of millions of people on their own mortgages, small business on their loans, student loans, insurance products. It affects a hugely diverse range of financial transactions globally, not just in the UK."

Britain's central bank, the Bank of England, is trying to avoid being dragged into this scandal. It has denied it knew about Libor manipulation and was allowing it to happen.

"It is nonsense to suggest that the Bank of England was aware of any impropriety in the setting of Libor," a BoE spokesman said. "If we had been aware of attempts to manipulate Libor we would have treated them very seriously."

Barclays said it submitted artificially low estimates of its borrowing costs because it thought rivals were doing the same, and higher submissions would make it appear to be in trouble.

Barclays is the first bank to settle in an investigation which is looking at more than a dozen other banks, including Citigroup, HSBC, UBS and RBS.

HSBC said that as a bank that contributes to setting the Libor interest rate it was providing information to authorities, but the Financial Services Authority said it was not investigating HSBC.

A New Marxism

"Why Marxism is on the rise again"

by Stuart Jeffries

Capitalism is in crisis across the globe – but what on earth is the alternative? Well, what about the musings of a certain 19th-century German philosopher? Yes, Karl Marx is going mainstream – and goodness knows where it will end

http://www.guardian.co.uk/world/2012/jul/04/the-return-of-marxism?newsfeed=true

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There's another reason why Marxism has something to teach us as we struggle through economic depression, other than its analysis of class struggle. It is in its analysis of economic crisis. In his formidable new tome Less Than Nothing: Hegel and the Shadow of Dialectical Materialism, Slavoj Žižek tries to apply Marxist thought on economic crises to what we're enduring right now. Žižek considers the fundamental class antagonism to be between "use value" and "exchange value".

What's the difference between the two? Each commodity has a use value, he explains, measured by its usefulness in satisfying needs and wants. The exchange value of a commodity, by contrast, is traditionally measured by the amount of labour that goes into making it. Under current capitalism, Žižek argues, exchange value becomes autonomous. "It is transformed into a spectre of self-propelling capital which uses the productive capacities and needs of actual people only as its temporary disposable embodiment. Marx derived his notion of economic crisis from this very gap: a crisis occurs when reality catches up with the illusory self-generating mirage of money begetting more money – this speculative madness cannot go on indefinitely, it has to explode in even more serious crises. The ultimate root of the crisis for Marx is the gap between use and exchange value: the logic of exchange-value follows its own path, its own made dance, irrespective of the real needs of real people."

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