The Financial Industry is Evil

This is a continuation of my series about how the economy works. I do not claim any originality here: quite the opposite, I only urge you to see the obvious. And it is perfectly clear to everyone that the so-called financial industry is evil. Every poll shows this – although, of course they don’t use the word evil.

Americans are demanding that it be brought under control – but that is unlikely. The reason for this is simple: because it controls the government, not the people. To my simple, moralistic mind, this is evil, because it is destroying the economy.

How can this happen? Consider my first posting in this series The Economy is a Network. I argued that networks can be analyzed, and we can use our networking skills to control the economy. But the Financial Industry is far ahead of us; they have already done this, and figured out ways to game the economy at everybody else’s expense. They hire the smartest brains money can buy and pay them obscene bonuses to do this.

To my mind, the situation is similar that in the late Middle Ages, when the Church became totally corrupt. Northern Europe and Southern Europe were divided on how to solve this.

The North went with the Reformation. For it, the situation was intolerable, and they did something about it. The end result was the Modern World.

The South decided it would do nothing about it, and it became a developmental and economic backwater.

The developed world now seems to doing this same: doing nothing about the corruption that is threatening it. The result will be the same: economic stagnation.

See also:

The Economy is Unstable


The World is Reasonable

The modern world had three main beliefs: in the importance of reason, in the worth of the individual, and that a better world was possible. All of these were interrelated, but we no longer believe in any of them.

Let’s start with the belief in reason. We now consider their belief in reason to be a highly overrated. It seems clear to us that reason is inadequate. The emotions, especially when expertly manipulated by the media (the product of high-technology), are much more powerful – and for us, power is everything.

It makes no sense to speak of the worth of the individual when have largely ceased to exist – overwhelmed by our advanced technologies. Torture is now considered acceptable, and any objections that the individual rights are being violated are pushed aside. The security of the whole is much more important. People have been merged into higher concerns – new religion whose main concern is business, whose main concern is power.

As for the last: a belief that a better world is possible. This is one of the theme songs of Obama, who can carry on like a black preacher – while, below the surface, continuing to act as the agent of power. And nobody notices.

Note the common element here: the return of the rule of power, which is typical of traditional (non-modern) cultures. We now live in a post-modern world.

I want to say more about the belief in reason. I am listening to an excellent course Birth of the Modern Mind: The Intellectual History of the 17th and 18th Centuries. Professor Alan Charles Kors is passionate about his subject, but I have to listen to some of his lessons twice to get the message – mainly about the importance of reason for these people: the intellectuals, such a Newton and Locke, that formed the modern world.

Educated Europeans believed that they had a new understanding—of thought and the human mind, of method, of nature, and of the uses of knowledge—with which they could come to know the world correctly for the first time in human history and with which they could rewrite the possibilities of human life.

We are no longer interested in intellectuals, disparage them – and consider ourselves superior to them. To put it another way: we are proud of our ignorance. We are truly post-modern in our minds and in our thinking.

The Economy is Unstable

This is the second of my series on how the economy works. We have not thought about what the economy really is – only considered it a mysterious force that could not be comprehended by ordinary mortals. I am sure part of it is mysterious, but we should try to reduce our ignorance about it. What I am doing in this series is just stating the obvious.

One of the most obvious facts about the economy is that it is unstable. It has always been subject to panics, booms and busts. The mechanism behind this is simple, but should be made explicit: it is caused by feedback loops that get out of control.

“Fine,” you may say, “Thanks for telling us the obvious. But what is not obvious is what to do about these defective feedback loops.”

The first step is conceptual: we need to decide whether we want to control the economy, or let it control us. If we do decide to get our hands on the throttle, we can work out ways to do that – a process of trial and error.

Some instability is desirable and normal. But too much is too much. We need to find out what that is – again, by trial and error. This will mean accurate up-to-date economic information – much, much better than we have now. Here again, the technology is available: computers talking directly to computers – instead of endless paperwork and bureaucrats.

If we decide to remain helpless, which I suspect will be the case, we can only blame ourselves.

This is part of a larger question: do we want a society that benefits most of the people, or one that only benefits a few? The present trend is obvious: we have decided to favor the few – and to return to a more traditional (or pre-modern) society.

The Economy is a Network

I started to explain why the economy was such a mess, thinking perhaps others might be interested in the subject too. But after thinking about it, I decided to break it into chunks that would be easy to digest. This is the first installment.

Just what is this thing we call the economy? The answer will not surprise you, since we now live in a networked world in general: the economy, like everything else, is a network.

And what is a network? Nodes (usually represented by circles) and links (usually represented by lines) on a network diagram. Each node can be connected to other nodes by a link. You get the picture. The whole situation gets complicated in a hurry, with links going all over the place – and that is one reason for our problems: we live in an increasingly complex world, where everything affects everything else.

However, hope is not lost, far from it. Computers and software are all networked, and they have figured out ways of keeping things under control. I have written about this before: when I rhapsodized about the Unified Modeling Language (UML) and things like that. All we have to do is let our new technology save us. But to do that, we have to provide it with the proper inputs. Otherwise: garbage in, garbage out.

This means figuring out what is going on in the economy: how all that money is sloshing around. Which means, whether we like it or not, some kind of Central Clearing House for all major financial transactions. We can’t control the economy unless we know what is going on there.

At this point, the powers that be, will object strenuously to any kind of governmental control – and claim that they, in their infinite wisdom, have everything under control. Ha! They have everything under control, all right, and they are taking us straight to the cleaners.

But that is the subject for another posting down the line: how the financial industry are a bunch of crooks – and how our government is in bed with them. My next posting will be about the dynamics of the economy-as-network: its built-in instabilities.

Have we Given Up on Poetry, or has Poetry Given Up on Us?

The correct answer is: all of the above.

Poetry Magazine: Even Be It Built of Boards Planed by Hand and Joined Without Nails, Yet May a Barn Burn

From the introduction to the April issue, where the poets are asked to comment, in detail, about their poems:

Here at Poetry we generally agree with T.S. Eliot’s notion that “poetry can communicate before it is understood.” In fact, we might go even further and say that to enjoy a poem in this sense—to respond bodily to its formal movement and sounds, the shape it cuts in the mind’s ear—is to understand it in some primary way.

This poem communicated to me all right: I was horrified by it – which is probably what the author intended, although he never says so – he just talks about his religious upbringing, which was similar to mine.

It says something we all know:

There is something horribly wrong with our world.

Luther on the Divine Right of Kings

This is a follow up to my posting The Spirit of the Reformation was Profoundly Medieval, where I mention that Lutheranism did not become the main branch of Protestantism, as is commonly supposed, Calvinism has been the clear winner, and the source of many of our problems.

On page 182 of The Making of the Modern Mind I saw this quote, and I had to copy it:

“The princes of this world are gods,” wrote Luther, “the common people are Satan.” “It is in no wise proper for any Christian to set himself up against his government, whether it acts justly or unjustly.”

Shocking, huh?

He then goes on to show that the doctrine of the divine right of kings was an intermediate step between the Middle Ages and the Modern Age. Interesting stuff.

People no Longer Exist as Individuals

The modern world placed a strong emphasis on the person: it believed in the importance of the autonomous individual. In the post-modern world, quite the opposite is true: individualism is being destroyed. To put it in even blunter terms: the people no longer exist – and this basic fact needs to be recognized. We have to start with the facts, and this is the basic fact of our times.

Insistence on this fact, however is not likely to help one make friends and influence people. People still like to think of themselves as unique beings, and you are likely to be shot by a blunderbuss, or something, for suggesting something different.

So, one might reasonably ask, if people are no longer individuals, what are they? This cannot be answered very well, because the post-modern world has not been around long enough for us to have the language to describe it. But our new existence seems to be a complex powered by two interacting forces: high technology and finance capitalism (sometimes referred to as globalization – not a very descriptive term, but one that conveys the size of the thing).

The basic fact is that power has moved from the people outwards to this external power structure – which we can only dimly recognize. It seems to be a return to a traditional society, where power resides at the top and is all-powerful. And where a new religion has taken over – a religion I am sure exists, anyone in the high-tech workplace has felt it, but no one understands it. Everyone is determined, instead, not to understand it – as is the case with all religions.

People now exist only as part of this overall thing – whatever we choose to call it.

This might not be too bad, some very respectable people, such as Plato and Calvin, have advocated some form of totalitarian control. Like all revolutionary movements, however, it wants to eliminate everything and start over with a new slate. Ironically, true to the American custom of mis-naming everything, they call themselves conservatives.

But the basic impulse goes back much further. They cannot resist being God, and re-creating the world in their own image.