I have a new piece on comment is free this morning which assesses the motivation behind the recent proposal by the governor of the Chinese central bank for a new global reserve currency.
I also point readers towards Richard Douthwaite's pamphlet, The Ecology of Money, which contains a much better proposal to link such a currency to energy use.
I have another piece at Comment is Free this morning. This one looks at the financial crisis in terms of the huge discrepancy between consumption and production that has become the norm over the last decade of so.
With impeccable timing, The London Review of Books has put John Lanchester's superb essay Cityphilia (originally published in January) back on its home page. If you haven't read it, you should. You're unlikley to find a better analysis of the origins of the current financial crisis, and its implications for wider society.
As someone who has been predicting the economic and financial chaos that we are now witnessing for a number of years, it's rather difficult to know what to say now it's finally upon us.
To be honest, I didn't think it would quite as catastrophic as it has turned out, although my gut feeling was always that as the financial markets became ever more complex and globally interdependent, then the inevitable crash could only get bigger.
It's fascinating to read a million and one commentators give their opinion. Suddenly we are all experts on short-selling. But all this attention to the detail and intricacies of the markets and the various instruments that have been devised solely to allow traders and fund managers to make more money for themselves and their wealthy clients should not distract us from the real problem: that a financial system that makes its central focus the generation of unearned wealth from speculative trading of shares and securities that has nothing to do with the real economy needs replacing with a system which supports the economy in a way that promotes the interests of all citizens and of wider society.
Reform is not enough; we need to replace the system with one that works, and to do that we need a thorough reassessment of the underlying economic theory on which the whole fragile edifice is built.
I have a new piece over at Comment is Free now, which you can read here.
It's a response to Aditya Chakrobortty's challenge to progressives to do better in their response to the current economics crisis.
Another good piece on the democracy debate prompted By David Miliband's speech earlier this week. This time from Adrian Hamilton in The Independent who concludes:
If I were the new Foreign Secretary, I would drop the word democracy altogether. It is in danger of becoming too devalued as a concept. Concentrate instead, in our discussions with China, the Gulf States and Africa, on the things that make up democracy: freedom of speech, an independent judiciary and equal human rights for all. On those we can talk with some (although not complete) authority and may hope to make some difference, step by step.
Of course we cannot speak with any authority on the question of helping to create conditions for economic justice in a globalised world, which is, presumably, why Hamilton fails to mention this other crucial prerequisite for democracy.
It never fails to amaze me how, in the debate about promoting democracy, so few politicians or commentators are prepared to consider the relationship between improving economic justice and the entrenching of democratic institutions in society.
Admittedly the relationship is a complex one. In the case of the developed western nations, a early taste of economic justice gave ordinary people an appetite for more, and democracy was the mechanism through which they chose to pursue a more equitable society.
Today, however, we appear to have all but given up on the principal of economic justice within the mature democracies, and certainly between nations, so we can have little of value to offer those societies where democracy is struggling to get a foothold.
I have to admit I only learned of the phrase outplacement this weekend, when a friend who works in the recruitment business told me how his department was being temporarily re-located, in order to clear several floors of office space in readiness for a huge influx of new outplacement business.
This business comes in the shape of thousands of high-earning city workers who are losing their jobs as a result of deteriorating market conditions. As part of their redundancy packages, their former employers will pay for them to go along to companies like the one my friend works for, to be advised on how to make the best of their unfortunate predicament: how best to save, spend or even invest their redundancy payments, and what alternative career options they might consider.
While a few may decide to throw it all in and retrain for another profession, there are no others professions that pay anywhere near the rewards you get as a city trader. Those that get close require years of study and experience, and are, in any case, fiercely competitive.
Most of these victims of the financial crisis will decide to sit tight until the market swings upwards again, and the banks start re-hiring.
I wonder if we should feel sorry for them? It's a terrible thing to be made redundant. But surely these individuals are the architects of their own downfall? It is they who encouraged the rest of us to believe that the good times could last forever. It is as a result of their irrational behaviour that the pension funds of millions of ordinary people are now in jeopardy. It is because of the way they exploit and abuse the market system that the entire global economy is now teetering on the brink of recession.
Some will argue it's a consequence a badly designed system; that these people are as innocent as the rest of us. But it only takes a basic grasp of economic history to know that a downturn is inevitable, and its scale will generally mirror the preceding upswing.
No, these people chose to ignore the risks because the personal rewards were too great. It is individual greed that has brought us to this position. The kind of greed that the advocates of changes to economic rules over the last three decades have repeatedly told us is good for economic advancement.
Well it may be good for the economic advancement of a small minority, but it means uncertainty for most of us, and continuing misery for those at the bottom of society.
People in the the outplacement business are rubbing their hands with glee right now. But those they will be counseling in the coming weeks will not be worrying too much. Through their generous severance packages, the financial markets look after the risk takers. It's the rest of us who have to bear the consequences.
I have an article in the current edition of Land and Liberty Magazine, the journal of the Henry George Foundation in which you might be interested. Their online presence is not as up to date as it might be, but you can download a pdf of the latest issue. If you do, and you like what you find, please make a donation here.
Most easily of all, you can read my article in full, here.
I was rather frustrated to discover that Art Garfunkel has not read my book. Quite why the frizzy-haired one has gone to the lengths of publishing a list of every book he's read since 1968 I'm not sure, but given that he's taken this rather peculiar decision, you'd think he might have caught up with some of the more essential reading of the last decade, before releasing his list to the world.
After all, I've listened to many of his songs over the years (although I haven't kept a list). Indeed I believe we may still have an old cassette of his and Paul Simon's greatest hits in the car. On second thoughts, I think the kids trampled it to smithereens while we were driving down to Italy last year.
Must say though, with Erich Fromm's The Art of Loving at number 2 on his faves list, and Ouspensky's In Search of The Miraculous at number 3, I wonder if Art and I don't have more than a love of Watership Down in common after all:
Anyway, if he'd been paying attention, he would have noticed that the nice people at Amazon are still offering my book at a discount. And don't believe what they say about only having two copies left in stock: it's a marketing ploy. I happen to know they have hundreds.
There will doubtless be much wringing of hands at the news that a Societe General employee has committed the largest fraud in history, effectively costing his (now former) employers a cool £3.7 billion.
Readers of this blog will know that I'm no fan of the globalised financial system, which I think has mutated into a morally fraudulent mechanism for further lining the pockets of the already wealthy. These days it has very little do with with the legitimate business of channeling investment capital into genuine economic enterprise; the sort that employs people, or makes things that ordinary people need and want.
That said, I suspect this fraud has less to do with the system than the culture of greed and aspiration that marks the times we live in.
Jerome Kerviel might, had things gone differently, have made a pretty packet out of his devious scheme. Given that he'd acquired the nouse to circumvent SocGen's control systems, had he not begun to play the markets only a year or so before things started to go pear shaped, he might conceivably have got away with it.
Apart from greed, and of a course psychopathic dishonesty, he must also have suffered a severe case of that peculiar gamblers' belief that, if you keep rolling the dice for long enough, things will come good. Of course, that's an attitude commonplace in today's financial system.
Barbara Stocking, Chief Exec of Oxfam, has a brave piece at comment is free. She defends the presence of Oxfam at the World Economic Forum in Davos, arguing that
For every selfish capitalist, there is an enlightened businessperson inspired by the challenge of global poverty and committed to changing the way they operate to help end it. They are important not solely because they care, but because many of them in are in positions of significant influence and can therefore do something about it.
It's a difficult one, for while Ms Stocking may have some very productive conversations with some of the attendees, and may well obtain support or sponsorship for some of Oxfam's initiatives and projects in the developing world, she is not likely to persuade anyone that the problems of the poor world are a direct consequence of the way in which the global economy is structured.
And it is the structure of the economy that has enabled those who go to Davos to make their fortunes. I'm not saying the poor are poor because the rich are rich, only that under the current system, the means by which the rich get rich necessarily reduce the life chances of those at the bottom, be they in rich countries or poor ones.
There is a rapidly growing band of African millionaires, but this has led to no change in the situation of most Africans, and nor will it.
When it comes to poverty alleviation, there are two options: Allow a minority to exploit an unjust system, and then lobby for them to give a share of their wealth to reduce poverty, as Bill Gates, Warren Buffet and George Soros have done very generously. Or, arrange things so that the disadvantaged have a fair chance in life and can access the means to their own economic security. This would permanently reduce the amount of suffering in the world, whereas charitable aid often amounts to little more than short-term sticking plaster.
Ms Stocking is in a difficult position. If she spent her time attacking the means by which the wealthy get rich, she probably wouldn't be invited to Davos. But it is to be hoped that organisations like Oxfam remember the true roots of poverty, and don't just settle for crumbs from the tables of the rich and powerful.
I have a new post over at Comment is Free just now. It's about the dreadful floods affecting parts of Mozambique, where I lived for a while and to which I still feel an attachment. The piece asks the simple question, if we can't manage to sort out our own society and economy so that the poor can be protected from floods, what hope is there for the people of Mozambique?
