By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives
Zygmunt Bauman (2007) Liquid Times: Living in an Age of Uncertainty; Polity Press, Cambridge
Zygmunt Bauman (2010) Living on Borrowed Times; Polity Press, Cambridge
Alex Preda (2009) Framing Finance: The Boundaries of Markets and Modern Capitalism; University of Chicago Press, Illinois
Karen Ho (2009) Liquidated: An Ethnography of Wall Street; Duke University Press, Durham and London
Money is deeply embedded in and inseparable from the cultural and psychological environment within which it is used. The debate about ‘efficient markets’ and ‘rational actors’ is really about the deeper belief systems that underlie modern economies. In recent years, an increasing literature in the sociology of finance has developed. While sometimes not easily accessible, this body of work is often far more insightful about the global financial crisis than the work of economist and financiers.
Resident in England after being driven out of Poland by an anti-Semitic campaign, Zygmunt Bauman is Professor of sociology at the University of Leeds. In his later works, such as “Liquid Times” and “Living on Borrowed Times“, Professor Bauman examines two different but interrelated issues – ‘post modernity’ and ‘consumerism’.
Professor Bauman’s central thesis is that in the latter half of the 20th century the world shifted from a society of producers to a society of consumers. Security was given up to enjoy increased freedom to purchase, to consume and to enjoy life. Professor Bauman uses the metaphors of ‘liquid’ and ‘solid’ modernity to capture this shift. Financial market’s obsession with liquidity and the word’s specific significance within finance is noteworthy.
In contrast with its ‘solid’ shape, ‘liquid’ modernity created new and unprecedented challenges. Social forms and institutions no longer had enough time to solidify into accepted frames of reference for human actions and long-term plans. Individuals now had to be flexible and adaptable, pursuing available opportunities. Liquid modernity required calculation of the likely gains and losses of acting (or failing to act) under conditions of endemic uncertainty.
The rise of financial markets and financialisation of everyday life is the irresistible result of liquid modernity. The rise of debt fuelled consumption and speculation derives directly from an uncertain world where risk taking is an essential survival strategy. The shift from the solidity of welfare statism to the liquid neo-liberalism is seen as a direct extension of this process.
Professor Bauman’s concerns are primarily social and cultural . He writes compellingly about the effect of declines in social safety nets and the increase in economic insecurity. Bauman describes a process in which individuals must desperately reinvent themselves through consumption. “What the denizens of the liquid-modern world quickly find out is that nothing in the world is bound to last, let alone last forever. Everything is born with a brand of imminent death and emerges from the production line with a use-by date printed or presumed.”
The readiness to discard extends to people who we do not recognise as fellow human beings – migrant workers, immigrants or terrorist suspects. “It seems all things, born or made, human or not, are until-further-notice and dispensable.” He concludes that consumerism and debt offers individuals a self-perpetuating illusion of utopia.
“Liquid Times” and “Living on Borrowed Times” offer deep insights into post-modern life. Specifically, it exposes the essential social and philosophical changes that lie at the heart of the conditions that led to the global financial crisis.
“Framing Finance” focuses on the history of markets. It tries to understand how the idea of the market that underpins modern economics developed from a social and cultural perspective. The author, a sociologist, provides rich insights into how speculation moved from a declasse activity into a central pillar of modern life.
The book is particularly interesting in showing how various devices or strategies were crucial in legitimising finance and trading. Professor Preda’s discussion of the employment of mathematics and market data to create a pseudo-scientific aura around money is enlightening. It also provides valuable insight into the origins and traps of quantitative finance. “Framing Finance” provides an interesting focus on how culture and imagination shaped and in turn were shaped by markets and their model.
“Liquidated: An Ethnography of Wall Street” uses the techniques of modern anthropological study to observe and comment on financiers, especially investment bankers and traders. Professor Karen Ho created this interesting study based on her personal experience of working on Wall Street and classical field study techniques. Observing the behaviours of bankers in Manhattan was perhaps no less enlightening but less glamorous and less exotic than studying rituals of remote Kazakh tribes (a field once favoured by Gillian Tett, now Assistant Editor of the Financial Times).
Professor Ho describes the banker’s worlds in a non-judgmental way and tries to provide a holistic view of how the culture works. As her fieldwork was undertaken before the global financial crisis, she does not have a chance to comment of the Chairman of Goldman Sach’s recent observation that bankers were “doing God’s work”. It would have surely added a religious dimension to banking, worthy of exploration.
Professor Ho’s central focus is to try to expose the system of beliefs, reinforced by education and experience that underpins finance. While bankers may not be aware of these, they are present and powerfully shape the world in which they operate.
“Liquidated” highlights certain factors that lie at the core of the global financial crisis. The best and brightest are hired by banks and then brutalised in a form of slave labour for 100 to 140 hours a week. Job security is non-existent and fear of failure is constant. The only part of the equation that makes sense is the pay grades that are obsequious.
This amalgamation of forces creates a culture where narrow, short-term self-interest dominates. Creating and selling products of no intrinsic value to people who do not understand them is a direct result of this culture.
The title and the underlying concepts evoke Bauman’s idea of ‘liquid’ modernity. Bankers seek to make assets liquid or tradable. The inherent contradiction is that they too are highly ‘liquid’ assets and can be ‘liquidated’, living in fear of this eventuality constantly.
This brutal world is masked in the narrative of free-markets and capitalism. Bankers cannot reject these “truths” that are held up as core values even if they are riddled with contradictions. This is because it would essential lead to ostracism from the society and culture and, most important, its monetary and material rewards.
While the ideas in these books are fascinating, the writing style is not easy. For example, Professor Ho’s book is derived from her dissertation and it shows, unfortunately. The writing styles can be described, politely, as “academic”. The conjunction of prolix text and jargon would not be out-of-place on a structured product desk. But it does not increase the readability of these otherwise insightful and interesting works.
The culture and societal background of finance are key factors in the financial crisis. To understand and prevent future crisis and human tragedy, these factors need to be understood and managed. The issue of executive compensation and the environment in which they work needs to be changed to avoid perpetuating and reinforcing current problems. As Adair Turner, chairman of the U.K. Financial Services Authority, stated at a meeting of the Future of Banking Commission: “We simply don’t know whether we really have tools which can change culture.”
Unfortunately, bankers or economists generally see George Orwell’s “Animal Farm” as a tale about farm animals. They are unlikely to challenge themselves and venture into these uncharted worlds.
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Now this is strange. Got a few reviews posted for ECONned (Amazon, B&N, and dkos) and just now picked up Traders, Guns & Money and got a few laughs.
“Killem and Billem?” I evidently don’t get out enough.
Bauman, in describing a world of fear, tension, and uncertainty, requiring endless “adaptability”, and all of it for the sake of an elusive material goal, and that somehow in gutting all the human bases of life we were supposed to better “enjoy life”, seems to be providing another case study in the cult phenomenon.
They gave up both security and real freedom for the sake of tawdry, sham consumer “freedom” and the illusion of material prosperity.
Today we see how in the end, as was predictable, they end up with none of these.
(Which is also what was always wrong about the lying media frame post-9/11, that it was a trade-off between freedom and security. Americans threw away both a long, long time ago. They long ago chose to let themselves be enslaved and terrorized for the sake of the materialistic gutter. And the response to 9/11 was never about seeking “security”, but that people trembled for their consumer crap. Bush was wrongly maligned for saying the right response to 9/11 was to go shopping. If we’re honest, all the evidence is that that’s exactly what America wanted to hear.)
By now the masses have internalized much of this slave mentality. But it didn’t get there in the first place on its own, although this quote seems to imply that:
Professor Bauman’s central thesis is that in the latter half of the 20th century the world shifted from a society of producers to a society of consumers. Security was given up to enjoy increased freedom to purchase, to consume and to enjoy life.
Does his writing really embody such passive criminal-speak? “The world shifted”? Security “was given up”? There was a massive top-down social engineering involved in all of this. None of it was any force of nature or historical determinism. For example, the enslavement of America to the car was a decades-long corporatism strategy. These were all political decisions.
Bravo!!!
Lets get rich and have a party!!!
Skippy…fashion = death
Beg to differ, attempter.
Maslows’ Hierachy of Needs has not, and never will be repealed. It is still an accurate description of how humanity prioritizes its needs.
As society has evolved, the basic needs are more easily satisfied, so attention turns to the next items up the heirachy. And that finishes up at “Consumerism” – nothing left to do but enjoy yourself.
This isn’t some diabolical plot, It is the result of a natural evolution. Business has gotten extremely good at sniffing out needs that people would like to satisfy, and working out how to get paid for satisfying them.
So we all got to be dumb, fat and (on the surface) quite content. Until the guys handling the money figured out that no one was watching . . . .
Capricorn,
If what you say is true (and I’m not arguing that it isn’t), then the entire modernist project, along with its economic sub-project—-capitalism—-are doomed to failure.
The entire modernist project, after all, is predicated on the assumption that the common man, sufficiently informed and educated, can make wise and rational and prudent choices. But is this assumption valid?
There’s a lot of evidence that indicates this assumption is not true. Modernism is now experiencing its second, and perhaps final, great crisis. But as Eric Hoffer famously commented in regards to modernism’s first great crisis:
It colors my thinking and shapes my attitude toward events. I can never forget that one of the most gifted, best educated nations in the world, of its own free will, surrendered its fate into the hands of a maniac.
–Eric Hoffer, The True Believer
Sorry, Downsouth, I over-simplified Maslow.
His top level motivations – those that come into play when all else is satisfied, are Self-Actualizations – morality, creativity, etc. (ex Wikipedia)
Given a choice between debating morality or creating something, and going shopping, which would you think most people would choose?
Depends on what buttons society is pushing…eh
And whom decides what sociaty is supposed to look like…um the people[?] or the masters of credit[?].
It’s long been clear that wealth and “stuff” don’t satisfy higher needs. Studies have demonstrated that beyond a certain level, increased material “prosperity” doesn’t make people more happy or fulfilled, and at some point becomes destructive as the stress of the rat race and keeping up appearances outweighs any marginal benefit.
But we didn’t need research for that. All anyone has to do is look around and see how restless, angry, and discontent even the rich tend to be, to see how unfulfilling it all is.
(I don’t recall if Maslow was a shill for consumerism, but if he sincerely believed that it met the needs he described then he’s been overwhelmingly proven wrong.)
What fulfills those higher needs? The world of the mind and soul, love, friendship, meaningful work, things like that. All the things neoliberalism and consumerism set out to eradicate with all the ferocity they could muster.
Anyone who surrendered to that path was misguided, to put it nicely.
Yes, the “Bauman’s central thesis” quote set off my gag meter also.
The reality is that In the latter half of the 20th century the world was intentionally and incrementally divisively shifted from a cohesive society of prudent producers into; a fragmented society of prudent producers and not so prudent ‘credit kool aide’ addicts.
The very intentional parasitic top down social engineering methodology was, and still is, to appeal to the less disciplined among us (I’m being kind here), and provide them with debt trap enslaving ‘credit kool aide’, marketing it as; freedom, security, deserved consumerism, enjoying life, etc. The debt traps are always masked in a scam complexity and sales pitch equal to the mark’s ability to understand and the mark’s greed level.
The result is that the society has intentionally ‘shifted’ into a graduated, more controllable divisiveness, where, at each level, as one person consumes the credit kool aide and ‘willingly’ puts on the debt chains, another more prudent person, is also enslaved by the less prudent’s actions, as those actions always involve a claim on, and misdirection of the use of, future resources. So, the top down parasitic social engineers (the wealthy ruling elite and their central bankers), through control of credit, control the divisiveness, the consumption of resources and the culture shaping media that keeps it all churning and exploiting in their favor. The physical chains of slavery have now shifted into the ‘self imposed’ psychological chains of slavery backed by the guns of the state ‘overseers’ who are also owned and controlled by the wealthy ruling elite and their central bankers.
But the above described machinations are a “force of nature or historical determinism”, it is a force of evolution. We are after all, all cannibals. That is the ‘base culture’ that must be recognized if we want to rise above our baser instincts and creates reasonable and workable regulations. God is a construct of man, not the other way around. People that claim to be doing god’s work are charlatans, and, contrary to …
“Adair Turner, chairman of the U.K. Financial Services Authority, stated at a meeting of the Future of Banking Commission: “We simply don’t know whether we really have tools which can change culture.”
… we do have the tools, they are called bullets, pitch forks and rope.
Deception is the strongest political force on the planet.
“We do have the tools.”
Yep. These are all political choices.
Doesn’t it seem that the lowest common denominator in the recent mess is understanding human psychology? Step up the ladder and it becomes understanding how human psychology works in the frame work of society. Step up the ladder and it becomes how human psychology and social science interact to influence economics.
Why do people think consuming more and having more is so important?
Why are people willing to put their savings and investments into financial instruments they don’t understand?
Why are pension fund managers so willing to rely on ratings agencies rather than performing their own due diligence?
Why are ratings agencies so willing to abdicate their fiduciary responsibility when assigning risk values to financial products they don’t understand?
How do those who have so much justify their excess wealth at the same time others have seen their wealth decline as a result of these individuals ‘leadership’ (I’m sorry, unless you have a cure for unemployment, homelessness, hunger, lack of water, famine, a cure for AIDS, and you have figured out how to fix global warming “aka ‘Climate Change'”, in about 95% of the populations’ opinion, you are not worth sh*t, and certainly not worth the bloated fees skimmed off the top from the many and varied exotic financial instruments traded while you or others were ‘managing’ companies where you didn’t understand in the least what they were truly doing).
Why do most consumers think the Earth has an unlimited amount of resources, yet we think the upward trend of the quality of living (or stock market, or whatever the flavor-of-the-month bubble is) is somehow infinite?
What is it that we just don’t yet get after 6,000+ years of ‘recorded’ history?
The technological equipment may be more advanced, but human psychology doesn’t appear to be…still playing the same old game.
Just wondering.
Why do people think consuming more and having more is so important?
Why are people willing to put their savings and investments into financial instruments they don’t understand?
Why are pension fund managers so willing to rely on ratings agencies rather than performing their own due diligence?
———————————————————-
Because they were told that this was ok by a barrage or articles in the media and in ‘scientific’ works.
Pundits also did a great job to bring the message across.
Since the message came from sources people thought they could trust, they accepted them as true.
This is how deceit and fraud works. First you create trust, then you break the trust (always with a good explanation to weasel out, of course).
http://www.ponerology.com/index.html
What is it that we just don’t yet get after 6,000+ years of ‘recorded’ history?
Have many of you westerners studied these 6,000+ year history. You would shocked at just how good you have it, financial crises and all.
Like the two books, and every comment on here, a good insight into a vast complex layer of driving forces.. in this case the predominance of “Psychology” is taken to an extreme.
I’ve been working with cultures and peoples that have changed little in the last 600 years, and the brutish threadbare nature of their lives, makes these discussion here unbearable.
The hyper liquidity spoken of the books is mirrored by a hyper inflation of exaggeration. The ego inflation is present in all the comments in all the blogs on the right hand side of this screen.
Nobody, including me obviously, can simply make an a simple comment
Agree completely. But sociology has long been enslaved to anti-Westernism. Oh sure, the 1900 were a great time to live in the “solid state.” Whats that you say? The vast majority lived their “solid” lives as colonial subjects? What, no rights for women? But I suppose it must be all confusing to the rich, white guys. Suddenly they have to, shocking, compete against the Indian and Chinese fellows making 5 bucks a day.
As an educated white male I obviously also miss the 1900 — Why back then I could be a high colonial official, bossing around thousands of Vietnamese or Indians or whatever while feeling superior about my intellect. Alas, I’m not quite prepared to sacrifice my morality to return to the “solid” ordering of things.
“As an educated white male I obviously also miss the 1900 — Why back then I could be a high colonial official”
pfft. Unless there’s something you’re leaving out, I think the odds are stacked against it, nevertheless.
Very amusing.
Next you’ll be telling us how you’re really Lloyd Blankfein.
Why not?
With no women, Jews, or visible minorities the field of competition is narrowed significantly. And because the upper class is already relatively well of, they wouldnt bother with getting dirty in the colonies. Its the cavalry regiments for the dumber/more valiant of them and the family business/foreign ministry for the more sophisticated.
Colonies were always built and staffed by the kind of people who take out loans to go to a place like Princeton because they know its a pipeline into Wall street.
Just to say “Cheers!” Mr. Das for calling attention to work which approaches finance from a perspective other than economics.
“bankers or economists generally see George Orwell’s “Animal Farm” as a tale about farm animals”: in which case, they can hardly be the “best and brightest”.
To be fair, most bankers and economists would probably see Animal Farm as being about how totalitarian (specifically communist) governments gain power, which is fairly accurate. But they probably wouldn’t see that the banking elite in our age is now bordering on totalitarian.
“As Adair Turner, chairman of the U.K. Financial Services Authority, stated at a meeting of the Future of Banking Commission: “We simply don’t know whether we really have tools which can change culture.”
What Mr Turner should have said is ‘We simply don’t know whether we really have tools which can change HUMAN NATURE.’
The answer to Mr Turners statement/query is NO, WE DO NOT HAVE THE TOOLS TO CHANGE HUMAN NATURE!
Numerous anthropoligical studies of tribes have shown that populations of about 140 to 160 individuals are optimim size for harmony and stability. Above this level of population per tribe close relationships begin to break down and disharmony among tibal members begins to increase. While the population remains at ~150 tribal members all the individuals know each other by name, stop and converse with each other during chance encounters, and various skills found among the members are put to use in a practical division of labor.
Humans lived in small tribes far longer than they have lived in mass populations made possible by discoveries of hydrocarbon fuels, the industrial revolution and food production on an enormous scale by a few farmers…say, about the last 225 years. Economy of scale, robotic factories and a race to the bottom of average worker pay has left much of the human population idle or in make work occupations. Is it such a wonder that some men jump through rediculous hoops to become bankers in order to avoid the fate of the remaining 99% of the population?
The pertinent question is…’is any length of time sufficient to allow human nature to adjust to the conditions which now prevail?’
Gates, we are all learning, all the time. Hell, of we thought we could never do better, we’d all take a good swig of that special Kool-Aid, and check out what gives in the next life.
We are adaptive, we are shaped by our physical and cultural environment. You can take a group of misfit malcontents, and turn them into a coordinated, effective force. That’s the job of the Drill Sargeant in Basic Training. Rudyard Kiplings’ “Captains Courageous” describes, albeit in adolescent terms, the type of transformations that go on every day.
Capricorn, If people really believed that the ‘next life’ was as wonderful as portrayed by many religions a great deal of the world population would ‘check it out’ right now.
Of course we are ‘all learning, all the time’, or at least the great majority of people are….But, what are we learning that will possibly overcome the basic instincts deeply imbeded in human nature? That which is hard wired into the oldest part of the human brain is not easily overcome by the facade of civilization. As an example; watch what happens when the lights go out on a hot night in a large metropolitan area, or how wars erupt after any number of destabilizing events in any culture.
Have you been subjected to boot camp? I have…for 12 weeks. Out of the original group of 96 new recruits, 31 were left on graduation day. The ‘type of transformation that goes on in boot camp’ is teaching raw recruits to obey an order from a superior immediately and without thought of consequences to oneself or an enemy. This type of ‘transformation’ is of little use after one leaves the military unless one becomes a police officer. Boot camp does not teach one to think independently and is poor preparation for civilian life in many respects.
To the contrary, boot camp does not even prepare the young military personnel for the shysters that they will encounter near the gate on most military installations.
You are certainly right about one thing…Rudyard Kipling is romanticized poppy-cock for young adults. Perhaps he helped recruit cannon fodder for the Brits Empire? Trust me, there is nothing glorious about war, there are no fond memories after seeing one’s friends in pieces, only the occasional bad dreams linger.
Gates, I’ve done Boot Camp. I’ve also taken several business operations which were failing and turned them around.
My point is that the potential to change is inherent in human nature. Sure, that change can go both ways on the moral/ethical scale. For example, look at the changes in mores and standards of behaviour in German society over the period 1925 through 1955.
The question here is Lord Turners’ concern – “We simply don’t know whether we really have tools which can change culture.”
You seem to believe that we can’t change “the culture”. I know that we can. It is possible that Lord Turner was referring to weather or not Economists were in a position to “change the culture” – and he may well be right about that.
“Liquidated” highlights certain factors that lie at the core of the global financial crisis. The best and brightest are hired by banks and then brutalised in a form of slave labour for 100 to 140 hours a week.
“Best and brightest”? A previous generation of liberal-progressive nincompoops described themselves this way. These were McNamara’s civilian “Whiz kids” and the other Ivy League Democrats who authored “Vietnam”. (spare me the mendacious “progressive” revisionism, please).
Definitely “best and brightest” in that sense. But not in the normal usage of these words.
Bauman and Ho have inspired the creation of a new word….
Amouraphor: The intense feelings of love and affection for one’s own metaphors.
_________
Doesn’t this post run contrary to much of what’s been written on this site by Yves and MacroEdge over the past several weeks?
Would love to read MacroEdge’s response to Professor Bauman’s central thesis that “in the latter half of the 20th century the world shifted from a society of producers to a society of consumers.”
As Yves would say: “I suggest you familiarize yourself with basic fiscal accounting.” Or, as Rob so eloquently stated: “Repeat after me: unless one sector spends more than it earns, another sector cannot earn more than it spends. That’s double entry bookkeeping, not high theory.”
But of course, who has time for dry old double entry bookkeeping when professors can get metaphorical while pushing an agenda of behemoth central governments under the guise of deconstructing The Post-Modern Man and all his hyper-consumerism?
Bring on the Thought-Terminating-Cliche’s…I put the over/under for Orwell references in this thread at 15.
_________
And finally…
This post begins with: “Money is deeply embedded in and inseparable from the cultural and psychological environment within which it is used.”
Then, through a couple of leftist academics, it laments the the constant flux of “liquidity”. It harkens for something more solid…and secure.
So, looping back to the fact that money is embedded into the culture, how do these academics propose that the society maintain a liquid set of cultural norms that values open-minded freedoms with a system of money that’s “safe, solid and secure”…especially when the free-flowing set of cultural “norms” demands “consumerism”…since the liquid culture demands a constant, never-ending stream of that which is fresh and vibrant?
Traditional, Family Values, anyone?
What a Post-Orwellian, Neo-Metaphorical pile of garbage.
There’s nothing Orwellian about it, just the recognition that the societies we live in are greater than their economies. If you recognize the importance for many, of traditional family values, you already get this.
So your point is well taken. Family values & tradition are what immediately leapt to my mind as well, however, it’s not the only outlet or alternative. There’s always creativity. Some people exercise theirs by painting their homes. My older sister is a gardening fanatic. My younger sister sews. The guy across the street builds cars. Me? I learn stuff. Not everybody is wired the same way, of course. I find that most people substitute community building and interpersonal relationships in lieu of exercising the creative impulse. That works as well.
I would venture to say that for the vast majority of people, money is not central to their psyches, since by far the majority of people choose not to measure their lives by the size of their bank accounts. (I’d be on anti-depressants if I did.) Having said that, I’m sure we all know people who do. Even I, who demonstrably doesn’t get out enough, know people like this, and I pity them. It’s such a spiritual dead end.
So, I’m not going to bother with the Bauman. Framing Finance looks interesting though, and I suppose I should begin to familiarize myself with the basic principles of accounting as well.
It never ends.
“Money is deeply embedded in and inseparable from the cultural and psychological environment within which it is used.”
I read the first sentence & didn’t want to read any further. What money? Where? Not deeply embeded anywhere in my neck of the woods. Not inseparable from my fingers. Not a trace of it anywhere around here.
But then I read, “within which it is used.” Okay. Now I get it. Money is like drugs to a drug addict. Bullets to a hunter. Paint & brushes to an artist. Some sort of specialized commodity.
Which means the money that Satyajit Das is referring to hasn’t anything to do with ordinary people like me.
Ordinary people need a means of exchange. If that isn’t money, then we need to find something else. Ordinary people also need some sort of social organization that responds to their needs, within which they can use whatever they must use as a means of exchange, since it isn’t money.
Right now we have neither money, nor government. We seem to be coasting, like a giant airliner that’s out of gas. (Will there be a crash landing? Have you ever heard of any other? Ever heard of survivors from a crash landing? I haven’t.) Thank-you, Satyajit Das, for reminding us that the parachutes were stolen long ago.
► Satyajit Das says:
“Liquidated” highlights certain factors that lie at the core of the global financial crisis. The best and brightest are hired by banks and then brutalised in a form of slave labour for 100 to 140 hours a week. Job security is non-existent and fear of failure is constant. The only part of the equation that makes sense is the pay grades that are obsequious.
This amalgamation of forces creates a culture where narrow, short-term self-interest dominates. Creating and selling products of no intrinsic value to people who do not understand them is a direct result of this culture.
When I read this it very much reminded me of the men who carried out the Spanish conquista of the New World. It’s the old conquest and plunder paradigm all over again, dressed up in new “scientific” attire. The 16th-century phenomenon was deeply rooted in the broader Spanish culture of the day, as explained by J.H. Elliott:
Within the crown of Castile, it seems that natives of Andalusia and Estremadura predominated: both Cortes and Pizarro were Estremadurans by birth. The first arrivals to the New World were, naturally enough, young unmarried men, most of them with previous military experience. Socially, they were drawn from the gentry class and below, for the upper aristocracy played no part in the conquest… Hidalgos in particular were well represented in the conquista—-men such as Cortes himself, who came from noble but impoverished families, and were prepared to try their luck in an unknown world.
The character of these men, and especially the predominance of the hidalgo class in the leadership of the expeditions, inevitably set a special stamp on the whole pattern of conquest. They brought with them from Castile the ambitions, the prejudices, the habits and the values that they had acquired at home. First and foremost they were professional soldiers, schooled to hardship and war.
[…]
Any attempt to explain the extraordinary success of an enterprise undertaken by so tiny a group of men against such overwhelming superiority of numbers must necessarily take into account both the aspirations of the individual conquistador and the readiness of the society from which he came to accept their validity and esteem their achievement. The conquistador knew that he faced sudden death. But he also knew that, if he survived, he would go back rich to a world in which riches conferred rank and power. On the other hand, if he should die, he had the consolation of dying in the Faith…
–J.H. Elliott, Imperial Spain: 1469-1716
At its simplest, money is an enabler of complex economic activity. It is a technology designed to solve the problem of distributing scarce goods and services among a (supposedly) insatiable population. However, given that humans are not rational, and that money, necessarily, seems to store wealth, it takes on far more complexity in the public imagination than a mere medium of exchange might suggest possible. The pursuit of happiness has become the pursuit of riches; we have a system, constantly beset with problems of corruption, predicated upon eternal growth, yet embedded in an obviously finite ecosystem; we have petrified social stratification feeding into the power of status symbols; and the endless pursuit of ever increasing profits, all taking priority over things like societal cohesion, education, health, crime and so on. Money, for a raft of reasons, appears incapable of taking a back seat in socioeconomic systems which depend upon it to solve the problem of scarcity. If the solving of a problem does not yield a money-profit for someone somewhere, that problem is unlikely to get solved. Over time this has a very deleterious effect on society. Money becomes more important than humanity, even though it has no meaning without us around to use it.
Meanwhile, alongside the roller-coaster ride of human history, technological development continues at increasing speed. Scarcity is, technically speaking, far less of an issue now than a century ago, particularly for things like food, water (if managed wisely), energy (if our know-how were put to good use), and shelter, and also for luxury items like music, movies and anything else that can be digitised. In a similar vein, we are more and more capable of replicating human abilities technically, such that a date of 2042 has been predicted when virtually the whole gamut of what we can do will be replicable. Already in the ’80s an AI software program wrote a novel; another piece of software composes music; The Eureka Machine deduces Laws of Physics by observing the gyrations of a double-pendulum; Hewlett-Packard have made a recent breakthrough in memsistors, heralding the possibility of neural-net computers in the near future. Soon (in decades) we will no longer need large numbers of humans to run the economy. Technological unemployment may well be considered a non-issue by the mainstream, but once automation of even complex intellectual tasks is cheaper than the cheapest human, we will be unneeded in the workplace. Even if that date is wrong, it is unlikely to be wrong by much. What with the potential eradication of scarcity of the basics (and more), what with the decreasing need for human labour, and what with money’s unwanted side-effects, I believe we need to begin looking at very radical alternatives to current (and all other monetary) systems.
We have more or less solved material problems technically speaking. At the moment we do not have a system capable of fairly distributing the benefits of our amazing know-how to all people planet-wide. Rather we have a system which assumes that rapacious greed characterises all of us, even though the evidence is to the contrary (see “The Spirit Level” by Wilkinson and Pickett); that assumes all sorts of negative attributes like violence and selfishness are hard-wired into human nature, even though our natures are primarily social and malleable; and which “just knows” scarcity is an eternal problem solved only by some variant of price-system. Change is the only constant, but sadly also the tritest of campaign slogans. No matter how overused in politics, change is a fact of life and is accelerating in the human sphere. We poor, slow fools are having a hard time keeping up. What we can do technically is far in advance of what we can imagine culturally, and there’s the rub. It is this problem of neural lag we should be addressing, in which money is one of those “permanent” features of society that is actually becoming, albeit it slowly, redundant. It is an almighty challenge.
Excellent post Toby!
Neural lag is being addressed for us by the wealthy ruling elite. Rather than distribute the benefits of know how to all people planet wide they are eliminating people planet wide and reducing consumption planet wide through the military banking/industrial complex. Credit control (and its many derivatives) is the primary weapon on the banking side forcing evolution to in effect evolve more rapidly than might be necessary. The externalization of humanity that is responsible for morphing humanity into its next form is greatly accelerated.
It is fascinating to me that we are so one with it and are able to witness and be so aware of our own evolution and the part we play in it.
Deception is the strongest political force on the planet.
I don’t know about all this technology stuff. I think most of the population will be exhausted to the breaking point just keeping all the technology working through the crashes, freezes, viruses, upgrades and system errors. For every robot there will be at least three full time jobs — tech support, software developer and sales. So each person will have to work three jobs for every robot. If I project what I go through just to keep my two laptops going to a house full of robots and automation I think I really will go crazy. So will the whole world. It’ll never happen. :)
If you just look at how much we can produce with so few people you’ll see that in fact efficiency increases as we deploy technology to improve what humans would otherwise have to do manually. Just look at an automated egg-factory, or bottling plant. No humans could do what those machines do. Many of the inefficiencies you point out are a direct consequence of short-termism, short-cuts and quick-buck-seeking, intellectual copyright hindering open-standards, and other monetary-related issues. Should humanity seek to automate as fully as possible with a view to true efficiency, to design out both built-in and perceived obsolescence, our know-how could be put to full use. Remember, language and farming are as much technological accomplishments as are silicon chips. It’s all “natural!” :-)
Hey crazzyman, they said that about indoor plumbing, I remember a very similar quote made to John Crapper;
“For every toilet there will be at least three full time jobs needed — tech support, soft seat developers and sales.”
But now you only call your plumber about once in every 3.7 years and look at all of the trips to the outhouse you save!
Efficiency.
Professor Baumann writes of the “declines in social safety nets and the increase in economic insecurity.” Is this true, I wonder? When I review the social benefits that my family could use today, if need be, and try to compare them with what the status was 40 years ago when my parents were raising their family and then 30 prior to that when my grandparent were raising their families I don’t feel at all that the safety net has declined.