Satyajit Das: The Truth of the Matter

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By Satyajit Das, former banker and the author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011) and Traders, Guns & Money

Stephen D King (2013) When The Money Runs Out: The End of Western Affluence; Yale University Press

David Roche and Bob McKee (2012) Democrisis: Democracy Caused The Debt Crisis. Will It Survive It? An Independent Strategy Publication

Luuk van Middelaar (2013) The Passage to Europe: How A Continent Became A Union; Yale University Press

Winston Churchill noticed that: “Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened”. Each of these three books, sometimes intentionally or sometimes not, concern truths about our economic, social and political systems.

Stephen D. King (HSBC’s Group Chief Economist) and Messrs. David Roche and Bon McKee (who run Independent Strategy, an economic consultancy) focus on the end of growth. Luuk van Middelaar (a political philosopher) writes about Europe, especially its politics.

Economics Means & Ends

The economic memes underlying When The Money Runs Out and Democrisis are familiar if not universally accepted.

Growth, historically, has been driven by population growth, opening up of new markets and improvements in productivity and innovation. In the later part of the twentieth century, growth was augmented by the use of debt to accelerate consumption directly. In addition, generous entitlement programs for some in many countries that were not fully funded or financed by borrowing boosted consumption indirectly as citizens spent more, assuming their health care and aging needs as well as education expenses of their children would be met by the state or other means.

States too indulged in Ponzi Finance to fund these promises and, in some instances, spending programs. Global imbalances were an integral part of this process.

The Global Financial Crisis exposed the weakness of this model – its Minsky moment, as some termed it.

When The Money Runs Out and Democrisis provide solid if unremarkable narratives of the causes and history of the crisis. Both conclude that the rapid growth and increase in prosperity was probably extraordinary, mistakenly assumed by citizens and policy makers as the new normal rather than an anomaly caused by a favourable confluence of events.

In When The Money Runs Out, Mr. King fails to acknowledge the role of bankers and banking in the problems, preferring to see them as mere “scapegoats” and the crisis as more complicated. Recent disclosures of internal conversations at failed Irish lender Anglo-Irish point to the toxic culture of banks and their insidious part in events, both leading up to and after the start of the crisis. Critics have pointed to Mr. King’s day job as perhaps one reason for the uncharacteristic diffidence in relation to bankers.

The Way Out?

With growth likely to be slow and societies having promised themselves entitlements which are unaffordable, at least without a major reorganisation of the social and economic structure, the question is what comes next.

Mr. King takes the view that there is no real solution and a Japan like stagnation is likely. The cure also is increasingly ineffective, as the major economies have become “stimulus junkies”.

Mr. King argues that the better way of dealing with the problem might have been the course pursued by South Korea and various South-East Asian economies in the Asian monetary crisis of 1997-1998. A Mellon-like cathartic liquidation (massive currency devaluation, bankruptcies, banking failures and (hopefully) short lived collapse in economic activity as well as a large reduction in living standards) may have restored the health of the economies.

This view is simplistic ignoring key differences. These economies were smaller, (in some cases) a lot of the debt foreign and a favourable external environment creating demand for exports. It also underestimates the unbelievable hardship for the less fortunate that resulted.

Talking about the human effects of the Asian crisis, a friend once told me of being in Indonesia during the Asian financial crisis. Fluent in Bahasa Indonesian, he overheard a conversation one night in the streets outside the hotel where he was staying. It was a family, a father, mother and two daughters. The discussion was about who was going to prostitute themselves that night to feed the family.

Mr. King does not address the social or political dimensions of the economic problems other than superficially.

Curiously, given his view that there is no real solution and his doubts about the effectiveness of policy tools, Mr. King ends his book with a serious of luke-warm and unpromising proposals – free labour movement, European fiscal union and central bank targeting of economic growth and higher inflation. The political issues, especially redistribution of wealth and resources, and the acute differences between different countries are ignored.

The title and subtitle of Mr. King’s book are puzzling. The money clearly cannot run out as central banks and policy makers can and have resorted to the electronic version of the ancient printing presses.

The end of Western affluence assumes that non-Western nations will be unaffected. Given that Western markets and investment are important drivers of emerging markets, it is difficult to see how collateral damage can be avoided. Given that emerging nations have large investments in Western economics through their central banking reserves or sovereign fund portfolios which are now at risk, it is difficult to see how contagion is avoidable.

Democrisis’ thesis is that without economic growth, the massive expansion of public and private debt is unsustainable. This instability is economic but ultimately social and political, requiring behavioural changes in both citizens and leaders and re-writing of the social contract. Democrisis discriminates between the position of different economies such as the US, Europe, Japan, China and other emerging nations which face similar but slightly different challenges.

Messrs. David Roche and Bon McKee are refreshingly clear eyed about the effects of current policies, which cannot restore economic growth but also have deleterious side effects, damaging not only to the economy but the foundations of the social and political system, ultimately undermining democracy.

Reverse Causality

When The Money Runs Out and Democrisis assume that causality runs from the economy to society/ politics. The Passage to Europe suggests that social and political systems may be the cause of the problems, at least in Europe. Dr. van Middelaar, perhaps unintentionally, shows the economic problems of Europe are not really economic problems at all but the inevitable and insoluble outcome of deeply flawed political processes.

The Passage to Europe is really two separate books, untidily stuck together.

The better book describes the development of the European Union and the politics of the project. It usefully and insightfully chronicles the internal battles and curious events that shaped the history of the Union (the early 1960s the European Court of Justice that established the supremacy of European law; the story of de Gaulle’s the veto; the Luxembourg compromise; and the background to the individual institutions such as the European Council of heads of government, the EU Commission and the European Parliament).

The second book is a more academic work of tentative political philosophising, reflecting Dr Van Middelaar background and work for Herman Van Rompuy, president of the European Council and occasional composer of haiku poetry. Dr. Van Middelaar argues that Europe consists of a series of concentric circles of influence: the Brussels and EU institutions; member countries and national governments; and non-EU Europe. He argues that the tension between these layers and the need for complex stratagems to resolve them, unsurprisingly, creates problems.

The following exchange about Europe in the UK TV series Yes Minister argued the same position with more wit:

Sir Humphrey: Minister, Britain has had the same foreign policy objective for at least the last five hundred years: to create a disunited Europe. In that cause we have fought with the Dutch against the Spanish, with the Germans against the French, with the French and Italians against the Germans, and with the French against the Germans and Italians. Divide and rule, you see. Why should we change now, when it’s worked so well?

Hacker: That’s all ancient history, surely?

Sir Humphrey: Yes, and current policy. We ‘had’ to break the whole thing [the EEC] up, so we had to get inside. We tried to break it up from the outside, but that wouldn’t work. Now that we’re inside we can make a complete pig’s breakfast of the whole thing: set the Germans against the French, the French against the Italians, the Italians against the Dutch. The Foreign Office is terribly pleased; it’s just like old times.

Hacker: But surely we’re all committed to the European ideal?

Sir Humphrey: [chuckles] Really, Minister.

Hacker: If not, why are we pushing for an increase in the membership?

Sir Humphrey: Well, for the same reason. It’s just like the United Nations, in fact; the more members it has, the more arguments it can stir up, the more futile and impotent it becomes.

Unintentional Clarity

The Passage to Europe provides probably unintended insights into the European problem. Any institution which can produce a 40 page document of how the EU flag and associated insignia should be displayed is of considerable ethnographic interest. In one respect, Dr Van Middelaar is right: Europe is a “word factory”.

But there are deeper revelations. The book reveals that the European project is a solution in search of the right problem to resolve. It reveals a lack of fundamental agreement between the nations, national governments and individual peoples about the basic idea of Europe. It reveals a deep seated desire of handsomely remunerated and largely redundant European politicians, bureaucrats and related acolytes to perpetuate themselves and preserve and expand their power and privileges. It reveals a political, intellectual and academic elite which is completely out of touch with and indifferent to the ordinary man and woman in any member nation. Only in Europe, unlike other polities, these are the core ideas of Europe.

Implicit in The Passage to Europe is the fact that everyone wants Europe a la carte, selecting the choice bits available from the menu and leaving the paying of the bill or the problems of cleaning up to someone else. Europe is what anyone at any time wants it to be and can coerce, convince or cajole other parties to accept.

For most citizens in member nations, Europe and the EU are largely irrelevant to everyday life. The people most interested and engaged are special interest groups seeking to capitalise on its generous endowments and subsidies.

While written before the European debt crisis, the book does not discuss in any detail the EU’s economic underpinnings– free markets, common currency – or its current difficulties. But its inadvertent revelation of the European process and pre-occupations allows an interested reader to extrapolate the likely evolution of the crisis.

Whilst not explicitly stated or implied by Dr Van Middelaar, a non-European reader would reach a depressing conclusion about Europe’s financial and political future. It is best captured by a quintessential European literary work – Dante Alighieri’s 14th-century poem Divine Comedy and the inscription on the gate of Hell: “Lasciate ogne speranza, voi ch’intrate” usually translated as “Abandon all hope, ye who enter here”.

A Matter of Style

Mr. King and Messrs. David Roche and Bon McKee write simply and directly, targeting the ordinary reader. Democrisis has the added benefit of brevity, encompassing around 100 pages.

The Passage to Europe relies on techniques of deconstruction and semiotic analysis, owing much to Jacques Derrida and Roland Barthes. Even allowing for the translation from its original Dutch, the writing often embraces, for at least this reviewer, a European high cultural and intellectual tradition, where comprehensibility must be sacrificed, meaning avoided and clarity feared. Frequently, the reader pines for even one of Herman van Rompuy’s poems, such as the one on Brussels: “Different colours, tongues, towers and gods. I search my way”.

These three books, each in their own very different and sometimes elliptical way, reveal a little of the truth of the matter. A reviewer of When The Money Runs Out noted that the author was an uber pessimist. By implication, the fact and arguments in the book were simply not true. Better to rely on mindless optimism.

But as Winston Churchill once observed: “There are a terrible lot of lies going around the world, and the worst of it is half of them are true.’

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  1. Newtownian

    Interesting and depressing. Much analysis and diagnosis of the problem. But not much evidence of solutions even from experts from the belly of the beast.

    I guess this is what distinguishes this dismal science from the real thing.

    1. from Mexico

      Newtownian says:

      I guess this is what distinguishes this dismal science from the real thing.

      No true Scotsman, hun?

      With a moniker like “Newtonian” I suppose one shouldn’t be surprised.

      Our problems with science and epistemology go way beyond economics. For a couple of outstanding reads that take a sledge hammer to the mythologies proselytized by the true believers in science, one can’t do much better than two books by the historian of science Naomi Oreskes: The Rejection of Continental Drift: Theory and Method in American Earth Science and Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming.

    2. nonclassical

      ..first, the TV series noted is “Yes Prime Minister”, and it features many such classic dialogues..

      Gore Vidal, 5 years ago stated U.S. will experience Japan like lost double decades..20 years…also he stated U.S. will never be the same…Vidal was prescient-I think we can all see the Orwellian nightmare before us-surveillance society, as defense contractors rush over next 2 years to create smaller and smaller-more invasive drones with which to “monitor”…

      A “stazi-like” society is on the way…brush up on that history….then there’s “Trans-Pacific Partnership” and other phony “trade agreements”, which are actually intended to turn the people’s representative government into authoritarian exercise totalitarianism, run by corporate masters….

      The books mentioned would not be among those I would choose-Mr. Das’ own
      “Extreme Money”, Yves “ECONned”, Naylor’s “Hot Money and the Politics of Debt”, Shaxton’s, “Treasure Islands”, and Dunbar’s, “The Devil’s Derivatives”; all on economics, added to historical of Wall $treet, and CIA, would be-are my preferences=documented TRUTH.

  2. Hugh

    “These three books, each in their own very different and sometimes elliptical way, reveal a little of the truth of the matter”

    Sorry, but this seems like a BS review of three BS books. I mean is that supposed to be the truth? That they are all BS. Why didn’t Das simply say so. He also makes it to be some great discovery that politics and economics are connected, even though as well read as he is, he should know that this knowledge goes back at least to the 1800s when the subject was called political economy.

    As usual with Das, he makes no mention of the rampant and systemic criminality of what has happened not just in Europe but in economies and governments all over the globe. The closest he comes is a glancing reference to the “toxic [not criminal] culture of banks”. Instead he or some of the authors (it is hard to tell when he is describing and when commenting) blame governments who “indulged in Ponzi finance” to fund “generous entitlement programs” for the Great Financial Crisis. Yeah, that’s it, not the largest interrelated frauds in human history, not the tightening grip of kleptocracy, not the looting of the rich and elites. It was our fault for actually thinking that government was there for us and our needs.

    To be fair, Das does mention the social costs of some of what the authors are suggesting, but I still do not know how he fits social costs, i.e. human suffering into his own economic schema.

    “With growth likely to be slow and societies having promised themselves entitlements which are unaffordable, at least without a major reorganisation of the social and economic structure, the question is what comes next.”

    As the above quote shows, Das is like a man who is told that the engine is in his car is shot, but instead of addressing the issue of replacing the engine, something he knows must happen, he asks, “So what comes next?”

    Well, what comes next for the rest of us, if we don’t change the system, is more of the same relentless scorched earth march of looting we have seen to date.

    1. jake chase

      Don’t be too hard on Das. He has written at least one excellent book on the ‘culture’ of banking. I think he agrees that none of these books is worth reading, except perhaps for the third one, for those unclear about the fabrication of the EuroMess and eager for a history lesson.

      Elites have sabotaged democracy for their own profit and aggrandizement, and toadying academics were behind them every step of the way. These shysters have shattered any conceivable justification for their privileged position, and no longer have any credibility among those who think at all. Why any of them bothers to write this mush (when their energies would be much better spent continuing to loot while there is still time) is the real mystery.

        1. from Mexico

          Here’s how Charles Dickens described the Rococo in A Tale of Two Cities:

          For the rooms, though a beautiful scene to look at, and adorned with every device of decoration that the taste and skill of the time could achieve, were, in truth, not a sound business; considered with any reference to the scarecrows in the rags and nightcaps elsewhere (and not so far off, either, but that the watching towers of Notre-Dame, almost equidistant from the two extremes, could see them both), they would have been an exceedingly uncomfortable business — if that could have been anybody’s business, at the house of Monseigneur. Military officers destitute of military knowledge; naval officers with no idea of a ship; civil officers without a notion of affairs; brazen ecclesiastics, of the worst world worldly, with sensual eyes, loose tongues, and looser lives; all totally unfit for their several callings, all lying horribly in pretending to belong to them, but all nearly or remotely the order of Monseigneur, and therefore foisted on all public employments from which anything was to be got; these were to be told off by the score and the score. People not immediately connected with Monseigneur or the State, yet equally unconnected with anything that was real, or with lives passed in travelling by any straight road to any true earthly end, were no less abundant. Doctors who made great fortunes out of dainty remedies for imaginary disorders that never existed, smiled upon their courtly patients in the ante-chambers of Monseigneur. Projectors who had discovered every kind of remedy for the little evils with which the State was touched, except the remedy of setting to work in earnest to root out a single sin, poured their distracting babble into any ears they could lay hold of, at the reception of Monseigneur. Unbelieving Philosophers who were remodeling the world with words, and making card-towers of Babel to scale the skies with, talked with Unbelieving Chemists who had an eye on the transmutation of metals, at this wonderful gathering accumulated by Monseigneur. Exquisite gentlemen of the finest breeding, which was at that remarkable time — and has been since — to be known by its fruits of indifference to every natural subject of human interest…

          The leprosy of unreality disfigured every human creature in attendance upon Monseigneur…

          But, the comfort was, that all the company at the grand hotel of Monseigneur were perfectly dressed…

          Dress was the one unfailing talisman and charm used for keeping things in their places.


          Far and wide, lay a ruined country, yielding nothing but desolation. Every green leaf, every blade of grass and blade of grain, was as shriveled and poor as the miserable people. Everything was bowed down, dejected, oppressed, and broken. Habitations, fences, domesticated animals, men, women, children, and the soil that bore them — all worn out.

          Monseigneur (often a most worthy individual gentleman) was a national blessing, gave a chivalrous tone to things, was a polite example of luxurious and shining life, and a great deal more to equal purpose; nevertheless, Monseigneur as a class had, somehow or other, brought things to this.

          1. jake chase

            Monseigneur sounds like an Eighteenth Century Jack Welch. Those doctors remind me of my urologist.

            1. from Mexico

              Here’s an example of what Rococo looks like these days:


              When one looks at Alexander’s dress (uniform) all loaded down with such elaborate ornamentation, one can’t help but be reminded of the male peacock tail which Darwin referred to in his theory of sexual selection. In The Descent of Man and Selection in Relation to Sex Darwin asserts that part of the “sexual struggle is…in order to excite or charm those of the opposite sex, generally the females, which no longer remain passive, but select the more agreeable partners.” His sexual selection examples include ornate peacock feathers, birds of Paradise, the antlers of stag (male deer), and the manes of lions.

              Joan Roughgarden, one of the few brave souls within the scientific community with the courage to challenge Darwinian fundamentalism, notes that:

              The homogeneity of our peer group is definitely preventing us from laying on the table hypothesis about nature which have a good chance of being correct. Those hypotheses almost invariably involve cooperation rather than competition. They involve cooperation rather than selfishness. They emphasize the body rather than the gene, the body and teams rather than replicators…. Basically the sociology and the peer review system and the grant awarding system rewards the generation of hypothesis that extend those held by the power centers.


              Roughgarden then goes on to blast sexual selection theory as being “locker-room bravado projected onto animals and then retrieved from animals as though a fact of nature.”

          2. sufferinsuccotash, stupor mundi

            It’s the best of Dickens, it’s the worst of Dickens.
            The best, because of his dissection of the ancien regime’s One Percent.
            The worst because of the last sentence, that the nobility had “somehow or other” turned France into a wasteland.
            Dickens, whose capacity for well-justified and eloquent anger at injustice was enormous, never could get beyond “somehow or other” when it came to explaining the causes of injustice.

            1. steve from virginia

              Decorations? What decorations?

              The Ancien Regime in late 18th century France was undone by the cost of wars in the West including the US revolution, a distorted tax system, monumental waste within government and a drought and accompanying famine. There was little in the way of transport so goods such as foodstuffs in excess supply in one part of Europe were unavailable elsewhere. As transport improved, excess were shipped away from persons in need toward money as occurred later in Ireland during the 1840s.

              The ‘Growth State’ economic regime is a child of inexpensive fossil fuels, particularly crude oil. The accelerated success of our regime has been its undoing as fuel is now exceedingly costly due to scarcity, it cannot be financed by way of its waste.

              Any analysis that does not include the end of cheap petroleum as a component of irreversible decline is not worth the paper it’s printed on.

              1. efschumacher

                Au Contraire. You can run a perfectly functional mass-transportation-of-goods-and-people society without resorting to cheap petrol. We did it for 100 years with trains. We can do it again the same way. It just seems to be beyond the current imagination and/or vested interest of current oligarchs and their political running dogs.

      1. nonclassical

        Jake-don’t go abstract=”toadying academics”…you’re speaking of University of Chicago Milton Friedman-“Chicago Boys” economic rationalization of power economics-politics….as related to “Project For A New American Century” war criminals…

        that bushbama has continued this fraud does indeed sit badly for dems…but then our resident “house negro” (polite conversation) is Chicago also…

        1. jake chase

          I think it goes beyond Chicago. MIT is another graveyard: foozlers exercising their puny math muscles on the basis of fraudulent assumptions. Samuelson, et. al. Didn’t Krugman come out of there too?

  3. Clive

    When I read that these fine treatises on the ills of our time were written by “HSBC’s Group Chief Economist” and another couple of fine, upstanding members of the community who “who run Independent Strategy, an economic consultancy” after wincing a little I had to summon up a huge amount of effort and will to finish reading the whole feature.

    I kind-of feel like a Tudor peasant being told what my worldview should be by the Pope’s local franchisee, some well dressed, well fed priest who gets to live in a nice warm and dry church lodging by maintaining a belief in the status quo. He’s just tried to sell me an indulgence. The future belongs to John Wycliffe, Jan Hus, Martin Luther, John Calvin et al sweeping away the idolatry, corruption and vested interests which have held the population in their thrall for centuries. I’m hardly, though, likely to get that information from the very same people who have so much to lose if the current system is consigned to history. More likely, they’ll try to tell me that the basic free market fundamentalism is right, we’re just not doing it right and practicing it hard enough or in a pure enough form.

    1. jake chase

      Well, you can’t blame them for trying. If you’re positively not interested in an Indulgence, how about a nice Credit Default Swap?

      1. Clive

        Thanks all the same Jake, but I’d rather have an Indulgence if I had to choose. At least there, the counterparty is the Almighty. Quite unlike the CDS merchant, I’m sure s/he’s adequately capitalised.

  4. Dan Kervick

    The title and subtitle of Mr. King’s book are puzzling. The money clearly cannot run out as central banks and policy makers can and have resorted to the electronic version of the ancient printing presses.

    I listened last week to a podcast of a King talk at the London School of Economics, and he begins the discussion by acknowledging right off that the money can’t “run out” for places like the US and UK – and so the title is a piece of willfully misleading and manipulative rhetoric.

    The gloom and doom “end of progress” narrative that has taken hold of much of the elite punditocracy and policy class is self-defeating and self-serving. It’s a line designed to buttress austerity economics, rationalize inert government, and cement the social and economic position of established elites in place.

    The global financial elite is stitting its big, fat, smelly bottom on the youth of the world and the vanishing middle classes, and robbing us all of our opportunity to achieve our true potential. If these jaded old farts aren’t interested in leading the world toward progress and new forms of economics growth, they need to get out of the way.

    1. Massinissa

      The thing to remember though, Kervick, is they will NOT get out of the way, at least not voluntarily. Too much privilege in their current fatass positions.

      They need to be forced out. But I dont know of any group with the political will and power to do the pushing.

    2. Susan the other

      +100. They don’t seem too inclined to be humble. They are pushing their agenda forward blatantly. All the ads on CNBC show happy young entrepreneurs around the world creating some company which participates in global trade. The image is a total lie. The elites are simply eliminating local economies at break-neck speed and attempting to replace them with a self-serving substitute which participates in global trade, which the elites “fund” with national subsidies because they have successfully redirected tax money away from entitlements and into their own projects where they can skim billions. They can never provide full employment or anything of social value. They are too busy hogging down at the trough.

      1. jake chase

        Everything on CNBC is a total lie. The programs are even worse than the ads. Sometimes I think they even falsify the market quotes.

    3. from Mexico

      Dan Kervick says:

      The gloom and doom “end of progress” narrative that has taken hold of much of the elite punditocracy and policy class is self-defeating and self-serving. It’s a line designed to buttress austerity economics, rationalize inert government, and cement the social and economic position of established elites in place.

      Since I pride myself in being an equal opportunity basher, I will take this opportunity to point out that it’s not just the academe that’s on board with the status quo. It’s full court press for TPTB, and the new Pope, with his drive to take the revolutionary, subversive and anarchistic theology of St. Francis de Assisi and turn it on its head, is certainly doing his part to prop up our decadent Powers That Be.

      Fake humility and fake austerity: it’s ubiquitous these days. It’s the latest scam to dupe the voters, and besides the academe, the political caste — folks like ALEC and Gov. Scott Walker — are playing it to the hilt. As the pro-capitalist magazine Business Week put it: “Part of ALEC’s mission is to present industry-backed legislation as grass-roots work.” And in his down-home campaign, the austere Walker can be heard saying, as he waves his brown-bag lunch: “This is my lunch. I pack a brown bag each day so I can save some money to spend on the more important things in life, like sending my kids to college.”

      But according to a group of Marxist Catholics, the academe and our political class have a strange bedfellow in their game of deceit: the new Catholic Pope.

      Born Jorge Mario Bergoglio, Pope Francis chose his papal designation in honor of Saint Francis de Assisi, the 13th-century monk best known for his poverty vows. And as pope, Francis’ manner has been less formal than that of his predecessors: a style that news coverage has lauded as “no frills,” noting that it is “his common touch and accessibility that is proving the greatest inspiration.” He avoids elaborate vestments, opted for a ring and cross of silver, wears old black shoes and refused a luxurious apartment. At his first media audience, the Pope said of Saint Francis of Assisi: “The man who gives us this spirit of peace, the poor man,” and he added “How I would like a poor Church, and for the poor.”

      But according to Maciek Wisniewski, that’s where the similarities between Pope Francis and Saint Francis end. The “papal austerity,” he charges, “instead of exposing the mechanisms of the dominant order, conceals them.”

      The exact opposite of Saint Francis, who formulated a subversive, revolutionary, and anarchistic theology that defied the ecclesiastical and social hierarchy and shook the foundations of the feudal order, Pope Francis has always been allied with the rich and the powerful of Argentina, Wisniewski notes. “By not talking about the ‘Argentina lesson’ (the decision about the debt, the importance of social investment),” Wisniewski continues, “or the movements which today oppose austerity, with his ‘cult of poverty’ Francis only offers the spiritual equivalent of ‘authoritarian austerity’.”

      As Wisniewski goes on to explain:

      The new Pope continues in the traditional doctrine of the Church, where the poor are only objects of charity and compassion, not subjects of their own history that should be liberated, and is far from, for instance, the thinking of Hugo Assmann or Franz Hinkelammert. These, synthesizing Catholicism with Marxism, developed a criticism of capitalism as a “false religion,” where the idols are money, profit and debt…

      Francis’ neo-Franciscan theology is not a tool of liberation, but a new strategy of discipline; it is not directed at the system, nor the bankers, but at the common people… The “papal austerity,” like the “politics of detail” of Foucault, seeks to teach us the virtues of “living with less” and of “asking for less” (salary, benefits, rights, services), to content ourselves “with the little that is,” and to neutralize the political potential of poverty.

      The original article can be found here:

      “Capitalism as religion and the neo-Franciscan doctrine as its discipline”

      (translations from the original Spanish are mine)

  5. allcoppedout

    Das is OK but I agree with Hugh on the BS review of BS books. At least he saved me the effort of reading them – I’m sickened by the signal to noise ratio in academic work. Missing in all such writing is any conception of an economy that would make most people more comfortable and why we can’t achieve this. Hudson has made this point in a number of papers.
    Much in the main posts here reminds me of discussing how we will farm 20 acres with a rabble of a thousand equipped with a horse and cart and a few shovels. We have somehow missed the advent of the tractor, let alone the new, more efficient, less earth compacting robots coming on line.

    A key and missing argument concerns opportunity cost – though I mean this broadly. Imagine being able to go back to 1930 and redirect politics to real democracy and investment to be productive to that instead of war. Where would we be now? What opportunity have the bastards really taken from us?

    1. Massinissa

      Huey Long ’36!

      Sorry sorry couldnt resist plugging longs name in. Its entirely possible Long wouldnt have made that much of a difference, but on the other hand he was too bonkers to not make one.

      Though Henry Wallace ’48 may have also made a difference, to be fair. Interesting to consider what could have been.

  6. allcoppedout

    And we miss where the pitchforks would go in the few suggesting it would be a great idea if they did none of the work, took half the crop and gambled it in the City!

    1. Dave

      Mr. King appears to me to be a realist, and realism looks to be in short supply these days. Money is of value only if it is scarce. If it is generated by merely pressing the proper numbers on a keyboard, it loses value.

      To a considerable extent, bankers are scapegoats. It is not their fault that humans have been so clever that they have become too good at producing goods and services. Since it is now difficult to make money by investing in productive enterprise, (we have too much of that already) can one blame them for attempting to make money only with money?

      The reality is that WW 2 was so good to us that we became the dominant economy of the world. But we are not as special as we think. Now that the rest of the world has recovered from their damage, we are finding that we are not so special after all. We are just like everyone else and will have to suffer the same consequences.

      1. jake chase

        If you insist on being philosophical, perhaps society’s overriding objective should not be enabling the making money with money? As for scarcity, electronic money may or may not be scarce, depending on who gets it.

        Apparently, it is still scarce enough that elected officials continually sell out their constituents in order to accumulate more.

  7. kevinearick

    The Problem Is The Solution

    Gravity is ancient History. Employ it as a sling-shot or get in line.

    God is quite capable of exercising judgment. If you have not cultivated a personal relationship, you should at least see that the robots destroy themselves, if left to their own designs. And if you are young, you cannot begin to fathom the reservoir of anger built by elders to contain this sh-show for so long, as fuel for the next great generation. In any case, you don’t want to enlist in a bomb-building competition, on either end.

    In today’s dollars, you require the equivalent of $350k/yr to raise a family within the empire, which no empire job pays. The difference to support the empire’s ongoing assumption of solvency has to come from somewhere, and collapses with global connectivity, which shorts the artificial nation/state slave trade rotation into general perception, and nature has repeatedly proven it can provide, with appropriate feedback. As the flies die in numbers at the end of the season, like they always do, there is ample opportunity. Adjust your distance and choose your soil accordingly. You don’t want to be near a stampeding herd, a farm subsidy, or anything that may be fashioned into a bomb.

    The empire majority has cornered itself, by busying itself cornering each other and taking out the corners with finance, doing you the favor of leaving control in the hands of a few, in indefensible positions, bankrupting their own currencies for lack of skilled labor on the assumption of automation. Then robots can’t get out of their own way; the local governments can no longer fund their welfare police retirement systems so the nation/states are printing themselves to death, and reversing the leverage funding all the empire make-work jobs, leaving the participants shut in, immobilized and trading worthless paper.

    Do not mistake emotions, replicated behavior from birth, for genuine feelings. The former is automated with anxiety threshold feedback, the latter requires introspection, which requires external mobility, and they are easily distinguished. At cycle begin, the superintendent is a teacher, and best is the goal, taught by example in the workplace. At cycle end, the superintendent is a corrupt politician, and best is the enemy of better, enforced by arbitrary authority, followed automatically, effectively cleaving the front end of the distribution and consigning the rest to History, to be recycled. Be the best at being yourself, which empire peer pressure automatically filters out, and the artificial empire borders automatically evaporate, because the empire bias cannot recognize the result directly. Filter the filter to turn dc back into ac. That’s what parents do.

    If you recall the distribution of event horizons separated by false assumptions, capital can only conserve the return line. You run the hot, and you can employ any form of gravity you want. You can leave capital behind, capital can change its habits, or you can price in a sling-shot. At the end of an iteration, capital controls both formal and informal authority. At the beginning, labor does. The middle class grows when formal civil capital and informal military labor are in agreement, to balance the result. Labor currently has no interest in the economy of the middle class, which seeks only capital, through replication.

    Don’t come to the elevator door for a free ride or to replace the elevator mechanic. Show the old-timer how you are going to employ the skills provided to build a better system. The mechanic employs the clutch so you can install your gear, to create time forward. People who love are not lucky; that a parrot, parroting a program for other parrots. Love is pain upon misery upon pain upon misery, self-sacrifice, on the off-chance that a youngster comes along to make it all worthwhile. Love and war are two sides of the same coin. You don’t make the investment so a new class of robots can take over for the old class, which is why the same robots are recycled over and over again at the top.

    Becoming a great generation is a decision, The Imperative. The majority, but not al, of the boomers chose comfort. Life is not a leisure activity. It is built, brick by brick, by hands fashioned for the purpose, from birth. Leave the passive aggressive damsels in distress and their manufactured crises back in distress when you exit the event horizon. The problem is the solution, on both sides of the empire’s divide and conquer mirror.

  8. allcoppedout

    Just a brief one on Mexico’s “scientists”. We overwhelmingly favour human cooperation above selfishness. Current jargon include, ‘the arms’ race of co-evolution’, ‘the selfish gene’ and ‘extended phenotype’. We may, at times, think of the individual human as a vehicle for such – but there are at least 21 ways in which we consider what is a biological individual. Give us a break mate – we already agree with you.

  9. efschumacher

    “Different colours, tongues, towers and gods. I search my way”.

    Van Rompuy is, too,
    a lousy haiku poet
    It’s 5-7-5.

  10. tom

    Das raises some interesting points, albeit from a narrow perspective. Almost like watching the World Series from a pin hole camera.

    Howvever, analyzing the UN System of National Accounts (UNSNA) seems to be the key to linking the numerous Ponzi finance schemes, Endless war which incidentally occured on the same timeline.

    Ultimately UNSNA gives the critical mind a wider HD view of the global system of finance.

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