Financial Fundamentalism - Interesting Thought!

[BlackShanglan]

I found this in a BBC article on a newly released book, "The Reluctant Fundamentalist." I found the author's take refreshingly interesting.

Fundamental focus

The Reluctant Fundamentalist contains a number of ironies - amongst them that the fundamentalism of the title is not to do with Islam, but comes from the company in which Changez works, which urges its staff to "focus on the fundamentals".

But Hamid, who himself worked as a management consultant for many years in New York and London, stressed that he was not attempting to single out America for criticism in the book, but rather a particular creed of corporate thinking.

"There is a corporate or a financial fundamentalism, which is broader than just America - it is a global thing," he said.

"It is a reduction of people to units of value, which happens all over the world, and increasingly often.

"In its own form, unchecked, it's exactly the same as any other form of absolutist system. I was setting up that kind of a parallel.

"I think those economic forces, and people who adhere entirely to them, generate the same kind of fear and hostility that people who adhere to fundamental religious forces do."

 

[Recidiva]

I like it. And I agree. Often corporate tactics (not limited to America) remind me of a Goodfellaesque mobster torturing someone to death because their "reputation" was damanged and hissing as justification "It's just business."

Except now the corporations are a bit smarter. They hire out second parties to do the dirty work, and then hire enough lawyers to say "It's just business."

 

[S-Des]

I agree as well. I find comments about how religion causes this or that, shallow and lacking in human understanding. We all have our "faiths" and whether we seek rewards in this life (money, love, sex, popularity, power, etc...) or the next, humans seem determined to behave similarly towards each other. A man who takes a huge financial bonus for doing nothing more than putting hundreds out of work (not giving a shit about them, their families, or the negative impact on the economy) are not much different from those who look to rewards in the afterlife and don't care who they have to destroy to get there. Maybe there's a difference in morality, who can say? If you put enough people out of work, there will eventually be a tipping point (much like the environment) where the damage is something that cannot be absorbed by a good economic engine.

 

[Recidiva]

I agree as well. I find comments about how religion causes this or that, shallow and lacking in human understanding. We all have our "faiths" and whether we seek rewards in this life (money, love, sex, popularity, power, etc...) or the next, humans seem determined to behave similarly towards each other. A man who takes a huge financial bonus for doing nothing more than putting hundreds out of work (not giving a shit about them, their families, or the negative impact on the economy) are not much different from those who look to rewards in the afterlife and don't care who they have to destroy to get there. Maybe there's a difference in morality, who can say? If you put enough people out of work, there will eventually be a tipping point (much like the environment) where the damage is something that cannot be absorbed by a good economic engine.

I think that's the point of fundamentalism. Having a motivation so "overpowering" that you can justify anything with it.

"Money/Power is everything."

"God is expecting this from me."

 

[Rumple Foreskin]

"There is a corporate or a financial fundamentalism, which is broader than just America - it is a global thing," he said.

"It is a reduction of people to units of value, which happens all over the world, and increasingly often.

This idea is flawed in that it implies what the writer calls "financail fundamentalism" is new. It's not. It has been the dark side of Capitalism and the Industrial Age since day one. The idea that modern globalization makes it any worse than that experienced by industrial workers in the 19th and 20th centuries is to ignore history.

Rumple Foreskin

 

[S-Des]

I think that's the point of fundamentalism. Having a motivation so "overpowering" that you can justify anything with it.

"Money/Power is everything."

"God is expecting this from me."

Although I try not to bestow too much confidence in philosophers, I thought Trey & Matt hit it perfectly in the episode about destroying religion. Cartman gets frozen and wakes up in the future, only to find out that religion is gone, so now men's armies (and sea otters ) fight over the correct name of the non-religious movement. I honestly think it would be that petty.

 

[Recidiva]

Although I try not to bestow too much confidence in philosophers, I thought Trey & Matt hit it perfectly in the episode about destroying religion. Cartman gets frozen and wakes up in the future, only to find out that religion is gone, so now men's armies (and sea otters ) fight over the correct name of the non-religious movement. I honestly think it would be that petty.

All hail "Time Child!"

 

[rgraham666]

It's why I refer to myself as a heretic.

It's also why I refer to myself as a sinner. Being mentally ill is a sign of lack of faith to the financial fundamentalists. And fundamentalist societies are never kind to sinners.

 

[Liar]

I work in the magazine business.

I have worked for a company whose leaders want to make profit for the shareholders. So they make magazines that people buy. Which means they make good magazines.

I have worked for a company whose leaders want to make good magazines. Since they are good magazines, people want to buy them. And thus, profit for the shareholders is made.

I'm pretty sure which place I don't want to work at again.

 

[Roxanne Appleby]

This idea is flawed in that it implies what the writer calls "financail fundamentalism" is new. It's not. It has been the dark side of Capitalism and the Industrial Age since day one. The idea that modern globalization makes it any worse than that experienced by industrial workers in the 19th and 20th centuries is to ignore history.

Rumple Foreskin

Oh, it's older than that even. It's a human thing. Under feudalism it was "land fundamentalism," and they killed and enslaved people over it. We should count our blessings that we've advanced beyond that stage. That said, the objectification of other humans is objectionable wherever it occurs, but it is not intrinsic to any particular economic or social system.

 

[elsol]

I guess I'm an economic fundamentalist.

In economic terms, if we're all resources then we are judged only by our earned or intrinsic values, thus much closer to equal than in any other arena.

The economy even has karma.

 

[rgraham666]

One big problem with economics as we currently envisage it is that you can make money by not doing anything. That's how insurance companies make their money. You pay them and they don't have to do anything. As long as they don't they're making money. This is why they have so many clauses in any contracts you sign. The less they do the more money they make.

There are other examples of this as well, such as the California energy crises a few years ago. By not delivering electricity the generators made billions of dollars.

Another problem is due to the nature of money itself. Money isn't real. We have to pretend it is to get through our lives. But it's an illusion, as all values are.

This allows us to 'create' money on the fly with things like the stock market and through arbitrage and through thousands of other methods of manipulation. So we can look like we're 'making money' when we're just conjuring it into existence through sheer belief.

Until we have a better understanding of economics, and currently our understanding of economics is at about the same level as medicine was when bleeding was a standard practice, economics is a poor substitute for ethics.

 

[Huckleman2000]

I blame the MBAs.
Next 29 year old who tells me "If you can't quantify it, you can't manage it" is going to get the quantity of one fist to his face.

 

[BlackShanglan]

I think that's the point of fundamentalism. Having a motivation so "overpowering" that you can justify anything with it.

"Money/Power is everything."

"God is expecting this from me."

And, of course, that perennial human favorite - "The ends justify the means."

This idea is flawed in that it implies what the writer calls "financail fundamentalism" is new. It's not. It has been the dark side of Capitalism and the Industrial Age since day one. The idea that modern globalization makes it any worse than that experienced by industrial workers in the 19th and 20th centuries is to ignore history.

Well, there are those of us to whom "19th and 20th centuries" is relatively new. Honestly, I read him in that context - that post-industrial revolution structures might well have been the beginning of this, and that it's continuing to accelerate. But possibly that's just me.

 

[BlackShanglan]

Although I try not to bestow too much confidence in philosophers, I thought Trey & Matt hit it perfectly in the episode about destroying religion. Cartman gets frozen and wakes up in the future, only to find out that religion is gone, so now men's armies (and sea otters ) fight over the correct name of the non-religious movement. I honestly think it would be that petty.

"We must remember the most important thing about science: being a dick to people who don't agree with you."

(And the correct name, of course, is the People's Front for the Popular Liberation of Judea.)

 

[BlackShanglan]

There are other examples of this as well, such as the California energy crises a few years ago. By not delivering electricity the generators made billions of dollars.

Another problem is due to the nature of money itself. Money isn't real. We have to pretend it is to get through our lives. But it's an illusion, as all values are.

This allows us to 'create' money on the fly with things like the stock market and through arbitrage and through thousands of other methods of manipulation. So we can look like we're 'making money' when we're just conjuring it into existence through sheer belief.

This is Marx's essential point on capital. One cannot "make" money with money because money itself performs no labor and creates no product. The only method by which capital can increase is by having someone else to labor in order to use the capital which you are not using, and then taking part of the product of his labors. Marx saw the problem much as you do - that people think of money that is earning interest as if it was a pig farrowing or another animal breeding and making more of itself, when it fact it can only increase by taking from the labor of others.

Capitalism says that this is good; that fee people pay to use your capital is the price of having ready capital to use. Marx doesn't like it; his point is that they would have the capital available anyway if people who weren't using it didn't try to hoard it and charge for its use. But then, I'm not sure how Marx envisions retirement working.

... economics is a poor substitute for ethics.

Yes. I'm with you very much there. But then, I'm a religious person and perhaps more conservative than many here. I think that economics makes poor ethics; I think that science makes poor morals. (Just to be clear, I also think that the Bible makes a poor science textbook.) That seems to take us back to fundamentalism; we need all of those things, not just one.

 

[rgraham666]

Not sure I agree with Marx on that one, Shang. My point is that money is an illusion. It's not real except in our minds.

If we were careful with it and recognized this fact it wouldn't be so bad. But we treat it like it's real and anything that 'increases' it makes us richer. My belief is that unless that money is converted into something real; a house, a car, a meal even; it remains an illusion. 'Reinvesting' in the stock market or whatever just spins an idea around. There's no, in my opinion, real increase in value.

Huck? The best book I ever read on running a business made it very clear you do not hire MBAs.

 

[The_Fool]

I blame the MBAs.
Next 29 year old who tells me "If you can't quantify it, you can't manage it" is going to get the quantity of one fist to his face.

A 29 YO can quantify it but without experience to understand the significance of the information, how can he management it? How does he know that he wants to manage it? What are the important aspects to be managed? Having an MBA after 30 years of work experience is a cool thing...

 

[BlackShanglan]

Not sure I agree with Marx on that one, Shang. My point is that money is an illusion. It's not real except in our minds.

If we were careful with it and recognized this fact it wouldn't be so bad. But we treat it like it's real and anything that 'increases' it makes us richer. My belief is that unless that money is converted into something real; a house, a car, a meal even; it remains an illusion. 'Reinvesting' in the stock market or whatever just spins an idea around. There's no, in my opinion, real increase in value.

Yes. That special nature of money I think is related to Marx's distinction between personally used and created goods and capital. Capital is closely tied to money because it's difficult to have capital without it. You can, of course, use a barter system, but when you have to look at, say, a heap of wheelbarrows you aren't using every day, you start to wonder if they might be put to better use. If it's a heap of cash, it's easy to sit it in a corner and just keep it, or to put it in the bank and charge interest without thinking about where that money comes from.

 

[BlackShanglan]

I guess I'm an economic fundamentalist.

In economic terms, if we're all resources then we are judged only by our earned or intrinsic values, thus much closer to equal than in any other arena.

The economy even has karma.

This is an interesting take. I like your point that when we look at the products of people's labors, it can take away some of the less pleasant other things we might have considered instead. In that light, it can be a useful thing. But I think that we can also lose our valuation of other qualities that are good and important - things like mercy, kindness, and compassion, which don't fit well into ledgers.

 

[JamesSD]

Hehe, it's threads like these that make me feel like a Relative centrist on this board (despite being a proud Liberal).

Many parts of Capitalism work wonderfully. Personally I see regulated capitalism as the ideal scenario for a country. Some free markets take an awfully long time to correct themselves, which is a problem. An example to me is the insurance industry - as margins and profits soar while service deteriorates, more and more people opt out of insurance. Eventually this would be self correcting as those juicy margins will be attacked by bargain competitors, but this can takes years if not decades to resolve itself, leaving millions of people in the lurch and vulnerable in the meanwhile. Pollution is another case where strict government regulation is necessary to reflect the "true" cost of activities.

Still, it's not the job of corporations to be moral. It's the job of the people and governments to establish regulations forcing ethical behavior onto the market.

The concept of capital investment is complicated, but it does make the world work. Almost every buisiness starts out with a loan of some form, be it venture capital investment or a bank loan. The only incentive for that money to be lent is the prospect of passive income, be it from interest or capital gains.

I'm against predatory lending and favor strict regulation, but I'm certainly in favor of my ability to put money in a savings account and earn a decent amount of interest on it, and when the time comes, to be able to borrow money at a fair rate and pay for a house.

I do think MBAs are rapidly becoming worthless sheets of paper. There are some smart MBAs out there, but they'd be smart people without them. From everything I've heard, you learn very little in an MBA program you couldn't pick up elsewhere.

 

[Recidiva]

Hehe, it's threads like these that make me feel like a Relative centrist on this board (despite being a proud Liberal).

Many parts of Capitalism work wonderfully. Personally I see regulated capitalism as the ideal scenario for a country. Some free markets take an awfully long time to correct themselves, which is a problem. An example to me is the insurance industry - as margins and profits soar while service deteriorates, more and more people opt out of insurance. Eventually this would be self correcting as those juicy margins will be attacked by bargain competitors, but this can takes years if not decades to resolve itself, leaving millions of people in the lurch and vulnerable in the meanwhile. Pollution is another case where strict government regulation is necessary to reflect the "true" cost of activities.

Still, it's not the job of corporations to be moral. It's the job of the people and governments to establish regulations forcing ethical behavior onto the market.

The concept of capital investment is complicated, but it does make the world work. Almost every buisiness starts out with a loan of some form, be it venture capital investment or a bank loan. The only incentive for that money to be lent is the prospect of passive income, be it from interest or capital gains.

I'm against predatory lending and favor strict regulation, but I'm certainly in favor of my ability to put money in a savings account and earn a decent amount of interest on it, and when the time comes, to be able to borrow money at a fair rate and pay for a house.

I do think MBAs are rapidly becoming worthless sheets of paper. There are some smart MBAs out there, but they'd be smart people without them. From everything I've heard, you learn very little in an MBA program you couldn't pick up elsewhere.

I'd be fine with capitalism if my government believed in it. Instead they give out welfare and incentives, slap tariffs and fines wherever a lobbyist is there to push through a law for one.

There is no "free market" with all the "corrections" the government makes to compensate for...let's say...automobile manufacturers, airline companies, corn farmers, dairy farmers...

When your government pays folks to NOT grow something, and also subsidizes substandard companies because they're "vital to the economy" there's a problem. If they were that damned vital, they'd have no problem making money, right? Isn't what capitalism is about?

 

[R. Richard]

If we were careful with it and recognized this fact it wouldn't be so bad. But we treat it like it's real and anything that 'increases' it makes us richer. My belief is that unless that money is converted into something real; a house, a car, a meal even; it remains an illusion. 'Reinvesting' in the stock market or whatever just spins an idea around. There's no, in my opinion, real increase in value.

Rob:
Investing money in the stock market is real. Money invested in the stock market is used to build a company(ies). The company provides jobs to employees and products/services to customers. In addition, a company also buys materials/tools from other companies and/or sells materials/tools to other companies. The entire business community is a real, working organism.

You see only the consumer side of an economy. There is also a supply side. The main failures in economics are the failure to see and appreciate the supply side. The communist government of the former USSR was a classic example. It was assumed that a group of political central planners could efficiently run the supply side of an economy. They could not.

 

[Pure]

hi shang,

there are too many choir members here. why don't you invite ms. roxanne to have her say.

in the meantime, for the sake of balance:

quoted by Shang"There is a corporate or a financial fundamentalism, which is broader than just America - it is a global thing," he said.

"It is a reduction of people to units of value, which happens all over the world, and increasingly often.

P: there isn't enough quoted to tell what the writer means. 'who' is 'reducing' people. corporate leaders, i guess. how? if Ford's boss says, 'we've sold only 5 million cars this year as opposed to 5.2 million last year,' has someone been 'reduced' ? probably he's trying to figure where people's preferences lie, and *then* how better to meet them.

James SD says An example to me is the insurance industry - as margins and profits soar while service deteriorates, more and more people opt out of insurance. Eventually this would be self correcting as those juicy margins will be attacked by bargain competitors, but this can takes years if not decades to resolve itself, leaving millions of people in the lurch and vulnerable in the meanwhile.

P: how often is response so sluggish? to take an example, i see lots of ads of the 'grey power' sort. auto insurance people offering better buys to us middle aged sorts. it's been happening for a while, as the boomers go through their 50s.

when is it sluggish? in the healthcare examples. arguably you have a bunch of congress persons in the pockets of Kaiser etc. and certain segments of the AMA. these legislators block changes. IOW, it's corruption of the political system--a perennial problem--not the fact that Kaiser is 'reducing' people.

IF Kaiser, for example, offers VERY limited access to specialists, I'm sure that the market, UNtampered with, would correct in a short time: specialists WANT customers, and a new offering would appear in short order from another branch of an insurance co. saying "Here's a package with xxx guarantees of access to specialists." and incidentally, the new package is formulated by --guess what?-- 'reducing' people to units; saying "if we offer X amount of access, we'll have Y new customers buying policies at Z dollars each, yielding a profit of ZZ dollars."

in short, i'd say that "quantitative" thinking about people is ethically neutral: to use an analogy, we can consider the weight of everyone in AH. that's "reducing" them to a number [of pounds]. what do we do with the information? for example, we'll maybe set up an exercize thread, since 1/3 of us are overweight. how do we track progress? weigh ins, every 3 months. Is Shang and others down, on average? again, we "reduce" each person to an "average weight loss" figure.

and of course we can 'break down' the units. Suppose Shang's reduction figure is negative. Shang gained; analysis shows that lots of us 50 year old horses gained despite the program. too many 'power bars' in the pockets during the 'power walks.' well, IF we can identify a segment NOT benefiting with the program and a reason, a variant can be devised. etc. using quantification, "reducing" 50 year old horses to numbers. so evil., right?

 

[Pure]

new story. capitalist disincentives.

i agree capitalists require incentives and disincentives. here's how the Chinese do it, moreso, given the scandals of late.

BEIJING — A former department head at China's drug regulation agency was sentenced to death Friday on bribery charges, as U.S. regulators ordered a recall of three more Chinese-made products deemed dangerous to children.

The developments were the latest in widening concerns about the safety of Chinese goods both at home and abroad.

Cao Wenzhuang, a department director at the State Food and Drug Administration, was given the death sentence with a two-year reprieve on charges of accepting bribes and neglecting official duties, said his lawyer, Gao Zicheng.

While the sentence was unusually harsh given the charges, such suspended death sentences are usually commuted to life in prison if the convict is deemed to have reformed.

Cao, who oversaw the pharmaceutical registration department, had been secretary to Zheng Xiaoyu, the head of the agency, in the 1980s. Zheng was sentenced to death in May for taking bribes to approve substandard medicines, including an antibiotic blamed for at least 10 deaths.

In the pharmaceuticals department, Cao, 45, had the power to approve pharmaceutical production in China from 2002 to 2006.

He was charged with accepting $307,000 in bribes from two medical companies, which were based in Jilin and Guangdong provinces and were seeking approval to sell their products. He also was charged with neglecting his duties in approving drugs.

In its judgment, the Beijing No. 1 People's Intermediate Court said the death penalty was warranted given the "huge bribes involved, and his refusal to confess ... and reluctance to return the money," the official Xinhua News Agency reported.

But he was given a two-year reprieve because he provided evidence that helped with the investigation of other cases, Xinhua said. It gave no details.