Secular Right | Reality & Reason

Mar/09

25

Muddle to the Right?

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I’m reading Niall Ferguson’s The Ascent of Money: A Financial History of the World right now. I’ve not read Ferguson before, and I have to say he’s a rather good prose stylist. Though dense with data & concept The Ascent of Money is a page turner, though perhaps it says more about me than the gripping narrative.

But the most interesting aspect for me right now is how dated some of the observations made are. The final touches on the book were put into place in late-Spring of 2008, so you have Ferguson referring to the “Financial Crisis of 2007.” I’ve heard him on the radio and he ruefully has admitted that events are so volatile that despite the timeliness of his book, in some ways it is almost quaint in terms of the perspective which it offers. Despite the fact that here in the United States we are on the precipice of verging to the Left, I can’t but help wonder if the ultimate results of the current crisis will be conservative. Not conservative in specific ways such as the election of conservative governments or greater faith in modern capitalism, but a deep conservatism of disposition which is nourished by the jaundiced skepticism which is in the air. Skepticism of the efficacy of government in the face of corrupt capitalism. Skepticism as to the virtue of the free market. Skepticism of engineering, financial and social. Skepticism of the goodness of one’s fellow man and the inevitable ascent toward the pinnacle of progress.

Though prehaps you’ll find it ironic that my pessimism about the current state of affairs makes me optimistic, so to speak, about conservatism.

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18 comments

  • Dave · March 26, 2009 at 6:07 am

    If you like Ferguson, may I suggest his “The Pity of War”, about World War One. Fascinating book about the war, including quite a bit of economics history and facts I had never seen before, all presented in an engaging style.

  • rob · March 26, 2009 at 11:00 am

    Unless Shepard Fairey slaps SKEPTICISM on the next Neo-Constructivist poster he manages to cobble together in Photoshop (provided he stays out of jail), I’m going to go out on a limb and guess “probably not”.

  • Caledonian · March 26, 2009 at 11:39 am

    “Skepticism as to the virtue of the free market.”

    No reasonable person ever claimed that the free market was magic and would make everything wonderful forever. The free market doesn’t prevent the consequences of stupidity, short-sightedness, and corruption.

    There is no system that can prevent those consequences. We can only try to ensure that we don’t make those mistakes, and when someone does, that they’re the ones that suffer for them.

  • Polichinello · March 26, 2009 at 7:31 pm

    The free market doesn’t prevent the consequences of stupidity, short-sightedness, and corruption.

    Not only does the free-market not prevent those consequences, it expedites them.

  • joe · March 27, 2009 at 3:18 am

    The financial markets have ALWAYS been a major source of economic disease. Kinda like mosquitoes :) The benefits of the free market in the REAL economy has never been in serious doubt. In the financial arena the case for unregulated markets is much weaker.

    “There is no system that can prevent those consequences.” Not true. Look at passenger airlines. The extremely low accident rate is the result of an extensive body of standards to which everyone must adhere.
    The only real issue is this: How much, if any, economic growth do we surrender if banks etc. must adhere to strict sane standards. There is always some tradeoff between efficiency and safety.

  • Caledonian · March 27, 2009 at 8:44 am

    “Not only does the free-market not prevent those consequences, it expedites them.”

    That’s not a flaw, it’s a feature.

    ““There is no system that can prevent those consequences.” Not true. Look at passenger airlines. The extremely low accident rate is the result of an extensive body of standards to which everyone must adhere.”

    You’ve missed the point. Who decided what standards needed to be enforced? How did people determine what the right standards were?

    *Someone* always needs to enact intelligence, prudence, and foresight. If the people are stupid and foolish, how can they choose quality leaders to make quality decisions? It’s possible to have system-wide rules enforced by power that work, but that’s harder to arrange than when people decide for themselves.

    It’s no use to give power to an authority to prevent others making stupid decisions if no steps are taken to prevent that authority from making stupid decisions itself. For bootstrapping to work, you have to have a working system, even only a tiny one.

    Socialism is possible, but it’s harder and more difficult than laissez-faire. Trying to implement social control on a society that can’t make freedom work is pretty much a guaranteed disaster.

  • Polichinello · March 27, 2009 at 10:33 am

    That’s not a flaw, it’s a feature.

    I agree.

    The problem is that for a modern society, we still need a reliable store of wealth accessible to citizens, which means the government needs to guarantee savings accounts. Since the government, and thus the taxpayer, is on the line, some form of regulation is required.

  • joe · March 27, 2009 at 11:28 am

    “You’ve missed the point. Who decided what standards needed to be enforced? How did people determine what the right standards were?”

    Its really not that hard. We have red lights, crossing guards at schools, fire codes, flood plain codes, lead paint was banned from housing, etc, etc, etc. Most safety standards arise out of painful experience.

    I’ll concede that starting from scratch can be difficult, but the current financial meltdown must be dealt with. It was much too big to shrug off. Banks have always had reserve requirements but the modern financial system grew too complex for existing rules. Some people had become utterly wreckless – checkout Iceland as an instructive example.

    None of this has anything whatsoever to do with socialism. We are talking about the financial markets, NOT the real economy.

  • Polichinello · March 27, 2009 at 12:59 pm

    How are financial markets not part of the “real economy”. Capitalization is pretty key any modern business.

  • Caledonian · March 28, 2009 at 5:27 am

    “we still need a reliable store of wealth accessible to citizens”

    Yes.

    “which means the government needs to guarantee savings accounts.”

    No.

    “Its really not that hard. We have red lights, crossing guards at schools, fire codes, flood plain codes, lead paint was banned from housing, etc, etc, etc. Most safety standards arise out of painful experience.”

    Agreed. But none of those things need to be regulated by government. People ostensibly want government to take up all kinds of responsibilities so that they don’t have to think or worry about them. The problems are: many such things are better handled by individuals, and government itself is one of the things people don’t want to have to think about.

  • Donna B. · March 28, 2009 at 3:51 pm

    I am fond of legal punishments for false advertising, fraud, and such. If those punishments are due to regulations, then I guess I’m for regulations.

  • Donna B. · March 28, 2009 at 8:44 pm

    And I just spent my last Christmas Barnes & Noble gift card on this book. It had better be good! Am I the only person who is much more careful with gift money than money otherwise obtained?

  • j mct · March 29, 2009 at 10:43 am

    I’d like to hear what you think of Ferguson’s book when done.

    I read another book by him on the early Rothchilds, it ends in 1848, and I got a lot out of the book, but only because I understood money and banking pretty well before I read the book. By the end of the book, I was quite sure that whatever Ferguson understood, money and banking weren’t among them, and of one didn’t bring an understanding of them to it, the book wouldn’t have been very informative. He wrote that book about 10 years ago, so maybe he’s gotten better.

  • joe · March 29, 2009 at 1:51 pm

    “How are financial markets not part of the “real economy”. Capitalization is pretty key any modern business.”

    Do you eat money? Does it keep away the winter wind? Does a finacial crash cause the tomatoes to stop growing?

    Obviously we need a finacial system just like we need water & electricity. Unlike the Real economy, a few fools can throw finance into disarray. A single obscure individual destroyed a major 200 year-old British bank. In addition the financial system extracts profits by unproductively churning assets. In the last 50 years the finacial industry has grown to absorb 25% of all coporate profits. Salaries of finacial managers have grown 200% relative to everyone else.

    “none of those things need to be regulated by government”

    In theory perhaps. In practice only governments have any real police power. Voluntary rules are easily ignored by the unethical.

    It is important to distinguish regulation from direction. A speed limit constrains your velocity but does not assign you a destination.

  • Caledonian · March 31, 2009 at 8:27 am

    “In theory perhaps. In practice only governments have any real police power. Voluntary rules are easily ignored by the unethical.”

    And the unethical are easily punished by people who refuse to do business with them.

    Sadly, the idea that normal, everyday people should exercise any discretion in their behavior and choices, instead of having things regulated for them, has fallen completely out of fashion.

    In practice, the choices of the masses have incredible collective power. The problem is getting people to exercise the power they have instead of sleepwalking through their lives.

  • Cornelius J. Troost · April 2, 2009 at 10:45 am

    While Obama’s election taught us that “the masses” have indeed collective power, we cannot feel convinced that they have enlightened judgment.At this time they are milling about absolutely befuddled by our vast financial crisis. To have an aggressive socialist to heal our wounds may well be a perfect storm for American capitalism and democracy.

    I believe that one of the key issues that will lead inevitably to our further descent into the maelstrom is related to the economics of education as Obama and various black political groups push us further into appeasement by capitulation. By that I mean we are rapidly moving in the direction of “living a lie” by tossing vast amounts at the notorious “achievement gap” which is so incendiary that black writers can openly call for new “crusades” without fear of refutation. I have read parts of a rough draft by Robert Weissberg, a retired professor of political science(Illinois), and his several pieces at Takimag.com that warn us of the coming wave of irrationalism by “reformers” willing to massively disrupt our generally very good educational system to correct the pathologies of black social and educational life.As weissberg suggests, we may be forced to distort all learning by false evaluation measures that will soothe black self-esteem.If he is right our current falsification under G.W. Bush’s NCLB will look like a picnic compared to the tricks conceived by desperate reformers.Poor Charles Murray shouted an alarm with his Real Education, but such realism is quickly crushed by our Obamania and romantic lust for impossible equal outcomes.

  • Caledonian · April 3, 2009 at 8:52 am

    “While Obama’s election taught us that “the masses” have indeed collective power”

    That’s not the sort of thing I’m talking about. I’m thinking more of the Montgomery bus boycott, although that’s still a collective action.

    I’m thinking of the effect of many individuals, working and choosing as individuals, that collectively effect change without effecting change collectively.
    The Obama election was many people coming together to lose their individuality (ungood) and work within the system to produce a result within the system (ungood).

    The awareness that we, as a group and as individuals, create the system, and maintain it through our choices, is being lost. All social systems are built upon that foundation, but ours especially so. When the concept of participation is corrupted, participatory democracy can’t survive.

  • Cornelius J. Troost · April 3, 2009 at 10:46 am

    Since Obama’s record of accomplishment was nil, his victory reflects in large part the emotional and instinctual voting of blacks who believe that he will enlarge entitlements and magically erase both educational and economic differences between whites and blacks.Hispanics see him as the golden gatekeeper for massive further invasions of illiterate illegals who will cripple America by making it Hispanic culture friendly, which is to say much less literate and adrift in terms of identity and traditions.

    The third group is white liberals who hate America and prefer a multicultural morass with a socialist government. Such a floundering Babel will be easily attacked by Islamic terrorists.This group is an ideological collective that at least thinks about political issues.The other two think tribally and emotionally.Like the massive belief of blacks that OJ was innocent, belief in Obama has zero to do with helping our nation and everything to do with being “one of us.” The True Believer of Eric Hoffer is afoot.

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