Milton Friedman at 100….

….is dead. So is Marx. So is Keynes. None of them are relevant to the New Future. It is time fiscal economics moved on.

Milton Friedman (left) would’ve been a hundred years old today, and all over the Western world, people who worship him, and use his quotes ad nauseam – but never talk about the consequences of his ‘ideas’ in the real world – are writing hagiographic guff about his influence. What follows is one from the Slog archives – even more relevant today – about the stifling idolatry applied to the likes of Marx, Keynes, and Friedman…none of whom knew about Libor rigging, speed of light trading, Russian market blagging, Ebay, eurozone meltdown, Northern Rock, gold price manipulation, intrabank online swindles, and a thousand other ‘free market’ atrocities.

There was an interesting piece in the New York Times recently (where else?) by Paul Krugman, in which he rather oddly argued on the side of the bankers (“there isn’t a structural problem really”) to make the following liberal (“let’s spend our way out of trouble”) point:

‘All of this strongly suggests that we’re suffering not from the teething pains of some kind of structural transition that must gradually run its course, but rather from an overall lack of sufficient demand — the kind of lack that could and should be cured quickly with government programs designed to boost spending.’

It’s the same one-dimensional thinking that could just as easily be applied to Merkel, Schäuble, and the 1922 Committee in its insistence on more and more cuts to services, and tax cuts for those with money to spend: it’s all about demand. But even more depressing is Krugman’s example as to how this sort of return to growth can be achieved: an article written in June 1939 saying the same thing as those (like me) who argue there is a structural problem with the model of capitalism we’re using:

‘The paper in question was published in June 1939. Just a few months later, World War II broke out, and the United States — though not yet at war itself — began a large military buildup, finally providing fiscal stimulus on a scale commensurate with the depth of the slump. And, in the two years after that article about the impossibility of rapid job creation was published, U.S. nonfarm employment rose 20 percent — the equivalent of creating 26 million jobs today.’

This is pretty  cool thinking from Krugman: we’re in the mire, quick – let’s get a war going and then supply it. This isn’t what he means of course, but the argument is so narrow as to be laughable. His problem in the piece is that he is arguing within the strangulating confines of  a sterile debate about theory and process…but in 2012, when he is offering 1939 solutions – comparing a debt free US with the zillion-dollar indebted America we see today. His article is the perfect quintessence of how and why we are failing to tackle what is, really, The Global Cultural Crisis: the one that should’ve begun in 2004, then was kicked down the time-line to 2008, and is still unravelling in 2012.

For people like Krugman and Buckley, the past is for shaping the future, and the present is for kicking into the future.

Think about it for a second. Wolfgang Schäuble is driven by memories of the Weimar 1923-25 hyperinflation: an event caused by direct money-printing following the draconian exconomic sanctions of the First World War. It all took place 23 years before he was born. The Tory’s ‘radical’ committee is called the 1922. A substantial proportion of votes in the first Greek election this year were cast in support of a theorist who died 130 years ago. Angela Merkel’s approach to life was learned in a Communist State that collapsed 22 years ago. The British Prime Minister (when he isn’t making it all up as he goes along) clings to the at least partly discredited ideas of Baroness Thatcher who, along with Reagan, let loose the dogs of banking on us. His Government is dominated by rich public schoolboys and Oxbridgers living in a fantasy world of good old days when everything was getting better and better.

The Right across the West cleaves as strongly as ever to the ideas of Milton Friedman, a bloke whose monetarist laissez-faire principles insisted  that a self-correcting economy would result in the absence of regulation….as opposed to the absence of wealth apart from the rich 3%. That same rich 3% now manipulates markets from gold to Government bonds across the world….all in the name of the Mighty Milt. He proposed the idea of trickle-down wealth, which in practice works in the opposite manner. Friedman spent thirty years developing his ideas: thirty years in which there was no global internet, China was a sleeping Red, satellite communication was unknown, and Bob Diamond had reached the tender age of twelve. There were no SOL trading software packages, deep liquidity pools, Hedge Funds (beyond a tiny sector after 1949 doing what Hedgies should do) or segmented multivariate bourses.

The Left clutches the comfort-blanket of Keynes ever more closely to its one-more-heaving breast. J M Keynes, the man whose opening words in talking about State economic stimulation were “it should never be attempted unless the public finances are in good order” is presented as the man who’s ideas never failed, but he wouldn’t recognise a single element of the globalist investment banking system that is so out of control in the contemporary economic environment.

In the UK, Labour is led by two men who seem incapable of getting beyond Keynes, and thus fail to land even a kid glove on the Friedmanite economic thinking of Camerlot’s right wing. All they need to do this is some Lesson 1 maths, but they’d rather support (and be supported by) a trade union movement representing a mass workforce that’s been devoid of the mass thing for two decades. The most powerful woman in the Party believes every word of socio-psycho-gender theories put forward between 1968 and 1971, and then proved completely wrong a quarter of a century ago. In the States, even Ron Paul – by far the most thoughtful and inventive of the Presidential candidates – can’t get beyond the idea of currencies based on the gold standard. Why gold in 2012? Because that’s what was used in 1926?

Francois Hollande in France represents a soft-left view that has failed wherever it’s been tried. Even in Greece – where the Establishment Parties are being deserted in droves – the successful breakthrough occurred among those Parties admiring the ideas of a dictator who shot himself in 1945 after reducing Europe to rubble, and a Soviet system that imprisoned and killed more of its citizens than any other State in history – including the one run for forty years by a mad paedophile in Beijing.

Why is this? The explanation varies depending on which tribe one is talking about at any given time; but basically, it’s a species thing largely involving a terror of the future, and a suspicion of The New Idea. We are all haunted by the ghosts of economies past.

Bankers quote the past purely from sociopathic greed. They point to it as a track record…while noting, in half-point type at the bottom of every investment contract, ‘The past is no guide to the future’. I think this is what folks call hedging.

Bureaucrats in general (and Brussels in particular) stick rigidly to the past as a form  of self-preservation. They are The Preservatists I’ve written about previously: like all contraceptives, they stop unexpected things from happening. But then they happen anyway, and so the functionaries defend themselves by saying that the event was unforeseen.

Economists have only ever worked with a rear-view mirror while driving through the fog. It’s tough to be a visionary while driving like this, but Marx managed it, basing his dialectical materialism on the idea of socialism being the synthesis of the agrarian and capitalist systems. This really was using the past as a predictor of the future, and it failed – as Marx himself accepted in his fading years. Free marketeers of the Friedmanite School admire the work of Adam Smith, a Scottish mercantile theorist who died 222 years ago, when half the global producers of 2012 hadn’t been discovered let alone exploited. Well vivat professores and all that, but could they at least have been alive in the 20th century please?

Large multinationals recite the theories of Ted Levitt ad nauseam. Levitt is the man who invented globalism, and then rationalised it with a stream of assertions, very few of which bear any interrogation at all. Yet his ideas continue to evoke hero-worship among the bollocks-school of global marketingspeak. Just a few weeks back, Michael Hiles put this on his blog:

‘I re-read this book almost yearly, and it reminds me again and again what an advanced thinker Ted Levitt was and how his ideas continue to shape business today.’

They sure as hell do, Michael. You and I may have noticed the mercantile zero-sum disaster that is now  upon us, but not Mr Hiles. To be fair, Levitt’s early ideas were right on the button: focus on the customer, not your ability to extrude stuff in a certain way. But his most enduring and nihilistic theory was that of the unstoppable inevitability of the dictates of Globalism. This has given us, among many other putrid things, a Newscorp with every British Government and both houses of Congress in its pocket, an AOL that behaves like the Moonies, a Microsoft that keeps unstable software on sale by shoving eveyone else out of the way, a Goldman Sachs perverting the actions of well-near every Government and investment market on the planet, and above all, ISPs dishing out joke service and poorly designed products from the safety of a million silos – the diametric opposite of the customer-facing model espoused by Ted Levitt.

+++++++++++++++++++++++++++

Are there ways of looking forward not back? Of course there are, but it’s risky, long-term and unpopular. Hence its non-adoption by the increasingly clueless corrupt cadres of the political class. But there ways through are there, if creative thought is applied.

The internet has proved itself on several occasions to be something politicians transmit on, but never listen to. This is not so of multinational business. Large globalist concerns react very swiftly to bad publicity and online pressure groups. The evidence thus far suggests that making life uncomfortable for anti-social business online is a far quicker and more effective thing to organise than the standard lobbying routes…all of which are crowded out with people who have far larger sums of bribe-cash than any of us. Today’s agents of change are outside, not inside, the legislative assemblies of the world.

Social anthropology is a highly pertinent discipline: most economic and fiscal theories ignore it completely, imagining that a ‘model’ somehow doesn’t have any real people to take into account. Social anthropology is completely absent from the mindset of supranationalism in general and the EU in particular. It makes zero impression on the thinking of the current German political executive, and roughly the same amount on the actions of Brussels bureaucrats. The fact that the FT’s Gillian Tett talks more sense about Japan, the US, China and regulation than most other commentators put together demonstrates the power of a mind looking first at people, and why they do what they do. Ms Tett, before she become a sought-after financial journalist, was a social anthropologist. Her Book ‘Fool’s Gold – How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe’ is the best book about financial culture and mores ever written. I’d be willing to lay odds that nobody in the UK Coalition or the Obama White House has read it.

Neuroscience in general (and Cognitive Behaviour Therapy [CBT] in particular)  offer enormous insights about the effects of testosterone and the learned response that dominates so much of Bourse activities.

Eckhart Tolle is a Buddhist-influenced writer on social and personal equanimity whose slim volume The Power of Now is one of the largest-selling books in history. Devoid of fluffy psychobabble and offering a profound insight on almost every page, it should be required reading for any market trader trying to get past tricks and monthly targets out of the mind – instead to focus solely on the circumstances of right now…and the consequences of any and all actions in the long term.

The key point about this tiny fraction of suggestions is that they are out of the ordinary, and designed to make the future better – not rationalise the ridiculous and time-wasting process of clinging to a piece of wreckage called the Past. This applies to nothing more tragically than the model of capitalism we have in 2012.

We have tried State command and we have tried Every Man for Himself. Neither worked – except for a corrupt and privileged minority. For a time we tried mutualist capitalism for a limited number of product fields and services, and on the whole it has worked – as the CIA’s website records clearly and with the necessary numbers to make it stick. But even that is not the entire answer or anywhere near it: the development of a bigger and better mutual business sector is really a form of fine tuning. Only facing up to the reality of failure and thinking within different criteria across the piece of capitalist endeavour and finance will get us to a better future – what I’ve been pushing as Radical Realism for some eighteen months now.

This article first appeared in slightly longer form as The Saturday Essay on May 12th 2012.

Postscript: Since writing this piece, and after revisiting it, I am minded to change the term Radical Realism to Radical Futurism. What does anyone think? All comments welcomed on the thread below, or at jawslog@gmail.com

68 thoughts on “Milton Friedman at 100….

  1. The inner workings of Krugman’s mind are just scary to look at. How he ever got anyone to listen to him is beyond me.

  2. We somehow need to rethink money and value, and make them work without banks or artificial wealth from thin air, or at least without banks as we now know them. Capitalism has become toxic and terminally ill. Socialism died some time ago. Globalism is a kind of plague. Maybe the answer is inevitable, unimaginably catastrophic collapse that will force something like an Amish lifestyle for some, terminal dystopia for others.

  3. Why gold in 2012?
    Because it cannot be debased, printed, financially engineered and is accepted all over the world. In short, it has that quality which no other commodity possesses-credibilty.
    If the USA opened Fort Knox and it was seen to be stuffed to the rafters with gold, the USA would have no economic problems. It won’t because it isn’t.

  4. The epoch of disillusionment has arrived, we are beginning to suspect that to fulfil a hope is to defeat it. For a moment it seemed that we had arrived, that we had solved all material problems and could sit back and enjoy an eternal Sabbath.

  5. ‘The internet has proved itself on several occasions to be something politicians transmit on, but never listen to.’
    They would have to face the ugly truth if they did listen to it, wouldn’t they?
    Indeed The Power of Now is an excellent read but, spoilt a touch with its continued reference to religion. Doesn’t anybody else see the irony in that?

    • @kfc. I think one of the outcomes of applying The Power of Now is that you reach a state of Mind where you realise you are part of The One; indeed you are The One. That is a spiritual, rather than a religious, experience.
      The practical benefit is that, in that place you realise you are much bigger than all the s**t that is going on around you.

    • Well I have definitely learned something from this blog. Looking at the complete bollocks spouted by this JW numpty it is hardly surprising they don’t listen. In fact it is hardly surprising they have lost faith in democracy and the wisdom of crowds altogether and have decided to run the show on their own.

      Blogs like this one only demonstrate the power of complete ignorance when used to bind people together. It demonstrates that if you started a political blog aimed at securing the rights and freedoms of leprechauns you would find plenty of people that agreed with you and vociferously demanded the government listen to them without ever rising from in front of their 52inch plasma TVs. I find myself with ever more sympathy for the politicians.

      • Just sayin’
        I notice you frequently blogging here, did not Einstein say repeating doing the same thing and it being wrong (worthless to the doer) is a sure sign of something akin to madness? just saying

  6. Practically every paragraph in this is utter bollocks. Newton died a long time ago – did Gravity die with him???

    The current right-wing government is indulging in Keynsian monetary stimulus by the way. The fact it is also trying to balance its own books does not mean it isn’t increasing the supply of broad money.

    I really don’t have the time to fisk the rest of your nonsense.

    • @Just Sayin’. Oh dear, Just. I wonder why you continue reading this blog. I was about to post that this is one of JW’s best essays, and something that needs saying.

    • @JS
      Comparing an ‘immutable law’ like gravity with a ‘fiscal theory’ is why you cannot grasp the point in most of JW’s pieces. It dismays me to see someone who has a quantum of intellect at least, have his thought processes so corrupted by idiological nonsense. Get away from left and right and think good and bad (for the greater happiness – not necessarily wealth – for the most people). Socialism does not work and Anarchy does not work. Somewhere in the middle ground is a place where the majority can reside with their lives untainted and enjoyable without the psyco’s who crave power over others, from spoiling ones journey through life to an inordinate degree. It is my feeling that this balance (social and personal) is where JW would like to take us. That we have the psycho’s of all ‘colours’ running the show is to the detriment of us all. Exposure of the pschotic nature of all of those in positions of power, is what is required to render them unacceptable as ‘rulers’ in even the densest of mindsets.

      • @Morningstar: “Socialism does not work and Anarchy does not work. Somewhere in the middle ground is a place where the majority can reside with their lives untainted and enjoyable…

        It is a feature of democracy that draws political parties towards the so-called middle ground because that’s where elections are won. But it is now proven not to work very well. But at least it’s sort-of democratic and allows the political parties to argue about their miniscule differences to give the impression of electoral choice. In truth their arguments amount to little more than over which nail to bang into the coffin next.

        And it’s given rise to the emergence of break-away parties like the BNP (mostly angry ex-Labour supporters who want some real top-down government action) and a bunch of others. Radical Realism is simply yet another option, this one offered by the Slogmeister, John Ward.

        Sooner or later people will wake up and realise that government is rarely the solution to any problem and is invariably the cause of most problems. At this point they will demand that government butts-out from being so deeply involved in virtually every aspect of the nation’s affairs. They will demand a proper written constitution to achieve this.
        But I won’t hold my breath waiting…

    • Just Sayin’
      Please go away and find a blog where you can rant away to your hearts content. The Milton Friedman Fan Club would be a suitable starting point. I detect the whiff of sour grapes. The above is one of the finest essays that Mr Slog has ever written. A model of clarity. Few are capable of consistently producing work of such outstanding quality. Apart from Ambrose E.P. no-one else gets close. Now run along and leave us in peace there’s a good chap.

    • Technically, Newton’s laws still stand, but in some cases have had to be built on – or can only be used in limited circumstances (eg: falling apples, basic motion). Once science’s view of everything grew to include black holes, universal expansion, and so on, Newton’s laws failed to adequately work on a lot of things. Luckily we had Einstein to layer a new set of stuff on top of Newton’s.

      I think that’s the point being made here… not that we need to junk all old thinking, but that sometimes that thinking only works well when applied to the things it was crafted to explain.

      So newton = good for apples, bad for galaxies. Maybe some economic theory = good for ‘traditional’ economics, bad for chaotic automated trading systems. For example.

      Surely that’s just common sense.

    • The author didn’t do his homework: “none of whom knew about Libor rigging, ….., eurozone meltdown”

      Speaking in 1998, just before the launch of the euro in January of the following year, monetary economist Milton Friedman said he was “not optimistic” about the new currency’s prospects. “Suppose things go badly, and Italy is in trouble,” he observed with eerie prescience.

      An independently traded Italian lira, he pointed out, meant the problem could largely be addressed by a plunge in the lira’s exchange rate. The downward adjustment in the exchange rate would, in effect, push the troubled economy’s prices and wages much lower, in relation to those of neighboring economies, greatly enhancing relative competitiveness. But with a single currency shared by all neighbors, the surgical advantage of this single price-correction mechanism is no longer available. Prices and wages would actually have to fall instead, a much more difficult feat. The likelihood of such “asymmetric shocks hitting the different countries,” said Friedman, meant that the euro had an uncertain future.

  7. John, Germany suffered punitive damages from the terms of the Versailles Trieaty and suffered hyperinflation after the 1st World War. However the massive capital flows out of Germany by the bankers was also a major contribution to this hyperinflation.
    The resultant social chaos created the conditions for the Nazis to gain power.
    We are well aware of their toxic creed and the horrors that followed.But we must also learn lessons from their ability to turn around a basket case economy to a dynamic ,full employment country in 4 short years. This is why Germans were so enamoured of Hitler.
    How he did it is quite simple, and similar to the means that Abraham Lincoln financed the American Civil War, he created his own sovereign money. The way this money was used is important. It was directed to wealth creating industry, giving employment and the resultant taxes cancelled the money created. Unfortunately the Nazis misused this power to concentrate on a military infrastructure mainly and the 2nd World war was a result.
    To this day Germany has several Industrial banks with long term visions of investment. This is one of the main reasons they are an industrial powerhouse and a wealthy country.
    The City of London mainly invests money in the Finance,Insurance and Real Estate sectors. They generate puff money, no real wealth or jobs. It is a socially useless sector and a parasite on the Uk economy.
    Our biggest problem is the power to create money has been allowed to be usurped by the private banking cartel. Our Govt, borrows OUR money from the banks and we pay interest on it,in the region of £50billion/year.
    Money is a token, a means of exchange, a tool. If used correctly to finance real productive wealth creating industry,it will create full employment and a surplus to finance our social support structures.
    At present banks create 97% of credit money and charge interest on it. The Treasury creates 3% ,mainly cash and issues it interest free to circulate in the economy ( a small seignorage is charged to the banks).
    The construct of our money system is a massive fraud on the citizen. Until our GOVT regains control of the power to create and issue debt free money we will continue to have these financial crisis.

    • Agree 100% it always amazes me the reaction to even involving private companies in things such as health or teaching gets from the public and yet the one thing no-one can do without, money, is created almost entirely by private entities (banks) who then cream off a huge amount of money from literally nothing (when you get your loan/mortgage from a bank the figures are just typed into a computer).
      Maybe this is classic distraction propaganda so that the masses never get to know how our system works for the benefit of a tiny (not even the 1%) group of people.

      Reminds me of the matrix film though people will fight to protect a system which actually does them more damage than the alternative as they think they will lose everything they have.

      Check out positive money they have the right idea as to how to get control of our money (and therefore our lives) back.

    • Salford

      extremely well put. Thankyou.

      To this day Germany has several Industrial banks with long term visions of investment. This is one of the main reasons they are an industrial powerhouse and a wealthy country.

      Add to this a fiscal system that is all but watertight. A person’s fiscal (tax) number is connected to their residence (of which you are allowed one main residence where all your affairs are deemed to take place) and a few other institutions. All of this reduces the opportunity for fraud. It is also all but impossible to get a mobile phone contract without a credit check, let alone a house.

      • @Gemma: I expect the socialist controls over Germany society explains the huge amount of black money in Germany and squirelled away in foreign bank accounts, including places like Luxembourg. People will always find ways around socialist controls.
        And why Germany was then in the forefront (including Gordon Brown) of getting the OECD to introduce a range of banking sanctions to force offshore banks to reveal names/addreses of their customers using the spurious claim they offered customers unfair deposit interest rates.

      • BT

        I think you have to start to think of these things not in left-left political terms, but in social terms. The Germans as a society want things – and these are not always what British or Dutch people want. An example: German motorcars do not have a speed-limit on the motorways, Lorries are very tightly controlled – In the UK lorries frequently go over the speed limit suggesting lax policing of laws.

        Banking regulation is very tight in Germany: it is one reason why all those profits from America could not be lent in Germany. There was simply no way. They made use of the Eurozone instead, since lax regulations in other countries allowed them to. Their “spurious” claim was probably borne out by the fact that German interest rates were relatively low (3% in those days?). Understand that Germany is a country of strict laws. If you have never lived there, you simply would not comprehend this.

        As to the black economy, I cannot say anything since I have never dealt on it in Germany. I know that it is common in the Netherlands where I live. In these straightened times, many are accepting cash in hand for work at prices well below what would have been acceptable even two years ago. Even these rates are as much as 50% above British rates for the same work, on the books.

        You can call them socialist controls if you choose. Frankly, I do not see it in such clear cut terms. Especially given the cultural differences between nations. Germany has a very successful Mittelstand despite all the regulations – and they are regulations that would make a Briton break out in a sweat. If you think it is bad in the UK, just try it in Germany! Yet the Mittelstand still manage to build stuff in a climate that has seen British and French and Spanish businesses collapse. Please do not come back and say that it is them exploiting the eurozone – that is weak-minded escapist tosh. It has more to do with some very strict regulation -across the board- that means businesses are well organized, well equipped and well funded.

    • Salford Lad, right on the money pal.
      Problem is, why do we insist on accepting party apparatchiks and other incompetents standing for election. If you want to give such power to government, you should choose your representatives very carefully.

      If we could retrain the bankers into investing in industry, (you could do that by cancelling tax perks on FIRE investments and the like) maybe we could make enough progress

      • Unfortunately we mostly only get incompetents standing for office so the choice is rather limited, all the talented people are making their riches in the private sector, all we get are power hungry nutters Harperson etc

    • What turned around the German economy was the skill of Hjalmar Schacht, President of the Reichsbank and, from 1934 to 1937, Reich Minister of Economics. Hitler himself wasn’t interested in economics and didn’t understand the topic.

  8. Breaking news that The Serious Fraud Office may charge the Libor-riggers with fraud and bankers face a possible prison sentence. Not in the UK they won’t. Let’s hope the extradition treaty with the USA works in our favour for once.

    • A few dupes slung to the lions to please the crowd, the real culprits (those at the top) will never be subject to this action.

      Much like the plumber get 12 months for ‘avoiding’ £50k’s worth of tax (which I don’t condone btw) while the billionaires swan around avoiding huge tax bills because they have the politicians in their pockets.

      We are on dangerous ground where the lae (and taxes) are only for the little people.

  9. The past is indeed useful in the application of first principles. Economics that does put people first is on the march as Modern Money Theory takes hold. The stimulus of the Job Guarantee would go a long way towards solvinh the horrors inflicted on the UK by Friedman via Thatcher.

    Other than that, what salfordlad said.

  10. O/T: Italian prime minister Mario Monti will meet French counterpart Francois Hollande in Paris later today for eurozone talks. He told Italian radio this morning that there was light at the end of the tunnel:
    ” It is a tunnel but … some light is appearing at the end of the tunnel. We and the rest of Europe are approaching the end of the tunnel.
    We are now seeing the results both in the willingness of European institutions as well as from the governments of individual countries, including Germany.
    http://www.telegraph.co.uk/finance/debt-crisis-live/9439261/Debt-crisis-live.html
    Must be all that ‘Pledging and Vowing’ Eh?

    • @kfc. “Light at the end of the tunnel” reminds me of the old joke. It’s some bugger coming to find you with a torch, carrying a load more work.

      • “pledging and vowing”

        And lying…and grifting…and hoping…and praying.

        These “statements” are coming every few days now, they need to ease off or the markets are going to be asking for a little more substance in them. Fluff will only ramp it up for so long.

    • @kfc: ha-ha. Did anyone tell him that the tunnel falls off a cliff and he goes straight down the pan. Must be time to get all those EU crats and political elites on board…..

  11. Are there ways of looking forward not back? Of course there are, but it’s risky, long-term and unpopular. Hence its non-adoption by the increasingly clueless corrupt cadres of the political class. But there ways through are there, if creative thought is applied.

    If you understand how such thinking works, the chance of it being risky is pretty low. It can be short or long term, and is only unpopular because it takes a great deal of effort and practice to attain.

  12. “Are there ways of looking forward not back? ”
    It has been asked if our politicians and people of power are lacking in their cannabinoid systems. They always look backwards. There are some good videos on a famous website that discuss this point. Dr Robert Melamede being a good example.

  13. The “atrocities” you refer to are just a new generation of atrocities, many atrocities before have been just as bad… though, admittedly, rarely has current regulatory atrocities, like capital requirements for banks based on perceived risks, reached such sublime level of atrocity.

    http://subprimeregulations.blogspot.com/

  14. “…none of whom [Marx, Keynes, and Friedman] knew about Libor rigging, speed of light trading, Russian market blagging, Ebay, eurozone meltdown, Northern Rock, gold price manipulation, intrabank online swindles, and a thousand other ‘free market’ atrocities.”

    I’m not sure these aspects of economic features are too related to economic models of the people you list. More an issue of proper regulation with severe penalties for violation. And I’m not sure it’s right to describe our economies as “free market” due to layers of dishonesty, corruption, protectionism and the rest of it by politicians and others.

    • The ideologies of the men named above assumed a level playing field and a “free” market.

      Over time these assumed standards have slipped away and been replaced with something that says its “Keynesian” or “Friedmanite” but is really just a facsimile. The principals of these ideologies are largely sound, but now they don’t belong in the hands of a massively corrupted and inept politicians and financial players.

      A hard reset seems to be the best chance of something better. Ugly as it would be.

      • @CL: “The ideologies of the men named above assumed a level playing field and a “free” market.”

        Did they? Wasn’t Marx into State managed economics? and Keynes too albeit in a softer way? A proper free market would be one that only has controls/limitations imposed on it to prevent/punish abuse etc.

      • Apologies, definitely didn’t mean Marx!

        No, just implying that the rules on day 1 of our current system don’t apply anymore. Not since “lie,cheat,steal” became the #1 priority.

  15. Socialists always try to claim the lessons of history no longer apply to the present. The lesson from history is that controlled economies result in human trajedy.

    Freedom has not been “tried”, and it has not “failed”

  16. If Garry had done A level economics ( Keynes),he would not have ramped up government spending on the back of temporary tax revenues,thus to be for ever remembered for ‘ no more boom and bust’.If MarK had taken time off at King’s to read Friedman ,rather than telephoning Moscow every day,he would have learnt that pumping up the money supply does not of itself increase aggregate demand

  17. Changing from “Radical Realism to Radical Futurism” would be in keeping with your Lefty sympathies…you know…the future’s not what it used to be ;-)
    Perhaps next week it could be changed to Progressive Radicalism…or perhaps Radical Progressism or some such. Just be careful not to pinch a label that the socialist Labour Party might be planning to use (Old & New varieties).

  18. It isn’t the first time I have been prevented from posting things onto this blog, I thought it was you doing it for some reason John, and I didn’t say anything, thinking you must have some good reason, but now I am 100% sure that it is not you, but someone else trying to block free speech.

  19. The first link was a scientific paper called Interaction between manufactured gold nanoparticles and naturally occurring organic macromolecules from School of Chemistry, the University of Birmingham, Edgbaston, Birmingham B15 2TT, UK. The second was from a site called Manmadediamonds.

    Obviously someone is very edgy about the first link.

    • Zoompad

      if you had two links in your comment, it will have been barred by default. Those default settings are down to JW, however I suspect he doesn’t know how to change them. If you put one link in one comment and you can followup with a response with the second.

      Hope this helps.

  20. Is not the very fact that you are able to claim that neither command economies and every man for himself economies have failed confirmation in itself that the past and history is relevant to you?

    I do not believe that any changes to the current economic model can be successful without reference to past & present failings. I have no problem with more mutuality but I still believe the best way forward is a market as free as possible, save necessary and effective regulatory oversight with severe sanctions for those who violate the rules. The virtual complete absence of the latter – wholly advocated and engineered by political elites – is how we got into the current mess.

  21. John
    Brave attempt at an absolutely massive question……I agree with most of your suggestions including opening up the question for further ideas……
    I agree that what ever we have been doing has failed and that logically there is a need for something new
    Many of the above commenteers have fallen right into your trap of framing their ideas in the tried and tested definitions of the well known political parties……. I honestly think that the broken bit is much more fundamental…….we have a failure of democratic governance……….successive govenments just dont have the incentive to either do what they promised or to not pass on a pile of sh** to their successors………of course that includes all the other failings like not maintaining independence from the media / corporate world / finance sector like failing to balance the books, get satisfactory performance from individual etc, etc.
    Maybe we should accept that we are not attracting the best, we can no longer expect the important positions to a vocation that people will fight to do irrespective of the salary and instead make government smaller but better rewarded……
    Also the proliferation of career politicians with no life/industry experience should be addressed
    Our style of government is to add layer upon layer upon layer of legislation which has got us to the stage of having laws that no one can readily understand without professional help…….tax being the obvious example……..this is another failure of the system……….there is an obvious need in some cases to reform or even wipe the slate clean and start again but successive goverments either think they dont have the mandate or the time to achieve anything as useful……..or if you want cynicism such a route would deprive future generations of lawyers from the associated fees……

    All in all its hard to see that the required degree of change can be executed within the established UK framework…….an idea following on from this conclusion and given the self destruction of Europe is to look at some other countries who are in are in a similar position to us and consider how we might collaborate / join / partner etc …..to pick up where Europe has failed……..ie use it as a springboard to introduce some good ideas / new ideas, expand our influence etc……

  22. This excellent article reads a bit like a ”thank you & goodbye” piece…or maybe not but, I will save it anyway and urge as many as i can to read it. Perhaps you should also mention that economists of the past missed on the reality of Television and the greedy ethics of consumption and lifestyle it imposed worldwide. And i want even start thinking about brainwashing on a scale never seen before in the past.Thank you for this particular post….

  23. context is everything and as for reading about the 3% and the way trickle down doesn’t work consider this. in the last decade about a billion of the poorest people have raised their living standards tremendasly around the world whilst the us, japan and europe have stagnated. if that isn’t a transter of wealth from rich to poor then i don’t know what is. we were the top 3%. the top 3% you were talking about was the top 3 of the top 3. there is always going to be very rich people. have a look around the world john you are in the top 3% so stop moaning.

  24. JW I dont know why you reserve Tolle for the bankers- we can all use it to advantage (his “A New Earth….”.is even better than “…Now”). Incidentally have you read Tolle’s “Guardians of Being”? As a dog lover it should be right up your street. Animals are themselves, nothing more. And here to remind us of the value of being just that.

    Mutuality acknowledges that no-one is separate. The butterfly only has to flap its wings….

    Thank you for this piece

  25. when comparing our “capitalism” to laissez-faire principles, we must remember that Milton Friedman did not support bailouts. Had banks been able to fail it would have changed the market and created consequences. how many car companies have been saved, and will need to be saved again. when looking at America’s version of a free market, can it really be said that it is free? the average person is left to carry the weight of the world while the rich are protected, this was not Friedman’s vision.

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