News & Analysis
Reuters: Turn to Government for Successful Societies?
Politics makes a comeback ... Prepare for the revenge of politics. For the past few decades, the quants – mathematicians, physicists and technologists – and their younger brothers, the economists, have been in the ascendant. With their mathematical models and their ability to crunch vast quantities of data, they have shaped the way businesses understand the world and operate within it. – Reuters/ Chrystia Freeland
Dominant Social Theme: Capitalism is failing. Perhaps politicians can save it.
Free-Market Analysis: Chrystia Freeland is one of those Reuters commentators who apparently believe that the best way to implement free-market capitalism is to use government to support it. As government is force and free-markets are voluntary, this becomes a questionable proposition, in our humble view. The question becomes: How can force support voluntarism? Isn't that a kind of ... oxymoron?
Ms. Freeland doesn't seem to try to address this, even though she makes a lot of other interesting points in this article excerpted above. She certainly has a good deal of intellectual firepower in her arsenal. She is currently editor of Thomson Reuters Digital, but that's not all ...
"Prior, she was U.S. managing editor of the Financial Times. Before that, Freeland was deputy editor, Financial Times, in London, editor of the FT's Weekend edition, editor of FT.com, U.K. News editor, Moscow bureau chief and Eastern Europe correspondent. From 1999 to 2001, Freeland served for two years as deputy editor of The Globe and Mail, Canada's national newspaper."
In a previous article regarding Ms. Freeland, we pointed out that she was utilizing the insights of a profoundly anti-free market entity, the CFR. That article was entitled was entitled "Capitalism Is Failing the Middle Class." We wrote:
Freeland doesn't come right out and say it, but if technology is leading to increasing middle class difficulties, then some extracurricular force will have to be brought into play to rectify the situation. This is one of the oldest and hoariest dominant social themes of the power elite: Market failures demand government relief. It is elaborated on many ways round the world every day.
This seems to be a central theme of hers, the idea that government itself must inevitably be the bulwark of the marketplace. A subdominant social theme would be that there is no qualitative difference between business and politics. One is necessary for the other and they must both work together for society to be successful and prosperous.
The problem here is a lack of qualitative weighting. We would argue that the voluntarism of the market is preferable to the force of government and its backers, competition is preferable to regulation, etc.
For Ms. Freeland, these two competing elements are seemingly somewhat value free. One kind of organizational structure is not preferable to the other. Again, we find this to be a contradiction in terms but it is surely one that Ms. Freeland is not alone in sharing. Here is more from her recent article (the one we are analyzing today):
Politics is making a comeback. That was one of the persistent themes at an invitation-only high-powered international conference about systemic risk in the financial services convened by the Global Risk Institute in Toronto this week (I was the rapporteur). As one of the bankers put it, if you want to understand the world economic outlook for 2013, and where your company should invest, you can't just talk to economists anymore: "You need to talk to political scientists."
I tested that idea with two thinkers – one an economist, the other a political scientist – who make their living helping businesses understand the world. Perhaps not surprisingly, Ian Bremmer, the political scientist and founder of the Eurasia Group, instantly agreed.
"When I started the firm in 1998, I had to convince people about the importance of political science, and I was not always successful," Bremmer said. Making that pitch is getting easier – Bremmer now has some 150 employees and 400 clients around the world.
That trend is growing, he believes, and he thinks a major driver is the rise of the emerging markets. Bremmer defines emerging markets as "countries where politics matters at least as much as economic outcomes;" he also points out that over the past five years emerging markets have been responsible for two-thirds of global growth. Put those together and you have a world in which politics matters more.
Bremmer has been betting since 1998, when he started his firm, that businesses should care about politics. Nouriel Roubini has no such professional stake in the issue. Roubini is an economist par excellence – he shot to international fame as "Dr. Doom" when his bleak predictions about the world economy came horribly true with the financial crisis, and his eponymous firm now boasts some 1,100 clients worldwide.
Even so, Roubini agrees with Bremmer's thesis, and takes it one step further. "The emerging markets have emerged, even as the developed markets have submerged," Roubini told me. "Politics have become more important for many advanced countries, too."
Freeland lists seven reasons why politics is becoming more powerful once more. She lists countries where markets are submerging and politics are taking over. Europe, China and the US are all participating in this trend, in her opinion.
And she writes, "We are living in a time of geopolitical creative destruction. Geopolitics are suddenly in play in a way that for the last half-century they haven't been ... We are moving from the brief, post-Cold War Pax Americana to a new age of Metternich, and the economic implications are vast, fast changing and hard to figure out."
She also believes that "a dominant theme – or, more accurately, lament – in Toronto was that financial regulation is back." This is another reason that "politics matter" once more.
Finally, she points out that income inequality is rising and thus capitalism hasn't delivered the proverbial goods. She counsels political scientists – young graduate students – to stay the course. She believes that politics will play a predominant role in the 21st century.
Our paradigm is different. We believe the world is run by individuals and families who control central banks along with their enablers and associates. We believe this tiny group of individuals wants to create world government and promotes dominant social themes that are fear-based promotions pushing the middle class toward giving up power and wealth to globalist institutions.
Reuters has an evident and obvious affiliation to this power elite and from what we can tell, those in the employ of Reuters knowingly or unknowingly provide argumentation justifying government control. Government is necessary to power elite plans as they rule via mercantilism, pulling government levers behind the scenes. No government, no control.
For this reason, among others, we would submit that various Reuters articles continually make the value-free government oriented argument, that both force and voluntarism are equally important in creating a civil society.
But how civil can such a society be? Ms. Freeland calls those who provide academic rationales for this process "political scientists." Again, how scientific is it to throw people in jail for nonpayment of taxes or imprison fathers for being unable to pay child support? And what is scientific about the way modern nation-states fund their operations, via impoverishing and out-of-control monopoly fiat money printing.
In truth, the 20th century and now the 21st were never about the "triumph of capitalism." The 20th century, as we can see from the vantage point of what we call the Internet Reformation, was a kind of modern dark ages in which elite directed history masqueraded as a free-market evolution.
But markets in the 20th century were likely more controlled than ever before. Every aspect of Western capitalism, from money to Wall Street to multinational capitalism, was captured by this tiny, secretive power elite, from what we can tell.
The idea that capitalism has been regnant over these past years is simply a misreading of history, in our humble view. What we do believe is that this is a kind of elite dominant social theme: Out-of-control market forces have made increased authoritarianism necessary as well as expanded regulation.
For this reason we have been predicting in numerous articles a neo-Pecora hearing in Washington that will destroy the rudimentary remnants of market capitalism in the United States. From what we can tell, the planning is taking place for these hearings now.
Each stage of freedom's takedown is being coordinated. The Soros-funded Occupy movement demands the incarceration of "banksters" while Reuters columnists celebrate the ascendancy of the political class.
As before, only the very top central banking families will be left unscathed – the beneficiaries of a system that will successfully confuse people about who and what to blame for the dysfunction of their societies and the bankruptcy of their communities.
Conclusion: We shall see if this strategy shall work as well in this century as the past one. The distinguishing feature (a change maker) is the Internet itself.
Posted by Leviathanfighter on 01/20/13 03:04 PM
Sorry, forgot the link:
Click to view link
Posted by Leviathanfighter on 01/20/13 02:59 PM
Obviously, Miss Freeland is parroting the standard mantra of the power elite, which goes something like this: Government is the sine qua non and engine of civilization. Before government, there was nothing. In reality, what they are saying is that government is God. Of all their lies, this one is probably the biggest and most fundamental, and, therefore, the most widely promoted by them.
For a very long time, powerful elites have hidden the truth from us, to wit, that civilization was not consciously planned, that it is the product of spontaneous order generated by the individual human mind. Austrian economics has freed us from the great lie, and given us the intellectual weaponry to combat it.
Miss Freeland is exactly the sort of person Mises was talking about when he explained about economics, "Its heuristic singularity is viewed with suspicion by those whose research work is performed in laboratories or in archives and libraries." (Link) Thus, she sells the same old phony thesis that economics is an objective, scientifically-based discipline, mathematically predictable, and independent of the vagaries of human thought and action, and that her elite-approved authorities have economics all figured out and settled for all time. Whom she drags into her argument tells the tale--"the quants - mathematicians, physicists and technologists - and their younger brothers, the economists."
Mises said further that "People would like to find in an economics book knowledge that perfectly fits into their preconceived image of what economics ought to be, viz., a discipline shaped according to the logical structure of physics or of biology." Thus, she defers to the "quants," et al., with their "mathematical models and their ability to crunch vast quantities of data," as if they could really "understand the world and operate within it," without any reference to the independent human mind and its subjective scales of values.
So, we have before us here the two competing and absolutely irreconcilable visions of human society. Which one will win out depends on who wins the information war.
Posted by taxesbyanyothername on 01/10/13 12:17 AM
Curiouser and curiouser, or, more properly, scarier and scarier.
Posted by laceja on 01/09/13 05:30 PM
Today, I posted a comment very similar to this on Click to view link. My comment was removed and I am no longer allowed to comment.
Posted by 1776 on 01/09/13 11:09 AM
"From England to the USA: "The whole world is relying on the United States Citizens"
Click to view link
Posted by taxesbyanyothername on 01/09/13 09:56 AM
None of the mansions or companies or anything else the Rothschilds have built is as impressive as what wrote that interview. They have spent more than two-hundred years constructing a multi-trillion dollar blindfold. He doesn't have it tied on, it has become part of his being.
Posted by Abu Aardvark on 01/09/13 05:54 AM
nithsdale on 01/08/13 02:39 PM wrote: "There is no history of capitalism that celebrates the freedom you are always whining about. From the ancient establishment of ports to service the transit of goods, government has been the hand maiden of business. (... ) Frankly, it is time you Austrian anarcho-ecos go back to your history books and relearn the facts of business and capitalism. Start with Walter Scott's Ivanhoe, and those original chapters which set forth the first use of banking in Britain and how entangled the kingdom was when it had to deal with other kingdoms"
Well, I guess you'll kinda agree with the following quotes, then:
"Inclusive capitalism is a difficult subject and I could speak for a long time on it, but I think it's a reflection on where capitalism was intended [to go].
Whether you're talking about Karl Marx or John Maynard Keynes, capitalism today has changed and I think inclusive capitalism is about giving a broader opportunity for people to participate.
It's not necessarily about more regulation, but about people understanding the general rules of behaviour, understanding how they put their money at risk and how developments take place in the improvement of society one way or another.
If you look at the ingredients of the mistakes from the Big Bang era in England, some of it wasn't just the supervision of the bankers. It was the accountants, the legal firms and the rating agencies.
It's a huge subject, but how do you train people in life to behave properly?
When you have supervision, you have to make sure that the supervisors are capable of adjudicating and of being good supervisors.
One of the questions is: 'do you reward them according to the people they are supervising?'
Every company, whether banks or anything else being supervised, should be in a system where a proportion of their profit or turnover should go into a pool.
The argument against supervision in many cases is that we can't afford it; we can't afford to pay the people but if you have a pool of funds from supervision, you use that money to pay for it.'
Sir Evelyn de Rothschild, December 2012
Click to view link
Posted by Charlie on 01/09/13 04:02 AM
"Experts" promoting statism are never without impressive credentials. The failures of communism were so obvious, even to the most utopian statist, that the new push is for government run "capitalism". It is apparent that SOMEONE must work and produce or there is no wealth to fleece. These greedy producers are a necessary evil but must be closely managed by the Noble Political class, who have enjoyed an ascendancy due to their increasing use of police and military force to make it so. Politicians are not ascendant in a free market system, only in increasingly tyrannical ones. I doubt Freelands definition of "civil society" is the same as mine.
Posted by 1776 on 01/08/13 09:57 PM
Sen. Elizabeth Warren: Middle Class Is Not Defined By Income Level By Jon Street January 8, 2013
Click to view link
Posted by rossbcan on 01/08/13 09:38 PM
"financial regulation is back"
maybe so, but, it is STILL FUTILE:
Click to view link
Posted by magnacarta on 01/08/13 09:28 PM
Name the Top Central Banking families so we can hang them. We know who Soros is.
Reply from The Daily Bell
No need to hang anybody. Just change the system.
Posted by alaska3636 on 01/08/13 07:50 PM
DB: Communities (religious or not) thrived.
I'm not a history buff or anything, but my understanding is that European (white) communities thrived: often and unceasingly at the expense of the natives whose lands and resources they needed to expand. Not exactly what I would call a free-market for aborigines and later the slaves whose efforts continued that expansion. So again, I say, I think we have yet to see a true macroscopic example of free-market capitalism at work.
I would like to know, however, where Rothbard speaks on post-Colonial free-markets so I may expand my fledgling knowledge.
Reply from The Daily Bell
You really believe pre-federal communities thrived because they committed genocide against American Indians. Does that include the Philadelphia Quakers?
Posted by taxesbyanyothername on 01/08/13 05:45 PM
Excellent DB! You have Rothbard manning the keyboard today?
Reply from The Daily Bell
High praise. Thanks. But no ...
Posted by alaska3636 on 01/08/13 03:13 PM
Nithsdale: There is no history of capitalism that celebrates the freedom you are always whining about.
Alaska: Indeed, free-market capitalism is a theory that has never been tested en masse due to elite interference. As soon as people create wealth, there have always been those parasites looking to siphon-off as much as they can. In fact, this fits in with time-preference theory and the distribution of human disposition. There are clearly people with such a short-term time preference and antisocial disposition that they are happy and willing to forgo the security of developing wealth producing skills, to use force to leech off of unsuspecting or physically weaker individuals.
Nithsdale: Frankly, it is time you Austrian anarcho-ecos go back to your history books and relearn the facts of business and capitalism.
Alaska: Again, there are no (very few?) macro-examples of free-market capitalism in history due to interference from institutions of coercion. The theories of Anarcho-capitalism are deduced (inferred?) from the axioms of Human Action and are predicated on the abstinence of coercion in the marketplace. You seem to misunderstand that if there were no institutions of coercion that many of the aggressions of people or businesses against communities could not be sustained, i.e. if people could not be forced to work (slavery) or forced into arbitrary boundaries of movement (nations).
Nithsdale: The elites that you flagellate everyday in your columns are latter day reps of that same force.
Alaska: Exactly! Keyword: FORCE. Underlying meaning: coercion. It's not a force in the same way of gravity or electro-magnestism. It's a byproduct of complex interaction of people experiencing the inherent choices present in Human Action.
Nithsdale: Without them, you would have no business or capitalism at all!
Alaska: Without them, we might finally reach the macro-level test of the theories of anarcho-capitalism and the (theoretically) unhindered growth for the largest number of people. You would have, finally, free-market capitalism.
Reply from The Daily Bell
Thanks, Alaska. But the arc of the US itself provides us with evidence of how free-markets work and how they are gradually eroded.
The US came to greatness culturally and perhaps economically speaking BEFORE the War of Independence.
Murray Rothbard describes this time very well when the English had virtually abandoned the colonies while Colonial bureaucracy was nearly non-existent.
Communities (religious or not) thrived.
Such an epoch could not last long however. The English returned to carry out the mad dictates of King George; the colonies rebelled and the bankers began to steer the US towards the shoals of a civil war.
The rest is history, of a miserable sort.
Posted by nithsdale on 01/08/13 02:39 PM
The Lady Reuters Editor tells it like it is.
Our business world always wants help from government, especially when it concerns moving goods from one country to another, more especially when it comes to energy products like coal, oil and liquified gas!
There is no history of capitalism that celebrates the freedom you are always whining about. From the ancient establishment of ports to service the transit of goods, government has been the hand maiden of business.
The problems arise when business thinks it can go off on its own and do its own thing. Suddenly problems arise with the locals, native traditions and in the chaos, governmenr re-appears to settle the controversies. Our very first embassies were established to handle that recurring situation.
Frankly, it is time you Austrian anarcho-ecos go back to your history books and relearn the facts of business and capitalism. Start with Walter Scott's Ivanhoe, and those original chapters which set forth the first use of banking in Britain and how entangled the kingdom was when it had to deal with other kingdoms... to buy back their king. It was a group of successful traders of the day that accomplished the mission and set the stage for the growth of international money and credit in our Western World.
The elites that you flagellate everyday in your columns are latter day reps of that same force. Without them, you would have no business or capitalism at all!
Reply from The Daily Bell
What do you have against freedom, nithsdale? Why do you feel compelled to argue the other side. Because you are a "practical agent of the state?" Or is there something in your soul ...
We would rather argue for freedom, then against, for human action rather than against it, for a BETTER human history going forward.
You wish to make an argument based on force. We wish to propose an alternative.