The Global Financial Crisis

Iceland's stock exchange values

Introduction

Today we are in an global economic crisis. It is an economic crisis not because of the scale, for at worst there has been a recession of a few percent of GDP, but rather because it has been systematically induced. The best strategies that have been proposed so far are essentially neo-Keynesian; because private demand has fallen, government expenditure can alter aggregate demand to provide a stimulus to the economy. At best, this can provide necessary infrastructure for positive externalities through network effects; at worst it will simply serve as a delaying tactic, leading to a greater crisis in the near future.

What Happened?

The start of the current economic problems were evident at the end of 2005 when there was a sudden halt to the rampant increases in real estate prices in the US. In 2006, as estate prices remained flat, the Dow Jones Index actually increased approximately a quarter. In 2007 real-estate prices declined leading to twenty-five subprime mortgage estate lenders went bankrupt, including the largest lenders such as New Century Financial, American Home Mortgage and Ameriquest. The largest U.S. mortgage lender Countrywide Financial narrowly avoided bankruptcy by borrowing $11 billion from other banks and in the UK there was a run on the Northern Rock bank, which was eventually put into public ownership in 2008.

Palestine: A Challenge to Humanity

Before I begin my presentation, I’d just like to say a couple of things about myself and Australians for Palestine.

The first is that I am not myself a Palestinian and have no family, cultural or any other connection with either side of the Israel-Palestinian conflict. I am, rather, employed as the Public Advocate for Australians for Palestine and, for the most part, my role in this position is to explain the facts of the conflict to Australian audiences.

The second thing I’d like to say is that Australians for Palestine believe that, by explaining the facts of the conflict to the Australian public, we are also working towards its peaceful resolution

And it in this sense that we share in the mission of the Unitarian Church to "Seek the Truth and Serve Humanity."

Indeed it our view that these goals of seeking the truth and serving humanity are interchangeable. For clearly, no one can properly serve humanity in a state of ignorance. But it is also the case that the search for truth implies the service of humanity.

For the search for truth leads ultimately to knowledge and all knowledge has consequences. And the knowledge of injustice, in particular, has moral consequences.

And it is in this spirit that I wish to address you this morning on the issue of Palestine: as someone who believes

  • That knowledge implies obligation.
  • That the fulfilment of such obligation often incurs sanctions;
  • But that the true test of one’s humanity is and always has been the willingness to follow one’s conscience, regardless of the consequences.

Next Friday marks an anniversary that commemorates the turning point in the histories of 2 peoples: the Israelis and the Palestinians.

For the Israelis May 15 marks their Independence Day: the day that they celebrate not only the establishment of the state of Israel in the country, which, until that time, had been called “Palestine”.

    National Self-Determination and Federal Internationalism

    The principles of isocracy demand universal freedoms and a federated free association of such individuals in communities; this much is obvious. But from this, the reality of existing states, nationalities and so forth, must be accounted for and requires a principled, non-politically partisan approach to international relations. For there can be little doubt of the terrible effects of both religious and national wars of history. As contemporary examples one can cite the conflicts in Chechnya, Palestine, Kurdistan, the Western Sahara, Kosovo, Tibet, Sri Lanka, Iraq and many others as wars of national liberation. The purpose of this document is to provide an initial sketch that can peacefully resolve such conflicts and empower individuals and communities.

    Definitions on such matters are a cause of some confusion, not helped by the administrative imposition of state-defined terms. A nation means a group of human beings, whose membership is defined at birth, from the Latin natio. From the seventeenth century onwards it was strongly tied to ideas of commonality through "blood and soil", that members of a particular nation had shared descent and a common homeland and the gradual establishment of the nation-state. A more contemporary perspective emphasises use of shared symbolic values; thus national identity becomes very close to cultural and linguistic identity.

    Nationality is different to country and to state. Countries are a region of land; a state is the institutional governance of that region. The matter is not helped by the insistence of states calling themselves "nations" or by bodies like the United Nations which is, in reality, a body of states. Or by such terms like "international law", which is invariably framed not between nations, but between states.

    Formation of Independent States

    Arm The People And Abolish The State

    Standing Armies

    Standing armies are full-time professional soldiers employed by the state to defend a country and attack other countries. They are largely an modern phenomenon, making their first appearance with the Fekete sereg (Black Army) of Hungary from 1458 to 1490, which started at approximately 8,000 soldiers but swelled to 30,000 as Hungary engaged invasions of Austria and Bohemia. As a prophetic warning, it was eventually abolished when the king, Vladislas II, realised he could no longer afford to pay for such a force. In the Ottoman Empire, the Janissaries, instituted sometime in the mid-fourteenth century, were also a standing army, used to replace tribal ghazi whose loyalty and training was often suspect. Adam Smith correctly remarked that standing armies are a sign of modern society, as such warfare requires increased skill (especially technical skill), and loyalty to country-wide authorities. However he incorrectly asserts "A well-regulated standing army is superior to every militia" and "... it is only by means of a well regulated standing army that a civilised country can be defended, so it is only by means of it that a barbarous country can be suddenly and tolerably civilised." (Wealth of Nations, Book 5, Chapter 1, Part 1).

    Why do we need pundits?

    Image credit: Daily Telegraph

    Why do people watch or listen to political pundits? Why would anyone need to listen to a pundit in order to 'know' what their own position on the issues should be? Isn't it clear that most of these pundits are imposing their own spin on things, their own political correctness, and in the larger part are following someone else's agenda - a particular political party, a corporation etc?

    Why the would a reasonable, intelligent, thinking person need to have their thoughts and perceptions argued by someone else? Unless they do not care about using their brain and making their own conclusions and prefer to do it the easier way - someone else doing the brain work for them? Isn't it enough that today's news journalism itself is spinning things (but in a more subtle way - by the manner a certain news program is presenting events and facts), that we need pundits to waste our time with useless verbiage and brain-washing?

    To me it should be like watching a football game (yes, I am European, so I obviously mean a soccer game). You watch the game, and all the commentator is doing is to tell what is happening on the field. I do not even need that, I would have switched the commentary off if possible and only listen to the reactions of the spectators - they are more telling than any commentator. But at least he is not trying to make me a fan of either team. After the match, I do not go on watching the sports pundits analysing the game. Because they cannot tell me anything new. All they would try to do is explain to me what I have just seen on the screen, but through their own perspective. No thanks!

    Normative and Positive Economics: A Isocratic Sketch

    Introduction and Definitions

    Whilst it is certainly more appropriate for a sketch for appropriate normative and positive economics to take up several hundred pages more than the several hundred words offered here, such as sketch is nevertheless provided. It is considered possible, albeit just, to provide in summary form the knowledge and experience of modern economics to state quite succinctly what works, what doesn't, and what is fair and what isn't.

    This sketch begins with a definition of socialism which refers to those systems of economic organisation which is characterised by public forms of ownership; conversely capitalism is defined by economic organisation those which have private forms of ownership [1]. As is well known, there are many variants of public and private ownership and indeed many variants within the continuum of the two extremes. One such dimension refers to the means of distribution and exchange in contrast with the ownership of productive forces [2]; here the significantly differences are between market mechanisms and centralised planning. Another such dimension refers to a political subsystem that operates in parallel to the economic; by which varieties dictatorships may be contrasted with varieties of democracy.

    Another set of definitions necessary for this discussion is reference to political economy and the factors of production, a field largely ignored since the development neoclassical economics in the latter part of the 19th century. From the work of Whilst providing important contributions to price, value, scarcity and studies in marginal utility [3], the conflation of land and capital into a single entity has all the signs of a tragic mistake. Whilst the conflation has been supported by both advocates of capitalism and socialism, economists are largely aware of the distortions that arise from the forced union.

    A Darwinian education

    Reuters reports on Mr Obama's speech:

    --

    The economy cannot sustain "21st century markets with 20th century regulations," Obama told reporters after the meeting with lawmakers.

    "If we once again guide the market's invisible hand with a higher principle, our markets will recover, our economy will once again thrive and America will once again lead the world in this new century as it did in the last," he said.

    --

    Adam Smith believed that the market's invisible hand ought to be guided by individuals acting out of enlightened self-interest. Everyone is better off if everyone acts in self-interest (the parable of the butcher, the baker, etc); as an ethics professor, Smith implied that everyone acted in self-interest to benefit the community. He did not mean that when everyone acted in self-interest without regard for the community, society would still somehow benefit.

    Mr Obama's "higher principle" is Smith and his liberal contemporaries' "enlightened self-interest."

    Darwin, in his essay The Moral Sense of Man and the Lower Animals, distinguished between two types of instinct: "higher" and "lower". Over the course of his essay, Darwin empirically demonstrates the existence of two distinct types of morality that are instinctive in both animals and mankind: the kind of instinct that leads animals to care for their fellow species, and the kind of instinct that leads animals to care for themselves possibly at the expense of their fellow species.

    Darwin wrote that, "man can generally and readily distinguish between the higher and lower moral rules. The higher are founded on the social instincts, and relate to the welfare of others. They are supported by the approbation of our fellow men and by reason. The lower rules...relate chiefly to self."

    Darwinian Institutionalism

    Happy belated birthday to Charles Darwin, and happy belated bicentennial! Two hundred years ago, Charles Darwin wrote a less famous treatise on morality titled The Moral Sense of Man.

    Most striking to me, from a political standpoint, are these lines: "As man advances in civilization, and small tribes are united into larger communities, the simplest reason would tell each individual that he ought to extend his social instincts and sympathies to all the members of the same nation, though personally unknown to him. This point being once reached, there is only an artificial barrier to prevent his sympathies extending to the men of all nations and races...as man gradually advanced in intellectual power...so would the standard of his morality rise higher and higher."

    What Darwin argues in this treatise is that there are two types of moral instincts in men. The lower instinct is that which relates to self-preservation; this is the self-interest that Smith capitalized on (pun intended). The higher instinct is that which relates to man's care for his fellow man, his community, and to humanity. Darwin argues that a finer mind would lead to a more compassionate heart.

    This is all very interesting from the standpoint of an educator: if you're training the "leaders of tomorrow," how do you help your students "advance in intellectual power" in a way that will rise their "standard of his morality higher and higher?" A later post will explore that.

    From the international relations stand-point, Darwin's prediction that the march of civilization will be marked by increasing cooperation has been accurate thus far. While he was writing, the West practiced a very pure form of realpolitik - statecraft based solely on self-interest. We now associate our own self-preservation with the good of the human race or at least a large slice of it. The EU is a prime example of it.

    Bushfire Defense


    Image credit: Aussie_Pecker/flickr

    This is a place to interactively examine the lessons from the 2009 Victorian Bushfires and similar events, with a view to finding solutions to the problems of living in an environment that can produce such fires.

    Individual isolated houses and tree lined streets need to be re-engineered to allow amenity and survivability.

    Lying in Politics Revisited: The Iraq War in the Age of the Internet

    Presented to the Australasian Society for Continental Philosophy Conference, Auckland, December 2008.

    Abstract

    Hannah Arendt's "Lying in Politics" is a pithy essay which not only documents the extent of public deception and personal self-deception by the U.S. administration during their military intervention in Indochina, but also acts as a commentary on her argument for liberty and freedom ensured through constitutional protections and the human motivation to protect those principles.

    Forty years later somewhat similar circumstances have arisen. Based on false assertions of the presence of weapons of mass destruction and collaboration with Al-Qaeda (along with other justifications), the world's greatest superpower finds itself embroiled in a war that appears to have no conclusion, suffers a lack of support on the domestic front, and is under profound international criticism.

    In addition to revisiting the replication of deception by political administrations to their population contrary to known reality, there are also the issue of significant changes to the acquisition of popular knowledge of popular knowledge that deviates from the official line. The internationalisation of media and the establishment of mass communication systems have profoundly altered the human condition of consciousness generation, but also has different effects in matters of civil disobedience.

    Presentation

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