26 June 2022

The Rules of Capitalism

by Allister J. Marran

The philosophical theologian Paul Tillich once wrote, ‘The fundamental virtues in the ethics of a capitalist society are economic efficiency, developed to the utmost degree of ruthless activity.’

The rules of capitalism put profit over everything else. Everything else. Nothing is sacred or taboo.

It is a complex man-made set of rules, it does not exist in nature, and requires its servants to ignore common sense and its obvious dangers and pitfalls.

It is a giant pyramid scheme of investors and producers at the top, and consumers down below, that requires the base to constantly grow, which is why we now have eight billion plus people on a planet that has very limited resources. It demands infinite growth cycles when raw materials are in short and finite supply.

To ensure its ongoing sustainability, we have constantly to create hype about new products that nobody wanted or asked for in order to make another sale, with built in obsolescence so that we can sell a new model again tomorrow.

Marketing costs for products and services often far exceed R&D and cost-of-production budgets, in order to convince you to fill your house to a large degree with, call it ‘trinkets’, ‘junk’.

The over-mining, over-fishing, over-production, and mass pollution is not sustainable. That's simply a fact.

While every scientist on earth is predicting doom and gloom for future generations, the economist disagrees, and tells us to put out heads in the sand, and ignore the signs. Keep calm and keep spending.

There is another thing. In its appetite to compete, capitalist economics has now become the science of scarcity.  In order to compete, we need to optimize—and optimize everything we possibly can. We strive for less wastage, smaller margins of error, faster turnover.

This means that we sail ever closer to the wind. Let one thing go wrong—a computer hack, a bacterial contamination, a military invasion in a faraway place—and millions of people’s livelihoods and even lives may be imperilled.

As capitalism multiplies the dangers, so it multiplies our vulnerability.

This generation, our generation, the ones who were told by the scientists and experts to just look around and heed the obvious warnings, will be known as the idiots who could have stopped it but chose greed over life, profit over common sense.

We have no water where I live, because the rains haven't come for nearly 10 years. The world is cooling where it's hot, and heating up where it's cold. Smog sits over the cities, and poison infects our water sources. Landfills are full, and growing fuller every day. Our oceans are being fished to extinction, and good farming land is being paved over and cleared for urban development and new roads and highways.

Having stuff, and being able to read and write, and exploit a man-made system, does not make a person smart. If people can't see beyond their basic, immediate, satiating needs and zoom out to see the bigger picture of an exhausted ecosystem with resources heading to zero, and the only world we will ever have struggling to cope, then perhaps we were never that smart or evolved in the first place.

We do not have a divine right to rule this planet. We are just the next animal to over-evolve and get to the top of the food chain. It's an awesome responsibility which sees us on a perilous perch which can be toppled if we do not proceed with caution and humility.

Just ask the previous mantle holders, those fearsome and magnificent dinosaurs, how tenuous that grip on the top dog spot is.

We can’t ask them, of course. They are extinct.

19 June 2022

Modesty (a Poem)

by Carl-Theodor Olivet *

Henri Matisse, Branch of Flowers, 1906.

I love you and give myself to you,
Yet you must promise me one thing;
Do not betray too much of you to me,
It could break our happiness in pieces …

The way that you consider and joke and risk it,
All have their origins, I know,
Your clear look, the vague fear,
The cheeky mockermouth.

Your magic, which tenderly plays about you,
Just as it is, is entirely preserved for me,
The days, the nights, year after year,
Shall design me delightfully.

Do not forewarn me, that I’ve gone too far
With my sweet daydreams,
I’m treating myself to a piece of eternity
And would not want to squander any part of you.

Do not betray yourself, lest you manoeuvre
into place to thwart me in some way, wickedly,
I do not analyse either
Whether you will always remain so unique.

Don’t speak in reply; that would be a mistake,
Permit me to paint the greatest bliss,
It will yet be, as mother says:
There comes a day to pay one’s wages.

If it’s over, then say it coldly, boldly.
That has broken many hearts, indeed …
And would tear me likewise from my dream.
Surely, I will get over it. 

 

* Theo Olivet is an author, artist, and retired judge in Schleswig-Holstein.



Bescheidenheit (ein Gedicht)

von Carl-Theodor Olivet

Henry Matisse, Blumenstrauch, 1906.


Ich liebe dich und geb mich dir,
doch  eines musst du mir versprechen:
verrat mir nicht zuviel von dir,
das könnte unser Glück zerbrechen ...

Wie du bedenkst und scherzt und wagst,
das hat ja alles seinen Grund,
dein heller Blick, die vage Furcht, dein kecker Spöttermund ...

Dein Zauber, der dich zart umweht,
nur so bleibt er mir ganz  erhalten,
die Tage, Nächte, Jahr für Jahr,
soll er mir wonnevoll gestalten.

Mahne mich nicht, ich ging zu weit
mit  meinen süßen Tagesträumen,
ich gönn mir  ein Stück Ewigkeit
und möchte nichts von dir versäumen:

Verrat dich nicht, falls du taktierst
und bös mit was mich hintertreibst,
ich hinterfrage ja auch nicht,
ob immer du so einzig bleibst.

Sag nichts dazu, es wär verkehrt,
lass mich mir größtes Glück ausmalen,
es wird schon sein, wie Mutter sagt:
Man müsse einst für alles zahlen.

Wenn´s nicht mehr geht, sag´s kalt und dreist,
so etwas bricht zwar manche Herzen ...
wenns mich auch aus dem Traume reißt,
ich werde es gewiss verschmerzen.


* Theo Olivet ist ein Autor, Künstler und pensionierter Richter in Schleswig-Holstein.

12 June 2022

The Diamond–Water Paradox


All that glitters is not gold! Or at least, is not worth as much as gold. Here, richly interwoven cubic crystals of light metallic golden pyrite – also known as fool’s gold – are rare but nowhere near as valuable. Why’s that?

By Keith Tidman


One of the notable contributions of the Enlightenment philosopher, Adam Smith, to the development of modern economics concerned the so-called ‘paradox of value’.

That is, the question of why one of the most-critical items in people’s lives, water, is typically valued far less than, say, a diamond, which may be a nice decorative bauble to flaunt but is considerably less essential to life? As Smith couched the issue in his magnum opus, titled An Inquiry Into the Nature and Causes of the Wealth of Nations (1776):
‘Nothing is more useful than water: but it will purchase scarcely anything; scarcely anything can be had in exchange for it. A diamond, on the contrary, has scarcely any use-value; but a very great quantity of other goods may frequently be had in exchange for it’.
It turns out that the question has deep roots, dating back more than two millennia, explored by Plato and Aristotle, as well as later luminaries, like the seventeenth-century philosopher John Locke and eighteenth-century economist John Law.

For Aristotle, the solution to the paradox involved distinguishing between two kinds of ‘value’: the value of a product in its use, such as water in slaking thirst, and its value in exchange, epitomised by a precious metal conveying the power to buy, or barter for, another good or service.

But, in the minds of later thinkers on the topic, that explanation seemed not to suffice. So, Smith came at the paradox differently, through the theory of the ‘cost of production’ — the expenditure of capital and labour. In many regions of the world, where rain is plentiful, water is easy to find and retrieve in abundance, perhaps by digging a well, or walking to a river or lake, or simply turning on a kitchen faucet. However, diamonds are everywhere harder to find, retrieve, and prepare.

Of course, that balance in value might dramatically tip in water’s favour in largely barren regions, where droughts may be commonplace — with consequences for food security, infant survival, and disease prevalence — with local inhabitants therefore rightly and necessarily regarding water as precious in and of itself. So context matters.

Clearly, however, for someone lost in the desert, parched and staggering around under a blistering sun, the use-value of water exceeds that of a diamond. ‘Utility’ in this instance is how well something gratifies a person’s wants or needs, a subjective measure. Accordingly, John Locke, too, pinned a commodity’s value to its utility — the satisfaction that a good or service gives someone.

For such a person dying of thirst in the desert, ‘opportunity cost’, or what they could obtain in exchange for a diamond at a later time (what’s lost in giving up the other choice), wouldn’t matter — especially if they otherwise couldn’t be assured of making it safely out of the broiling sand alive and healthy.

But what if, instead, that same choice between water and a diamond is reliably offered to the person every fifteen minutes rather than as a one-off? It now makes sense, let’s say, to opt for a diamond three times out of the four offers made each hour, and to choose water once an hour. Where access to an additional unit (bottle) of water each hour will suffice for survival and health, securing the individual’s safe exit from the desert. A scenario that captures the so-called ‘marginal utility’ explanation of value.

However, as with many things in life, the more water an individual acquires in even this harsh desert setting, with basic needs met, the less useful or gratifying the water becomes, referred to as the ‘law of diminishing marginal utility’. An extra unit of water gives very little or even no extra satisfaction.

According to ‘marginal utility’, then, a person will use a commodity to meet a need or want, based on perceived hierarchy of priorities. In the nineteenth century, the Austrian economic theorist Eugen Ritter von Böhm-Bawerk provided an illustration of this concept, exemplified by a farmer owning five sacks of grain:
  • The farmer sets aside the first sack to make bread, for the basics of survival. 
  • He uses the second sack of grain to make yet more bread so that he’s fit enough to perform strenuous work around the farm. 
  • He devotes the third sack to feed his farm animals. 
  • The fourth he uses in distilling alcohol. 
  • And the last sack of grain the farmer uses to feed birds.
If one of those bags is inexplicably lost, the farmer will not then reduce each of the remaining activities by one-fifth, as that would thoughtlessly cut into higher-priority needs. Instead, he will stop feeding the birds, deemed the least-valuable activity, leaving intact the grain for the four more-valuable activities in order to meet what he deems greater needs.

Accordingly, the next least-productive (least-valuable) sack is the fourth, set aside to make alcohol, which would be sacrificed if another sack is lost. And so on, working backwards, until, in a worst-case situation, the farmer is left with the first sack — that is, the grain essential for feeding him so that he stays alive. This situation of the farmer and his five sacks of grain illustrates how the ‘marginal utility’ of a good is driven by personal judgement of least and highest importance, always within a context.

Life today provides contemporary instances of this paradox of value.

Consider, for example, how society pays individual megastars in entertainment and sports vastly more than, say, school teachers. This is so, even though citizens insist they highly value teachers, entrusting them with educating the next generation for societys future competitive economic development. Megastar entertainers and athletes are of course rare, while teachers are plentiful. According to diminishing marginal utility, acquiring one other teacher is easier and cheaper than acquiring one other top entertainer or athlete.

Consider, too, collectables like historical stamps and ancient coins. Afar from their original purpose, these commodities no longer have use-value. 
Yet, ‘a very great quantity of other goods may frequently be had in exchange for them, to evoke Smiths diamond analogue. Factors like scarcity, condition, provenance, and subjective constructs of worth in the minds of the collector community fuel value, when swapping, selling, buying — or exchanging for other goods and services.

Of course, the dynamics of value can prove brittle. History has taught us that many times. Recall, for example, the exuberant valuing of tulips in seventeenth-century Holland. Speculation in tulips skyrocketed — with some varieties worth more than houses in Amsterdam — in what was surely one of the most-curious bubbles ever. Eventually, tulipmania came to a sudden end; however, whether the valuing of, say, todays cryptocurrencies, which are digital, intangible, and volatile, will follow suit and falter, or compete indefinitely with dollars, euros, pounds, and renminbi, remains an unclosed chapter in the paradox of value.

Ultimately, value is demonstrably an emergent construct of the mind, whereby ‘knowledge, as perhaps the most-ubiquitous commodity, poses a special paradoxical case. Knowledge has value simultaneously and equally in its use and ‘in its exchange. In the former, that is in its use, knowledge is applied to acquire ones own needs and wants; in the latter, that is in its exchange, knowledge becomes of benefit to others in acquiring their needs and wants. Is there perhaps a solution to Smith’s paradox here?

05 June 2022

Picture Post #75 The Calm of the Library



'Because things don’t appear to be the known thing; they aren’t what they seemed to be
neither will they become what they might appear to become.'


Posted by Martin Cohen


What makes this image particularly striking to me, is the quiet and earnest way the figures regard the books even as they stand amidst a scene of utter devastation. The man on the right nonchalant, hands-in-pockets browses the shelves seemingly oblivious to the collapsed roof just behind him; while another visitor to the library (in the left background) is clearly lost in the pages of one of his finds…

So, what‘s the back story? And this is that on the evening of 27 September, 1940, the Luftwaffe dropped 22 incendiary bombs on London's Holland House - a rambling, Jacobean country house, dating back to 1605, destroying all of it with the exception of the east wing, and, incredibly, almost all of the library.

The picture was originally used to make a propaganda point about the British shrugging off the Blitz, and that’s fine too, but today, stripped of its wartime context, I think it contains a more appealing message about how books and ideas can take us into a different world.