Archive for July, 2015

An oft repeated argument by numerous commentators about the benefits of free markets and capitalism is the incentive system it fosters.

Whilst constructively shaping human behaviour is needed in order to positively reinforce the benefit humanity can bring to the wider universe/environment, a question continues to linger about what type of incentive do alternative systems propose, and can they indeed work?

This post by a Muslim Counter Racist activist sheds meaningful light here and in my opinion makes a compelling argument if fully analysed

One particular point I would like to highlight here is the final part;

If this all sounds too ‘idealistic’ and ‘anarcho-libertarian’, I should like to draw attention to the closing phrase in this sign / indicator (ayat) – which is also the closing phrase of this enclosure / chapter (surah), viz. “and if you turn away, He will replace you with another people; then they will not be the likes of you.” In short, if a people are not willing to measure up to this ‘ideal’, then they will be replaced by others.

Capitalism might appear robust and permanent, but it is nothing but the ‘froth’ that mounts up on the surface of the water and is destined to pass.

I draw your attention to this because it ultimately plays to another well rehearsed attribute of capitalism and pluralism which should be supported; the idea of ‘Creative Destruction’, if an idea is deemed to fail, then it should be allowed to, naturally (no bail-outs/artificial support), and a more robust, stronger idea will take its place by having learnt from the weaknesses of what came before.

The true form of Deen-al-Islam is not with us in the contemporary world and how can we therefore assess accurately if it can indeed work. If it is not implemented correctly, it will indeed fail.

How do we assess whether our flirtation with capitalist principles have failed – do we really have the freedom to choose to replace it, or have we been coaxed into believing that it works?

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The above three part documentary (The Foods that Make Billions) is a well worth a view

For me it explores an underlying truth: the business of capitalism is to exploit and manipulate

Nowhere is this better shown than in the first of these episodes on water. How do you sell something that is readily available to people for free – you change (manipulate) people’s perception and convince them that they are better for paying to consume it.

As one commentator in the first part profoundly observes, (and to paraphrase); “The backdrop to this predicament should be clearly understood where one part of humanity can’t get access to any clean water to live, yet another part spends remarkable amounts moving/selling vast quantities of water from those that have to those that already have”

A further example of how insane behaviour can be shaped by the desire to accumulate capital and sell anything for the sake of profits is the following business which was recently seeking to raise investment. An extra-marital affairs website encouraging spouses to cheat, thereby increasing business potentially for divorce lawyers (very expensive), possibly increasing leisure/retail consumption (with the new partner, maybe even another wedding?), perhaps a spill over into the housing market too (new abode, sell old home?), whereas the real cost (and how would you like to measure this exactly) on any offspring from the marriage, on the wider family, the established correlation to crime statistics with those who grow up in broken homes and the consequences for society generally, is completely ignored.

The monetary benefits from such a business venture will readily show up in financial performance, shareholder returns, GDP indicators, but most of us will be left to argue about the drawbacks which no-one will be capturing and therefore any debate can be calmly brushed aside as unsubstantiated moral opinion.

The fact this company specifically targets married couples as a differentiator to other peer-to peer dating websites speaks volumes for the no limit approach to capitalism in the name of liberty and free markets.

I have previously discussed the argument about how the allocation of resources works more ‘efficiently’ under this approach than the alternatives, but it should be noted how severe misallocations of capital can easily occur which the wider community will pick up at the expense of the individual or select few participants.

Clearly, its not only bad tax law that significantly affects human behaviour. The amount of manipulation exacted in the name of profit should be appreciated.

 

 

A long standing concern with using Gold as sound money is the market in which it operates. Please see previous posts exploring this however a current article from the Telegraph sheds more light on the workings of these mechanisms, further highlighting the extent of the manipulation possible and the lack of transparency – it is a wonder that we still call it a market, since it arguably doesn’t even meet some of the fundamental proponents, namely efficient information and price movements based on real participants trading the commodity.

It is telling how much speculators were able to move the market recently. Some commentators have often ridiculed the extent of their influence when markets work in the right way….whenever that is.

Note also the reference to how controlled the price is relative to the US Dollar – the world’s (great fiat) reserve currency – any thoughts the days of the Dollar were numbered should be tempered. This demonstrates the ability to control Gold through the ‘tool’ of paper currencies and interest rates, let us not think merely changing the base of money will solve our problems, we must reconstruct the entire market and all it stands for.

Emerging markets have borrowed $4.5 trillion in US dollars. The borrowers are vulnerable to a double squeeze from both higher US rates and a dollar spike.

What threatens to become a “margin call” for dollar debtors could ricochet through gold markets as a secondary effect. It may have begun already.

Another text exploring how an alternative system could, in theory function, although this is simply one interpretation. By G.A.Parvez

http://islamicdawn.com/wp-content/uploads/2015/01/The-Quranic-System-of-Sustenance-by-G-A-Parwez-Tolue-Islam-Trust.pdf

 

Please find here a resource which may prove useful in further deconstructing and exposing the economic system and its associated theory

The Principles of Economics – Some Lies My Teachers Told Me – Lawrence A Bolan

The Inherent Flaws of Europe

Human beings need a “focus of belonging”. If they don’t get it via their nation, they end up “viewing themselves as belonging to a religious sect… or a racial or linguistic group”. You “can’t have a civilised, peaceful democratic society on that basis”.

Bernard  Connolly, author of The Rotten Heart of Europe

With the potential impending exit of Greece from the european single currency, it is worth understanding how the whole Euro project was an economically unsound piece of political propaganda in the first instance.

The desire to spread the net to as many countries as possible, despite their questionable financial positions was all in the name of presenting a strong image of unity, which was never there in the first place. Take the story of Greece and the assistance of Goldman Sachs in helping it fudge its entry into this union; it is the people at large who are ultimately paying the severe price of this and many others continental sized mistakes.

The above article based on a book originally released in 1995, shows once more how these early warning signs, obvious to many, were largely plastered over and suppressed by those trying to steamroll public opinion in favour of their desires.

This sounds all too familiar to the concerns raised before the financial crises in 2008, I wonder how well those in authority are now listening to the heightened concerns of the current cheap money era policies?

Such is the cost to the citizen of being part of not only a nation state, but a continental super state.