Posts Tagged ‘Third World Poverty’

Consider this post in reference to the concept of derivatives.

I feel that if anyone wants to attempt any critique of the derivatives market in its entirety, one has to move past any continued emphasis on ‘casino capitalism’, as this is an oft repeated line which, whatever its merits or otherwise, has become an easy reply for those who favour such practices.

I believe one needs to concentrate on debunking the notion of risk management in order to effectively retort.

Many supporters of derivatives would rightly point to their use is not just to speculate with (as in Investment Banking), but as a valid means to manage risk, especially in Insurance, and it is this aspect which deserves further attention in my humble opinion

The above linked post brilliantly draws together the notion of colonising time as an integral commodity, matching any such physical asset, thereby shinning a much needed light on the important and neglected aspects of this discourse of, post colonialism and global racial financialisation.

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It has been oft repeated that in our democratic, liberal societies, the few have greater power over the many

Is it the top 1% that owns a greater share of the capital and wealth than the remaining 99%? It is interesting to think of how many of these ‘many verses few’ statistics genuinely exist when analysing our reality

Given the freedom to own property and generate capital, which can indeed be a positive thing, to what extent is this so open to abuse that the rules of the game were never really meant to create fairness and a degree of equality? Is human nature, which is left unchecked, too prone to avarice that such freedoms will always result in a small elite hungry to capture ever more resources than required?

This is not another post looking to promote controlled economies,  however its purpose is to illustrate that, with the best of intensions, will some freedoms, when applied to a population shaped and conformed to behave in a certain manner, always result in a pyramidical structure taking shape where these conditions exist? Is this shape the overriding effect of all the freedoms at our disposal? Consider the following;

Top Asset Management firms by total value of assets under management

Think about what this data is actually telling us; when asset managers acquire equity, or interest in another business enterprise, they take a degree of ownership in that firm. Thereby, over time and because of the funds that flow to these giant institutions, the few in combination, have ended up in a position of ‘owning’ in part or in full, the many corporations that they have a share in – allowing them to ascend to the top of the pyramid; the few owning much greater proportion combined than the many. It also follows that this leads to a common source of control and influence across an economy/region given this limited pool of effective ownership.

Another perspective on this could be that much of this capital originates from the mass population who are the ultimate owners, through their long term savings and pension provisions invested with these providers. Therefore, is this an attempt to invert the structure, allowing the many to benefit? I would argue not, the masses, when considered individually, on average, do not financially benefit as much as the managers who take material cuts from the pool of funds at their disposal. Often their reward incentives are not adequately aligned with the retail investors at large, allowing the elite to become disproportionally better off than the investors who are searching for gains. The small investor is also not the party which excercises the controlling power.

In addition to this asset ownership, consider more generally, how much land the few own in comparison to the larger population, the size of GDP of the few regions compared to the many, the distribution of resources, the access to what is classed as the best quality of education, the trend continues and the structure that we can continually see forming is that of a top down, hierarchical pyramid – it should be clear from such insights what the ultimate power structure of the contemporary world is and what the fruits of everybody’s efforts are really delivering.

 

 

For anyone not familiar with the work of Ann Pettifor – one of the few to correctly call the coming of the financial crisis a number of years prior to it arriving, and one of the main proponents of the Jubilee 2000 campaign which cancelled a portion of third world debt – please search for her various articles, lectures and opinions online.

Associated with Keynesian economics and the Labour party, her views may be dismissed by some, however upon closer inspection, I was interested in her view on the creation of money, and what this meant for resolving the debt and economic problems facing the developing world.

She is principally part of the PRIME think tank/research group, which has a number of papers on its site proving an alternative voice on economic issues

The above lecture at the LSE discusses her latest book, ‘The Production of Money: How to Break the Power of Bankers’, and gives an insight into her theories.

What I wish to highlight, are the following;

  • The issue of commodity money, and how scarce resources should not be used as a basis of any monetary system
  • The recognition that a fiat monetary system, can and should be used for the benefit of the population – outside the control of private banks, but in the knowledge that an entirely man-made system should be used to achieve a level of prosperity in all societies
  • There are certainly many socialist aspects to these beliefs, such as exerting capital controls and spending money into existence in terms of health, education and social expenditure thus increasing national debt, however interest ideally should not be necessary when such a system is implemented
  • There are some similarities with what Positive Money are advocating, but it seems there are specific differences, as this discussion points out…

 

 

By following the money trail it is possible to  discover how intertwined British Imperialism was with its emergence as an economic power and the prosperity created for the nation.

Please read the following eight short pieces by James Walvin, on the monuments and show pieces across Britain and the people behind them, all connected to various trades directly linked to Slavery.

I will continue to explore this topic in a number of posts in future under a similar title

Poor countries don’t need charity. They need justice.

Is this another deception with our perception of ‘The World’?

One of the most comprehensive reports into the real financial transfers into and out of the developing world shows that the extraction of wealth from the third world, much of it former colonies, continues apace.

Rich countries aren’t developing poor countries; poor countries are developing rich ones

How Poor Countries Develop Rich Countries

I find the fact that some $4trillion since 1980 is attributed to debt interest repayments fascinating. The scale of this particular transfer is testament to the continued servitude of many nations states.

When many times more is sent back in exchange for every dollar received in aid, does this not sound like a familiar profit making enterprise at work?

Reading the original report, I find this sentence especially on point…

Much improved statistical compilation and reporting is required in order to have a more adequate picture of global financial flows; a task that urgently needs to be undertaken collaboratively by the International Monetary Fund, World Bank, United Nations, Organization of Economic Cooperation and Development, and the Bank for International Settlements.

Is this a list of the usual suspect organisations?

 

imran-1

 

I remember some years ago, a British commentator remarked in an off the cuff, ignorant manner, that Islam (and therefore Muslims in general) had not contributed any thing of substance in the last 100 years or so.

Which Islam or Muslims was he referring to? A number of respected intellectuals have made valid contributions to the most profound topics of discourse in contemporary matters, be they governance, enterprise or spirituality. Perhaps this person never made an effort to look beyond his own sphere of understanding in order to identify these contributions

One such example of what the Muslim world has delivered for contemplation of all nations states, is the funding model based on Zakat – financial or non-financial investment for the sake of others, not to gain personally, but to establish a method to fulfill a need which private profiteering cannot.

In the UK, we struggle to foot the cost of basic welfare through taxation. The number of taxes in existence are far too much to understand how far the web stretches and how much they impact our everyday lives, destroying incentives to save or to give.

In a part of the world riddled with abject poverty, injustice and failing state apparatus, a beacon of light is being provided by world class medical institutions such as the Shaukat Khanum Memorial Hospital (SKMH), entirely funded by donations and providing free cancer treatment to the most disadvantaged patients. Across the third world, similar initiatives  do exist, whether they are based on Zakat or not, I highlight this project due to it being based on principles found at the core of the Islamic faith; giving up of ones own property to provide for others, in a way which establishes justice.

At the end of 2015, SKMH opened its second site in Peshawar. The factors which make this institution thrive, are not confined to Islam, however it certainly demonstrates the way in which incentives, resources and an interest to gain from intangible, distant means, not necessarily financial in nature (based on a belief in a power other than that of Man), can be made to work perfectly well for a wider section of the population, independent of state disintegration.

https://www.shaukatkhanum.org.pk/

 

 

 

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.