There’s No Such Thing as a Free Lunch, or a Free Market

My recent post suggesting three simple reforms to financial markets provoked a bit of a squall on Twitter. The Free Market Fundamentalist Tendency especially seemed incensed that any restrictions on markets was a good idea.

Most of the criticisms were either simply abusive – such as that I’m “bonkers” – or ideological rants with little substance. But a few were at least thoughtful attempts to refute or critique what I had suggested. Chief amongst the latter was an extended critique by Christie Malry. Continue reading

Three ‘Simples’ Principles for Controlling Run-Away Finance?

I have been thinking about what sort of moral principles ought to apply to finance, including banking. The sort of thing I’ve been thinking about are some fairly simple things that would appear obvious to most of us, but apparently don’t apply to the world of finance.

Today I heard a Lib Dem MEP say something to the effect of “what are we going to do, stop the markets from doing certain things”? Well, er, yes. We stop ‘the markets’ from trading in human body parts, or in whole humans for that matter. We don’t allow them to freely trade nuclear weapons, or other WMDs. In other words there are all sorts of moral and practical restrictions placed upon the markets, for our own protection. After the gigantic and still unfolding damage unrestricted financial markets have managed to inflict, isn’t it time to consider what they should not be being allowed to do? Continue reading

The ‘Managerial Revolution’ is Over: They Won?

“Income Data Services, which totted up pay, bonuses and various share awards, says the average FTSE 100 executive director pocketed a 49 per cent rise in the last financial year to bring their remuneration to £2.7m a year. Chief executives had to make do with a 43 per cent rise, poor lambs.”

James Moore, The Independent, 28 Oct 2011.

This week I was teaching one of my MBA classes about ‘power in and around organizations’, which was also the title of a book written by the academic Henry Mintzberg back in 1983. Thirty years ago Mintzberg concluded that most of the evidence suggested that the power of senior management within corporations has massively expanded and that it was now they, rather than the technical owners – i.e. shareholders – who really controlled the organizations. Continue reading

Paperless Assets and Assetless Paper – Why Only Government Can Make Capitalism Work

The Peruvian economist Hernando de Soto has offered a very interesting twist on the western financial crisis. To summarize, he argues that the problem in the developing world is the translation of real, physical, assets into trabeable paper. This allows the raising of capital through loans, which lubricates capitalist development. The west, he suggests, now has the opposite problem – it has allowed the growth of lots of paper that has no clear relationship with real assets.

In short – the developing world has lots of assets but not enough paper whereas the West has too much paper that has no assets. Continue reading

Half of Tory voters are social democrats? (Fabian Report)

This press release from the Fabians raises interesting issues about the future of public services…….

Fabian Society – Tory voters think cuts should be temporary 11.10.11

Around half of Tory voters disagree with the Conservative ideology of rolling back the state, new polling and analysis by the Fabian Society reveals. 69% of voters (including 56% of Conservative voters) think the spending cuts should only be temporary and that ‘the Government should increase spending on public services again when the public finances are in better shape’. Just 22% of voters (including just 39% of Conservative voters) agree with David Cameron that the cuts should be permanent and that “Government should look to reduce its role for the long term”. Continue reading

Politics In the Eye of the Storm, for now



Tropical cyclones, as is well known, have a ‘eye’ that is relatively quiet. As the howling winds of one wall of the cyclone pass over and relative quiet descends, it is easy to think the whole thing is over.

We now appear to be in the eye of an economic and political cyclone right now, giving a strange, almost unnatural, calm to this years political Party conferences.

Continue reading