2013/01/11 Minutes Economics Working Group

2013/01/11 Minutes Economics Working Group

1. What does the EWG think of a campaign to reduce working week by half? Citizens income – land value capture and interest abolition. In 60s it was believed there would be reduced working week; minimum income paid to everyone in the country; social security linked to this; LVT would be a distraction. Money is not necessary; acts of kindness – money needs to have no currency. Money is brilliant; proxy for trust; basic income very unpopular. Gradido; Shutt reckons 60% marginal rate of income tax required. Taxation – political will. Economic zones like permaculture: stock-exchange and speculative activity; real world ; friendly zone to do away with money; utopian to imagine world without money. Criticality of the development of the human species; paper on work (Nelio); Socratic method; most people don’t go out to work; forced to be worked; displaced labourers were coerced into working every day; Swedish was egalitarian society compared to many (not perfect and we’d need to go further); SDP successful because democratic socialist party in opposition; Occupy needs to act in that capacity to be both reasonable and outrageous; banana trade costs added in multiple locations. Need political power and political consciousness; reassess obligations of society as regards work; raise the idea of shorter working week; Sweden’s social contract is deteriorating; inequality; take money from the rich and pay to the poor who will work shorter week, work share; those who work longer may not want to work less; man should live to work not work to live; occupy has a lot of latent support; Sir Thomas More Utopia – suggested a shorter working day and week; culture change within one country which would drop out of international trade.

2. Scale and its consequences – bulge bracket banks and transnational corporations

In late 2011, a study was published in NewScientist which showed 147 “super entities” (SEs) control c. 40% of 43,060 transnational corporations. This was an empirical study based on information in the public domain (shareholder registers and common directorships). If one could look behind blind trusts and nominee companies, it would probably reveal much greater concentration of wealth and power. The study refers to 45 of the top 50 SEs being financials (banks, insurance companies etc.) and the top 20 includes banks such as Barclays, JP Morgan Chase and Goldman Sachs.


Individuals, whose interests are served by these SEs, tend to move in the same circles and their placemen serve their interests in media, politics and public institutions. The names appear in the attendee lists of the World Bank Forum in Davos, the Bilderberg meetings, the think tanks (eg. Brookings Institute and Chatham House) and NGOs (eg. Rockefeller and WWF) which dominate public political and economic discourse. And of course, through the media, messages are managed to manipulate events and the people.

Their power is concentrated and derived from the banking and monetary system. Power corrupts and absolute power corrupts absolutely. This applies today not to individuals but the hegemonic economic system.
3. Dave – systems theories leading to big entities and why it is bad; oligopolies; communities optimal size c150. Multiple links geometric progression; costs of coordination; strategies to reduce the links; hierarchy; great multiple forking structure; information arriving at different points delays messaging; sub-divisions in corporations to reduce complexity; the Madness of Crowds (Tulip and South Sea Bubble); crowds guessing sweets, average is uncannily accurate; maintaining variety in the ecology facilitates dealing with a limited number of people; union structures to counter opposing employer hierarchy; neo-liberal zeitgeist – Adam Smith recognised the need for regulation; don’t have a large number of independent players; party leaders talks to the likes of Vodafone / large players; fragility with concentration; banks allegedly sharing risks but incestuous relationships makes system vulnerable; nominee holdings; NS article; bow tie structure; banks dominant; small number of people collaborating fragile;
4. Comments – accords with understanding; how do we eradicate financial engineering; species in nature – stochastic model in evolution one species grows and the diffuse into lots of different mutations; social media; reason why things get bigger; power is concentrated. Fritz Schumacher – small is beautiful. Scale – big potentially being bad – not always the case – competition, the benefits of scale; evolutionary development parallels; processes with a degree of inevitability – Jack London Iron Hill prophecy multinationals etc. privately owned; scale is not necessarily the issue; NHS was the envy of EEC – 3% admin v 12% in Europe 30% in US (60s and 70s). Under Thatcher rose to 12% – Blair to 20% and heading to 30% on the current policies; not size but ownership; sizeable portion of Capita and G4S owned by Invesco; privatisation costs more than in-house; rubbish collection example; need to make the current situation ungovernable. Sophisticated game of monopoly – don’t care about the consequences; sociopathic/psychopathic characters; product of an accumulation of history – world is sick; power of transformation; imperium and potentia; imperial v potential. Antidotes to scale; meme/models for small groups; community currencies easier to cope with than entities of scale eg. Imagine China; enough currency alternatives could compete and undermine behemoths. Liquidity expert Martin Taylor on Vickers writing in FT – Basel 2010: 20 chanting demonstrators surrounded by 40 cops ; smash sign of UBS – police did nothing; scale and appropriateness; Schumacher didn’t know anything about money and compound interest; fractals; cooperative alliance, regional, national and globally; can’t measure the coastline of British Isles at the atomic level. Regulation is ineffective in trying to work against the natural trend of the system – like pushing water uphill; Jared Diamond’s Collapse: civilisations which perished in the past were controlled by elites disconnected from the majority and made inappropriate selfish (short term) decisions in the face of external threats leading to the collapse; disagree that the problems are caused by bad people (psychopathic tendencies) – people respond to the systematic incentives for greedy, destructive behaviour.
5. Leyton Marsh quiz at the Hare and Hounds 7:30pm details from Mike;

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