Monday, November 24, 2008


Unpredictability as a constituent of the universe.
History is the story of human effort to impose order on life, to refashion as much of the universe as possible into a set of complex but organized - and therefore ultimately predictable - events. Most of us are bureaucrats at heart, conscious that things occasionally go wrong but determined that they will do so less and less, and that by taking due precaution we can protect ourselves from the vicissitudes of fate. Wise to the fact that we like to feel permanently armed against extinction, Hollywood earns plenty of cash by having heroes rescue humanity from disaster when all seemed lost.
Acknowledging chaos as part of life’s fabric means leaving that cosy scenario behind in the cinema.
At a personal level we are familiar enough with uncertainty. We know that brakes seize, pipes spring leaks, rains fail, smokers may or may not get lung cancer, we may or may not bump into an old friend on our next trip into town. We know, too, that some chance events are fatal. Yet we like to pretend that, far from being a product of happenstance, the planet earth has a purpose. Day-to-day randomness we can handle, ultimate purposelessness is another matter.
Most of the orbs out there in space (maybe all of them) are devoid of organic matter. It follows that life must be an anomaly; because if the universe worked predictably, it would be uniform, and we couldn’t exist. As it is, we occupy no more than an infinitesimal blip in the space-time continuum; and cosmically speaking, there’s no reason why we should be around for long. When we’ve finished ruining the planet, or the planet has finished with us, we’ll doubtless leave it. And all the beauty of which we make so much, the green fields, the desert sands, the snow-clad peaks and verdant valleys, the masterpieces of our own making, will melt back into the primeval soup from which they and we emerged.
Since we can count ourselves lucky to be here, maybe we shouldn’t lament the fundamentally chaotic nature of existence; for though chaos may one day cause our extinction, it has brought us into being and moulded our aesthetic and emotional response to the world.31 The harmony we find in natural landscapes, in the intricately disordered branches and twigs of trees, in overgrown gardens, in the ephemeral patterns of passing clouds is not accidental. Our brains are tuned to them. Artists understand this, which is why their works so often seem disordered, untidy - complexity being the overriding condition of human experience and the medium in which our imagination floats most easily. Shakespeare who saw many things, saw this too:

Sometime we see a cloud that’s dragonish
A tower’d citadel, a pendant rock,
A forked mountain, or blue promontory
With trees upon’t that nod unto the world,
And mock our eyes with air.32

By contrast, we can’t inhabit a world in which everything that takes place accords with Aristotelian logic. Drama trimmed to the unities of time and place, architecture stripped of ornament and quirkiness, music played strictly to beat and measure - these may offer simple pleasures and even evoke admiration; but we experience them distantly, and tire of them easily. By contrast we enter and move within the worlds of War and Peace, or Lear, or The Iliad, recognizing in the messiness of the life depicted, the multiplicity of characters with whom we mingle, the thoughts they express, the diversions and tangential paths on which they and we embark, a parallel to our own. The best music works in just this way also, by creating expectations in us, and then satisfying them not with the notes our ears might anticipate unaided, but with a sequence that at once meets our expectations yet surprises us with an appeal to something tangential and more involving than we could have imagined for ourselves. All great art is, in that special sense, complex - satisfying to our brains which are complex too, and inimical to our instincts, which are self-protective and conservative. Art best plays its role in our lives when it defies the bureaucrat in us; when it beats against imposed order; when it simulates the chaos that we know lies at the heart of all that exists, and thereby helps us understand how wondrous strange it is to be alive and conscious.
31 “Impurity,” wrote Primo Levi, “which gives rise to changes, in other words, to life.” - The Periodic Table, Turin 1975.
32 Anthony and Cleopatra, IV.14

Tuesday, November 18, 2008

Capitalist Theory of Corruption

The theory - first proposed by George Hiram Arbuthnot17 - that corruption has been a prime ingredient of human progress and remains an elemental component of economic development in capitalist societies.
Oxford’s famed dictionary defines corruption as moral depravity, but Arbuthnot disagreed, arguing that murder, abandoning children, and spreading AIDS were morally depraved but we wouldn’t normally describe them as corrupt. The definition he proposed was the acquisition of power or material advantage through a betrayal of trust; and he gave some intriguing illustrations: lobbying a politician was permissible, murdering him illegal, bribing him corrupt; impartiality was desirable, favoritism inevitable, nepotism corrupt; and so on.
Corruption has probably always been with us, but Arbuthnot was not concerned with tracing its origins or assessing its role in human psychology. His aim was to expose it as one of the fundamental pillars of our way of life.
The corrupt, in his view, have always been the breakers of moulds, the iconoclasts, the novel thinkers and doers, the darers, the explorers and the ruthless. Cortés conquered Mexico by lying to his host18, taking him prisoner and destroying his realm19 . Pizarro performed the same feat in Peru. England lied, swindled and murdered her way to domination of half the world with the help of carpet-baggers, slavers, religious charlatans and power-crazed politicians out to build a reputation.
Not everyone, even of their own kind, thought the pilgrim fathers such respectable creatures. “’Tis a great misfortune,” writes one of them, “that most of our travellers who go to this vast continent in America, are persons of the meaner sort, and generally of a very slender education.”20
Locals - the inaptly-named Indians - treated the newcomers well until their hospitality was repaid with such cheating, hostility and viciousness that they could do no other than try to repel the invaders. “They really are better to us than we are to them,” our author continues, “...they always give us victuals at their quarters and take care we are armed against hunger and thirst; we do not so by them, but let them walk by our doors hungry....We look upon them with scorn and disdain, and think them little better than beasts in human shape, though if well examined, we shall find that, for all our religion and education, we possess more moral deformities and evils than these savages do or are acquainted withal.” One is reminded of Rudyard Kipling’s pithy appraisal of Gunga Din:
“You’re a better man than I am...”
By the time Lawson wrote up his travel adventures in the Carolinas, the natives he described and others like them had seen their women raped, their sons enslaved, their villages burned, and vast tracts of land sold from beneath their feet “ consideration for valuable parcels of cloth, latchets, beads and other goods...”21
Property prices on the eastern seaboard have risen a little since then.
“The conquest of the earth,” opined Conrad, “which mostly means taking it away from those who have a different complexion or slightly flatter noses than ourselves, is not a pretty thing....”22
Arbuthnot’s familiarity with the details of colonial conquest led him to suspect that modern capitalist societies stood on corrupt foundations - an idea that he was to spend most of his academic life examining. His research focused primarily on the period of fully-fledged capitalism, roughly from the late nineteenth century to the present. With the help of an admiring coterie of radical students - who idolized him - he assembled a unique collection of case studies on corporations that had benefited from corrupt practices. Regrettably, like Freud with many of his patients, he was obliged to conceal the identity of those he studied to protect himself from ruinous litigation, which meant that his results could not be independently verified. Even so, he spent much of his life at PISS fighting off law suits from firms and individuals who claimed to recognize themselves in his work.
One of Arbuthnot’s most celebrated cases involved a firm he called International Home Machinery (IHM) which began life as a manufacturer of domestic refrigerators. The company was founded by Irving Mountebank and Eric Pilfer23 two former shop floor operatives at Thornton Refrigerators which was then the dominant brand in the US market. IHM succeeded in establishing a toehold in the market but then found itself losing ground as Thornton reacted to the competition by increasing its advertising, bribing retailers with loyalty discounts and launching a price war potentially ruinous to IHM. Mountebank and Pilfer, who had taken IHM public, sold out when the going got rough; and in their place the Board appointed former traveling salesman Bert Advent as president. Advent’s qualifications for the job were unimpressive but he was known to be hard-nosed, ruthlessly competitive and unafraid of ethical compromise in pursuit of a sale. His plan to topple Thornton was ingenious. He launched an IHM product range identical in every detail to Thornton’s best selling lines - even down to the labeling. No casual observer could distinguish between the machines. Even retailers thought they were selling Thornton product. Only one problem: the IHM copies had built-in flaws: motors overheated; cooling pipes leaked, doors fell off, thermostats failed. A few months after Advent’s faulty copies reached the stores, complaints began flowing in. Before long, the press smelled blood: Thorntons, they hinted, was in financial trouble and in order to save money was compromising on product quality. The firm reacted quickly, offering a free replacement to every dissatisfied customer, but its reputation was shot. Sales plummeted, the stock price nose-dived, and within a couple of years IHM had bought out Thorntons and effectively closed it down. IHM went on to become the largest and most trusted refrigerator supplier in the world. According to Arbuthnot, IHM’s story demonstrated how ingenuity in the service of corruption can give dynamic firms the edge in competitive markets.
That this is well understood in the world of commerce will be clear to any attentive reader of the business pages of the serious newspapers which are riddled with hints, suggestions and occasionally - where the evidence is clear - accusations of malpractice by company executives and government officials.
Early objectors to Arbuthnot’s theory pointed out that if he was right, then capitalism would be at its best in the most corrupt societies - a patent absurdity. But Arbuthnot responded that this was a misunderstanding. Universal corruption simply ruined everyone and produced either chaos or its obverse, repression and tyranny - circumstances directly opposed to the stability needed for a properly functioning market economy. Capitalism, by contrast, required most corporations and most of society to observe the unwritten laws of honesty and integrity. Few prospered in the long run; but their general probity was what allowed the creative few to bend the rules; and what gave rise also to the commodification and exploitation of labour, and to the triumph of wealth concentration over wealth distribution, of resource extraction over environmental conservation, of Mammon over Mankind.
Arbuthnot himself was a complex and somewhat eccentric figure. Born in South East London, the son of an Ethiopian father and Vietnamese mother, he grew up in a multi-ethnic community of working-class, first-generation immigrants and refugees. His fascination for languages and the use of language began early; and his mixed racial origins gave him entry to many different ethnic and social groups in the area of his home. By the time he won a scholarship to Oxford - only the third to do so from the inner-city school he attended between the ages and twelve and eighteen - he was fluent in Amharic, Vietnamese and French as well as English, and had acquired the rudiments of several other languages including Punjabi, and Polish. He met his wife Greszyna at Oxford where she was employed as a college cleaning lady. She later, of course, became one of the most successful plastic artists of her generation as well as a successful actress and founder of the influential Art Renouvelé movement of the sixties. Commenting on the marriage after his wife’s death in a car accident at the early age of fifty-eight, Professor Arbuthnot had this to say: “Greszyna and I made love the first time she came to clean my room at Oxford. And we made love an hour before she died. Throughout thirty-four years of mutual support and companionship, we never tired of bonking each other. It was the basis of our relationship. Men dream of having a sexual companion like Greszyna, and I was lucky enough to have the dream fulfilled. If I have ever in my life attracted envy, she was the reason.”
After taking a brilliant first in Amharic language and literature24 and gaining a fellowship at All Souls, Arbuthnot came to international prominence with two books, “The aetiology of allophylian languages - a study in the decline of meaning,” and its sequel, “From multicolour to monochrome”, a historical analysis of the impact of language on vision which concluded shockingly that, after a long efflorescence between the dawn of history and the mid 1950s, our imaginative and intellectual horizons, as reflected in what we say and see, are now shrinking at roughly the same rate as the polar ice caps.
Arbuthnot would probably have remained at Oxford had it not been for the commotion that followed this second work, which aroused a volatile blend of controversy and ribald mockery. Students in Oxford demonstrated noisily outside the gates of All Souls, and hurled eggs at him during his weekly lectures at the Taylorian Institute. Opinion columns in the media prosecuted and defended him with equal vigour. Pickets at the West End theatre where Gryszyna was appearing as Madame Ranevsky shut down performances, forcing the management to replace her with an understudy. In the end Arbuthnot gave in to pressure from his university colleagues and resigned his fellowship.
As so often happens, American academic institutions proved less squeamish than their staid British counterparts, and Arbuthnot’s disgrace resulted in a flood of offers for his services from across the Atlantic.
After a brief spell as a visiting professor at Yale, he was offered a tenured professorship at PISS, initially in the department of linguistics. Two years after taking up the post, in an open letter to the Connecticut Journal of Palaeography , he announced that he had abandoned linguistic science, having concluded that the store of meaningful statements about language was exhausted and replenishment improbable. The remainder of his life he devoted to corruption - the field for which he is best known. At first PISS reacted adversely to this unilateral role change and tried to revoke Arbuthnot’s professorship; but his employment contract, leak proofed by New Haven litigation guru Max Sprackett, would have made the cost of paying him off ruinously expensive for the institution. Later, Arbuthnot took delight in recalling PISS’s failed efforts to fire him which he cited as corroboration of his corrosive view of capitalism. “I reneged on my contract, but I won anyway,” he was fond of saying. “I myself am corrupt insofar as corruption is available to me.”
A new phase of Arbuthnot’s career now began which eventually led to a reconciliation with PISS and accession to the Chair of Semiotic Casuistry which was created specially for him. Over the following years, he produced a stream of books and monographs, the most important of which is his seminal “Double Dealing and Double Dutch” a monumental two-volume attempt to demonstrate that capitalism flourishes best in societies openly hostile but covertly tolerant of corruption. Most of the first volume is devoted to addressing what he called the “blithe assumptions” of Max Weber and later Richard Tawney in their attempts to equate the rise of capitalism with the Protestant Ethic.25 Weber thought that protestantism sanctioned wealth as the reward of ascetic devotion to work. Tawney, who disapproved of acquisitiveness, tried to reverse the equation by positing an accommodation of religion to the capitalist ethos. According to Arbuthnot, neither understood the power in the European Christian tradition of biblical strictures against wealth. Every Christian in Europe was brought up with the idea that personal enrichment was sinful. It was easier for a camel to pass through the eye of a needle than for a rich man to enter into the Kingdom of God.26 Love of money was the root of all evil.27 He that hastened to make riches should not go unpunished.28 Etcetera.
Jews, who interpreted their Torah differently, had no problem with believers getting rich provided they observed the requirement to share a portion of their good fortune with those who had too little wealth or none at all (a mitzvah). Hence why Jewish prosperity, which is open and generous, struck Christians as the moral equivalent of an alliance with the devil; and also why lovers of gold like Shylock, Volpone, Uriah Heep, and Scrooge - are counted among the villains of European culture.
Protestants - and puritans most of all - advocated not personal enrichment but cooperative productivity: work for the good of all. Even Adam Smith’s invisible hand was supposed to promote the general welfare.
If opulence was illicit and its getting corrupt, the desire for it had to be concealed, or at least cloaked in dark puritanical cloth. And so riches were best accumulated underground, out of sight of men - and of God.
In the United States, home of capitalism, the founding fathers and their descendants rebelled against their puritanical forefathers (as children do) and publicly set personal enrichment on a pedestal next to holiness. But since they remained among the most religious people on earth, their wealth needed to be justified in the eyes of the Lord. For, as Orwell noted, “Even the millionaire suffers from a vague sense of guilt. Like a dog eating a stolen leg of mutton.”29 No accident, then, that in the United States charitable donations became big business, for they were a salve of conscience - a bulwark against the schizophrenic paradox of being at once richer and holier than everyone else.
By the same token and for the same reasons, corruption became bigger, bolder, and ultimately more ruthless than elsewhere, on a par with the size of the country and the bluster of its history.
One of the most interesting sections of Volume II of Arbuthnot’s great work deals with money-laundering - which he interpreted as a desire on the part of those who had transgressed in amassing great wealth to return to the way of heaven and to the path of probity here on earth. For, he argued, most great fortunes rested on some kind of skulduggery at their origin, even if with the passing years their possessors had acquired an aura of graceful respectability. The trick with ill-gotten gains, then, was to disguise their origin by re-deploying them in a legal activity.
At the end of his life, Arbuthnot wrote a series of valedictory essays30 , somewhat in answer to his many critics, in which he explained that far from considering corruption a necessity of life, he saw no reason why humanity could not progress happily without it. As a scientist, however, he did not see himself as an advocate of one mode of being over another. “People talk to me of morality,” he wrote, “and accuse me of a dreadful neglect of duty because of my refusal to condemn the corruption in capitalism. I recognize no such duty. Human nature is what it is; and insofar as I am human, I share humanity’s foibles. If that makes me a scandalous reprobate, a vile apologist for evil, so be it. If the Maker of all things exists, I can expect shortly to encounter Him. When that moment arrives, perhaps He will take the opportunity to acquaint me with His views.”

17Professor of Semiotic Casuistry at the Princeton Institute of Semantic Sciences (PISS) (2012 - 2039)
18 Moctezuma.
19 Tenochtitlan, “the world’s most beautiful city,” according to the Spaniards who burned it.
20 John Lawson, A New Voyage to Carolina, London 1709.
21 Shaftesbury Papers and other records relating to Carolina and the first settlement on Ashley River prior to the year 1676,” Langdon Cheves (ed), 1897
22 Joseph Conrad, Heart of Darkness, 1902.
23 All names have been changed.
24 As the only Amharic expert in Oxford, he was obliged to examine himself and mark his own papers.
25 See Max Weber, Protestant Ethic and the Spirit of Capitalism, 1902; and R.H Tawney “Religion and the Rise of Capitalism, 1926.
26 Matthew 19:24.
27 1 Timothy 6:10.
28 Proverbs 28:20.
29 George Orwell, Essay on Dickens, 1939.
30 Notes for the nether world, Plainsboro Paperbacks, 2038.

Tuesday, November 11, 2008

Sub-Prime Poverty

Bank failure and the sub-prime mortgage fiasco have provoked so much debate, analysis, hand-wringing and finger-pointing as to leave the impression that everything that can be said about them already has been said. We all know by now that the banks loaned too much money to folk who could neither muster an adequate deposit on the house they wished to buy, nor keep up with their payment obligations.

Nobody, however, seems to have wondered why - after a decade of prosperity and economic growth - so many people were unable to get a conventional toehold on the property ladder. Why the need for sub-prime mortgages in the first place?

Part of the answer lies in house price inflation. But why did house prices rise by so much when other prices didn't? To answer this, we need to understand that when banks make a loan - not just a mortgage loan but any loan - a large of proportion of the funds will consist of money that didn't exist before the loan was made. That's right. No matter the guise under which it appears, or the complexity of the financial instrument that creates it, under a fractional reserve banking system - which is what we have - new debt means new money. And when new money unlinked to output enters the economy it causes inflation. Remember those loan offers that dropped into our mail box every morning? Many of us took the bait. Result: loads of new cash scurrying in search of something to buy. We spent a great deal of it on cheap imports from the far East and elsewhere and thereby hid some of that inflationary pressure. But you can't import real estate; and that's where the underlying inflation showed itself. House prices went skyward.

The second part of our answer is more sobering. During the five years from 2000 to 2005, the US economy grew 14% and productivity grew even more - by nearly 17%. Over the same period, median family income - the level at which half the households earn more and half earn less - actually fell by 3%, while unemployment rose slightly. So where did the income from growth go? Mainly to corporate share-owners and company bosses. By 2006, Chief Executive Officer pay was over 250 times that of the average wage. In the 1960s that ratio was only 24 to 1.

Therein lies the source of the sub-prime phenomenon.

Those hundreds of thousands maybe millions who took out mortgages beyond their means are a direct reflection of increasing inequality and - yes - poverty. People were promised the American Dream and then found - too late - that carpet baggers, corporate directors, and feckless politicians in Washington and Westminster had placed it beyond their reach.

Sunday, November 2, 2008

Built-in Obsolescence

Originally, a means of ensuring that consumer goods like cars, refrigerators and computers are periodically thrown away and replaced by new models.
Companies have adopted a variety of strategies for inducing people to jettison old products. The crudest method - much used in the early and mid-twentieth century - involved the use of poor-quality components which were guaranteed to cause a breakdown shortly after the expiry of the warranty. Like many industrial innovations, this one is widely attributed to American enterprise - the world’s number one source of corrupt ingenuity in the service of private gain.
The danger of embedding imperfections into a product is that disenchanted consumers might switch to a competing supplier. Extended warranties - for which the buyer pays a premium - resolve this little difficulty. They also reinforce the case for shoddiness. Since no one likes paying for something they don’t need, a breakdown confirms that the warranty was worth the money.12
Other methods of ensuring obsolescence have joined the fray.
Changes of style make old products stale and new ones fresh and exciting. Expiry dates induce us to discard what we might otherwise still be inclined to use or consume. Manufacturers refuse to provide parts or to service goods they would rather see replaced by new purchases.
Sometimes producers use a cocktail of techniques to turn a product they trumpeted twelve months before as the quintessence of everything to which a sane member of the human the race might aspire into a tired disgrace worthy of the scrap-heap. Bud Eccles, the American consumer guru of the 90s, recalls how for years he received an annual brochure from America’s number one luxury car maker describing a farmer from the outback - a man that lived tough and bought tough and deserved his little perquisites - who exchanged his car for a new one every year. Twenty-five at the last count and still faithful to the world’s finest model the brochure proudly proclaimed. Eccles wrote to the Chief Executive Officer and secured an interview. “If the car needs changing every year, the conclusion must be that it’s no darned good,” he told the CEO. “And that farmer o’ yours is a goddamn fool for wastin’ his money on crap.”13 The CEO threatened Eccles with legal action and had him escorted from the premises.
Business executives and entrepreneurs aren’t alone, however, in their attachment to obsolescence. God also seems to approve the idea. Everything that lives wears out; and by the time we humans make our final departure, many of us have been obsolete for years.
Our creations - of which we make so much - likewise crumble or pass into desuetude. Philosophies, - modes of interpreting the world - may seem in their pomp to yield eternal truths - until the next generation refutes them. States - even “impregnable” empires - rise and fall. Species flourish for a time, only to succumb to the multiplicity of ways in which it is possible to become extinct. Our species will doubtless follow suit - if not at our own hand, then by some other means: perhaps a celestial catastrophe; or maybe because limits exist to the number of reproductive cycles available to any life form before it mutates into some other creature, or disappears altogether.14 In any case, the Earth seems set one day to expire, taking its creatures with it.15 If the astrophysicists are to be believed, not even the heavens are immune to exhaustion: the stars - our sun included, - will one day burn themselves out. “The cosmological eye, “ writes Barnaby, “in the end sees the varied, pulsating colours of life as no more than millisecond flashes of strange order in a dark and disordered night”.16
If we accept - as perhaps we must - that the universe will for all useful purposes come to an end, product obsolescence becomes no more than a reflection of a wider reality. Can we blame corporate executives for marketing goods of limited durability when God appears to have done the same with life?

12But note that repairs usually carry less than six months’ warranty, except for goods with second-hand value - such as cars - where lifetime warranties are cavalierly offered based on the probability that the owner will sell it within 12 months.
13Bud Eccles, “Memoirs of a Marketing Man,” unpublished monograph, University of Scunthorpe Business Faculty Library, 2000.
14Dinosaurs of the Cretaceous Period were not at all the same as their older cousins of the Triassic Period, 140 million years before.
15“ is no more than a glaze upon the delicate as the bloom on a peach.” comments Richard Fortey: “Life: An Unauthorized Biography”, London 1997, p 300.
16 Janet Barnaby, “Quarks, Quirks and the End of Life,” Sydney, 2013, p 72


The practice of disseminating lies that are so transparent as to be unequivocally recognizable as falsehoods. Named after the forty-third president of the United States, George W. Bush, under whose presidency Bushit emerged as the most common method of communicating policies of dubious merit to the electorate. What the Bush administration discovered was that a majority of the public attends far less to the content of a political message than to manner in which it is delivered. Provided a leader looks presentable, sounds confident, and is sufficiently partisan, he or she can undermine democratic rights, tamper with electoral procedures, ignore constitutional protections, and give voice to lurid nonsense with impunity.
Some historians view the advent of Bushit as marking a watershed in the development of political demagoguery. Before Bush, politicians thought it necessary to keep their mendacity within the bounds of plausibility. Even tyrants like Hitler and Stalin grounded their deceits in elaborate fictions designed to convince the populace of their honesty and to justify their worst actions. Their mistake, according to Bushit theory, was to assume that people pay attention to facts, to evidence, to rational argument passionately delivered. Bushitters know otherwise. They lie and cheat openly, and deny the rationality, even the humanity, of whoever disagrees. In this they are invariably supported by those large sections of the media whose commitment to truth is in inverse relationship to the intensity of their political affiliation. Anthony J. Blair, prime minister of Great Britain (1997-2007) became the first European political figure to base his leadership on Bushit principles when he employed fabricated evidence to justify military action against Iraq. He went on to obfuscate many other issues, in a manner that seemed to some observers bizarre, if not whimsical.