Recession prompted 'unprecedented' fall in UK wages

At our brother blog, the Lord of Reward. Something for socialists to applaud and libertarians to deplore.

Link here.

BBC: Should Britain let go of London

Link.

Britain - a call centre for London. London - a piece of 'real estate' for the global rich. It isn't healthy and it isn't good. It feasts on the nation. Like a vampire, it sucks the blood; like a zombie, it eats the brains. We at Burning Pyre believe that the provincialisation of the nation outside of the capital is the price to be paid for the destruction of industry, but better that than the collapse of the UK, thought the Tories in the 80s. It has a certain logic to it, but of course it's proved decisive to the growth of nationalism in Scotland and Wales.

The question is, how long before the regions bring a motion to Parliament to rename London Transylvania?

ONS report on regional economics here (March 2013).

Political Olympics: twitter antics

Bad tweet saw Greek OC drop athelete...

Despite her apology, pressure continued to mount for Papahristou to be removed from the Greek Olympic team

...

‘It’s the same as violating fair play,’ [head of Greece’s Olympic mission] told a Greek television station.

How, when it had nothing whatsoever to do with the sport with which she is involved, or any sport for that matter?

 ...another bad tweet sees Swiss athlete sent home

In a statement, Gian Gilli, the head of the Swiss Olympic delegation, said that Morganella, 23, had “said something insulting and discriminatory” about the South Korean soccer team. 
 ...
In a separate statement, Morganella said that he had “made a huge mistake” by sending the Twitter message after the game and that he was “truly sorry for the people in South Korea, for footballers, but also for the Swiss delegation and the Swiss football in general.”  


MP in the shit with the PM for complaining about the opening ceremony


The worst:

Hunt for Tom Daley Twitter troll: seaside police raid nets suspect, 17

A 17 year old boy tweets that an athelete has let down his father. I feel for the athlete (his dad died last year), but should this really be an arrestable offence? The worst thing is, people actually felt the need to report the comments to the police.

LIBORgate: less than full disclosure?

Diamond accused of not being fully open with MPs walks with a now-confirmed £2m severance package.

Link.

He'll walk; Tucker'll walk - they always do. When complete global financial collapse is the alternative to fraud, the law will turn into a pragmatist. This is clear from the fact that countless subprime loans were linked to LIBOR, which is to say that the rate of interest at which incredibly risky borrowers borrowed (the so-called NINJA loans - no income, no job, (no) assets. WHAT THE FUCK WERE THEY THINKING?) was linked directly to the rate at which banks received short loans from other banks in order to lend. It was a patriotic act to fudge LIBOR and continue the illusion that it was safe for banks to lend short to each other (rather than knowingly pass around an HIV-infected needle at a bag and spoon party). patriotic to capital and Smithsian self-interest, that is.

LIBORgate: Diamond Bob polishes himself off

faces grilling of MPs. Senior Bank of England official knew about the scandal.

Let's see how far they take the same line as Murdoch and get away with it: "I didn't know about LIBOR manipulation by people in my division." Didn't work for the Nazis at Nuremberg. Some consistency please, people! The law is the law!

Link.

LIBORgate

Let's start with a fundamental truth: rigging votes is less important than rigging money. When a vote is rigged, you end up with a candidate very slightly different from the one that won the most votes. When money is rigged - by banks manipulating the rate at which they will lend to each other - you set yourself up for a massive redistribution of wealth. It is the selfsame systemic risk problem that caused the Credit Crunch. The money Barclays itself would have made on manipulating the rate is like the tiny circumference of a thrown stone as it breaks through the surface of a calm pond; it is dwarfed by the ripples which emanate from the source of the impact. Five years' worth of manipulated LIBOR is the latest storm in managed capitalism, the main problem of which is not corruption or venality - for they exist in all walks of life and to a degree never smaller in history - but scale. The ability of single events to spiral out of control and destroy not just banks but countries is the ineluctable causal principle of our networked society.

Northern Rock: worker woe

I've refrained from commenting on the recent announcement of redundancies-to-be at Northern Rock out of apathy. After more than six months of procrastination, the powers-that-be have decided to run with the figures that the Telegraph accurately predicted back in October 2007. What a crock. It makes one wonder what else has been planned from the very beginning but is yet to see the light of day...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/29/cnrock129.xml

One in three Northern Rock staff face axe

29/10/2007

Northern Rock may have to cut up to 2,000 jobs – one in three of its workforce – due to a dramatic slump in new business.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/18/bcnrock118.xml

Northern Rock to axe a third of staff

19/03/2008

Ron Sandler, boss of newly nationalised Northern Rock, plans to slash a third of jobs [2,000] at the stricken lender in an attempt to repay its £25bn taxpayer loan within three years.

We didn't get where we were today without recognising the degradation of 'modern life'...

Theses on the 'arms race' of rationalism

1. The ‘arms race’ that proceeds apace in all aspects of modern life, arises from the entrenchment of rationalism as the objective touch-stone of society, and characterises the motives of present-day social and economic life.

2. All other objective forms of valuation – religion, art, culture, race – have fallen by the wayside, either through design or the passing of the years.

3. We have arrived at the reductio ad absurdum of rationality. We cannot avoid it; we’re placed so firmly on the lines of rationalism that no other paradigm (religious, cultural, social, or political) can compete. All paradigms previously ascendent in the history of mankind are truncations of this one.

4. The arms race arises from Western thought and mechanics. Materially speaking, it is determined by the division of labour as the maximisation of output. Perhaps it has always been man’s goal to exploit to the fullest the resources both natural and human that are to hand. But it is our modern age that has perfected this goal. In perfecting this goal we have overcome the problem of scarcity that has hung over man’s head since the dawn of his time.

5. One can observe the gradual entrenchment of rationalism reaching back to the use of tools in the hunt. But let us take an example from our time: Shareholding and profit. On a microeconomics level, profit is the objective indicator of an end in itself for a business. Shareholders do not get into the business of owning shares for any other reason than that they wish to improve the health of the stocks they own. If one gets into business for ‘sentimental’ reasons, then he is destined for hard times. In the business world, all principles, morals and values are ancillary to the production of surplus value, determined as the rational end to which the energies of a business are employed. In business, profit is the objective indicator of an end in itself for a business. The macroeconomic goal of a business is to provide value and output to the general economy, which makes all modern life possible.

6. The arms race described here is an offshoot of the development of a self-conscious normativity, which was the first revaluation of values for modern Europe. We are living with this normativity problem today. It comes originally from the development of Reason nurtured by the increasing self-confidence of the bourgeois class, and latterly from the incredible proliferation of rationality and the subsequent diffuseness that this proliferation of Reason has given rise to. The ‘Dialectic of Enlightenment’ is nothing more than an account of this latter diffuseness of perspectives and material progress that Reason enables.

7. The arms race – as the unification of the management of resources, populations (as labourers) and discourses – cannot be stopped. This is not in itself a negative judgment, but an outline of the likelihood of success for those who oppose it.

Cartoon video: 'Money as Debt'

View here.

It explains the growth of banking in Europe. At 08:53 it mentions the concept of the 'run on the bank', with which all Northern Rockers will be familar. At 09:50 we see the local bank affected by the run on its reserves (Northern Rock, USB, ) being bailed out by an infusion of real money by the Central Bank (the Bank of England).

At 09:10 it touches upon the fact that government had the opportunity to outlaw banks, but they preferred not to stand in the way of the inevitable. The creation of the concept of banking - of lending money at interest on funds that don't physically exist - is a particular feature of the arms race of Modernism. Banking facilitates the maximisation in output of the availability of credit. If we discover a better way to do something (and production-output is an objective indicator of success), are we to revert to more primitive methods out of fear? No. Once the idea is introduced to the world, then competition becomes a fact. The law bans only the forms of competition which are counterproductive to the economy as a whole. As the availability of credit allows the flow of commodities to increase, and the increase in commodities increases the number labourers employed in the market both as waged producers and individuals with needs that need to be met with money. Consequently, credit is good for the economy. To illustrate the success of the 'credit model', we should note that (at 18:27 in the video), of all the money in the economy, only 5% of money is government-created 'hard cash', whereas the remaining 95% comes from bank credit (money created out of debt). Moral and ethical concerns are secondary.

A problem: at around 31:00 we are introduced to a solution to the problem of exponential growth. Sustainability, as the sustainable solution which would avert the collapse of an economic system predicated upon infinite growth (such as ours), is made possible by the division of labour as it exists in the present system. The reduction of all value to labour and commodities from debt and securities would mean a great decrease in the amount of money in the economy, partly because the source of funds which enables loans to be made would shrink to a 1-to-1 correspondence between value and money. The decrease in value would mean cutbacks in funding, because there is no incentive to lend money, part of which contributes to the upkeep of the workers, and no worker wants to pledge labour without receiving value in return. Workers would be forced to work without receiving pay, and pay is only created in this new system by exchanging actual value created in the product they are working on.
Of course, the government could own the money and lend without interest, enabling projects to be completed and the worker to be paid along the way, but we would have an economy that had halted almost all possibility of developing new forms of technology and medicine through lack of funding; the only way to increase funding in this 1-to-1 economy is to increase the amount of actual value created, which is marked against the labour producing the commodities that are available. How do you increase the money in such an economy, making funding of new projects possible? By introducing new people to the labour-market and by producing more goods. There is no escape from the 'arms race', and its destiny in Mutually Assured Destruction.

For those 8 out of 10 who work in the service industry

Read this.

'Lenin's' superlative cynicism reminds me of a time when I was gripped by the spirit of the Feederz and their ringleader Frank Discussion. I once emailed Frank, who offered me some interesting advice on how to spice up my workday. Needless to say, I didn't follow it because, as Adorno and Horkheimer said, art promises you something that just isn't possible, it is structured according to entirely different categories; art is nothing like real life.

Ah shit, just enjoy the song.

Escapism and Pascal

Shockingly, I have developed an interest in escapism that I had not cultivated since childhood. A child's escapism is - if we push the fact of the resourcefulness and creativity of children aside - partly attributable to the fact that it does not have mastery over itself in a way that the fully self-conscious adult does.

Pascal wrote that if we spent as much of our lives dreaming as we do living in the physical world, then the dream-world would be as important and as real as the actual world. For my part, I am still struggling with the work-life balance - 8 hours work + 2.5 hours commute; 6.5 free time; 7 hours sleep. My free time is only 61.9% as real as my 'dead' time, as the Situationists put it.

'Life is a dream a little less inconstant'.

The media and the banking crisis

The poor status the media has in the eyes of the public is something that is widely known, satirised and passed on, like a fact of ‘idle talk’, as Heidegger called it. However, the viciousness of the media cannot truly be appreciated until one experiences it first-hand, as it were. And the Northern Rock crisis has certainly changed my perception of the media, and radically so. The alacrity with which the pressmen yearned to extort comments from the perplexed staff – who were misfortunate victims of circumstance – shocked me, as one wrong word from one of these employees – and the wrong word is precisely what a journalist will seek to latch onto and amplify – this wrong word could and almost certainly would cost that employee his or her job. His livelihood disposed of because of the rapacity of the press. The media is evil. The methods it uses in pursuit of material are an exaggeration of the effects of the ‘arms race’ of self-interest that we see everywhere in our civilisation.

On one side, we have the journalist, whose purpose is to bring news to the people. On the other side, we have the people, who endorse journalists in demanding news. That 6,000 jobs could be lost - which would exact irrevocable damage upon the economy of the North East of England, that is without doubt - is indeed a moral problem, but not morally urgent enough to invoke a moratorium on the dissemination of harmful news. After all, 'the people have a right to know', as they say. But it is not simply the 'ontological' aspect of the journalist's place in society that influences the way in which this crisis has been read to the public. Behind the journalist is the phenomenon of journalism - an industry, like any other. The purpose of this industry is to pursue its goal of reporting news. If one member of the industry refrains from reporting news, then another one will take up the task, having recognised that its competitor has voluntarily removed itself - in a manner of speaking - from the struggle for resources. Had all industry media refused to report on the situation out of a responsibility to avert crisis, then one or more of the fringe-industry 'guerrilla' media would have been provided with the platform it needed to penetrate into the mainstream and siphon off significant parts of the market share. I’m granted the example of the Drudge Report.com, which broke the story of the Clinton-Lewinsky scandal after the mainstream media demurred to run it. The mainstream industry consequently raises its hackles, just as every industry and business and employee and worker does when it is threatened by the possibility of being out-matched by a competitor.

The underlying fact that was recognised by Adam Smith at the outset of capitalism is that competition creates optimum efficiency. But the intensity of competition that reiterates optimum efficiency and the subsequent need to exhaust the potential of available resources – into which bland concepts we can insert the flesh-and-blood story of the funding crisis at Northern Rock – is raised to a tragedy.