Break the black box: let’s get our act together on global finance


9:10 am - June 17th 2013

by Guest    


      Share on Tumblr

by Brett Scott

For too long people have viewed the financial system in the same way they view their computer – as an obscure black box that we interact with without understanding how it works.

You can throw things at the black box, and you can lament its consequences, and you can shout at it, but this doesn’t fundamentally alter anything.

Ad-hoc regulatory measures – such as the financial transactions tax – may be useful in the interim, but even if a government found methods to tame the financial sector’s excesses, we’re still left with a population that feels fundamentally alienated by the system, struggling to conceptualise any deep alternative.

For a deeper shift we need a reorientation of approach. In my new book, The Heretic’s Guide to Global Finance, I’ve attempted to sketch out pillars for such an approach.

Firstly, people need to break down the notion that the financial system is something ‘out there’, controlled by technocratic elites that know more than they do, and somehow only contained via state action. If anything, the state has displayed massive levels of collusion with the financial status quo.

Secondly, people need to start actively exploring the system, in the same way a computer hacker might actively explore a computer. There is a curiosity deficit when it comes to finance, and that entirely suits the interests of the current financial regime. The more people believe that financial knowledge is complicated, or boring, the more power that regime has.

Thirdly, people need to recognise the creative potential that exists in financial instruments and institutions. There is nothing inevitable in the way, for example, shares are used, and that latent potential can be co-opted. Think about creating hedge funds of dissent, shareholder activism and divestment campaigns, and financial transparency initiatives.

Fourthly, people need to embrace their own ability to experiment in the field of financial innovation. On the Left, this requires breaking down any ideological opposition to the concept of entrepreneurialism.

Entrepreneurialism needn’t mean the Economics 101 style of rational economic profit maximisation. It can be driven by a rebellious impulse, an artistic impulse and an anarchic impulse.

Lastly, people need to start testing alternatives. Far too many activist groups talk about alternatives without ever trying them out. How about starting an inter-group mutual credit system? The campaign organisations of the future are not going to be NGOs funded by rich people. They’re going to be live experiments in alternative economics, getting messages across by demonstrating them.

This ‘beta-testing’ is the first step to inducing the network effects required to scale alternatives up. If you’d like to see a video of how this works, check this Youtube clip. The guy doesn’t try to convince people to dance, he just starts dancing himself, so get dancing!


Brett Scott is a campaigner and writer who works in alternative finance and financial activism. His new book – The Heretic’s Guide to Global Finance: Hacking the Future of Money – is published by Pluto Press and is available now. Non-traditional currencies accepted! Brett tweets as @suitpossum.

    Share on Tumblr   submit to reddit  


About the author
This is a guest post.
· Other posts by


Story Filed Under: Blog ,Economy ,Technology

Sorry, the comment form is closed at this time.


Reader comments


1. Baton Rouge

Finance used to be a service industry facilitating big capital’s anti-democratic machinations not for a profit but for a very fat fee. After Thatcher however it became a `profit’ making `industry’ in its own right. Of course, the only way finance can `make a profit’ is by stealing it which it did by initiating in 1986 the world’s biggest ever credit bubble which with the help of Gordon Brown’s `dodgy growth theory’ became the world’s biggest ever Ponzi Scheme. The fake money being created by the out of control finance sector trading on the AAA ratings of New York and London of course gave a huge boost to a sclerotic, monopolised and dying capitalist sytem creating a sustained crazed boom but the final outcome is a sclerotic, monopolised and dead capitalism system with a bankrupted finance system sucking up centuries of accumulated national wealth, debasing once mighty currencies and permanently ruining the balance sheets of the greatest imperialist powers the world has ever known whilst monopoly national and global corporations profiteer and use their monopoly power to suck all the activity out of the real economy and accumulate huge uninvestable cash hoards.

Of course, finance could be a very useful tool in democratic and sustainable economic planning but it would require first that the bankrupt banks be allowed to go bankrupt to end the ruination of states, currencies and nations and second that their staff, deposits and estates be taken into administration to form a People’s Bank lending at base rate to small business and facilitating social investment. Said bank must have a monopoly of credit to prevent any undemocratic private sector from organising basically the theft of all global wealth through the creation of trillions and trillions of bogus, counterfeit claims on it. Naturally for finance to work for democracy the cash-hoarding, profiteering, asset-stripping monopoly corporations and their gigantic surpluses will have to be socialised and democratised too.

2. Baton Rouge

Finance used to be a service industry facilitating big capital’s anti-democratic machinations not for a profit but for a very fat fee. Thanks to Thatcher however it became a `profit’ making `industry’ in its own right. Of course, the only way finance can `make a profit’ is by stealing it which it did following the 1986 Big Bang with the world’s biggest ever credit bubble which with the help of Gordon Brown’s `dodgy growth theory’ became the world’s biggest ever Ponzi Scheme. The fake money being created by the out of control finance sector trading on the AAA ratings of New York and London of course gave a huge boost to a sclerotic, monopolised and dying capitalist system creating a sustained crazed boom but the final outcome is a sclerotic, monopolised and dead capitalism system with a bankrupted finance system sucking up centuries of accumulated national wealth, debasing once mighty currencies and permanently ruining the balance sheets of the greatest imperialist powers the world has ever known whilst monopoly national and global corporations profiteer and use their monopoly power to suck all the activity out of the real economy and accumulate huge un-investable cash hoards.

Of course, finance could be a very useful tool in democratic and sustainable economic planning but it would require first that the bankrupt banks be allowed to go bankrupt to end the ruination of states, currencies and nations and second that their staff, deposits and estates be taken into administration to form a People’s Bank lending at base rate to small business and facilitating social investment. Said bank must have a monopoly of credit to prevent any undemocratic private sector from organising basically the theft of all global wealth through the creation of trillions and trillions of bogus, counterfeit claims on it. Naturally for finance to work for democracy the cash-hoarding, profiteering, asset-stripping monopoly corporations and their gigantic surpluses will have to be socialised and democratised too.

For too long people have viewed the financial system in the same way they view their computer – as an obscure black box that we interact with without understanding how it works.

The car people drive daily is a black box to the majority of drivers… because the majority do not understand how something works does not mean it needs to change, you think finance has “power” because its complex..

Ad-hoc regulatory measures – such as the financial transactions tax – may be useful in the interim, but even if a government found methods to tame the financial sector’s excesses, we’re still left with a population that feels fundamentally alienated by the system

Nearly £120 billion of taxpayers’ money was wasted or spent on useless projects by the Government in 2011-12 ! Are you trying to be funny? How about the public sector joins the real world first off, get your own house in order.

The TaxPayers’ Alliance (TPA) has identified cuts it says could save around £120 billion, enough to effectively wipe out the UK’s budget deficit, without “closing a single hospital, firing a single teacher or disbanding a single regiment”.

Infact FUNNY how there is no mention of this on this site, you all just keep saying “bankers bad” eh?? While the resources needed are annually being pissed away, and you dont care.

“Entrepreneurialism needn’t mean the Economics 101 style of rational economic profit maximisation. It can be driven by a rebellious impulse, an artistic impulse and an anarchic impulse.

Lastly, people need to start testing alternatives.”

Great, go for it. No, really, have fun and let us all know how it goes. Because this is exactly how market societies advance: experimentation. The stuff that works we all start doing. The stuff that doesn’t, well, only a few people got hurt.

I entirely approve of this free market approach to finance and banking.

Entrepreneurialism needn’t mean the Economics 101 style of rational economic profit maximisation. It can be driven by a rebellious impulse, an artistic impulse and an anarchic impulse.
—-

What the fuck does this even mean?? A product stand of self made goodies at a techno rave in the middle of a feild while the customers are flying on mushrooms may be driven by rebellious impulse, the same hippys and rebels will be the first to ask for a profit, the maximum profit, after their first 14 hour day, this is why they do not make it to the third year of break even before they get to see a profit in their self start ups, they dont even start.

Author please respond, you see, I have been thinking about the total lack of fiancial education given in secondary schools for some time, from personal to mainstream finance.

Not a word is mentioned and its a huge problem, so on the one side as I see it, we have the school system failing, and on the other side we have activists wanting to teach those who know nothing about finance that its all about a rebellious impulse, an artistic impulse and an anarchic impulse.

Thanks for the vote of confidence Tim

And thanks for your comments too Onebe. Yeah, a car is actually a good example of another system like that. I actually learnt car mechanics when I was a teenager precisely because it annoyed me that the wiring under the bonnet was confusing and that there was an entire industry of mechanics that would thrive of that lack of self-belief.

As for the entrepreneur point, I’m just saying many entrepreneurs that I know don’t really build things to make cash, including many in the traditional scene – they sometimes tell themselves that, but frequently they’re seeking to create things of beauty, you know, a bit like Steve Jobs

Also Onebe, on the education point – I wrote a whole other article about that for Libcon at some point – will try find it for you. I’m also hopefully publishing a piece on education reform as one basis of financial reform – can send link once that’s done

I actually learnt car mechanics when I was a teenager precisely because it annoyed me that the wiring under the bonnet was confusing and that there was an entire industry of mechanics that would thrive of that lack of self-belief.

The industry thrives because there is a demand for their services and the indivuduals within the industry have spent years in training and applying their skills, they spend 8-10 hours a day servicing their clients.

That is the only reason the industry thrives. I get the feeling from a lot of your writing that you feel finance is made to appear complex, for no purpose other than to keep people down and out.

As for the entrepreneur point, I’m just saying many entrepreneurs that I know don’t really build things to make cash, including many in the traditional scene – they sometimes tell themselves that, but frequently they’re seeking to create things of beauty, you know, a bit like Steve Jobs

100% with you on that one, passion drives legit creation like no other, but no amount of passion without economic sense will drive the ship.


Reactions: Twitter, blogs
  1. Liberal Conspiracy: Break the black box: let’s get our act together on global finance | moonblogsfromsyb

    […] via Guest Liberal Conspiracy http://liberalconspiracy.org/2013/06/17/break-the-black-box-lets-get-our-act-together-on-global-fina… […]





Sorry, the comment form is closed at this time.