Theresa May uses the Starbucks argument again

[epiphany]

Although that would be better than what we have now, how would it stop capitalists making short-term decisions that have a less financially-quantifiable negative effect on the rest of us? I'm thinking about business decisions which degrade the natural environment (like irresponsible logging or fracking). No bailouts needed there, but still actions that have real negatives for the rest of us in the long run.

 

Good question.

 

This goes back to investment banking, since it determines which businesses have the capital to operate. Much of the banking system we have now, as you know, is based on a single bottom line - maximising profit for shareholders. They do not consider minimising externalities such as environmental and social impact as part of their raison d'être, and indeed why should they? As a result, they inevitably end up investing in companies who also do not consider these externalities since the most lucrative investments may happen to come from the most ruthless corporate enterprises (especially those with links to the arms trade and governmental institutions).

 

For investment to be directed to companies that do operate based on a multiple bottom line, we need ethical banking. These are banks with charters that are either democratically protected by their member-owners or enshrined in their modus operandi like a constitution would be to a nation.

 

However, they still seek the best possible returns on their investments, like any bank, they just have a stricter idea about what is considered good investment, based on long term, social factors that will end up effecting us all, even the banks who neglected these factors in favour of short term (and short sighted) profit only.

 

Ethical banks exist in the marketplace today, the Co-operative and Tridos being two of the most prominant. There are two ways in which we can encourage the growth of ethical banking and therefore encourage the movement of capital away from institutions that operate based on a single bottom line and towards an economy where ethical enterprise has more market share.

 

1) Use the existing marketplace as consumers and vote more consciously with our money. Better consumer awareness would help, but interestingly ethical banks have grown through the recession simply because of consumer disillusionment with traditional banks. The Co-op did so well recently it was able to merge with Britannia and create a "super-mutual". This means they have more capital than ever to invest in competitive ethical enterprise. In other words, consumers are generally becoming more and more aware of the benefits of ethical banking as the corporate banks' destructive practices are exposed.

 

2) Pressure the government to reduce the tax burden on banks that adopt ethical charters and who can provide evidence of their commitment to maximising investment in ethical companies. Incidentally, ethical banks that are run on a mutual/co-operative basis would end up returning their profits into the community, since they have no external shareholders to syphon profits out of the real economy, therefore any loss in tax from these institutions is made up in the real economy. This is why ethical banking is also called sustainable banking, because it is cyclic rather than parasitic.

 

I would prefer a society where private property is not recognised and there can be no virtual trading of commodities (i.e. you can sell any copper or wheat that you actually have in your possession but you can't sell any that is merely represented by pieces of paper or 1s and 0s). This would give us a truly resource-based economy where decisions are made on what resources we have available/left, not a fantasy economy based on the buying and selling of IOUs.

 

That is the left-libertarian position if I am correct, whereby property is defined by use value and possession, not speculative, de facto market abstractions.

 

It's a huge and complex subject, and I need to do far more reading on it before I can align myself with any particular view.

 

All I will say is that, under most systems from minarchist capitalism to big state socialism, a primary and crucial role of government is to define property rights (that is one reason why I am not an anarchist), and the way in which they are constructed in society today is merely one way out of many that need to be considered.

[Rupert_Baehr]

...I would prefer a society where private property is not recognised and there can be no virtual trading of commodities (i.e. you can sell any copper or wheat that you actually have in your possession but you can't sell any that is merely represented by pieces of paper or 1s and 0s). This would give us a truly resource-based economy where decisions are made on what resources we have available/left, not a fantasy economy based on the buying and selling of IOUs.

 

 

"I would prefer a society where private property is not recognised".

 

Would that apply to your private property or just to the property of other people? If you got home and found somebody sitting in your the communal armchair in your the communal house, watching your the communal telly and eating your the communal tea, would you be happy with that?

 

"... you can sell any copper or wheat that you actually have in your possession but you can't sell any that is merely represented by pieces of paper or 1s and 0s). This would give us a truly resource-based economy where decisions are made on what resources we have available/left, not a fantasy economy based on the buying and selling of IOUs...."

 

The purpose of commodities trading is to smooth out fluctuations in the price of those commodities.

 

If you were a manufacturer making (for example) copper tubing and a large plumbers' merchant put in an order with you for 250,000 metres of copper tube, what price would you quote him?

 

If your quote is based on today's prices and the price goes up by 20% between the date of the order and the date of delivery, where are you going to find the money to make good your loss?

 

If you assume that the price is going to go up by 20% by the time you fill the order and the plumbers' merchant didn't believe you, do you think you will get the order?

 

If you tell your customer that you have no idea what the price of copper will be in 3 months time (when you were due to deliver the order) and he will just have to pay whatever the price is on the delivery day, where will he find the money?

 

Of course, if you knew what the price of copper was going to be in 3 month's time - and if you bought an option to buy copper at that price in 3 month's time, then you would be 'in the running' to obtain the order and the merchant would be able to decide whether or not to buy from you.

 

If the prices are going to change dramatically and if there is no way to protect yourself against such price changes, neither of you is likely to want to do the deal.

 

Not a problem, really ... unless you happen to be a plumber who wants to buy 10 metres of copper tube to do a job, or the guy in the house with the leaky pipes.

 

Unless, of course, it's one of those communal houses, in which case you can move next door.

[donkey]

 

The purpose of commodities trading is to smooth out fluctuations in the price of those commodities.

 

 

 

.

 

That is the biggest load of B*LL*X I have ever heard.

[ElasticMan]

Many of these protesters are not exactly without a bob or two.

 

Many return to a leafy suburb to snuggle up and keep warm for the night in a cosy bed.

 

I would be happy for the riot police to go in full force to rid our streets from these hypocritical scum

 

Scum?? For protesting about corporate greed?

 

The empty tent story has already been debunked, even the police has disowned it (it was a shoddy smear by the Daily Telegraph with no scientific basis).

 

The real scum are the millionaires and billionaires who cause the financial crisis and global recession. They only survive because of huge tax payer bailouts, and get they continue to rake in millions on salaries and bonuses, even when they repeatedly fail to meet their own targets.

[stevie1957]

I'm not surprised. Although very rude of them to behave like that. Most of them probably couldn't do a steelworker's job to save their lives.

 

I agree. ............... ...

[andygardener]

"I would prefer a society where private property is not recognised".

 

Would that apply to your private property or just to the property of other people? If you got home and found somebody sitting in your the communal armchair in your the communal house, watching your the communal telly and eating your the communal tea, would you be happy with that?

 

"... you can sell any copper or wheat that you actually have in your possession but you can't sell any that is merely represented by pieces of paper or 1s and 0s). This would give us a truly resource-based economy where decisions are made on what resources we have available/left, not a fantasy economy based on the buying and selling of IOUs...."

 

The purpose of commodities trading is to smooth out fluctuations in the price of those commodities.

 

If you were a manufacturer making (for example) copper tubing and a large plumbers' merchant put in an order with you for 250,000 metres of copper tube, what price would you quote him?

 

If your quote is based on today's prices and the price goes up by 20% between the date of the order and the date of delivery, where are you going to find the money to make good your loss?

 

If you assume that the price is going to go up by 20% by the time you fill the order and the plumbers' merchant didn't believe you, do you think you will get the order?

 

If you tell your customer that you have no idea what the price of copper will be in 3 months time (when you were due to deliver the order) and he will just have to pay whatever the price is on the delivery day, where will he find the money?

 

Of course, if you knew what the price of copper was going to be in 3 month's time - and if you bought an option to buy copper at that price in 3 month's time, then you would be 'in the running' to obtain the order and the merchant would be able to decide whether or not to buy from you.

 

If the prices are going to change dramatically and if there is no way to protect yourself against such price changes, neither of you is likely to want to do the deal.

 

Not a problem, really ... unless you happen to be a plumber who wants to buy 10 metres of copper tube to do a job, or the guy in the house with the leaky pipes.

 

Unless, of course, it's one of those communal houses, in which case you can move next door.

 

That was what they were created for and still can serve that purpose. However long ago they principally because just another game at the casino for the brokers, often played at massively leveraged stakes.

 

One very useful banking reform would be to regulate commodoties brokerage so that only those genuinely dealing in the physical commodity could utilise futures, forwards and options etc with volume limitted to roughly the actual physical volumes bought or sold.

[TeaFan]

"I would prefer a society where private property is not recognised".

 

Would that apply to your private property or just to the property of other people? If you got home and found somebody sitting in your the communal armchair in your the communal house, watching your the communal telly and eating your the communal tea, would you be happy with that?

 

"... you can sell any copper or wheat that you actually have in your possession but you can't sell any that is merely represented by pieces of paper or 1s and 0s). This would give us a truly resource-based economy where decisions are made on what resources we have available/left, not a fantasy economy based on the buying and selling of IOUs...."

 

The purpose of commodities trading is to smooth out fluctuations in the price of those commodities.

 

If you were a manufacturer making (for example) copper tubing and a large plumbers' merchant put in an order with you for 250,000 metres of copper tube, what price would you quote him?

 

If your quote is based on today's prices and the price goes up by 20% between the date of the order and the date of delivery, where are you going to find the money to make good your loss?

 

If you assume that the price is going to go up by 20% by the time you fill the order and the plumbers' merchant didn't believe you, do you think you will get the order?

 

If you tell your customer that you have no idea what the price of copper will be in 3 months time (when you were due to deliver the order) and he will just have to pay whatever the price is on the delivery day, where will he find the money?

 

Of course, if you knew what the price of copper was going to be in 3 month's time - and if you bought an option to buy copper at that price in 3 month's time, then you would be 'in the running' to obtain the order and the merchant would be able to decide whether or not to buy from you.

 

If the prices are going to change dramatically and if there is no way to protect yourself against such price changes, neither of you is likely to want to do the deal.

 

Not a problem, really ... unless you happen to be a plumber who wants to buy 10 metres of copper tube to do a job, or the guy in the house with the leaky pipes.

 

Unless, of course, it's one of those communal houses, in which case you can move next door.

 

I would have thought it was fairly obvious that the kinds of realities I want to see can't exist inside a capitalist system, in which case it's pointless to try to relate them to the current economic system. People need to use their imaginations a bit and see beyond what we have now, which seems to me to be in a state of entropy.

 

And as regards commodities markets, the buying and selling of food staples commodities has priced basics such as rice and wheat out of the reach of some people in the world, leading to starvation. It's just wrong.