The Fog of Commerce -and- The Nomads of Financialism

…War, organised war, is not a human instinct. It is a highly planned and co-operative form of theft. And that form of theft began ten thousand years ago when the harvesters of wheat accumulated a surplus, and the nomads rose out of the desert to rob them of what they themselves could not provide.Dr Jacob Bronowski, The Ascent of Man

You have to be an idiot to hate Capitalism. Wait, I’ll clarify. You have to be an idiot to not live in a hut you built yourself, eating food you grew or raised or killed yourself, concerning yourself with the coming seasons (of the year, not Dexter) and hate Capitalism.

Capitalism is just an approach, it isn’t good or bad. Or, to put it another way, the theory of Capitalism is just that, a theory, but there’s an endless amount of seriously cool shit that has come out of a billion people all buying (haha) into that one theory. This is good, right?

As I understand it, Capitalism proposes a way of life structured around producers and consumers, employers and employees, money and goods, capital and debt. It’s made my life an exciting one to lead. But that’s just an interpretation of Capitalism in the real world.

In fact, as a simplification this might work but as a description of how Capitalism now functions in our world it’s utterly inadequate. Look, I’m not an academic. I haven’t done any proper research. I’ve just read and thought about this a lot. And this is what I think.

Capitalism, just like Socialism, Marxism, Humanism, Sexism, Racism, isn’t a human instinct. These are ways in which we attempt to combine instinct (survive, stabilise, sustain) with what happens when we meet other people with the same instincts.

Sexism and Racism are overtly aggressive and lamentable outcomes of instinct, because when someone else threatens the ability to fulfil one of our core instincts, we fear their power and we seek to undermine and weaken the threat in order to repel it.

Socialism and Marxism are ambitious outcomes of the instinct to mass in the safety of numbers, to gain the protection and the product of a collective movement of effort in a shared direction to a shared purpose. But they fail in a world where our instinct to work with others comes into direct contact with our instinct to distinguish ourselves from them.

Capitalism empowers our instinct to distinguish ourselves, to define ourselves, because it heightens the importance of the individual in the system, the separate pieces of the machine. But our instincts to share, to give and to care receive none of the same rewards as our more self-interested instincts, which causes tension.

It’s a system ripe for influence by powerful members of the system, and open to the seizing of advantage by those with a knack for the way the system works. Inevitably there are successful individuals and unsuccessful individuals. The gap only gets bigger, and as a result so do the tensions which the system unavoidably creates.

I’ll take the liberties of an wilfully ignorant and perhaps over-confident writer and expand Adam Smith’s invisible hand to be a theory like so: In a free market, producers or employers will react to what consumers or employees do, money will respond to the movement of goods and capital will correspond to debt.

My issues with the prevailing, currently exercised interpretation of Capitalism is that the invisible hand is tied, often by the same powers who demand it be allowed to move freely. Because we’re not living Capitalism pure, not now and perhaps not ever (it’s probably impossible to purely express a theory at this level). We’re living Financialism.

That sounds a lot better than Moneyism or Wealthism, but all three express what I mean. I believe Capitalism is more than just a system of money. It’s one of all the aspects and roles I mentioned above. But Financialism, and the economic money/investment markets which drive what we think of as Capitalism, are concerned only with money.

Whatever the sad impact of this on you and me, it has happened because of what I like to call the Fog of Commerce and the Nomads of Financialism.

Like war, commerce is not a human instinct. They are constructs in the real world which are driven by human instinct, shaped by our desires – a commander wants the best possible victory with the fewest possible casualties. A consumer wants the best possible product for the least possible outlay.

When producer and consumer, employer and employee, money and goods are close to one another – the independent shop and the regular patron, say – a relationship exists which can easily and quickly react to the desires of either party. Just as, in a skirmish, a squad leader can precisely respond to attack and inspire the morale of his troops.

But the larger the producer the less able they are to react to or even consistently consider the many and competing desires of its consumers, like commanders in the fog of war. The greater the distance both physically and emotionally between the producer (in terms of influential personnel) and the consumer, the more obscuring the Fog of Commerce.

By this I simply mean that, at the top decision-making level of a large corporation, the desires of individual consumers is noise. Making sense of this noise costs, but generalising is cheap. And unless the noise is too loud to ignore, decisions can be made based on information that is in turn based on a decision to prioritise cost over relevance.

Example: A pharmacist I knew was, after a mild bank holiday weekend, asked by her supervisor why sales of cold medicine hadn’t reached the expected targets. As a professional, she knew it was probably because the unexpectedly mild weather meant people didn’t have colds so didn’t need medicine.

But as a staff manager herself, she knew this answer wasn’t accepted at any level of the command chain, all the way up to the head directors. Understanding unexpected events is difficult, especially when you’re removed and obscured from the event itself, but plotting expectations on a graph and theorising controllable reasons is cheap and easy.

All of this might just mean that big, bloated organisations eventually suffer as disgruntled consumers either turn elsewhere or, if they’re sufficiently ambitious or driven, become producers themselves. Corporations that don’t adapt fall away, small upstarts become big conglomerates, the cycle continues.

This does happen, of course, and will continue to happen. But I believe it should happen far more often, and would happen more often without the Nomads of Financialism.

In Dr Bronowski’s lecture, he defines the nomads who by all accounts invented war as non-producers, non-farmers. He draws a picture of a world where the horse acted as both the trigger for this nomadism and as the first engine of war, enabling the nomads to strike unpredictably, seize goods indiscriminately and flee too quickly to be caught.

I’m all too easily drawn to generalisations about investment bankers, economists, hedgefund managers… But there’s a simple reason. I fear these roles. The people who hold these roles don’t perform either of the two main functions I see in our communities – they aren’t builders and they aren’t hunters. They are the Nomads of Financialism.

I used to work at a well-known magazine publisher, which I won’t name because I like a lot of people there. But this is how my image of their upper echelons was shaped – when I joined, they’d just survived a rocky and challenging beginning to the new millennium, and were admirably now happily back into the black.

Immediately following this announcement came the intention to become the biggest niche publisher in the UK. To grow. Which, in practice, meant spending all that capital (and more) on investment in a huge buy-in of new titles. This would make us the biggest niche publisher, which would in turn raise our share price. It would create money.

I’m not enough of a fool to suggest I know exactly what happened next, but I do know that a significant and unexpected number of the new arrivals didn’t prove to be as good an investment as they should have been. From a stable but non-remarkable position, this company had succeeded in creating instability for an overall non-remarkable result.

Risk is risk, yes. And I might have it totally wrong. But what I know is that I saw a company with capital and comfort, money in the bank, end up as a company with debt and questions. And for what? For growth.

In Financialism, there are only two goals. The first is to make money, and the second is to use that money to make more money. Having money isn’t enough – you have to have growth, because without growth you won’t have more money. Nomads are driven by nothing but these goals, because the system rewards only these goals.

Nomads don’t create product, they benefit only those who are part of the global financial market. They eat, sleep and think money at a level where it probably even transcends money itself and becomes like The Matrix, a buzzing, seemingly incomprehensible mess of figures and numbers, the real picture buried somewhere in the tangle.

If the investment bankers who can see that real picture are like commanders who can read the battlefield, then below them are the troops – the investors who eagerly enlist in the action to seek money and more money, in a world where growth is the only visible option.

Why should this matter to any of us? For me, I’ve self-indulgently loved writing this because it’s finally given me a framework to discuss my fears and my intuitions without having to resort to shrieking. It’s a stance and a model that I can explain, stand by and argue about.

But what should matter is my point that the problems caused by the Fog of Commerce are perpetuated by the Nomads of Financialism. In true free market Capitalism, the cycle should work out and those who resist the progression of time should fall away or lose power. But in Financialism, it’s the Nomads who can influence who falls and who succeeds.

Or at least, they’ve been allowed to project the image of holding this power. If my old company had stood by its stability, what would have happened? Financialism states that the Nomads would have pursued growth (and more money) elsewhere.

For a company sitting on its own money, that’s not a problem – it’s a fortified, privately owned concern. Except, if the people at the top are caught in the Fog of Commerce, they run the risk of becoming Nomads themselves, of being attracted by the exhilerating horseback (bear with me!) pursuit of growth.

But for a company which has investors (Nomads) the decision to say ‘enough’ and ignore rapid growth isn’t always an option. Without growth (ie, more money) the Nomads will strip their assets and gallop off to more attractive opportunities. Leaving a company whose stability depended on the interest of investors in very unstable condition.

And this is why people think they hate Capitalism. Because in Financialism the Nomads are Capitalism, because they control and glorify growth in a system which suffers the Fog of Commerce. We don’t hate Capitalism, we hate the Nomads. We hate them because we fear their indiscriminate approach, their apparent lack of concern for us.

We hate them because we wish we were Nomads too. We wish that we could get rich quick, get famous quick, get what we wanted right now. We wish we could roam, without concerns, and only look after our own interests. And those of us who don’t wish this struggle because the perception is that the roads to alternatives are closed to us, the Nomads are holding all of the crossings to new territories, new ideas.

Financialism is an arrested cycle, a perpetual stall. It goes nowhere interesting, except for the cheapest and quickest route to growth. And in a world where many people with an ounce of talent either want to be a Nomad or are afraid of Nomads, we forget the fact that we don’t actually need them. We just need to resist them.

I see a future where the individualist drive of Capitalism finally matures within us, creating not a self-directed consumerism but a self-powered optimism. We realise that the global financial market doesn’t have to exist. We realise we can live in a world without investment bankers. Without the Nomads of Financialism.

We just have to find a way to blend our instincts to distinguish ourselves, to discover who we are and what we do best, with our social instincts to build together, to hunt for the benefit of our communities, and to create an -ism which accepts all of our instincts, driven by the individual on a personal level but managed sensitively on a universal scale.

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About Ben Catley-Richardson

Writer, reader, husband. Father!
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