This is what is making the rounds on the trading floor today!

[art]

Re: This is what is making the rounds on the trading floor today!

I'd like to point out that it would be more appropriate to assume the quote fake until proven true, than to assume true until proven false. The burden of proof goes to the one making the claim, not the one disputing the claim.

I read it and immediately thought "this must be fake". If you posted and claim it is true, then cite the primary source. Unfortunately, "the trading floor" doesn't carry a lot of credibility these days (or any days?).

[due_indigence]

Re: This is what is making the rounds on the trading floor today!

The quote at the top of this thread just doesn’t ring right with me. I believe I’ve posted the quote below somewhere around here recently. I know I’ve used it in a couple of recent articles. It’s an authentic quote from Frederick Engels Socialism: Utopian and Scientific, (1877)

“Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsalable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution.

The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again.

Little by little, the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit and speculation, which finally, after breakneck leaps, ends where it began--in the ditch of a crisis. And so over and over again.”

This quote describes the Marxist overproduction dynamic. By itself, it’s a remarkably prescient account of the current dilemma. As it turned out, easy (or is it sleazy) credit helped ameliorate stagnant wages for a number of years, thus forestalling the standard-of-living declines implicit in overproduction. However I don’t know –and would be surprised-- that either Marx or Engels foresaw debt securitization, originate-and-distribute, the gumption of the Chinese or global vendor finance. If they did, I would appreciate someone pointing me towards the relevant passages.

[Uno]

Re: This is what is making the rounds on the trading floor today!

and back in the real world, Marx does not seem to understand the power of innovation at all. That innovation can make everyone better off.

Capitalist consumption seems to work well at motivating men and women into true applied innovation that increases our standard of living.

Communism seems to work well at destroying our standard of living and promoting theoretical psuedo science clap-trap such as economics.

People complain about the bubbles but the paper bubbles, greed, and speculation around the start of the last century directly created the industrial revolution.

There is a massive amount of applied innovation going on as we speak in America motivated by this last round of paper money, debt driven greedy consumption. An entire new multi-generational group of Rockefellers, Morgans, Fords, ... will soon be taking over ... this is what the elite fear.

[Munger]

Re: This is what is making the rounds on the trading floor today!

and back in the real world, Marx does not seem to understand the power of innovation at all. That innovation can make everyone better off.

Capitalist consumption seems to work well at motivating men and women into true applied innovation that increases our standard of living.

Communism seems to work well at destroying our standard of living and promoting theoretical psuedo science clap-trap such as economics.

Good point. Er ...



http://www.youtube.com/watch?v=HFxYyXGMfZM

[due_indigence]

Re: This is what is making the rounds on the trading floor today!

As recently as a few months ago, you'd have gotten away with claiming the 'real world' for capitalism. But you'll need to re-earn the luxury of that bumper sticker. The received wisdom has been thoroughly plundered. Everyone's back to the square-one of thinking. Nothing is gospel.

[Slimprofits]

Re: This is what is making the rounds on the trading floor today!

I've searched high and low.

The bloggers that insist that this quote didn't appear on the Internet before December of 2008 are wrong.

Looks like this person has used it as a 'forum signature' since at least January of 2006.

I found another reference which suggests that the quote can be found, not in Capital, but in Theories of Surplus-Value, which has both been published on it's own and as Volume IV of Capital. Full text here. However, I don't see anything that resembles the alleged Marx quote.

[ProdigyofZen]

Re: This is what is making the rounds on the trading floor today!

I'd like to point out that it would be more appropriate to assume the quote fake until proven true, than to assume true until proven false. The burden of proof goes to the one making the claim, not the one disputing the claim.

I read it and immediately thought "this must be fake". If you posted and claim it is true, then cite the primary source. Unfortunately, "the trading floor" doesn't carry a lot of credibility these days (or any days?).

Correcy Art, i do take it as fake first rather then as real. I simply posted it up with an explanation. I believe the trading floor offers more wisdom than where you work..... There may be very dumb people on the trading floor but you also have the opposite side of the spectrum with people like Marc Faber and Jim Rogers who i regard as extremely intelligent simple men.

[Mn_Mark]

Re: This is what is making the rounds on the trading floor today!

As recently as a few months ago, you'd have gotten away with claiming the 'real world' for capitalism. But you'll need to re-earn the luxury of that bumper sticker. The received wisdom has been thoroughly plundered. Everyone's back to the square-one of thinking. Nothing is gospel.

If we were going to have an honest national discussion about this we would at least have to first ask if "capitalism" can be fairly blamed for a situation which is as bad as it is because of government interference in the free market - by guaranteeing bank deposits and a hundred other things so that people's natural diligence was thrown away, by artificially encouraging a housing boom with tax policies and Fannie/Freddie, by adopting a fiat currency so that the wealth of savers can be stolen away from them through wild currency gyrations, by giving government so much power that corporate elites, by gaining power in it (eg Paulson), can give away massive amounts of citizens' money to prop up private businesses...

None of those things are the fault of "capitalism", which is nothing more than the principle that wealth belongs to the person who earns it.

I've personally come to accept that we are apparently going to have to suffer through some sort of Eastern European-style socialist period of poverty so that a critical mass of the neosocialists in the West can see with their own eyes what happens when socialism is adopted. (Adopted even more fully than it already has been, I mean.)

[Chris]

Re: This is what is making the rounds on the trading floor today!

Look, this quote got approximately 22,500 Google hits, most dated from as far back as the 03 Jan 2009. If it was a real quote from Marx, even in translation, it would score in the millions. Heaven knows, there are enough Lefty ideologues interested in the guy.

As a political economist Marx makes for interesting reading but his ideas are wrong and history has proved them so. How many of the proletariat ever led the revolution? My point exactly.

[c1ue]

Re: This is what is making the rounds on the trading floor today!

Chris,

I think you speak from a very poor, if existent, understanding of Marx.

Marx clearly defined classes of proletariat.

From wiki:

Marx makes a clear distinction of proletariat as salaried workers, which he sees a progressive class, with Lumpen proletariat, "rag-proletariat", the poorest and outcasts of the society, such as beggars, tricksters, entertainers, buskers, criminals and prostitutes, which he considers a retrograde class^[1].

Yes, Lumpen Proletariat have never led a revolution. But plenty of proletariats have - ranging from the Committees of Correspondence in the French revolution, to some of the founding fathers, to Lenin and his cohorts.

As for his theories being right or wrong - they're only 150 years old or so.

Plenty of time yet!

Soviet Russia and Communist China both fail major measures of what Marx woud have termed true socialism - so claims that Marx's theories are wrong are as premature as those claiming capitalism is wrong because of our present situation.

[Chris]

Re: This is what is making the rounds on the trading floor today!

Clue,

I spent time in the British academic system. Reading Marx is a pre-requisite to entry here. [JOKE] ;)

If you have free time to spend on Marx then take a look at these works. They were written in the late 70's/early 80s period by the late sociologist Alvin Gouldner. Gouldner was a Marxist who used Marx's system of interpretation to perform a Marxist interpretation of Marx himself. I think you'll enjoy them very much.

The Two Marxisms: Contradictions and Anomalies in the Development of Theory.

The Future of Intellectuals and the Rise of the New Class.

If you can read online for extended periods then you can find The Two Marxisms here.

[c1ue]

Re: This is what is making the rounds on the trading floor today!

Chris,

Thanks for the pointers - I will definitely take a look.

My comments on Marx notwithstanding, I actually do not think Marxism is ideal.

My personal views are more political-neutral: I separate systems between the selfish - of which capitalism/invisible hand is the figurehead, and collectivism for which Communism is the figurehead.

Quite honestly I see both extremes as undesirable.

Capitalism - or literally Darwinism as a way of life - reeks too much of a Scientology type appeal to the wealthy and influential. It gives the imprimature of destiny to those whom have used luck, capital, plus social networks to keep ahead of the merely individual.

Our esteemed departing President is a fine example. While I don't think W. Bush is a mean spirited or evil person, I equally don't think he would be anywhere near where he is today were it not for the dynamic I describe above.

Communism - or as I call it, Ant Hive in the making, equally is flawed. For in every group of humans are those who seek to subvert the existing system for personal gain. Perhaps it is all humans who seek to do this. But I equally fear this outcome.

My view is best summarized by H. Beam Piper in one of his space opera books - likely inspired by the same fountain as American Libertarianism: (Thank you Google you print pirates!)

http://www.scribd.com/doc/2395105/Sp...-Beam-19041964

"But what about your form of government, your social structure, that sort of thing?" somebody, impatient with the artificialities of the court wanted to know.

"Well, we don't use the word government very much," he replied. "We talk a lot about authority and sovereignty, and I'm afraid we burn entirely too much powder over it, but government always seems to us like sovereignty interfering in matters that don't concern it. As long as sovereignty maintains a reasonable semblence of good public order and makes the more serious forms of crime fairly hazardous for the criminals, we're satisfied."

H. Beam Piper was a gun collector (gun nut?) who committed suicide when his personal finances collapsed. Ironically a check was trying to make its way to him when he took his own life in 1964.

It is this tragedy which puts into relief Piper's own libertarianism.

That such a talent could be ended in such circumstances, this is why I don't adhere too much to one side or the other but seek to learn from both, and hope that a balance can be found in the future.

[Chris Coles]

Re: This is what is making the rounds on the trading floor today!

Good point. Er ...

http://www.youtube.com/watch?v=HFxYyXGMfZM

Thank you Charles, a very good point, very well made.

The principle aspect is that there was an underlying philosophy of feeding capital into a society who in turn took innovation by both hands for the long term benefit of the group. I am here drawn to the images of Russian workers sitting on the ground beside the huge steel mills they were in the process of constructing during the 1920's and 1930's. They were often well educated people, but who had taken a decision, as a group, to work as common labourers under the most extreme conditions to achieve something they could not as individuals. The communist state in turn had invested capital, (though they would never admit to that), in their common endeavour, to build a steel works... I might add, with their bare hands.

We saw an exact parallel, but this time in the USA with the construction of the likes of the Hoover Dam. Or again as here in the UK with railways and Bridges.

Until or unless you have built something in that way, you will not understand why they would make the personal sacrifice and even more importantly; why such an exercise can be so successful.

What went wrong was not dissimilar to what has so isolated the USA at the political level in the rest of the world today, the Russians got indifferent to the need to follow through with policies at that "personal, individual" level. Instead, the core philosophy of the central institutions, overrides the individual local community and imposes what turned out to be indifference to the humanity of an individual responding to their local communities needs.

Here, the slightest difference can bring an enormous difference to the long term success of a nation. In the Russian case, you disagreed, you were imprisoned or shot dead, but in the USA you got fired and were left to make your own way forward.

But recently we have seen the same institutional indifference, but this time not by the US government, but by the Western banking system. Yes, no bank "shoots" anyone, but the underlying principle remains the same. This time you get bankrupted and enslaved to debt. That is classic institutional indifference and simply another form of slavery.

What I have previously described as "Communism is religion for ants" is that the ant hill, as an institution, over rides the individual ants to the eventual detriment of everyone.

We are, all of us, presented with another variation of this institutional inhumanity today and this time we have to do our best to try a slightly different route out of the resulting mess.

Personally I believe we can achieve that, but, yes, there are many different viewpoints and many more that revel in the discontinuity rather than look forward to stability.

[ProdigyofZen]

Re: This is what is making the rounds on the trading floor today!

Well, Hong Kong just won the freest economy in the world for the 15th straight year, I am in my mid 20's now and working in finance, I will be moving to Hong Kong or Singapore in the future for that reason.

[Munger]

Re: This is what is making the rounds on the trading floor today!

Thank you Charles, a very good point, very well made.

The principle aspect is that there was an underlying philosophy of feeding capital into a society who in turn took innovation by both hands for the long term benefit of the group. I am here drawn to the images of Russian workers sitting on the ground beside the huge steel mills they were in the process of constructing during the 1920's and 1930's. They were often well educated people, but who had taken a decision, as a group, to work as common labourers under the most extreme conditions to achieve something they could not as individuals. The communist state in turn had invested capital, (though they would never admit to that), in their common endeavour, to build a steel works... I might add, with their bare hands.

We saw an exact parallel, but this time in the USA with the construction of the likes of the Hoover Dam. Or again as here in the UK with railways and Bridges.

Until or unless you have built something in that way, you will not understand why they would make the personal sacrifice and even more importantly; why such an exercise can be so successful.

What went wrong was not dissimilar to what has so isolated the USA at the political level in the rest of the world today, the Russians got indifferent to the need to follow through with policies at that "personal, individual" level. Instead, the core philosophy of the central institutions, overrides the individual local community and imposes what turned out to be indifference to the humanity of an individual responding to their local communities needs.

Here, the slightest difference can bring an enormous difference to the long term success of a nation. In the Russian case, you disagreed, you were imprisoned or shot dead, but in the USA you got fired and were left to make your own way forward.

But recently we have seen the same institutional indifference, but this time not by the US government, but by the Western banking system. Yes, no bank "shoots" anyone, but the underlying principle remains the same. This time you get bankrupted and enslaved to debt. That is classic institutional indifference and simply another form of slavery.

What I have previously described as "Communism is religion for ants" is that the ant hill, as an institution, over rides the individual ants to the eventual detriment of everyone.

We are, all of us, presented with another variation of this institutional inhumanity today and this time we have to do our best to try a slightly different route out of the resulting mess.

Personally I believe we can achieve that, but, yes, there are many different viewpoints and many more that revel in the discontinuity rather than look forward to stability.

Very interesting take on the matter, and very well put!