Let Your Freak Flag Fly - Money and Morals

This morning I've read the Goldman Sachs resignation letter published in the New York Times and an interview on the excellent Banking Blog in the Guardian about right and wrong becoming blurry.

On reflection two things spring to mind.

Firstly Shawcross's biography of Murdoch. I no longer have the book but I remember the opening prologue. Murdoch is waiting to find out if a tiny loan (of $10 million) is going to be rolled over. It was (from memory) the late 80's and his company was potentially in trouble because of his investment in the Sky satellite. Although apparently insignificant, if the loan was not rolled over, a payment could not be made and Murdoch feared a chain reaction that could bring down his company and potentially send the world economy into a nose dive. You may think that this is just Shawcross stroking Murdoch's ego, or Rupert's ego running away with itself. But that's not the point. Situations do occur where tycoons, captains of industry, central bankers believe that the outcome of decisions will huge consequences. What should their moral compass be in such circumstances. Should they be willing to lie? To cheat? To break the law? To be unethical? To go against their conscience?

And secondly a scene from the tv drama 24 series 2. There's a trailer of it here. The relevant bit is near the end. Jack says "If you don't tell me where the bomb is, those men are going to kill your son." And then when the terrorist refuses, "I despise you for making me do this". It very effectively sets up a moral dilemma in a dramatic fashion. Is Jack courageously doing the right thing even though its morally abhorrent? (I won't spoil it for you by revealing what actually happens just in case you've not seen it).

The point I want to make about moral choices and banks is this - Money seems to have the ability to make us postpone and ameliorate moral choices. Everything becomes a compromise, and money provides the excuse and the reason. We can't afford to buy free range eggs, so we buy battery eggs. We have a pension which we know the nasty investment banks using to ruthlessly exploit people & nature in return for profit, so we give £2 a month to save the children. But moral choice cannot be postponed or ameliorated indefinitely. You know how karma works. You know what happens when you repress stuff. Sometime, somewhere those choices, that decision will pop up with bigger and badder consequences. What you hope is that you don't have to make it.

We invented corporations precisely for this reason. They absolve us of individual culpability. We facilitate this by making ourselves morally submissive to the corporate body. The profit motivated corporate body is itself submissive to money. They adopt money's amoral nature. And, in turn, so do we. A banal but vicious circle. Two things to remember. Profit seeking corporations rule the world. And. We created them to take the blame.

Money is mysterious. And so is its relationship to mind. Its amazing how something apparently amoral can pop up along with maybe sex & death as one of those things that can get our brow furrowed in moral confusion.

I've sometimes wondered why as a man in the second half of my forties I still have long hair. People think I'm a biker or musician. And I'm not. It's probably cost me a fortune.

However, I think Dave Crosby might have the answer. It's a moral choice I've made.

I almost cut my hair
'Twas just the other day
It was gettin' kind of long
I could-a said, it was in my way
But I didn't and I wonder why
I want to let me freak flag fly
And I feel like I owe it to someone


Almost Cut My Hair - CSN live version

Underneath Economics - Freud, Keynes, Hayek

I've spent a few hours this morning over at the Social Democracy in the C21st blog mostly reading this post and this post on Praxeology; a system of thought that underlies one particular understanding of economics.

I generally find philosophy texts hard going. Particularly now, as it's a long time since I've studied any philosophy and I have forgotten the language. Although saying that, I am currently reading Zen and the Art of Motorcycle Maintenance which is the apparently the most widely read philosophy book. In it Pirsig refers to philosophy as the high ground of knowledge. I did enjoy my time studying the Philosophy of Science - in part that was due to the structure of the course. I was studying Economic History but, because the course was also a requirement for MSc & PHD students, I ended up studying alongside Physicists, Chemists etc from Imperial College instead of just the normal Economics students. It was clear that we all thought very differently about things.

Anyway, I wanted to talk about briefly in this post about Freud. The author of the Social Democracy blog (a very fine blog to which I'm a regular visitor) the mysterious Lord Keynes is dismissive of Freud - in fact Freud is used as a measure of nonsense. Here's what he says:

If Hayek were alive today and gave us an honest answer to this, he would have to class such vulgar Misesian praxeologists as talking nonsense on a par with Marxism and Freudian psychology.

Elsewhere there is also another reference to Hayek who mentions Freud's Life and Death instinct as causing him annoyance when used as an explanation for..... well, everything.

So given that one of my intellectual heroes, Freud, is being attacked I thought I best write a quick post to explain why I think Freud is a good 'un. Before I do I should say that another of my intellectual heroes is Hayek; creating something of an existential crisis for me :)  I'm not going to harp on about Praxeology which will no doubt be a blessed relief to you, dear reader. For what its worth I agree with Lord Keynes that it is flawed. Assuming all human action is purposeful is a silly start for any attempt at understanding. You might as well assume rational self interest ! oh hang on...

You see. You only need to scratch a little beneath the surface of economic thought to realise that you need to have some conception of mind. And that's why I'm standing up for Sigmund. I worry that people have this image of Freud and psychoanalysis as some kind of medico-mystical pseudo-science steeped in C19th prejudices. It's a view of Freud I've some across time and time again. And as far as much of psychoanalysis goes, I'd probably have to agree. But, and here's the thing, the intellectual landscape that Freud eventually arrived at provides (imo) a brilliant, insightful and wonderful conception of mind.

Here's what Freud means to me.

He describes the structure (or architecture) of the mind. [Id, Ego, Superego.]

He describes the nature of relations between Ego and Object as ambivalent. [Co-Existence of Contradiction]

And he describes the fundamental forces of nature which act through the structure and upon the relations. [Life & Death Instinct, Eros & Thanatos. Attraction & Repulsion.]

Yes, he said different things across his lifetime. He also didn't come to his conclusions by mixing chemicals in a jar or measuring correlations between events. But what he suggests about us tallies with my experience of life more than another other attempt to explain our psychology. 

It's this ~base~ Freud that appeals to me. I don't need Neurosis & Psychosis, Repression, or even Concious and Unconscious. 

To bring this back to economics... You'll know that one of the 'real' Keynes' buddies was James Strachey (I say buddy with a knowing wink!). Strachey, a psychoanalyst himself, was most famous for translating Freud's work into English. His and Freud's work sit on my bookshelf today. I've only ever heard Robert Skidelsky refer to Keynes & Freud in the same breath - oh no, wait there is something in John Smithin's 'What is Money' on this too*. But this lack of exploration of the overlap between Keynes & Freud strikes me as odd. I would have thought that if we believed we could understand mind, then we'd understand money**. Or vice versa. It would seem rather strange to imagine some world where we know everything about the human condition and nature and yet still struggled with money. And we are still struggling, aren't we? We haven't reached the 'End of History'.

My own peculiar understanding of Money - and consequentially that subset of Money known as Economics (I'm teasing) - owes much to Freud. Nothing to do with money's anal erotic nature or anything similarly steeped in the more complexity of the application of psychoanalytical thought, it's just because its a simple set of ideas that seem to tally with the way I experience the world. Praxeology - and Homo Economicus more generally - maybe simple ideas but they do not describe our experience of being. That has much more to do with loving & fighting than rational self-interest.

So please, don't think that all that Freud suggested was that you fancied your Mum and wanted to kill your Dad. He went on a weird journey for sure. And he changed his mind about things. But his description of the mind isn't nonsense. Hayek may have thought it was nonsense (although as the faux Lord Keynes hints, he'd have been too polite and respectful to have said so plainly), Keynes (the real one) didn't.

*a brief search has revealed this paper too The End of (Economic) History by Jean-Paul Fitoussi.

** there is of course the very trendy behavioural economics - not my cup of tea, I'm afraid. 

Money Wisdom #25

"Logic presumes a separation of subject from object; therefore logic is not final wisdom."

Robert Pirsig Zen And The Art Of Motorcycle Maintenance  ([1974], 1999) p.133

Money Wisdom #24

"Possession is a universal domain, that is, any human language can be expected to have conventionalised expressions for it"

Bernard Heine Possession: Cognitive Sources, Forces, and Grammaticalization  (1997) p.1

A Review of Presence of the Past by Rupert Sheldrake

I had a familiarity with Sheldrake's ideas prior to reading Presence of the Past, gained in the main through his and other websites. I'd also read 'Dogs That Know When Their Owners Are Coming Home' which I have to say I didn't really enjoy. Sheldrake ideas are fascinating but I found 'Dogs' somewhat repetitive and whilst some of the stories are interesting they served to illustrate the constraints of a mechanistic understanding of phenomena rather than to elucidate Sheldrake's theories.The same can be said for 'Presence of the Past', however in terms of the depth of coverage and the explanation of ideas it is far superior.

I find Sheldrake's writing a little variable. For example, his discussion of the philosophy of science is very well written. He clearly explains complex ideas and shows their limitations without being dismissive. The weakness in his writing comes when he discusses his own theories. He seems to tag them on as an afterthought. I found myself wanting him to put a bit more meat on the bones of his theories and to worry a little less about appearing as an observer who seeks evidence one way or the other to confirm or deny his hypothesis. Personally, I'd prefer him to write with belief rather than detachment.

Having not been hugely positive about the book, I must say I do have a great admiration for Sheldrake. This is partly why I've given 4 stars. The main reason for the score though, is that despite its flaws the book does point towards a new way of understanding reality. That's no small thing. I have the Science Delusion sitting on my shelf and will read that shortly, but I expect that to really get tune into Sheldrake's morphic field I'm going to have to read 'A New Science of Life'.

This review is on Amazon here. I should also mention that I read this book on a Kindle which was ok but I'd have preferred the hard cover, and I bought the paperback version as a present for my daughter. She's studying Maths at Uni and I wanted to give her something to challenge philosophy of science perspective that the University will espouse.

Money Wisdom #23

"Words are wise men's counters, they do but reckon with them, but they are the money of fools".

Thomas Hobbes quoted in Bynum et al (1981) p.300

from Rupert Sheldrake The Presence of the Past (2011)  l.1863 (Kindle)

Post about Posts

I've been bombarded by tweets & emails begging me to publish my latest essay. Not really.

I do feel some perverse sense of duty to get it out there though, mainly due to the fact that I've said several times that its on its way. However, its my work, and its my decision. And I really don't want to put anything out there about money that I'm not totally happy with. There are a couple of problems with the essay. Firstly, it seems to be turning into a much longer piece. It does appear to have a natural flow - which is a very good thing - and to curtail it just to satisfy my desire to get a bit of feedback seems wrong. Secondly, I'm switching a little between audiences. One minute I'm writing for an academic audience, the next I'm writing for the general reader. I don't think its a fatal error, but its one I want to get fixed in the first 10K words.

The essay is an exposition of my peculiar view of money - which pretty much sums up most of what I write about money - but for the first time, I've set it in an historical/evolutionary context and it seems to work for me. Seems like an obvious thing to do, and its surprising that I've not done it before. I have managed to find the hard copies of the work I did on this about ten years ago - about 60-70K words in all - which I'll re-read. In fact, I may publish some of this in the meantime. Or I may just put out bit-size chunks of my new piece. I certainly intend to put more out there this year than I have in previous years. It would be nice to get some momentum going.

I also intend to write a few of my poetic pieces. I use the term very loosely, of course. I get a sense of satisfaction from doing these. Its nice to let go of the fear of how people might interpret what I say. 'Price is to Money, as Weight is to Gravity' for example gets across so much of what I think about Money, but its not a phrase that would sit too well in an essay without several chapters of explanation. Sometimes its nice to just let them slip into people's consciousness and see what happens. My shorter pieces give me the chance to do this.

So the general idea is more posts about money - more book reviews, more short pieces, some extended pieces - and less posts like this. The blogger's curse. Posts about posts. Yuck.

A Review of 'Priceless' by William Poundstone

As a twitter buddy of mine pointed out, with a name like Bill Poundstone you'd be destined to write this book. It's an easy read with plenty of interesting anecdotes which serve to highlight Poundstone's exposition of behavioural economics as it relates to pricing. Brief histories of the personalities involved in the subject helped to sustain my interest; experimental design is important, but it can be a little dull reading about it.

I'm a money freak - history, philosophy, sociology of money - so I approached the book from this perspective. However, I think it would be of interest to the business reader, the academic or indeed the general reader. It gives the reader an insight into the techniques that can be used to set - and achieve - a price. Poundstone shows that what we think about price very much depends on context. On its own, the understanding of the power of anchoring - a bid/offer that sets context for and influences how you'll feel about a price- will repay you the cost of the book.

Happy New Year 2012

Happy New Year to You

I just want open up the new year with a brief miscellaneous post.

I've been feeling a little frustrated with my job. Apologies for the odd moan on twitter. I shouldn't feel sorry for myself. I've been a lot more productive with my money stuff in 2011 than I was in 2010, and that's what I'm really concerned about. When I take into account holidays etc, my current job pays pretty much the same as the tour managing. There's not the same kudos, of course. But when I'm at home I can completely forget about my job, that was never the case with the music industry stuff.

I feel like I've taken a good leap forward in 2011 with my Owning & Owing essay - even though its not finished. I look forward to putting it out there. I feel like it might have given me a new structure to explore my ideas about money. I'll admit that at times in 2011 I have thought I should really attempt to go into academia via a PHD or something. I faced a choice in 2000 about whether to continue into post-graduate studies at the LSE, or do something more interesting ;) I'm sure some may say that my current occupation would indicate that I made the wrong choice. But I don't have any regrets about that. In some ways I wish that I'd just done the van driving 5 years ago rather than getting involved with the music industry.

The other problem with academia for me is that my ideas about money are really odd. I had one Professor tell me that my ideas were 'plainly crazy'. Fair enough. But then neo-classical economics is 'clearly wrong', so who knows, 'crazy' might be closer to the truth ! At the end of the day, what I want to do is explore my ideas about money, academia (or any other job) has to be a means to that, not an end in itself. Sounds a bit arrogant and self indulgent when I put it like that, but that's how it is, I'm afraid.

So all that is a long winded way of saying what most people say at the start of a New Year - I want to be more productive this year. With both my kids moving out off to Uni, who knows I might just do it.

Money Wisdom #22

"Whatever has value in our world now does not have value in itself, according to its nature - nature is always value-less, but has been given value at some time, as a present - and it was we who gave and bestowed it."

Friedrich Nietzsche The Gay Science (1882:301)