The City: London and the Global Power of Finance by Tony Norfield. Book by a Marxist former City worker about how the city works. He has a fairly traditionally Marxist perspective, citing Marx, Lenin and some early 20th century Marxists like Rudolf Hilferding on the subject of finance. In this view the City appropriates surplus value from workers worldwide and distributes them to shareholders and its own workers. However in addition, Norfield describes the City as having its own hegemonic power, which serves "imperialist" interests in the UK as a whole. Developed nations have better access to capital, can borrow at lower interest rates, can threaten other nations with boycotts, are more secure and can exert power over weaker nations this way.
Norfield attacks several ideas which he sees as fallacies. First, that the City is simply an extension of US power: he regards it as having its own distinct interests and points out cases of the UK government acting against US wishes. While smaller less powerful than the US, it's still one of the larger financial powers of the world having inherited Imperial advantages.
The second fallacy is that the interests of financial sector can be separated from "productive" sector. He points out that manufacturing and other firms use the the City extensively to raise finance, to launch takeovers, to hedge against risk and process payments. In his view the City cannot really be reigned in without getting rid of capitalism itself.
Norfield is more convincing in the first than the second. He largely ignores the specific arguments usually made for the City acting against the interests of the wider economy. For instance, by taking risks and then relying on bailouts if they fail, the city extracts value as taxes from the non-financial sector: he doesn't try to calculate whether this outweighs the imperial power it provides.
Others regard the City as being a "resource curse" in the same way as oil discoveries can cripple a developing economy. A valuable resource raises the value of the currency, meaning that the rest of the economy's products and services become more expensive, crippling everything else.
Norfield sometimes seems to regard the UK governments careful pampering of the City as evidence of the City's value, when it could also be a part-ideological, part-cynical nexus of interests between politicians and financiers.
One of the best aspects of the book is the detailed economic history of UK finance. In particular I liked the analysis of Churchill's return to the Gold Standard as being in the conscious interests of the British Empire. While he's often regarded as just being too ignorant of economics to understand that it would hurt UK citizens, he may have regarded that as an acceptable price to defend the Empire. He cites Churchill's speech:
In our policy of returning to the gold standard we do not move alone. Indeed, I think we could not have afforded to remain stationary while so many others moved. The two greatest manufacturing countries in the world on either side of us, the United States and Germany, are in different ways either on or related to an international gold exchange. Sweden is on the gold exchange. Austria and Hungary are already based on gold, or on sterling, which is now the equivalent of gold. I have reason to know that Holland and the Dutch East Indies – very important factors in world finance – will act simultaneously with us today. As far as the British Empire is concerned – the self-governing Dominions – there will be complete unity of action. The Dominion of Canada is already on the gold standard. The Dominion of South Africa has given notice of her intention to revert to the old standard as from 1st July. I am authorised to inform the Committee that the Commonwealth of Australia, synchronising its action with ours, proposes from today to abolish the existing restrictions on the free export of gold, and that the Dominion of New Zealand will from today adopt the same course as ourselves in freely licensing the export of gold...Overall, quite interesting and a useful balance to the convenient assumptions that the city can be easily divorced from the rest of the economy, but has too many gaps to be really definititive.
Thus over the wide area of the British Empire and over a very wide and important area of the world there, has been established at once one uniform standard of value to which all international transactions are related and can be referred. That standard may, of course, vary in itself from time to time, but the position of all the countries related to it will vary together, like ships in a harbour whose gangways are joined and who rise and fall together with the tide. I believe that the establishment of this great area of common arrangement will facilitate the revival of international trade and of inter-Imperial trade. Such a revival and such a foundation is important to all countries and to no country is it more important than to this island, whose population is larger than its agriculture or its industry can sustain, which is the centre of a wide Empire, and which, in spite of all its burdens, has still retained, if not the primacy, at any rate the central position, in the financial systems of the world.
What I'm Reading 2
Blindsight by Peter Watts. Hard science fiction novel about future humans making first contact with aliens. It asks you to suspect a lot of disbelief, but is very rewarding if you do. The science and ideas are top notch, and the book has a dark, tense atmosphere. The author is apparently a marine biologist and the aliens are some of the most satisfyingly alien and plausible I've ever read about.
Well worth reading, it seems to have become a bit of a classic. Be aware that it has a grimdark tone and isn't exactly bubbling with optimism.
Been feeling a bit down and lacking in energy. Doesn't seem to be any particular reason for it, except maybe January blues.
Weight is still OK and I've been keeping up with the running though it takes up a lot of my very limited free time. Getting some personal bests again, seem to be over that plateau thanks to a bit of hill work: did a few short hilly runs in my lunchbreak at work. The guys at work are mad keen on running and vastly fitter than me. My personal best for 10km is a little under 57 minutes if I go flat out. Four of them went out for a little lunchtime jog the other day, and the slowest of them did 10km in 52 minutes.
Kid had to go the dentist. Feel so sorry for him: he has a problem where his tooth enamel is thin or missing, so he's prone to need fillings even though he's really good about brushing and barely eats sweet things. So he's really good but he has the same tooth problems as a brat who shoves candy in his face all day and never brushes: it's so unfair for him. I feel sad and guilty for him: feel I'm not able to give him the kind of childhood I had.
Socioeconomics. Telling interests and ideas apart. Do Politicians Serve the One Percent? "In 2009 center-right parties maximized the happiness of the 100th-98th richest percentile and center-left parties the 100th-95th richest percentile."
Articles. China's fake European cities succeed by getting more Chinese. Davos: You will find me eager to help you, but slow to take any step. The ex-dominatrix teaching women to demand respect. The Man Who Made Black Panther Cool.
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