Cows versus squirrels: a mammalian metaphor gone mad

 

What on earth is all this about?

When the winter comes in the squirrel has already stored 3000 nuts in different tree holes that provide the food storage to overcome the harshest season of the year. The nuts have been collected in past months and will be shared with the other members of the community if someone is in need. The squirrel is small but has adapted to live in all sorts of environments including European capitals. It’s agile, collaborative and last but not least independent.

On the other hand, the cow needs to take shelter in the stable during winter. It would not survive without the famer taking care it of all needs. Its life is quiet and relaxed. It just needs to feed, reproduce, and produce milk. But it consumes a lot of resources and life ends always in the abattoir. Its life depends entirely on others for maintenance and aims. Cows live all together but don’t collaborate. The farmer is in charge.

That is in fact the baseline concept for a conference being organized this September by a consortium of Danish and Swedish institutes on “how the European Union can foster and support such pioneers through the new socio-economic policies, namely social business and social innovation.”  Does it all seem clearer now?  Maybe not…

This metaphorical comparison aims to help civil society leaders and social entrepreneurs picture the transformation our society is going through: less leadership and help from governments and corporations, and the need for self-organisation, funding, support and development of solutions to social problems. We have to rethink our strategy, collaborate and innovate in order to transform from the cow to the squirrel.

The traditional resources as public funding and sponsorships are shrinking but new opportunities and synergies are emerging.

Fair enough.  But where does the EU fit into this metaphor?  Is it the cow?  Or the tree the squirrels hide their nuts in?  Or the abattoir?  I’m confused…

Promoting Human Rights in Less Developed Countries

Human Rights Developing CountriesA key challenge faced by those engaged in international human rights policy and practice is adopting an effective framework for protecting and promoting human rights around the world in a way that preserves and articulates their universal nature, while at the same time respecting local values and practices.

One way to approach this challenge is to examine values, norms, customs and practices in non-Western cultures which can act as ‘receptors’ for human rights principles and practice. A new Dutch collaborative research project adopts just such an approach (and is thus called the ‘Receptor Approach’). It brings together experts from around the world and from a variety of disciplines – law, anthropology, sociology, political science, international relations and philosophy among others. Continue reading

Cheating with Numbers – Bankers vs Journalists

In a banking crisis, many – or most – banks flirt with insolvency. They stay in business through cheating, lying, and blackmailing the state. As I said in a speech in Tokyo in January 2009:

The past does not predict the future, of course, but it should make us wary. The pattern, as Japan found, is for policy-makers to underestimate the seriousness of the problem and for financial institutions to spend years refusing to confront their predicament head on. The required psychological shift is a profound one.

Throwing money at the problem is, in many ways, the easy bit. Much more demanding is the process of unpicking and revaluing the poorly-understood risks that are at the heart of the financial sector’s difficulties. This is a process that has barely begun.

Back in April last year… bold action was promised to sort out the ‘bad’ from the ‘good’ banks, but nine months’ later that is only beginning to happen.

Instead, many countries have pumped money into their financial institutions, without having the tools to force these institutions to identify, value and dispose of toxic liabilities.

This mistake is likely to prove costly. As Ben Bernanke admitted last week, large quantities of “troubled, hard-to-value assets” have now become the primary obstacle to the financial system’s recovery.

The Eurozone is now riddled with zombie banks, all using their too-big-to-fail status to distort the response to depression in the European periphery, while the deceptions of British banks are steadily being exposed, with Barclays currently in the firing line. In the United States, too, a pattern of rampant criminality is steadily emerging. Liars. Cheats. Blackmailers. Guilty as charged.

But as the Leveson Inquiry has shown, the British media has many of the same bad habits. Not just a willingness  to break the law and bully both the powerful and the helpless, but a casual mendacity, where the story is pre-determined and facts are twisted to give it as much viral zing as possible.

In the lede to his latest on the financial crisis, Aditya Chakrabortty (the Guardian’s ‘economics leader writer’) exemplifies the latter tendency.

We don’t know each other, but I want to offer you a deal: You each give me £20,000. And that’s it. What do you get in return? Well, it’s a fair question but I can’t even promise to pay it all back. But let me assure you of this: your hard-earned cash will keep me in the style to which I’m accustomed. And that’s got to be good for all of us. So I’m sure you’ll agree that 20 grand is an absolute bargain. Indeed, I would call it a once-in-a-lifetime offer; only I can’t promise not to come back again.

You’ve probably guessed that the transfer I’m talking about has already happened. Each man, woman and child in Britain has already handed over £19,271. And our money has gone to the banks.

That’s a carefully crafted hook, reinforced in the last paragraph (“next time, the British might need to cough more than 20 grand each”) to hammer the lesson home. It’s designed to be picked up on Twitter and Reddit, and grumbled over down the pub, all driving eyeballs to the Guardian’s website.

But as a meme, it’s deceptive at best. If 63 million UK citizens had each coughed up £19,271, the total bill would be around £1.2 trillion – but that’s more than the UK’s entire national debt which exceeded £1tn only at the end of last year. It’s simply impossible for the government to have dished out so much money to our banks.

So what’s going on here?

Continue reading

LIBOR: more outrage, please

Matt Taibbi in Rolling Stone:

To me what’s missing from all of this is the “Holy Fucking Shit!” factor. This story is so outrageous that it shocks even the most cynical Wall Street observers. I have a friend who works on Wall Street who for years has been trolling through the stream of financial corruption stories with bemusement, darkly enjoying the spectacle as though the whole post-crisis news arc has been like one long, beautifully-acted, intensely believable sequel to Goodfellas. But even he is just stunned to the point of near-speechlessness by the LIBOR thing. “It’s like finding out that the whole world is on quicksand,” he says.

Aditya Chakraborty in the Guardian:

At a hearing in the US last month into how JP Morgan lost up to $9bn in the UK in derivatives trading, congresswoman Carolyn Maloney commented: “It seems to be that every big trading disaster happens in London.”

This is surely where the pressure from the Libor scandal needs to be directed. Miliband is right to demand a public inquiry. But rather than a nice, compact affair that can be swept under the ministerial carpet, any investigation needs to understand how to reform the finance sector so that crises like these don’t recur; and so that banks actually work in the public interest rather than hire propagandists to pretend they do. Because in the end, financial reform is not about technicalities, but about politics: deciding what role banks should play in an economy, and what kind of economy we want.

And just as the Leveson investigation has unpicked the toxic intimacy between the Murdoch empire and the political classes, so any inquiry into finance needs to expose the strength of its grip on our politics.

In the wake of the Lehman’s collapse of 2008, there was much talk about how the relationship between state and finance would be changed in the public interest. Those efforts were effectively killed off by the finance lobbyists and, if we’re honest, the unpreparedness of progressives in Britain to seize the opportunity. The Libor scandal offers a second go at the same argument. We either have it out this time, or we run the risk of repeating 2008. Only next time, the British might need to cough more than 20 grand each. A lot more.

The Myth Gap

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