The insatiability of human desire.Moral Hazards. Too big too fail. Systematic Risk. Kicking the can down the road. These are all the fashion buzzwords use to describe and old phenomenon first articulated by Thorstein Veblen back in the days of old, like the Herman Cain advertisement when a man on a horse was just a man on a horse. Except the whole world is going to get smashed by a poisonous bouquet of flowers. It’s still Veblen’s economics of invidious comparison and the necessity of waste, exorbitant waste. Seen this way, the Greek debt crisis, Euro Contagion, and the more banal events occurring with chronic frequency such as the English woman throwing live cats in the garbage, Chinese motorists running over babies and so on are perfectly comprehensible byproducts of the the consumerist mentality end game. Of course the ultimate fast track is the ritual slaughter of individuals, death camps etc. where the penultimate luxury waste is human beings, “a dime a dozen.”
As Veblen said, the incentive to accumulate has nothing to do with subsistence or with physical comfort or well being. Forget Gross national Happiness , Happiness Indexes and so on. No, it is rather a race, a contest for reputability based on invidious comparison, which means there can be no definitive attainment. Its the motor of the cycle of consumerism.
It is especially the rule of the conspicuous waste of goods that finds expression in clothing and automobiles where the principle of pecuniary repute is most visible, always in evidence and it lends an indication of our pecuniary standing to all viewers at the first glance. No one finds it problematic that the greater part of expense incurred by cars is for the sake of respectable appearance rather than functionality such as protection and simply getting from A to B. And, probably at no other level, except perhaps clothing, is a sense of shabbiness and shame, even guilt, so perceived, as it is if we fall below of the standards set by social appearance in the matter of transport: …
…It’s the sort of thing that would make most people cry. But when Italian surfboard designer Roberto Ricci totaled the side of his $199,950 Aston Martin Rapide, he laughed it off. Ricci was showing a British journalist just what his baby could do, when all of a sudden it didn’t….It’s one thing to crash a car while out joyriding or being involved in a collision, but to crash a vehicle during a test drive is beyond embarassing. Roberto Ricci of Italy was taking a magazine editor out on a drive in his Aston Martin Rapide to show off its performance capabilities, when he suddenly lost control of the vehicle & ripped majority of the right side of the Rapide….
…While remaining calm, Ricci realized that instead of hitting the “Sport” button on the center console, he accidentally disengaged the traction system, which caused the mayhem. And while wrecking a $200,000+ car would make even the highest roller curse & throw tantrums, this guy shrug the incident off like he only got a fender bender. Read More:http://scoopthemag.com/watch-out-man-crashes-aston-martin-rapide-while-on-a-test-drive/
On a larger national level of waste, Greece has been trashed, crashed and recycled. With Northern European complicity, Greece indebted itself and now effectively, it is the “possession” of the North and in particular, Germany. In fact, the refusal of these powers to grant Greece the right to hold a referendum is a disavowal of democracy. In fact, the new Greek government, all EU technocrats, invokes, is in effect, a coup d’etat through the constitution. Not only has democracy been subverted, economically, there is no exist for Greece. Germany can deflate Greece all it likes; there is no way for Greece to export its way out. Greeks will not start producing cars and trucks. So, Greece has become a cultural luxury good for the North. The end result of conspicuous consumption. Used and now trashed to be evaluated by ragpickers or sold for scrap.
Joseph Heath:Consider the case of waste – or to be more specific, the particular sort of waste generated by conspicuous consumption. Veblen’s criticism here is relatively simple. Some goods are valued and consumed for their intrinsic properties. Thus the “advance of industrial efficiency” leads to improvements in the quality and comfort of life. Yet property is accumulated, not just to satisfy our basic physical needs, but also for its honorific qualities. It serves as a basis for invidious comparison, not just with respect to quantity, but also quality. This sort of accumulation is collectively selfdefeating, for the simple reason that not everyone can be above average. The result is that, regardless of how much the standard of living rises, “the normal, average individual will live in chronic dissatisfaction with his present lot”. One way of
iculating the problem to say that status (along with all of its derivative concepts, such as self-respect, esteem, honor, and merit) is essentially an ordinal ranking system, and thus the quest for status is a zero-sum game. Read More:http://homes.chass.utoronto.ca/~jheath/veblen.pdfa
…Furtado, a Canadian singer whose hits include “I’m Like a Bird” and “Promiscuous,” used the website Twitter to disclose her plans for the $1 million. “In 2007, I received 1 million$ from the Qaddafi clan to perform a 45 min. Show for guests at a hotel in Italy,” she wrote. “I am going to donate the $million .A spokeswoman for Furtado could not be reached to say which group Furtado plans to designate for her donation….
It is because these economic activities have a real cost, yet fail to produce any benefit, that they can be referred to as “wasteful.” Veblen is
clear, however, that this description is not intended to impugn the motives of individuals who engage in consumption governed by “the canon of conspicuous waste.” From the “standpoint of the individual consumer” it is not wasteful. “Whatever form of expenditure the consumer chooses, or whatever end he seeks in making his choice, has utility to him by virtue of his preference”. Thus the use of the term waste “implies no deprecation of the motives or of the ends sought by the consumer”. The problem is that, because of the collective action problem induced by conspicuous consumption, this gain in utility is ephemeral. It is undone the moment a “fresh increase in wealth” gives rise to “a new standard of sufficiency” and “a new pecuniary classification of one’s self”. Thus the outcome of competitive consumption is unsatisfactory, not according to some “external” standard imposed by the critic, but according to the preferences of the consumers themselves. It is for this reason that waste of this sort fails to satisfy what Veblen calls “the economic conscience”. There is of course an influential line of thinking, descended from antiquity, that emphasizes the insatiability of human desire. This was based upon a commonly observed psychological tendency, through which the satisfaction of one desire gives rise to several more. The significance of Veblen’s analysis lay in his redirection of our attention away from the psychological toward the social, and away from the mental state toward the object of desire. From this perspective, it is natural to expect that the rate of growth of “the pecuniary standard of decency” would be a function of the rate of growth of the economy. Read More:http://homes.chass.utoronto.ca/~jheath/veblen.pdf
Mark Blyth: So we face another Lehman moment. The sea is rising and the wall isn’t high enough so it should be in the self-interest of the core banks to take precautions and raise more capital to withstand the flood – right? Haven’t they learned anything from 2008?
Actually, they have. They have learned from Lehman that they are now bigger and more systemically important than ever. So if they refuse to recapitalize, then the problem is simply passed back to the state to sort out.
Oddly, Germany’s entire banking industry has just joined forces to attack the EU’s recapitalization plan. In effect, playing the immoral hazard card. They know there is trouble coming, but sorting it out themselves would cut into profits. Far better to pass it back to the state with a reminder of the consequences of their failure. The lesson of Lehman has indeed been learned – it’s good to be too big to fail.
We used to live in a world where banks bailed out sovereigns, but now sovereigns bail banks that are too big to fail – and the banks know it. Capitalizing upon this is now a business model. It’s a truly immoral hazard. Read More:http://triplecrisis.com/greece-lehman-and-the-politics-of-too-big-to-fail/