Matt Taibbi, John Lennon and Capitalism

Further to "Save Us From Matt Taibbi and His Ego on Goldman and the LME Warehouse Biz", Izabella Kaminska writing at Dizzynomics:
Rules and capitalism

A few follow-up points re. my Taibbi post earlier today.

1) the core point I was trying to make is that bashing banks/corps — to the degree that you’re basically inciting lynching — for acting exactly how they are supposed to act (as for-profit institutions) is not constructive. Can you blame a lion for being aggressive? Or a child for taking advantage of an open cookie jar? Or a soldier for killing a hostile enemy? No. Retrospective revisionism is dangerous. We benefit from hindsight and experience, and as we do we change the rules to make them better and more suitable for society. That’s civilization. There are plenty of things that were judged acceptable 20-30 years ago but are not considered acceptable anymore. But you can’t blame the winners of a game that turns out to have had poorly constructed rules just because you ended up losing. I.e you can’t change the rules of the game after you’ve already lost or blame the winners for having navigated the rules of the game better than you.
They were acting within the rules of the established system and still are. By all means amend the rules from this point on or even change the game, — perhaps the only justification for inducing public outrage — but fining or persecuting people retrospectively (unless it turns out the winners actually broke the rules) is as morally sketchy as the ethics you’re accusing them of having lacked in the first place.

Ultimately it all comes down to ethics, which are an adaptive and subjective value system. Sure there are obvious cases like the slave trade or Nazism, where saying “I was only acting according to my orders or within the parameters of the accepted system” is a poor excuse, especially once we all know better. But most of the time — especially in a value system that emphasizes the importance of looking after one’s own interests from birth — it’s much harder to go against ritual conditioning in the name of superior ethics system.
For example, I find all murder morally reprehensible and unacceptable including the nationally sponsored variety. I consequently find it very hard to glamourise or praise the army, or to subscribe to the culturally acceptable practice of treating soldiers as heroes, even when they’re acting benevolently or as peace keepers. For me, no matter how much good they do, the fact that they are prepared to kill on command negates everything else they do. IMO no civilized person would agree to kill another on command. Maybe this makes me naive and rightfully scuppers my chances of survival. But I can’t change how I feel. I’ll just have to accept that my ethics would not serve me well in hostile territory or war.

But the same exact scenario applies to ethics in banking and business. Capitalism is a kill or be killed world. You can’t afford to have more ethics than your competitor. You would be wiped out.
It takes society stepping up collectively on the ethics ladder to make a difference.

2) the second point I was trying to make is that making something illegal doesn’t necessarily remove the incentive to do that thing. You can ban banks from owning commodity businesses but you can’t stop other institutions from picking up where they left off. The service they are providing will just be provided by someone else, most likely a non-bank affiliated to a physical player. To use an analogy: you can institute speeding limits on roadways for certain types of public vehicles, but the incentive for private vehicles to drive more quickly than you will always be there.

3) which leads me to the point that the alternative, restricting everyone’s speed, only risks slowing down the whole economy. In other words it risks over regulating....MUCH MORE

She ends with:

8) the only way you can get a cybernetic free-market balance that represents everyone equally and doesn’t concentrate power is if you remove all information asymmetry. But then you have to say goodbye to privacy as well as intellectual property. No information asymmetry means open society. It means intellectual discovery for discovery’ sake alone. It means all new info about industrial processes being shared. It means no information or proprietary advantage. No patents. No copyright. And no IP.

In other words, it means no more conventional capitalism. John Lennon territory.

Oddly enough, in one of those bits of concurrance* that happen when you have thousands of stories dropping out of a dozen terminals and feedreaders, vbounded had noted the day before:
JLennon: free OTHER people's IP
Lennon & Yoko interview 1980

PLAYBOY: "On the subject of your own wealth, the New York Post recently said you admitted to being worth over $150,000,000 and..."
LENNON: "We never admitted anything."
PLAYBOY: "The Post said you had."
LENNON: "What the Post says... OK, so we are rich; so what?"

PLAYBOY: "The question is, How does that jibe with your political philosophies? You're supposed to be socialists, aren't you?"
LENNON: "In England, there are only two things to be, basically: You are either for the labor movement or for the capitalist movement. Either you become a right-wing Archie Bunker if you are in the class I am in, or you become an instinctive socialist, which I was. That meant I think people should get their false teeth and their health looked after, all the rest of it. But apart from that, I worked for money and I wanted to be rich. So what the hell... if that's a paradox, then I'm a socialist. But I am not anything. What I used to be is guilty about money. That's why I lost it, either by giving it away or by allowing myself to be screwed by so-called managers."

In other commentary I learned that some of Izabella's critics read into her writing what they want to see. From Mike Norman Economics, Feb. 14:
Izabella Kaminska — Rules and capitalism 

Without meaning to, and actually meaning the opposite, Izzie makes an excellent case against capitalism in a liberal democracy that values human and civil rights, which presumes not only the rule of law but also ethical behavior in order to prevent social and political dysfunction for economic gain and political privilege.

Capitalism conceived as neoliberalism and liberal democracy are on a collision course.

Actually she does mean to.

It's just that she writes with just enough diffidence and nuance (because when you get past the bombast and loudmouths, this whole economics/finance/law thing is all an experiment) that she becomes a Rorschach for the readers. 

I still think she sometimes deliberately throws red meat to the hounds, which see: bitcoin, gold etc; but on more complex topics she's doing the mentally healthy version of cognitive dissonance that F. Scott Fitzgerald was talking about with his line: 

"The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function."

Be that as it may I shall henceforth refer to Matt Taibbi as "Scoop" for his faux-investigative reporting.
(he really did rip-off a lot of her stuff, from pointillist factoids to big picture to framing, see Counterparties: sources)

*Or is it synchronicity?

How fortuitous. Right now I'd rather listen to Sting than "Imagine".
And watch April 1st for some LME action.