Thursday Morning Links

This and that for your Thursday reading.

- Costas Lapavitsas discusses the disproportionate hold finance has over the global economy:

Financialisation represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades.
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Financialised capitalism is, thus, a deeply unequal system, prone to bubbles and crises – none greater than that of 2007-09. What can be done about it? The most important point in this respect is that financialisation does not represent an advance for humanity, and very little of it ought to be preserved. Financial markets are, for instance, able to mobilise advanced technology employing some of the best-trained physicists in the world to rebalance prices across the globe in milliseconds. This "progress" allows financiers to earn vast profits; but where is the commensurate benefit to society from committing such expensive resources to these tasks?

Financialisation ought to be reversed. Yet such an entrenched system will never be reversed by regulation alone. Its reversal also requires the creation of public banking that would operate with a new spirit of public service. It also needs effective controls to be applied to private banking as well as to international flows of capital. Not least, it requires new methods of meeting the financial requirements of households, as well as of small and medium enterprises. There is an urgent need for communal and associational ways to provide housing, education, health and other basic goods and services for working people, breaking the hold of finance on everyday life.

 - Hugh Mackenzie takes a look at the latest figures on CEO compensation - showing that Canada's wealthiest executives will make more by 1:11 today than the average worker will all year. And that represents yet another move toward increased concentration of income and wealth - as last year's figure is included in Trish Hennessy's review of 2013.

- Peter Jones criticizes the Cons' narrow-minded foreign policy:

A predictable world order where things like trade and security play out according to rules (admittedly something observed more in the breach in many parts of the world) is a world in which smaller countries have a better chance of advancing their interests. This is quiet, patient, painstaking work that rarely generates headlines. Progress is incremental and measured in years. It is less emotionally satisfying to some than yelling at the world from the rooftops. But it makes a contribution, over time, to creating a world that serves Canada’s interests.

The Conservatives have stood this on its head. In making foreign policy a reflection of their domestic approach to governance – finding wedge issues with which to detach segments of the population and play to their fears and angers – the Conservatives have given us a bitter, small-minded foreign policy. There are a few notable exceptions, such as the promotion of gay rights internationally, but most of the Conservative approach is centred on angry assertions of simplistic moral absolutes that play well to certain domestic constituencies, but contribute nothing to the world or to unifying Canadians behind a positive vision of their place in it.
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Ironically, all of this undercuts what the Conservatives should recognize as an overriding foreign policy objective: good relations with the United States. For example, President Barack Obama’s administration currently has a tough job trying to both find a nuclear deal with Iran and promote compromise between Israelis and Palestinians. Both issues are key to avoiding wars in the Middle East in the next decade. The administration needs friends and allies who will quietly roll up their sleeves and help look for answers. What it gets from Canada is bluster and intransigence...

- Finally, Paul Bernal's observations about privilege are well worth a read:

When I read about Boris’s speech, and when I think about all the patronising, elitist, offensive stuff that this government and pretty much every government I can remember have said, it makes me angry. Things like accusing poor people of not knowing how to budget, how to cook, how to feed their kids, how to make good decisions, or of being lazy, stupid etc. Suggestions from ministers that they could easily live on the amounts people get in benefits. Suggestions that people don’t try hard enough to get jobs. Suggestions that they don’t work hard enough. They all make me angry – and they make it clear to me that most of those speaking don’t know how privileged they are – and what the consequences of that privilege are.

For me, there are a few things that I try to remember. The first is the most obvious – that I’m deeply privileged and deeply lucky. The second is that I still don’t know quite how privileged and lucky I am – because so much of the privilege is hidden and built into the system, so much that those who are privileged can’t see it...

There’s an old saying: ‘with great power comes great responsibility’. There’s a degree to which it’s true, and it certainly seems that the current lot of powerful people are thoroughly irresponsible. I’d like to add another – though it’s deeply wishful thinking. With great privilege should come great humility. Those of us who are privileged – like me, and like Boris – should be able to find that humility. To know that we really don’t know what it’s like to live without our privilege. We can try to imagine – but we’ll never really succeed. And we should know that we’ll never really succeed – and be far, far more willing to listen properly to those who do know it. Most of all, though, we should know when not to talk as though we had all the answers. We should know when to shut up.