Comedy scriptwriter unmasks capitalist economics as no better than voodoo

(This was also published on the Indian news website WeSpeakNews)

Mark Kelly turns his back on the police state (and the dog)

With Greece and Spain still teetering on the brink of financial collapse, the NatWest Bank’s computers refusing to transfer money to anyone for two days this week and comedian Jimmy Carr getting attacked by the Prime Minister for tax-dodging, it seemed like a good time to talk money with comedy scriptwriter Mark Kelly, not a man known to dislike Marxist-Leninism.

“It’s perfectly reasonable for economists not to know what to do,” Mark said to me in a cheap cafe in Soho (I was paying), “because Economics is not a science in the first place.

“If you have a problem with an aeroplane, then aerodynamics IS a science. There’s a cause and effect as to why a plane isn’t working and you can fix it. You can’t do that with Economics because there’s no verifiable cause and effect. Economics is essentially no different from voodoo. It’s all based on belief. Things only exist because you believe they do.”

“Well,” I said, “I was always crap at Economics at school. They forced me to do Economics for ‘A’ Level because they said I had to ‘do a science’ and I was even more crap at Chemistry and Physics. I was useless at factual subjects because I could never remember abstract facts like Sodium Chloride = NaCl and Methyl Chloride = CH₃Cl but I was good at conceptual subjects like British Constitution where you could discuss things. I was good at waffle.”

Mark quite rightly ignored this (and I added in those chemical system details when I was writing this blog). I was waffling.

“I think,” Mark said, “that the best essay on economics – but I would think this – is one by Lenin on fictitious capital. The idea of capitalist economies creating fictitious capital. Money breeds money. The history of capitalist economics is primarily the history of debt and debt itself can ultimately only be collected by force.

“So America has a phenomenal level of debt, but no-one has the nerve to call in America’s debt because, if you do, they’re suddenly going to find that you’ve got a very oppressive regime and it has to be overthrown. America can’t be ‘called’ on its debt, despite the fact it has an enormous debt… but other countries can.

“If you have a big enough debt, one of the ways of dealing with it is to get rid of the person you owe the debt to… in other words War. Bourgeois economists would never include War as an economic strategy; but it is.”

“So,” I said, “Greece should basically declare war on Germany and France?”

“It’s their best bet,” Mark replied. “No, seriously, what they should do is build an enormous horse, push it over the border and then, at night, the horse opens and all the Greek Communists come out and fiddle with the other bank’s computers.”

“Computers are the soft underbelly,” I said, “The NatWest computers have been in chaos the last two days and transactions were not being processed. A friend of mine who has been involved in banking computers said it sounded to him as if someone had tried to hack into the main computer system or its twin – because they presumably have a back-up system somewhere in some un-marked building.”

“Well, as for computers…” said Mark, “with the very very sophisticated credit default swaps, the parcelling-up of debt and stuff… basically people like Goldman Sachs have been employing for 20 years or so – well, really since Reagan became US President – they’ve been employing enormously highly-rated mathematicians and some of the formulae they come up with in credit default swaps and so on are so sophisticated that there are literally only a handful of people who understand the formulae.

“So banks have been operating on the basis of formulae which they’re quite happy to admit they themselves don’t understand. It’s ultimately no different from voodoo. You’re just taking the word of other people and everyone has a vested interest in taking everyone else’s word and that, itself, is the essence of a bubble. So you have a housing bubble or you go back to the 18th century and you have the South Sea Bubble and the Tulip Bubble in the 17th century.”

“The Tulip Bubble?” I asked.

Mark quite rightly ignored me.

“People,” he continued, “talk about The Market now as if The Market were a human being. What would The Market say? How would The Market react? As if The Market were a rational person with an identity, whereas it’s not. It’s composed of an enormous number of irrational, deeply avaricious fuckwits all racing around saying Buy! Sell! Buy! Sell! 

“The choice is between a rational, planned economy – which is what Lenin was after – and… and… the irony is that capitalist economics is actually anarchy in the worst sense of the word: it’s utterly chaotic.”

“Well, yes,” I said. “Pure capitalism without any restraints is pure anarchy because the strongest person wins.”

“It’s not a science at all,” Mark said, “It’s no different to voodoo. The basic problem isn’t how to fix the system. The problem is the system itself.”

Then we carried on talking about comedy clubs.

It seemed the best thing to do.

American comedian Lewis Schaffer gets unexpected $10 billion windfall

Lewis Schaffer smiles broadly after receiving the $10 billion

British-based American comedian Lewis Schaffer had a smile on his face last night, after he was given $10 billion.

I was there when the paperwork was handed over at the Source Below club in London’s Soho.

The money was given to him by two grateful ladies who had seen his twice-weekly Free Until Famous show. The ladies were from Zimbabwe. So was the $10 billion note they gave him at the end of his show.

Lewis Schaffer told me: “John… It’s not going to change me one little bit. Zimbabwe is a great country and I love the picture of the balancing rocks. I feel very humble.”

A close-up of the note is below.

The paperwork for Lewis Schaffer’s $10 billion windfall

Mafia capitalism takes the same route as the Titanic on its maiden voyage…

Capitalism with a dash of  socialism to add a restraining touch of morality  is, arguably, the least-worst economic option for running a country’s economy. Certainly better than Communism under inevitably self-perpetuating elites.

But shareholder-based capitalism is flawed and possibly doomed, because its aim is the short-term maximisation of profits for the shareholder rather than the long-term growth and health of businesses in which the shareholders invest. The aim is short-term profit-taking, not efficiency. In that sense, it has the same flaws as countries run by dictators or businesses run by criminal organisations… or, indeed, countries run by criminal organisations.

Which brings me to Italy.

I have just arrived in Milan for a couple of days.

I have blogged about the Mafia before…

According to a report issued two days ago, the Mafia is now “Italy’s biggest business”. But this is hardly news – ’twas ever thus in my lifetime.

Post-War Italy was, in effect, run by the secret Masonic lodge P2 (Propaganda Due) for around thirty years: an unholy alliance of politicians, big business, the military, the intelligence services and the Mafia. It was a conspiracy theorist’s most paranoid dream come true.

The real ‘new’ news story about the Mafia’s financial power seems to be that the current world financial crisis has particularly hit Italy and has partially unified the traditional Mafia groups.

In the current economic crisis, traditional banks are reluctant to lend, so many Italian businesses nationwide have been forced to borrow at crippling rates of interest from organised crime, including the three big Mafia groups – the Cosa Nostra, the Camorra and the ‘Ndrangheta.

As a result, the Mafia now have an alleged annual turnover of around £116 billion with reserves of 65 billion Euros, making them “Italy’s biggest bank”.

This is according to a report issued a couple of days ago by Confesercenti, a prominent employers’ association which represents 270,000 small-to-medium businesses. They simply called their report Criminality’s Grip on Business  and it says the Mafia account for around 7% of Italy’s Gross Domestic Profit – and we are talking very ‘gross’ here.

Marco Venturi, the president of Confesercenti, was quoted as saying: “According to our estimates, loan sharking caused the closure in 2010 of 1,800 businesses and destroyed thousands of jobs. Right now, Mafia Inc is the only business enterprise willing to make substantial investments.”

That sounds to me like a man with an eye for publicity.

But, basically, if you are running a small business facing ruin and potential closure in the current economic crisis where banks are only interested in short-term strategies, you have few options to try to save yourself except to borrow from the Mafia… which ironically may itself result in ruin and the potential closure of your business.

Small business owners with tight margins and limited cash flow also, as always, face extortion and straight robbery by the Mafia, at a reported rate of one crime every minute.

This week’s Confesercenti report says the influence of various mafias is now being felt not only in traditional strongholds such as Naples and Palermo, but increasingly in the wealthy north of Italy, in regions such as Lombardy – in other words, the country’s business capital of Milan – and the report says the mafias have expanded there with the “complicity” of some politicians, as well as lawyers and accountants.

Again – perhaps especially in Italy – that comes as no surprise.

Another report this week – by Libera, an anti-Mafia association – says the average adult Italian spends nearly 1,300 Euros every year on slot machines, bingo and other forms of gambling. This 76 billion Euro market is Italy’s third biggest industry and the Libera report claims the Mafia have also now moved into what the report calls ‘new’ areas of business such as public health, transport and logistics.

Milan is known for its fashion industry and now seems to have picked up the latest street fashion – criminal organisations running not just Big Business but the country’s infrastructure.

Well, that is the story.

In fact, I think, as I said earlier, this is hardly news – ’twas ever thus in my lifetime.

In Italy, traditions run deep.