Ohiyesa — Simplicity

"The native American has been generally despised by his white conquerors for his poverty and simplicity. They forget, perhaps, that his religion forbade the accumulation of wealth and the enjoyment of luxury. To him, as to other single-minded men in every age and race, from Diogenes to the brothers of Saint Francis, from the Montanists to the Shakers, the love of possessions has appeared a snare, and the burdens of a complex society a source of needless peril and temptation. Furthermore, it was the rule of his life to share the fruits of his skill and success his less fortunate brothers. Thus he kept his spirit free from the clog of pride, cupidity, or envy, and carried out, as he believed, the divine decree — a matter profoundly important to him.

"It was not, then, wholly from ignorance or improvidence that he failed to establish permanent towns and to develop a material civilization. To the untutored sage, the concentration of population was the prolific mother of all evils, moral no less than physical. He argued that food is good, while surfeit kills; that love is good, but lust destroys; and not less dreaded than the pestilence following upon crowded and unsanitary dwellings was the loss of spiritual power inseparable from too close contact with one's fellow-men. All who have lived much out of doors know that there is a magnetic and nervous force that accumulates in solitude and that is quickly dissipated life in a crowd; and even his enemies have recognized the fact that for a certain innate power and self-poise, wholly independent of circumstances, the American Indian is unsurpassed among men."

Ohiyesa (Dr. Charles Alexander Eastman), Santee Sioux

The Soul of the Indian

Houghton, 1911 (Public Domain)

Izabella Kaminska — Property bubbles and ghost cities

I have a working theory about the premium property bubble in capital cities like London. There’ll be a post about it on AV soon. (Have been a little under the weather so it’s taken a while.)
In a nutshell, the idea is that the economy is plagued by a glut of misvalued capital — which is seeking preservation for as long as possible and at all costs. The preservation is not really about the dollar sum of that capital, but about preserving the position on the social hierarchy ladder that it provides for....


But, as per my German sun lounger analogy, owners of abstracted financial capital have lost perspective on what their capital rights represents. They wish to preserve not the wealth provided for by the means of production, but the superior social position that this used to entitle them to.
The truth, however, is that they are no longer entitled to that. Also, what they misunderstand is that they are no less well off as a result of losing that claim. It’s everyone else who is elevating to their wealth.
Nevertheless the search for the preservation of their past superiority continues — the days when they were adding social value — continues.
Consequently this capital flitters from one idle asset class to the next, avoiding at any cost an opportunity to invest in something productive — out of fear this might expose them to the sort of risk that might lose them their superiority claims forever. It’s worth noting that the constant speculative flittering is damaging in its own right.

Dizzynomics
Property bubbles and ghost cities
Izabella Kaminska

In a healthy capitalism, the purpose of real capital is production for consumption and financial capital is for further capital formation from gains from production, that is, for productive investment. When financial capital is accumulated as financial wealth for it own sake, neither for consumption not productive investment, rentierism and power, then capitalism becomes dysfunctional.

Steve Roth — Identity Games: Saving ≠ Saving? Whodathunkit?

Before I go, one more thought: After coming up with this “accumulation” notion/usage, Very Little Googling revealed that (no surprise) it’s hardly original. It’s right there in Volume I of Das Kapital. (I just discovered this? Hey, I’m self-taught, with the resulting predictably spotty/spotlight reading background. I’m working on it!)

And let’s not forget: It was the 1930s. Kuznets and co. were developing the national accounts, and they were devoted capitalists. They’re gonna use Marxist language, much less concepts and theory? In the National Accounts? Of The United States of America? Not gonna happen.

Asymptosis
Identity Games: Saving ≠ Saving? Whodathunkit?
Steve Roth

Chris Dillow — Leftist Tories?

As James O'Connor wrote:

"The capitalistic state must try to fulfill two basic and often contradictory functions - accumulation and legitimization...This means that the state must try to create or maintain the conditions in which profitable capital accumulation is possible. However, the state also must try to maintain or create the conditions for social harmony." (The Fiscal Crisis of the State, p6)

Insofar as the Tories have been successful down the decades, it's because they've been able to balance accumulation and legitimization; Thatcher stressed the former, Disraeli the latter, but they are two legs of the same beast.

This raises two questions. First, how strong are the material pressures on the Tories to adopt a more egalitarian stance? I'm in two minds here. On the one hand, working class power is sufficiently weak that it can be ignored, which means there's little need to "bribe the working classes", in Bismarck's phrase. But on the other hand, the social norm against corporate tax-dodging is strong, and the hope that enriching companies would encourage investment and growth seems to have been dashed - both of which point to the need for more legitimization policies.

Secondly, if redistributive policies can be adopted by the "right" (eg Disraeli, Bismarck), and if they can be shunned by the "left" under pressure from capital (eg New Labour), could it be that we over-rate the importance of the colour of the government, and under-rate that of the social norms and class power which constrain governments? At least some economic research (pdf) suggests the answer might be: yes.

Stumbling and Mumbling
Leftist Tories?
Chris Dillow | Investors Chronicle (UK)