Saturday, 3 December 2011

The Market Don't Like It

A couple of things that I've been musing on.

Firstly a comment from raconteur and atheist-about-town, Gurdur on Twitter that "the Market gives you what you think you want, not what you need". And secondly a remark on the BBC that the central banks were intervening to sell cheap dollars as, if each American bank were left to lend, they'd not do so to protect themselves and that, while each bank individually doing that might be sensible for each bank, if every bank acted like that the whole system would crash to a halt. Which, whatever you think about capitalism, would be a bad thing if it happened. I reckon if you want to smash the system you should do it slowly - maybe by sitting in a tent in the cold. But the point is that, by lots of people making small rational decisions, the Market makes large irrational ones.

It was the mythical concept of the "market" as an entity in its own right that nudged me. I say "mythical" not in the sense of "untrue" or "imaginary" so much as "expressing truth in a vivid way". And in this Advent season, where better to look than the book of Daniel?

"So he said, “Do you know why I have come to you? Soon I will return to fight against the prince of Persia, and when I go, the prince of Greece will come; but first I will tell you what is written in the Book of Truth. (No one supports me against them except Michael, your prince." (Dan 10:20-21)

You don't have to believe in angels, good or otherwise, to understand the concept - the "prince of Persia", expressed in angelic form, could be taken as the spirit of the Persian people and so on. But maybe the "Market" can be seen in the same way.

The governments of the world, of course, bow down to the  Market. It is said you can't buck it. You must prove yourself strong to be trusted. For if you cannot feed the Market with the debt repayments it deserves, it will not pour out its bounty upon you with lower bond rates. If you cannot impress the Market with your country's virtue, your currency will decline or - if you are in the Euro - you will be required to cut the size of your state. Democracy is no defence - if you cannot meet the Market's ravenous demands then it will install a new leader for you - one who understands the ways of the Market.

The Market is no being in its own right. Like the deities of the ancient RPG of Runequest, it gathers its strength from those who believe in it. It is made up of the behaviours of millions of shareholders, dealers, pension fund savers, and beyond those - through the companies whose value is traded in The Market - the consumers who feed the beasts and are fed in turn. The Market has delivered much to those who believe in it - where once we had the choice of two kinds of instant coffee in supermarkets, today we can have half an aisle of filters in a variety of countries of origin and strengths - decaff or full-caff or, for all I know, passed through the digestive tract of a civet. But it has done it at the cost of corner shops, of lives and livelihoods. But it is to the Market that we look to keep us in our old age, to give us somewhere to save our money, to provide funds when we need a new car or house.

It's a beast to be sure, is the Market. It consumes people and governments alike. On the whole I hope it's mythical. Because if it's anything else, it's a scary old thing. Best to keep on the right side of it. Anyone want to buy some bonds?

Just after writing the above I read this in the Guardian. It's obviously the trendy metaphor.

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