About Rationally Speaking
Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.
Sunday, August 07, 2005
In Praise of Idleness-III
"Finance is more powerful than industry when both are independent, but the interests of industry more nearly coincide with those of the community than do the interests of finance."
This is exactly the sort of problem that brought us -- 70 years after Russell wrote -- Enron and the whole Wall Street mess. The idea is that capitalism, if it has to work, has to be based on certain rules ("managed capitalism," they call it in Europe). One of these rules is a tight coupling between investments (capital) and the products of the industry one is investing on. In turn, this means that things like day trading and other short-term "investments" are not investments at all (because there is no time for the industry to actually use that capital and deliver a product), they are speculation. And speculaton is gambling pure and simple.
We now live in a society in which, for some bizarre reason, it has become normal to accept the idea that people can "make a kill" on the market and become millionaires overnight. Usually, of course, on the skin of thousands of others who either lose their money or their jobs. This is nonsense on stilts of the highest order.
The solution, of course, is pretty simple: regulate stock trading in a way similar to, say, government bonds: you can't sell before a certain minimum period of time, and if you do you incur a penalty. This sort of measures would reconnect, as Russell puts it, finance and industry, and would greatly benefit the welfare of the majority of people. Alas, the American public has been sold on the idea that anybody can become instantly rich, and this hope dazzles and blinds us into acquiescence to a system that makes most people's lives worse than they could be. Just think of the fact that the richest country in the world (and the self-professed best democracy on the planet) still has the shame of having tens of millions of its citizens and children without health care. But that's another story...