Markets versus capitalists

Imagine the scene. An idiot gets drunk, goes for a swim and gets into difficulties. I refuse to swim out to help him, as it's slightly dangerous for me to do so. Do I then have a right to be angry at another man who later, and reluctantly, swims out to the rescue?
Surely not.
So why are bankers reportedly angry at Mervyn King for not being quicker to rescue Northern Rock? After all, it was their refusal to lend to it through interbank markets that triggered its troubles.
What we're seeing here, though, is more than mere hypocrisy. This episode shows that many bosses don't really believe in free markets.   Instead, they are like the slaggiest single parent. They pretend to be victims, and expect the state to save people from the consequences of their own stupidity and promiscuity. Indeed, they are worse, as the single parents at least often have the excuse of bad education and upbringing.
This shows that there's an enormous difference between free markets and capitalism. And when the two collide, it's capitalism that wins, even at the price of humiliating a good man.

Comments

[Rob Spear]

Presumably by "capitalism" you mean something more than "the means of production is privately owned". Surely state payouts, whether to corporations or private individuals, is better described as welfareism or something.

[chris]

Private ownership (capitalism if you like) is consistent with welfareism, if the state gives hand-outs to owners, as it does.

[kinglear]

There's a wider issue here - someone has to sanitize all the crap mortages floating around, and until they are offloaded, the credit markets won't get back to normal (assuming there is a normal in the near future after this). After all, shit wrapped in beautiful paper is still shit.
So what Mervyn is doing is bailing out Barclays, A & L etc etc from their bad lending decisions. Mind you, he could hardly do otherwise after taking £5billion of NR's crap

[kinglear]

... and PS, even the £15 billion mentioned isn't going to come anywhere near sorting the problem.

[FG]

Way to be ignorant, pejorative, and hateful toward single parents. There are millions of single parents in the world who parent well, who aren't promiscuous, who were once partnered and are no longer, etc.

You seem to what? Have generalized to the population of single parents based on a sample of Britney Spears? Nicely done.

[Jennie]

Yes, speaking as a (well-educated, upper-middle-class) single parent, way to make me completely forget the point of your article in a haze of red mist...

[Leona]

Your comment about single parents and the startling blanket stereotype with which you brand them, has turned this entire entry into a soup of utter stupidity.

Congratulations.

[Sarah]

I'd love to comment on the actual issue at question here, but am finding it difficult to move beyond your blatant ignorance and prejudiced stereotyping. What gives you the right to label all single parents as 'stupid' and 'promiscuous'?

[Will]

The distinction between markets and capitalism is - as far as I know - most famously made by Fernand Braudel. The former involves 'transparent exchanges' which "involve no surprises, in which each party knows in advance the rules and the outcome, and for which the always moderate profits can be roughly calculated beforehand". The capitalist on the other hand has "broken off relations between the producer and the person who eventually receives the merchandise".

Capitalists basically impose themselves as the brokers within otherwise reasonably balanced relationships of exchange, and force parties to negotiate via them. The capital relation is defined by power, and not by exchange (as you consistently argue, Chris).

[Matt Munro]

Yes there are some well educated, intelligent, articulate middle class single parents, in the same way as there are some honest estate agents. Exceptions do not disprove the general rule. Most single parents are young, never married, poorly educated and unemployed. But you are not allowed to say that middle class single parents are ok - because that "stigmatises poverty"-so you all get tarred with the same brush. Single parenthood isn't really what the daily mail brigade object to, it's reliance on the state, no one cares what sort of parent you are if you have independent means. None of this alters the valid point that single parents (not the middle class ones) play the victim card and expect the tax payer to pay for their choices.
I didn't think we had free market capitalism anyway, more like state sponsored capitalism.

[The Pedant's Apprentice]

Young Mr Dillow remarked "they are like the slaggiest single parent". I am at a loss to see why so many people volunteered themselves as being in that category.

[ad]

"This episode shows that many bosses don't really believe in free markets."

It shows "most bosses" would like things to be rigged in their favour. That is not a new observation, and is not something that distinguishes them from almost any other group.

[Frank B]

I'm sorry, Matt, but exceptions DO disprove the rule.

[Dipper]

err ... Chris clearly picks out "the slaggiest single parent", so not all single parents.

[Dipper]

so just like The Pedant's Apprentice said, in fact

[james C]

The 'slaggiest single parent' is on benefit and earning lots of undeclared cash at the local massage parlour. She also runs an escort business and employs illegal immigrants. She is making so much cash, which she depoasited at Northern Rock in a flagrant case of 'moral hazard', which was bailed out because Mervin King was one of her punters. This is why Dillow is so cross.

[Mark Wadsworth]

My ex-wife is a single parent and she's a slag, if that helps?

[Mark Wadsworth]

My ex-wife is a very upper middle class single parent and a total slag, if that helps?

[Meh]

I believe the phrase is "well, duh." One of the biggest problems in UK economic discourse is that it tends to be dominated by voices from The City. Putting aside questions about their competence, they have consistently framed policy choices around their own interests. And few economist or libertarian commentators in the UK seem to be prepared to put the effort in to ask questions about this phenomenon, preferring to stick to the usual strawmen lefty-bashing, despite the unions (for example) being much further away from the policy making apparatus.

[FG]

So Matt, by "single parents," you are then referring to those parents who have never been married? Who were not married at the time of the child's birth? What? Because the term "single parent" refers to any parent who is parenting without the benefit of a partner -- whether that is by choice (i.e. donor insemination), by 'accident' (i.e. birth control failure or failure to adequately judge consequences and thus having a child without being partnered but without setting out to do so), by legal fiat such as divorce and custody decision, or by default as when a spouse dies.

The number of "single parents" who are young, uneducated, on the dole, and promiscuous is NOT THE MAJORITY when the population of all single parents -- rather than only those who were unpartnered when the child was born -- is considered.

And just for the record? I have a doctorate in family sociology. Wanna play "citation war"? 'Cause we can do that. And then we can argue about poor single mothers and whether we should kick them for having children they can't pay for, and you can rail on about responsibility and choices, and I can show how many of them made the choice to have a child back when they had benefit of a partner (and an income) and how other child-centered decisions, such as opting out of the workforce for a time, subsequently harmed their solo earning potential. And so on. And that is JUST for the single mothers who ARE having financial difficulties and might need help. Not any of the other single parents, mothers and fathers, who manage to get by without subsidy and who don't need or appreciate your (undeserved, misguided, ignorant) disdain.

You remind me of the sort of person who doesn't want his property taxes to go to pay for public school because he doesn't have kids who are in public school and thus shouldn't 'have to pay'.

[Planeshift]

"no one cares what sort of parent you are if you have independent means."

I do. If you can't bring your offspring up properly I don't particularly care if you have a job or not. To bring myself down to your level, the kids who vandalise my car are the offspring of the single parents on benefits, but when the offspring of the wealthy behave badly then they'll steal my pension.

Frankly Matt the prejudice is getting a little tiring, you may find single parents on benefits annoying but its hardly the most important issue that we need to address.

[dearieme]

"the most important issue that we need to address": oh God, it's "we" again. I had hoped I'd heard the last of that sort of drivel when I graduated.

[Rob]

When the person who later reluctantly swims out to save them is the lifeguard, I think I do have a right to be angry at them. And the regulator does occupy a position analogous to that of the lifeguard here. Likewise we're entitled to criticise members of the police who don't immediately intervene in fights, even if we would not intervene in them.

[Maynard Handley]

"You remind me of the sort of person who doesn't want his property taxes to go to pay for public school because he doesn't have kids who are in public school and thus shouldn't 'have to pay'.
"

And you remind ME of the sort of moron who is incapable of reading English. WTF do you think "slaggiest" refers to in the sentence? If Chris said something like "I believe evil people deserve to be in prison" would you be jumping up and down because "Chris claims *all* people should be in prison"?

[reason]

To bring a bit of decorum into the conversation, I like the phrase "markets versus capitalists". It sort of explains what has happened in the US. We have a government there that claims to be for markets but is really for capitalists. A reincarnation of Teddy Roosevelt is needed. Competition policy should be seen as crucial to a free market economy as monopoly (or near monopoly) as a bad thing (whatever the extenuating circumstances). I really think that Microsoft should have been broken up (the operating system and application software parts divorcing) for instance.

Capitalism lives from the competition between capitalists. And that has been known since Adam Smith.

[chris]

Thanks to those of you who have defended my point about single parents. I certainly didn't mean - as my phrase makes clear - to attack all single parents. My mum was one.
My point was addressed at the bankers themselves, who have forfeited any right to sneer at what they call the underclass.

[Cleanthes]

" We have a government there that claims to be for markets but is really for capitalists."

It's not even that: you can very easily be both a capitalist and be free-marketeer.

What you have both here and in the US is a government in favour of rent-seekers, not all capitalists.

[pommygranate]

Chris

Huh? Which bankers are angry at King? Your link doesn't lead us to indignant bankers storming the BoE's headquarters.

Personally i am glad that NR's depositors are going to be safe, whilst their senior managers who got them into this mess have lost 80% of their equity.

[chrisc]

King performed very convincingly at this morning's Treasury committee.
Needless to say, the buffoons on the committee appeared to be blissfully ignorant of the relevant legislation which they themselves had passed.

[Matt Munro]

Intersted in the vitriol my entirely reasonable post has drawn. For the benefit of the respondents

1) No I can't be bothered with a "citation war" I'm not a sociologist, but I do have an Hons degree in psychology (a 2:1 BSc if we're going to act like 6th formers). References are for dissertations, this is a blog.

2) Only a sociologist would fail to realise that the term "single parent" refers to the sterotypical chain smokin council estate slag, rather than people like Princess Diana (who by some analyses was a single parent)

3) I have 2 kids, one is a step son and guess what that means my partner was a single partner before I met her. And he goes to "public" (which generally means state in the UK) school, more than paying for that I object to educating the spawn of the middle classes at university.

4) As the sociologist among you will know being a single parent (and/or their progeny) correlates with a range of reduced life chances in terms of education, health, housing, crime, welfare dependency, mental health, addiction et al. These all have enormous social and economic costs which we are only now starting to realise.

5) I therefore disagree that "it's hardly the most important issue we need to adress" It imapacts most people a lot more than theoretical middle class, left wing debates about the war in Iraq, food miles, or how difficult it is to source ingredients for an organic tofu salad.

[dsquared]

on the other hand if you saw a building on fire and didn't put the fire out yourself because you didn't have access to sufficient water, and the building nearly burned down because the fire brigade arrived late because they "didn't think it was serious", then you'd be perfectly justified in being a bit cross with the fire brigade. Which suggests to me that it might not be a good idea to base important policy conclusions on metaphors.

[donpaskini]

I thought that using an irrelevant prejudiced stereotype about a group of people and using the defence of 'it's ok, I don't mean you nice respectable people' had been binned back in the 1970s.

I'm sure Chris wouldn't even have considered replacing 'slaggiest single parent' with the equivalent stereotype about an ethnic group.

A shame, because it was otherwise a good article.

[chris]

D2 - your analogy's no better than mine. The Bank is supposed to be the lender of last resort, which means showing up late is in its job description - unlike the fire brigade.

[Mark Wadsworth]

What Cleanthes says.