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August 22, 2016


Steve Hemingway

(Great link to Gillian Anderson's animation, btw)

You are dangerously honest about what it takes to be a successful financial journalist.

Deviation From The Mean

You open the article by asking about the pursuit of excellence but then bring up Marx’s idea of human development. Are the 2 things the same or even mutually exclusive?

Excellence presupposes a division of labour to some extent and targeting a particular thing, whereas human development may be about expanding ones overall horizons and escaping a division of labour. So Usain Bolt may be great at the 100 metres but perhaps he is rubbish at Sudoku? And maybe he is good because of luck rather than the pursuit of excellence, i.e. the right genetics. Or maybe he has used drugs?

The left criticism of capitalism is more related to an overall human development I would say, so capitalism ties an individual to a trade or career for life, until that trade disappears!

It is interesting that the increases in productivity brought about by capitalism have not led to less division of labour but probably more. In IT for example once upon a time you saw a project through from beginning to end; now you are simply a cog in the overall process.

It should also be noted that excellence depends on the sport to a large extent. In that with some sports all you need to produce champions is a program where people with tape measures go into school and say, yes you will be a great cyclist and hey presto they become great cyclists. With some Olympic champions they actually did not take part in the sport until a spotter pointed them out, suggested they changed sports and within a few years they became Olympic champion! So not an individual pursuit of excellence, in the noble sense, but something akin to horse breeding. It should be noted that this is easier to achieve in sports where little or no skill is required, such as running or cycling. For example no spotter can use a tape measure or genetic indicators to pick out the next Messi. Maybe this explains why states are so obsessed with the Olympics because a well organised program can bring direct results, whereas with some sports things are far less certain. So great success in the Olympics but failure in say, World cups, could be a sign that the nation is taking the easy way out to make it look like it is pursuing excellence, when it fact it is seeking the easy wins and avoiding the pursuit of the difficult.


The usual enormous confusion between the industrial system of production based on cheap energy-dense mineral fuels, which «generated an affluence that permits the luxury of helping some people chase their dreams», and "capitalism" and "neoliberalism" (or "sovietism) which are political systems grafted onto it.

Seth Edenbaum

"In America there are comparatively few who are rich enough to live without a profession. Every profession requires an apprenticeship, which limits the time of instruction to the early years of life. At fifteen they enter upon their calling, and thus their education ends at the age when ours begins. Whatever is done afterwards is with a view to some special and lucrative object; a science is taken up as a matter of business, and the only branch of it which is attended to is such as admits of an immediate practical application."

Melville was a failure as a writer, if money is the measure. So do us all a favor and define "excellence" for us. Thanks.

And for what it's worth, the new rulers of the world under capitalism style themselves after the rulers of the world under monarchism. The new aristocrats amuse themselves with the new flaneurs, and bourgeois morality is laughed at as it always was. As a well known critic put it, "I. Do. Not. Follow. The. Olympics." He's a snob of course, but so are the rich whose interests he serves.

And now academic philosophy is developing a fixation on the idea of an "epistocracy", a class it's safe to say adherents would see you as a member of.

And LA is full of brilliant British actors, trained and educated, slumming for big cash in Hollywood. Life goes on.

Dave Hansell

"Define excellence. "

An astute and timely observation.

To add some flesh on that bone perhaps it would be more appropriate to talk of quality rather than excellence.

In which case one could do worse by starting with Zen and the Art of Motorcycle Maintenance which has a few pertinent observations on this matter.


@ Seth, Dave - I had in mind MacIntyre's distinction between excellence and effectiveness. Excellence is mastery of a practice; effectiveness is the acquisition of money, power or fame. Melville achieved excellence, not effectiveness. A great or potentially great actor who foregoes challenging roles for simple parts in mindless blockbusters sacrifices excellence for effectiveness. And so on.
Excellence isn't the same as quality. For me personally, there's little quality in heavy rock music, but I can see that Tommy Iommi (say) has achieved excellence within it. (For this reason, there needn't be any snobbery about excellence).
I had assumed that everybody knew the work of MacIntyre, or at least had read my blog about him a few days earlier.


"...I’d probably have done an even worse job at the IC than I have. I would have promoted rip-off actively-managed funds..."

I think it is to the IC's credit that they allow you to tell readers *every* week (at least that I've read it) to "just buy a tracker." Is there a rapid turnover of the poor sods trying to sell advertising, or are they just resigned to it, like Labour whips and pre-leadership Jeremy Corbyn?

Luis Enrique

tsk. 'buy trackers' is immoral advice. trackers are free riders. information gathering and analysis (active investment) has positive externalities: more of it would increase efficiency of capital markets (and poss raise whole market performance, even if the average active manager still wouldn't beat market?). Socially-minded investors should pay for it despite not fully internalising rewards. Chris should be promoting active management to raise social welfare, not trackers to max private returns to individuals.

[I am only half joking]

Dave Hansell


It seems different terms/words mean different things to different people depending on context.

As someone who spent over forty years in hands on semi skilled (in my view) engineering; often going through the same daily struggle against shoddy work practices and poorly designed work structures and processes as Tressel's painters in Hastings over a century ago; I've always viewed the aquisition of money at least as a feature of efficiency which often undermined effective quality outcomes in the workplace.

Of course, similar problems occurred when facing seagull managers who came in, buggered things up and then went off elsewhere, never stopping long enough to clear up their own mess, building their career trajectory seeking organisational fame, power, prestige and fortune.

Trying to work effectively to produce effective worthwhile outcomes under a regime of short term efficiencies designed to make the monthly/quarterly stats. and the management hierarchy look good so they could move on was extremely frustrating.

The idea of effectiveness being about what forty odd years of experience and observation told us was bottom line efficiency and individual careerism which undermined efforts to produce effective quality outcomes/output is somewhat difficult to wrap ones head around.


Luis, I half agree with you (and have some money in an active investment trust).

My uneducated hunch/concern is that the real damage passive funds might do is by letting CEOs do whatever they want, rather than in free riding on others' research.

On course bookies did a reasonable job of setting starting prices for the much larger high street bookies, so you can get away with quite a lot of free riding. (I said it was an uneducated hunch.)


“The Olympic games have raised an old question: does capitalism encourage the pursuit of excellence or does it stifle it?”

This is actually an old right wing trope, lazy workers need incentives. Actually in my experience most people attempt to do the job to the very best of their abilities and the only incentive they need is personal pride. I think circumstances rather than incentives explain Sir Phillip Green and his wife’s insatiable appetite for spending time on Yachts.

The problem with capitalism is that this natural desire for doing ones best is brought into opposition to the dynamics of capitalism, i.e. the battle between wage labour and the capitalist. These things impinge on the natural need to do ones best. So capitalism distorts, impinges upon and sometimes facilitates this natural need.

So the pursuit of excellence is probing at the entirely wrong question in my opinion. For asking whether capitalism encourages the pursuit of excellence is like asking does capitalism encourage the pursuit of staying alive.


I am simply a variable cost in the process of production of value.

However when I am out in the garden I am not a variable cost but a human (possibly under instruction from the wife!)

Some lucky beggars see their life as being other than a variable cost, but they don’t count in the grand scheme of things.

Seth Edenbaum

By the logic of capitalism as such, McDonald's "billions served" is a mark of excellence. And when DeLong says the urban un-rich are or should be perfectly happy with the mealy cardboard "simulacrum" of a good tomato, it's simply proof that DeLong fits the same mark of excellence on the intellectual scale as McDonalds does in food.

Capitalism breeds lazy self-interest, and the "scientific" acceptance of greed as a given reinforces the prevalence of greed. Through the liberal demand for optimism over realism greed as a given is transformed, by slight of hand, into greed as a good.


Georges Lefebvre, The Coming of the French Revolution
"The great majority of nobles either did not know how, or did not wish, to get rich. The great majority of younger sons had no desire to "derogate." They sought the remedy elsewhere, in a growing exclusiveness."

And I'll repeat this:

Aristotle: "...for the principle of an aristocracy is virtue, as wealth is of an oligarchy, and freedom of a democracy. "

Montesquieu: "We shall examine this relation in each government, and we shall begin with the republican state, which has virtue for its principle."

Montesquieu imagined a virtue ethics of democracy. Capitalist liberalism following "science" denies virtue a constitutive role. Laws represent virtue so we don't have to. The result is mediocrity.

The flowering of culture under capitalism takes place only at the beginning, when people still tied to old ways embrace new ones, so they follow rules of family and tradition while simultaneously enjoying a new individualism. If you wanna know why Iran in the 90s is considered to have produced some of the the best films of last 50 years, there it is: individualism and its opposite, in tension.

And fyi most individual sport more and more is mechanism, Fordism of the body. Simone Biles' strength is graceless mechanical skill. All elements of dance stripped away. Team sport is a different thing; it's social interaction, adversarial engagement: it's war and politics.

roger gathmann

That excellence equals "the best we can be" is a pretty vague proposition. Newton was the best he could be as a mathematician and astrologer, but he seemed to be emotionally barren. Bagehot, in an interesting essay on Macaulay as a historian, remarks that great scientists or historians have to sacrifice a certain interest in human activities. I'm not sure of his examples, but I would think that the best we can be has more dimensions than being, in youth, good athletes. In fact, I think sports is a very very poor model for what it means to be the best we can be. Raising a family is a much more messy, and accurate, model. The Olympics includes team sports, but concentrates on individual sports - and both types are shaped by competition, which is just one of the forces that define the best we can be.
Nozick, it should be noted, was also a fan of using the sports example, and it has become part of the conservative defense of capitalism, to the extent that CEOS are routinely compared to sports stars when, of course, they are nothing like sports stars. I think that the sports model is popular not because it explains excellence, but because it mystifies it.


1. A guitar of the quality of a Gallatone Champion would run one about $1,800 - more than a months wages at the median per capita income for most of America. Sure, you can get a cheap CNC guitar for $300 that is okay - but a good guitar is at least $700. Not sure how you came up with this.

2. The time period of which you speak compared to now is hardly comparing apples to apples.


Seth - as a former gymnast and coach, your comment about young Ms. Biles is absurd. She is the most beautiful gymnast I have ever seen. Her lines are as close to perfect I have ever seen - better than Vitaly Sherbo (6 golds in 1992) or his buddy Sasha Kalivonov (who was kicked off the 1992 team for doing 6 perfect routines while drunk), better than Aurilia Dobre - who was stunning, better than Nadia. Just because she is powerful, doesn't mean she lacks grace. Her leaps are perfect and the lines are nearly perfect. Heck, she looks better than the drawings in the Code of Points!

Seth Edenbaum

I shouldn't have said "graceless", but aside from my own opinion, watching for 40 odd years, talking to dancers who've been around for awhile they say the same thing. The increase in technical skill has been matched by a decrease in "art", the grace of dance. It's always been true of male gymnasts and that's why women have always been more popular. Women's gymnastics has always played up the gamine, the feminine, the balletic. It's sexist; I'm not defending it. There was no equivalent aestheticism for men. Scherbo is not Baryshnikov. And ballet takes us back to the tsars and kings.

If you want to watch a republican observe a monarchist tradition with both irony and deep respect see Wiseman's La Danse https://www.youtube.com/watch?v=fOzkWakRLmE


"Tin Pan Alley and the old Hollywood studio system both chased the dollar, yet they gave us great art too."

Is this great art? Adorno (New Philosophy of Music), one of the great critics of capitalism, certainly when it came to its effects on the arts, would population see that genre that gives instant gratification and as a means of keeping the population docile and stupid. HIs books identify a decline in music (in the sense that on the one hand it became much more elitist on the one hand and out of the reach of the people on the other) that began in the late 18th century.


«Trying to work effectively to produce effective worthwhile outcomes under a regime of short term efficiencies designed to make the monthly/quarterly stats. and the management hierarchy look good so they could move on was extremely frustrating.»

That is very common. Now, stand back and look at the big picture from a distance.

When is doing that the best strategy? When the goal is to asset strip existing operations!

Asset stripping is the recommended strategy, in different doses, for businesses that are classified in the Bain Consulting Matrix as "cash cows" or "dogs".

The investor and executive classes have classified *entire countries* (or large regions of countries) as "cash cows" or "dogs" and set the incentives for local managers to asset strip as fast and hard as they can.

This can apply to individual companies. For example "tech" companies often don't survive long past the retirement of their initial cohort of executives. There are several reasons, but the main one is simple: they started with the company when they were 30-40, and when they reach 50-60 they switch from investing in new products and fighting for new markets, to cutting R&D and capital spending, and squeezing as hard as they can their existing customers, alienating them in the long run. Because they are not there for the long run: they want to "goose up" book profits to cash in bonuses, dividends, and their options by turning the business into a "cash cow" and asset stripping it before they retire.

Their successors then inherit what has become a "dog" business, and they see that 10 years or more of no product development and abusive customer relations mean that their best bet is to find and asset strip whatever their retired predecessors forgot to squeeze out, and effectively liquidate the company into near bankruptcy and run.

"Creative destruction", even if I am not sure J Schumpeter really had asset stripping in mind for that :-).

An Alien Visitor

Capitalism encourages a class based system to function and reproduce itself.

For the masters this includes the pursuit of wealth and all that goes with that, from incredible innovation to world wars, from the application of science to libor rate rigging. Co-operation to theft. Starts ups to asset stripping.

For the workers it involves doing a hard days work for a fair days pay, for showing respect, for doing the right thing, for being caring and sharing and for knowing your limits.

For the middle classes it involves ambition and civility, a little of the pursuit of wealth combined with doing the right thing.

Wealth and power is for the rich, responsibility is for the wage slaves!

Seth Edenbaum

"Capitalism encourages a class based system to function and reproduce itself."

Capitalism has not ethos beyond self-interest. Again, there is no 'virtue" to McDonalds; it's food/money as mechanism.

Bourgeois virtue is NOT wanting to be a millionaire; it's pride of place, stability not upward mobility. Bourgeois virtue is a holdover from the the monarchy, not an invention of modernity. Permanent revolution is the capitalist dream. We're in a hurry to get somewhere, to make "progress" towards... what? FASTER! FASTER!

Adorno as the product of a place and age was a bureaucrat of irrationalism, so terrified a instrumentalism that his only response was a Weimar dithyramb to logical self-destruction, Rube Goldberg a la Tinguely https://www.youtube.com/watch?v=0MqsWqBX4wQ

Obviously since his taste was for the tried-and-true, and decadent, he picked Schoenberg over Ellington. If you listen to Verklarte Nacht you realize how close it comes to Korngold. I keep seeing Errol Flynn and Olivia De Havilland running through the forest. Schoenberg chose the chains and bondage kitsch of moralist serialism/serialist moralism over open melodrama. But of course S&M and B&D, Douglas Sirk, Foucault and Fassbinder are all melodrama!

Seth Edenbaum

I should add Adorno was terrified only because he saw instrumentalism as scientific and therefore "true". The Enlightenment was a father figure; Adorno was the victim of a father’s cruelty that he couldn't help but see as logical and therefore just. Sputtering irrationalism was his only option. He couldn't see his way to an empirically derived awareness of the absurdity of progress for its own sake and the "research imperative" http://tinyurl.com/ja8zclj

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