Sunday, September 2, 2018

Mafia Economics

Image result for finnish stock exchange wiki

- Got anything for me?
- Well, yes. I think I do.
- I'm listening.
- I've read how some economists, studying of all things the Finnish stock exchange, have decided that the free market isn't really free, at least not at first.
- What is it at first?
- Exclusive, mafia style agreements to give each other preferential, better than market treatment, made for the benefits of trust and security between individuals and groups who know each other. After a while, the economists say, 'disruptors' enter the market, offering extra-good deals causing the mafia arrangement to break down as one or both partners take the better offer and enter into the now again temporarily free market.
- Do I have to complain that nothing ever comes out of the mouths of economists but idiocy like that?
- Why not? It's good to hear it out loud once and a while. Besides that, what occurs to you?
- That anyone who actually does trading knows that a private arrangement comes about not for gain but against the idea of gain and profit.
- As an expression of friendship.
- Yes. The arrangements don't break down when extra-advantageous trades are to be had.
- When do they break down?
- When the practice of friendship breaks down. Something more like the economists describe happening in the Finnish stock market is what England feared the American colonies would do: struggle for independence the moment they were strong enough to do without the trust and security of being tied to the mother country.*
- Which in practice meant that there were in reality no other than practical ties involved.
- Yes. In present politics we can see the movement in the opposite direction, from market to mafia. Political power was once distributed throughout a market of numerous purchasers, dominated but not controlled by rich individuals and corporations. Now an exclusive deal has been made where a cabal has been formed to gain and hold total power for those dominant groups collectively.
- The Republican Party acting in service of billionaires and multinational corporations.
- Yes.
- So you claim this fatality, this decline of our country happened not because of the security and advantages to political agents forming that cabal - that is 'idiotic, economist's thinking' - but because, what? ideas of friendship have decayed, which ideas previously provided security from otherwise unrestrained markets? I'm a little lost. How does friendship function to provide security in the political market?
- In a couple, fairly obvious ways. First, in reminding that politics has to keep as much as possible out of private life, the sphere in which friendship operates. And second, by ensuring that the ideas of politics demanded are those that are friendly: that is, which respect human nature and aim at helping it flourish.
- And there we are, all the way from the Finnish Stock Exchange! I gave you mafia economics, you gave back a friend's politics. We did pretty well from our trade.

Further Reading:
* See: Theodore Draper, 'A Struggle For Power'