Monday, 16 January 2017

My reading of Chapters 1 & 2 of ‘The Heretics Guide to Global Finance’

‘The Heretics Guide to Global finance: Hacking the future of money’ Brett Scott 2013:

The beginning of Scott’s books is concerned with showing how the most accepted and ‘popular’ view that people (the average member of the public) have of Banking, money and finance in general, is on the whole wrong. More specifically how people understand the way their money is held and used by banks, if at this level people struggle to grasp the concepts of bank credit then they would struggle further to understand the wider Financial System (FS).
Scott identifies that “Part of the problem is that many of us are often trying to imagine global finance as one component”.
With the mass exchange of trillions of dollars every day across multiple countries, one would be forgiven for wondering what on earth it mattered to them or their money how HSBC directs flows of money from New York.
However a key concern that Scott touches on is that “They [financial professionals] frequently brush off public concerns about finance, claiming that outsiders don’t understand how the system actually works”
A part of his book is titled “The Importance of Denying Experts” and it is for this reason I’d like to focus on the latter part of chapter 1 which focuses on how people can better understand the flow of money around the world as well as Finance in general.
Deconstructing [and grounding] the feral force of finance: Ch1, p20
Grounding Finance 1: Geographical Context
To start, “Global finance is more like a collection of financial city-states” which “steer” money around the world. These include the likes of London, New York, Hong Kong, Zurich etc, understanding how wealth crosses more than just national borders is the start.
Scott describes these city states within their own sub genres…
-          USA & UK ‘Anglo Saxon Capitalism’
-          Zurich ‘Continental Capitalism’
-          Japan has its own extra conservative economic norms
These ‘sub-genres’ of Capitalism describe the economic norms for nations, ‘Anglo-Saxon Capitalism’ or the ‘Anglo-Saxon Model’ for example which usually denotes lower taxes, regulation and a smaller public sector.

GF 2: Identifying areas of concern
Scott has 4 concerns which he believes people focus most on when personally deciding to engage in the idea of Finance: Financialisation, Complexity of the FS, Unethical investment, Culture of Finance. As is evident “Much of the concern is about accountability”, the role of Finance in governing our lives is a key area of which people concern themselves with. Primarily it is the mistakes and errors of the system which interest them.

GF 3: Getting personal
Scott identifies that upon further study some people may find that the state of current systems of Finance are ‘concerning’, and others not so much.
Direct action groups against the corruption and unsustainability of the current FS while appearing to fight the good fight, raise problems which go back to ‘Identifying areas of Concern’ to do with ‘Accountability’.
The problem with an approach such as the ‘Occupy’ movement with its sit-ins and mass demonstrations of people is that “the FS bears no resemblance to a dictator with a face, who can be deposed from power and replaced”, people on the whole still find that the “the concept of a financial ruling class appears abstract”.

Scott’s guide highlights the complexities within the FS while also identifying why people should engage in it. It is important to remember that as it is something embedded deep within our social structures “Everyone in a society is … part of the FS”.
[Apologies for lack of footnotes]


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