Markets and riots....
I’m going to try to things together here, possibly not in the way you would expect. There is an obvious and very clear link between the greed of the City and the greed of the street, between the trader looting markets and the hoodie looting HMV. However this is not what I want to focus on.
We have seen riots before and we have seen market crashed before. I certainly don’t believe one has caused the other. What I am interested in exploring is cause and effect, or at least the limits of it. If we look at both the market and the street as ecosystems with environments and actors what do we see? Well first there are a diverse range of actors in both. There are the casual bystanders, the ‘ringleaders’ the, the authorities, the media circus, the people caught up in the excitement and the disgruntled. One of common element in both seems to be a prevalence of males – but that’s probably another blog.
Also there are the stories these actors tell themselves about their actions and reasons and this informs the usual check we place on ourselves in terms of ethical behaviour. We have all become familiar with the explanation that this is related to powerless actors defending themselves in a hostile environment beyond their control or influence – but is that the traders or the looters? We have heard people question the point in self regulating when the people around them aren’t – heroic traders/raiders struggling against a cruel world.
Of course both exist in environments that are poorly regulated. The markets are poorly regulated because the actors have argued that is the most efficient way to organise markets, our streets are poorly regulated, thank goodness, because it would curtail the behaviour of self-regulating citizens if they were not. Here is where the two diverge though. The behaviour in markets is not only mostly selfish it is exclusively selfish in fact. There is no regard for responsible behaviour beyond that which influences profit. The ‘streets’ on the other hand are (normally) surprisingly well behaved without the need for constant vigilance. People will let you pull out first in your car or will open a door for you. They will miss their turn simply to make life flow easier in general. That seems both odd and uplifting. It seems as if the market exists more like a permanent riot?
If we observe the regulators in both cases we seem a similar pattern. Both are slow to (re)act and both rather powerless. But this is no surprise. The rioters did not wake up that morning and start planning a riot and it is clear that traders have no idea which way the market is heading (I saw one broker forecast 6,500 by Christmas on Friday morning). So if the actors are not clear as to direction how might the authorities manage? Bear in mind that in war generals go to great lengths to keep their plans secret a plan that does not exist at all must be the hardest to predict. Regulators could sense the mood I guess – but in truth the ‘mood’ always seems a poor predictor – works best in hindsight. We could close the streets and send in the riot police each time an individual is shot or arrested but in truth this was probably not the catalyst and certainly would be an expensive and intrusive way of policing. With markets there is clearly little central banks can do but at the same time this should not come as a surprise. Their reaction will be late, will be manipulated and will, inevitably, miss the target.
Interestingly the role of the media is similar in both. We see ‘inside’ Tweets, interviews with victims and victors, expert opinion, excitable newsreaders, politicians and elder statesmen – be them veterans of Brixton or BCCI. The news begins with a small change, a few tweets and a couple of videos hint at trouble. Speculation begins as to motives, cause and developments (remember the errors made over Utøya?). The story unfolds. Stressed protagonists explain how they have no choice, victims are paraded, minsters try to calm matters and the outraged are increasingly outranged. There are promises we will act to prevent this again and we slowly settle back to normality.
The damage done to London is counted in millions and the loss due to the market crash the same week – trillions. Both will have resulted in a loss of life. Neither can be stopped. We cannot have freedom if we do not allow protest; we cannot be sure protest will not spill over into riot and riot into looting. We cannot have capitalism without markets; markets will tend towards greed and monopoly. We don’t have to tolerate both though. Both raiders and traders can be educated. Both can be drawn in to a more active society and community that does not see personal greed and possessions as aspirational. We can all help. Not ‘hug a hoodie’ but by slowly turning away from the excess and base elements of society that promote exclusivity. That doesn’t just mean turning away from gangsta rap lyrics it also means turning away from the likes of Location, Location, Location..............
I’m going to try to things together here, possibly not in the way you would expect. There is an obvious and very clear link between the greed of the City and the greed of the street, between the trader looting markets and the hoodie looting HMV. However this is not what I want to focus on.
We have seen riots before and we have seen market crashed before. I certainly don’t believe one has caused the other. What I am interested in exploring is cause and effect, or at least the limits of it. If we look at both the market and the street as ecosystems with environments and actors what do we see? Well first there are a diverse range of actors in both. There are the casual bystanders, the ‘ringleaders’ the, the authorities, the media circus, the people caught up in the excitement and the disgruntled. One of common element in both seems to be a prevalence of males – but that’s probably another blog.
Also there are the stories these actors tell themselves about their actions and reasons and this informs the usual check we place on ourselves in terms of ethical behaviour. We have all become familiar with the explanation that this is related to powerless actors defending themselves in a hostile environment beyond their control or influence – but is that the traders or the looters? We have heard people question the point in self regulating when the people around them aren’t – heroic traders/raiders struggling against a cruel world.
Of course both exist in environments that are poorly regulated. The markets are poorly regulated because the actors have argued that is the most efficient way to organise markets, our streets are poorly regulated, thank goodness, because it would curtail the behaviour of self-regulating citizens if they were not. Here is where the two diverge though. The behaviour in markets is not only mostly selfish it is exclusively selfish in fact. There is no regard for responsible behaviour beyond that which influences profit. The ‘streets’ on the other hand are (normally) surprisingly well behaved without the need for constant vigilance. People will let you pull out first in your car or will open a door for you. They will miss their turn simply to make life flow easier in general. That seems both odd and uplifting. It seems as if the market exists more like a permanent riot?
If we observe the regulators in both cases we seem a similar pattern. Both are slow to (re)act and both rather powerless. But this is no surprise. The rioters did not wake up that morning and start planning a riot and it is clear that traders have no idea which way the market is heading (I saw one broker forecast 6,500 by Christmas on Friday morning). So if the actors are not clear as to direction how might the authorities manage? Bear in mind that in war generals go to great lengths to keep their plans secret a plan that does not exist at all must be the hardest to predict. Regulators could sense the mood I guess – but in truth the ‘mood’ always seems a poor predictor – works best in hindsight. We could close the streets and send in the riot police each time an individual is shot or arrested but in truth this was probably not the catalyst and certainly would be an expensive and intrusive way of policing. With markets there is clearly little central banks can do but at the same time this should not come as a surprise. Their reaction will be late, will be manipulated and will, inevitably, miss the target.
Interestingly the role of the media is similar in both. We see ‘inside’ Tweets, interviews with victims and victors, expert opinion, excitable newsreaders, politicians and elder statesmen – be them veterans of Brixton or BCCI. The news begins with a small change, a few tweets and a couple of videos hint at trouble. Speculation begins as to motives, cause and developments (remember the errors made over Utøya?). The story unfolds. Stressed protagonists explain how they have no choice, victims are paraded, minsters try to calm matters and the outraged are increasingly outranged. There are promises we will act to prevent this again and we slowly settle back to normality.
The damage done to London is counted in millions and the loss due to the market crash the same week – trillions. Both will have resulted in a loss of life. Neither can be stopped. We cannot have freedom if we do not allow protest; we cannot be sure protest will not spill over into riot and riot into looting. We cannot have capitalism without markets; markets will tend towards greed and monopoly. We don’t have to tolerate both though. Both raiders and traders can be educated. Both can be drawn in to a more active society and community that does not see personal greed and possessions as aspirational. We can all help. Not ‘hug a hoodie’ but by slowly turning away from the excess and base elements of society that promote exclusivity. That doesn’t just mean turning away from gangsta rap lyrics it also means turning away from the likes of Location, Location, Location..............
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