Category Archives: image with essay

LOLMarkets!

Anyone reading this blog is probably aware of the LOL-fad: the addition of witty captions to photos of cats, fashion models, and so forth, which has taken the interwebs by storm.

So in a moment of inspiration, I wondered: why couldn’t we do the same for economic sociology? I mean, I know I’m not the only one who spontaneously thinks of puns that mash up pop culture with “The Great Transformation,” right? Right? [Tap, tap, tap.] Is this thing on?

If the blogosphere is good for anything, it’s for allowing microscopically small interest groups to band together and share the kind of thoughts that would be greeted with disbelief or incomprehension by others. If the Ferret Fanciers of Greater Milwaukee can do it, why can’t economic sociological punsters?

Rather than keeping those gems of humor to ourselves, let’s enjoy them together. Friends, Romans and economic sociologists, send me your LOLs!

Here’s one that came to me when I ran across this picture of the Angel of Death during the earily days of the market meltdown–I know you can do better! So send in YOUR LOLpix! Operators are standing by! 

talk-to-the-invisible-hand

“Talk to the Invisible Hand!”

UPDATE!

I knew someone was on this…ladies and gentlemen, I give you LOLFed.com, the funniest site I’ve seen in ages. Here’s today’s LOL with a snippet of the accompanying text:

sandy-weill-lol This one’s for all you crazy kids out there who said Sandy Weill’s experiment of creating a banking supermarket could never work, that its sheer size and the scale and multitude of services offered under a single roof were unsustainable, that no one management team or board of directors could possibly oversee its many arms.  You were absolutely right!

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Financial Etymology

Since today marks the end of a catastrophic calendar year in the financial markets, these snippets of etymology I ran across recently seem particularly appropriate, in a gallows-humor way.

On the origins of the term “money,” from the Latin monetas, meaning “warning:”

Here's the Federal Reserve building in Washington, DC; looks kind of like the Parthenon with a flag stuck on top where the Romans might have put a sculpture of the goddess.

Here's the Federal Reserve building in Washington, DC; looks kind of like the Parthenon with a flag stuck on top where the Romans might have placed a sculpture of the goddess.

The Romans kept their coinage in the temple of Juno on the Capitoline Hill, putting the money under the protection of the goddess. Ever wonder why so many banks look like Greco-Roman temples? That’s why. “In God(dess) We Trust!”

Before she became the guardian of the Imperial Treasury, one of her original functions was to warn the Romans of impending danger; she was known as Juno Moneta, or Juno-Who-Gives-Warning. So her role as protector of the money supply and protector of the city were conflated, leading to the modern English word “money” for all forms of currency.

On the origins of the term “securities:”

what-me-worry-715605

The Latin words se and cura combine to form this word, meaning literally, “without care.”

This conjures up MAD magazine’s Alfred E. Neuman, whose slogan seems to have been taken up by our securities regulators.

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Feral Economic Sociology Part II: Graffiti and Fiscal Policy

the-awesome-money-photo-milan-26-may-08

In my ongoing quest to document the under-examined world of populist economic sociology, I submit for your inspection this surrealist gem, snapped in Milan, 26 May 2007 on the wall of an alleyway.

I hasten to include the date because if the image were more recent, I would have taken it for a witty visual metaphor for the sub-prime mortgage crisis: the one-eyed pyramid representing the US government, via Fannie Mae and Freddie Mac, reeling in borrowers with the promise of easy money, only to “get them on the hook” for debts they couldn’t service.

Then again, that seems to be the modus operandi of the US government in relation to other countries, as well. The record of American presidents offering cash-for-compliance to foreign governments goes way back: for an account straight from the horse’s mouth, as it were, click here; for an anecdotal account of the practices (a bit thin on supporting evidence, in my view, but nonetheless an entertaining read) click here. The practice of withholding cash to punish non-compliance with the US agenda has an equally long history, Cuba being one of the most glaring examples.

So perhaps this graffito simply reflects the way US power is experienced overseas: as a kind of “fishing expedition” to see what other countries can be made to do in return for cash. It’s worth noting, however, that according to the OECD, Italy actually deploys a larger percentage of its GNI overseas than the US (source document):

foreign-aid-as-a-percentage-of-gni-among-major-countries

These data could be interpreted in a number of ways in relation to the graffito. Perhaps Italians see a significant qualitative difference in the way their country uses foreign economic aid, in contrast to the US strategy. Or maybe the sheer volume of money the US has to distribute overseas (in absolute terms, rather than as a percentage of GDP) leads to the perception that we can lure other nations as easily as a skillful fly fisherman working a stocked pond.

But then, what are we to make of the angelic wings on the one-eyed pyramid? Do they suggest benignity or ubiquity?

What do you think?

I also wonder why the best graffiti I’ve seen anywhere in the world–both in terms of aesthetic value and socio-economic commentary–come from Italy. I’ve seen graffiti everywhere in my travels around Europe, Asia and the Americas, but the Italians produce by far the most intellectually sophisticated and visually appealing images (see my “Socialist Snail” post below for another example). I wonder if it has something to do with Italy’s strong Communist Party affiliations, and the excellence that current and former Communist countries have exhibited in producing propaganda…a more formal medium than graffiti, to be sure, but one with similar persuasive objectives. I’ll try to find some photos from my personal collection of Chinese, Russian and Cuba propaganda posters to illustrate my theory…watch this space!

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Opiate of the Markets?

Did you notice that international stock markets had a little party this week, despite worsening economic news? The latest US unemployment report is shockingly bad, most of the nation’s retailers are reporting double-digit declines in sales (bad news in a country where consumer spending represents two-thirds of GDP), and American stock markets remain in the tank, with the DJIA 40% lower than this time last year. And things don’t look much better in Europe and Asia, where signs of recession are multiplying despite frantic efforts to shore up their economies with stimulus packages and interest rate cuts.

Japan's Nikkei Index

Nikkei Index

So what should we make of the chart on the right?

It shows Japan’s Nikkei Index, which–despite all the bad news, and with no end in sight–experienced a significant surge on Wednesday.

UK FTSE Index

UK FTSE Index

In fact, markets around the world did a little happy dance following the US Presidential election.



Hang Seng Index

Hang Seng Index



Did someone declare a global holiday from doom-and-gloom?



French CAC40

French CAC40

Whatever it was, the words “President-elect Obama” seemed to make financial markets temporarily giddy and blissed-out, much like spectators in Grant Park on Tuesday night.


German DAX

German DAX

Here in Germany, people are celebrating and offering congratulations to any American they meet. They were practically singing “forget your troubles, c’mon get happy”–an unexpected burst of optimism in the nation that coined the term schadenfreude .


DJIA

DJIA

But it looks like Wall Street didn’t get an invitation to the party.

While the Dow was up on election day itself, once the results were in, it went right back down.


S&P 500

S&P 500



As did the S&P 500…




NASDAQ

NASDAQ




..and the NASDAQ.



Maybe the US markets are more in touch with the grim reality of the world economic crisis. Or maybe US markets are just more sanguine than others. That interpretation might seem risible given the extreme ups and downs we’ve seen in the past month, but it’s supported by the historical evidence. Over the past 50 years, momentous events in politics have rarely made much of an impact on US stock prices. Indeed, Cutler, Poterba and Summers showed in their 1989 Journal of Portfolio Management article that even events of world-historical significance, like the JFK assassination or the Soviet invasion of Afghanistan, have barely registered on the US markets.

Which makes it all the more fascinating to see the financial exuberance (which may or may not be irrational) that greeted the news of Obama’s election overseas. Let’s see if there’s another surge on Inauguration Day. And here’s hoping that next time, the party will last a little longer and include the US markets.

David Fitzsimmons, Tucson Daily Star, 5 November 2008

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Feral Economic Sociology: The Tip Jar

Ubiquitous in American commercial establishments, this object is a monument to the social meaning of money.

This one, snapped in a coffehouse in Santa Cruz, California, is based on a premise that any label-conscious teenager could explain:

How you spend is who you are.


Postscript: Tip Jar Theft

Several years ago, I heard from a friend who managed a teahouse in Providence, Rhode Island that the store’s tip jar had been stolen right off the counter; it had been placed in the traditional “tip jar spot,” right next to the cash register, in full view of the cashier, staff and other customers. The thief apparently just grabbed the beer stein full of change and ran out the door onto the crowded college-town main street before anyone could stop him.

This prompted a cascade of reactions on my part, in roughly the following order:

  1. Shock
    Tip jars, like the “poor boxes” found in many churches, are part of the informal “gift economy” that long predates the contemporary payment economy–the one in which money is transacted as payment for goods and services. The two economic systems coexist, sometimes clashing with and sometimes reinforcing one another.

    Stealing a tip jar is a lot like stealing the “poor box” from a church–it means taking gifts intended for other people. That makes it more than a property crime: it’s also a crime against the basic law of social life–reciprocity– which has been found in every society, everywhere in the world, in any historical period for which data are available. (I’m happy to send references to those who would like to geek out on this…)So the money in that tip jar was given voluntarily, like a gift, above and beyond the formal price of the good or service purchased. Whatever the tippers’ motives–perhaps gratitude for a good tea recommendation?–their gesture enacted an age-old practice that serves in part to express goodwill and fellow-feeling within what can otherwise be sterile, impersonal transactions.

    The tip jar theft story induces the same kind of shock we experience in response to any form of desecration–thus, you don’t have to be a Buddhist to be appalled by the destruction of the Bamiyan sculptures by the Taliban. By stealing the tip jar, the thief dragged an emblem of the pre-capitalist “gift economy” (back) into the commercial matrix, desecrating a symbol of secular sanctity. The result was a kind of reverse-transubstantiation: turning gifts back into “just money,” there for the taking by anyone willing to bear the social opprobrium.

  2. Surprise
    After I got past my initial “Dang, that is cold” response to the story, I started thinking like an economic sociologist again and my reaction turned to surprise…specifically, surprise that this was the first time I’d ever heard of a theft of this kind. And, like all good cases of feral economic sociology, it caused me to consider a question that had never before crossed my mind:

    Why don’t people steal tip jars more often?

    It’s money literally sitting on the table (or counter, as the case may be), open and unsecured. You’d think this sort of thing would happen all the time, and that businesses would either stop the practice of the tip jar entirely, or take measures to protect it from theft (as my friend did in his teahouse, by chaining the new tip jar to the cash register).

    Yet the very vulnerability of the tip jar, sitting there unprotected on the counter, is a very important part of its appeal and its symbolic resonance. Perhaps that’s why the custom persists, despite problems of theft. Display of an unsecured cache of tips, easy to spot and easy to steal, represents a very positive thing for any society: impersonal trust, the ability to rely on the basic honesty and fairness of strangers. On this, the integrity and robustness of whole societies, and particularly economies, depend. The past month in the stock market is a testament to what happens when people lose that trust, in one another and in institutions (Alan Greenspan, of all people, explained the problem very well in his 1999 commencement address at Harvard).

    The “invisible hand” is the one that isn’t stealing from the tip jar. Or the “poor box.” If I had to propose a “decline of civilization index,” the frequency of such thefts–along with the destruction of other public goods and symbols of impersonal trust–would rank high on the list of index components.

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From the Economic History Files: Private Fire Brigades

I snapped this photo of plaque over the front door of a house in Seville, Spain, because it records a Hobbesian state of socio-economic affairs: a world without public goods.

Used to be that there was no such thing as a public fire department. If your house was ablaze and you wanted help, you’d better have one of these plaques over your door, or you were SOL. If you wanted a fire brigade to come to your aid in such emergencies, you had to join a kind of club with private membership fees. It worked like this: you ponied up the fees, the club gave you a plaque to put over your front door, and then if fire swept through the neighborhood, the club dispatched help, but they *only* assisted paying members. So if you didn’t have that plaque over your door, the fire rescue teams would pass you right on by. It would not be uncommon to find that your house burned down while the one next door would be saved.

Sometimes, these clubs indulged in what laissez-faire economists might call “healthy competition.” This from Wikipedia’s entry on fire stations:

In many western countries, fire brigades were originally created by insurance companies to safeguard the property of their policyholders. Those who bought policies were given a plaque that would be mounted in a prominent position on the structure to denote its protected status. These plaques can still be seen on some historic buildings, particularly in the United Kingdom. Firemen summoned to burning buildings were expected to look for these plaques before fighting the fire. If the fire was in a building covered by a rival insurer, some brigades would deliberately obstruct that company’s fire brigade in an attempt to give rise to greater property damage (and subsequent expense to the insurer).

Some would call it savage and inhumane. Since the Reagan 80s, others have called it just desserts: if you don’t have the smarts or the money to insure yourself, then you must bear the consequences of not taking “personal responsibility.” And as we all know, privatization of public services has been such a rollicking success in domains such as:

Etcetera, etcetera, ad nauseum. Actually, privatization of public goods has repeatedly resulted in economic, social and ethical disaster (example: England’s 18th century Acts of Enclosure, or the privatization of France’s war debt by John Law), so why are we still talking about this?

That was a a rhetorical question. The answer is: because privatization makes some people incredibly rich.

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