Which century is Richard Seymour living in?

I\’m not entirely convinced that it\’s this one.

But what does the banking system do that we actually need? In the present system, banks perform a number of functional requirements. Commercial banks operate as a clearing house for bills of exchange, thus reducing the costs of circulation and ensuring the quality of those bills as a measure of value.

Banks can do that, certainly. It\’s even possible that some of them do, occasionally, deal with bills of exchange (although that particular function is more likely to be found in an invoice factoring company these days). But to describe it as a core function or competence of 21 st century banking would be more than a little odd.

It would be as if the writer\’s knowledge of how banking works were cribbed from some 19th century explanatory or polemical tome….oh, wait, yes, I do see the problem.

It would require taking as much of the economy out of the market as possible and placing it under direct popular control. It would require, in short, a sustained popular challenge to capitalist power,

It just never ceases to amaze me how people continue to get this wrong. Capital, capitalism, and markets are simply entirely different things. Different axes. One can have a non-capitalist system which contains markets just as one can have a capitalist system without them. And of the two it is vastly more important that we continue to have markets than that any form of capitalism survives.

I really just don\’t get why people continually confuse the two.

19 thoughts on “Which century is Richard Seymour living in?”

  1. Surreptitious Evil

    I don’t think they do actually confuse them – they merely conflate them. Because they’re lazy and that error means that they can fish in their outdated propaganda tracts for ‘easy answers’.

    But what does the banking system do that we actually need?

    Borrow short and lend long? But then in the Socialist Utopia of Seymourland, all your needs (including the occasional rape and, yes, I know he is on the anti faction but not all of his fellow travellers are) will be provided by the state. So you won’t need money. You simply stand for days in the queue to receive the small percentage of your official ration that is all that can be managed because:

    1. Most people are spending the time they should be producing stuff standing in queues.

    2. Most of what is produced gets creamed off by the workers because they can’t get anything any other way because they don’t have time to stand in queues.

    3. What does get to the central distribution depot is mostly reserved for the nomenklatura. Because they work so hard on the people’s behalf, they can’t spend time standing in the queues.

    So, actually, everything shifts to the black market.

    Didn’t we do this experiment? 1917 to 1990ish?

  2. My own feeling is that the closer to the retail customer it gets, the more ninteenth century banking gets. Goldman Sachs et al shift quadrillions of dollarpounds across world in the b.link of an eye, but if you want to get five hundred bucks from an American bank to a British one, it’s seat of the pants stuff apparently characterised by old men in bowler hats wandering slowly from desk to desk putting chits on spikes.

  3. It’s pretty simple. Socialism, for instance, is a quasi-religious political doctrine; lefties find it convenient to imply that anything else that glories in the “ism” suffix is also a quasi-religious political doctrine. Since one can stick “ism” on the end of any word one chooses, this gives them a versatile propaganda tool. Tools for Tools, eh?

  4. IanB, while I don’t wholly disagree with you, you must see why it is in some sense easier and quicker to send one payment of 200 million GBP than 200 million payments of 1 GBP.

  5. his subtitle is..

    …..The eurozone will do all it can to protect the financial system, at the cost of tremendous social misery…..

    Yet none of this is to protect the financial system, it is to protect the Euro, and yes there is a better way.

  6. Surreptitious Evil (#1)

    As usual – superb and summing it up brilliantly – it’s as thought these people are wholly ignorant of anything pertaining to the Old Warsaw Pact and the USSR in general – the hilarious belief ‘it’ll all be different this time round’ suggests an almost Primary school level of naivete and zero experience of the real world, which based on the few Guardian columnists I have encountered is a fair summation of how to get on the paper’s payroll.

  7. Surreptitious Evil

    Thanks for the compliment 🙂

    the hilarious belief -it-ll all be different this time round- suggests an almost Primary school level of naivete and zero experience of the real world

    Ah, yes – but this is the real point behind Seymour-et-al’s thinking. Last time, the true spirit of the Marxist revolution was hijacked by Leninist thugs and the pure-spirits of the Trotskyite democratic centralism were exiled and murdered. Whereas, if St Leon hadn’t been marginalized, then a purer, nicer, Politburo would have been formed, for the caring management and enrichment (not in financial terms, of course) of the lives of the glorious workers.

    Which Politburo, as the SWPer collapse has shown, is just as vulnerable to seizure by a dictator and his cronies and as any of the other marginally different flavours of post-Marxist interpretation.

    So all we need to do is find some poor (certainly about to be) state and let them subject it to 70-odd years of trotskyism. So that they can be proven horridly wrong. Again.

    Seriously – Russia, China, Cambodia, East Germany, Vietnam, North Korea etc, etc – how many effing attempts do they think they deserve? Yes, I know, keep letting them try until they finally get it right …

  8. Interested-

    I do accept that. What intrigues me though is that the US system seems considerably flakier than similar processes in Europe. The whole wire transfer thing seems to be virtually a wing and a prayer.

    Tim adds: The internal to America system is actually pretty good. Cheap and efficient. The international system (SWIFT) is also pretty good. However, America has lots of small banks which aren’t actually on SWIFT. So payments to and from these small banks go to or from them via big money centre banks. And they just like sitting on the money for a few days to make a bit of interest (the cumulative numbers are vast, which is what makes the interest interesting).

    A transfer from a US money centre bank (say, Bank of New York) works just fine. But First Savings and Loan of Bumfuckville AL gets screwed by said money centre bank…..or rather, the customers do.

  9. “It just never ceases to amaze me how people continue to get this wrong. Capital, capitalism, and markets are simply entirely different things. ”

    Because almost no-one is educated, to any level about economics and finance. I’m not even talking about Keynes vs Friedman, but even the terminology of economics. And almost no journalist seeks to enlighten their audience, instead stoking the narrative of it all being some crazy, alien world.

  10. Tim W-

    Thanks. Yes, that fits with my experience. It’s not so much the delays, it’s what happens when payments go missing, or customers’ cards are suddenly being refused for no reason (which also seem to be handled by intermediary banks…)

    Tim A-

    A big part of the problem is that we have no agreed definitions of what words like “capitalism” mean. I prefer to use it as a synonym for free markets, but many other people for instance think it means a mixed economy, or use it as a perjorative for statist markets, and so on.

  11. I’m not so sure he’s got his idea of banking from a 19th century economic tome. I reckon it was Dickens or Trollope. Dastardly villains are always turning up to bankrupt people, brandishing bills of exchange (well, that’s my recollection anyway.)

  12. “One can have a non-capitalist system which contains markets just as one can have a capitalist system without them. And of the two it is vastly more important that we continue to have markets than that any form of capitalism survives.

    “I really just don

  13. Ian B has said something similar to what got cut out of my post @ 11, so I won’t bother re-creating, save to quote Wikipedia, which says:

    “Capitalism is an economic system… Elements central to capitalism include… competitive markets, and a price system.”

    Out of interest, leaving out pre-industrial societies, which countries/economies, past or present, would be properly described as free market, but *not* capitalist?

    Tim adds: Tito’s Yugoslavia was the largest attempt to create a non-capialist but market economy. Certainly performed very much better than the non-market socialist economies.

    And of course there are many non-capitalist parts of our own economy: John Lewis and the Co Op for example. Just as there are non-market parts like the NHS…..

  14. Tim W-

    I don’t quite understand how you’re defining “capitalist”. John Lewis and the Co-Op are free market businesses that are cooperatively owned. Are you defining it by the model of business ownership?

    Tim adds: Yes, of course. That’s what it means. Capitalism means that the productive assets are owned by capitalists. Socialism that they are owned socially. Markets and non-markets are describing how exchange happens, not who owns what.

  15. Tim, thank you. I had not considered Yugoslavia at all. John Lewis, Coopp, yes, but pretty small compared with Tesco, Aldi, sainsbury, M&S, Morrison, asda, greggs and every owner run corner shop, which I at least would count as capitalist.

    NHS is the big one, but they are supplied (inter alia) by Glaxo, Astra Zeneca, Pfizer etc (and plenty of small companies supplying everything from nappies to bedding).

    I think my point was that in a free market you seem to end up with lots of capitalists. I don’t have a problem with that.

  16. Er, isn’t capital just accumulated wealth?
    So capitalism is just the distribution of the wealth, regardless of whether it’s investment, going to the pub, setting off fireworks, manning the A&E or hiring a one legged arse kicking diversity advisor.

    I sometimes have to send small sums around and my experience of the most tiresome banks is:
    Russia
    Spain
    New Zealand
    Austria
    South Africa
    SWIFT systems are usually OK (except Spain) but routing codes seem to change weekly.

  17. Ensuring the quality of bills of exchange is what the banking system in this century does. Nowadays they are called cooperate bonds, mortgages, personal loans and credit cards.

  18. >Tim Almond

    I agree however capitalism is defined we are said to live in a capitalist country but it is remarkable that nothing about it is taught a school.

  19. Ian B,

    “I prefer to use it as a synonym for free markets”

    But, the economic system of Nazi Germany was non-free market capitalism. You had companies, with owners, but the state heavily directed the economy. I’d probably say that the train operators part of the rail system in the UK is non-free market capitalism.

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