Friday, November 13, 2020

Fluctuations

The stock market is quite particular, in as much as the commodities that are bought and sold have no use value, only exchange value. They are perpetually moving from one account to another without going anywhere. This is not a closed circuit, however, as bonds and shares come on to the market or leave it on a regular basis. Just as more cash and credit can invest the market or be drawn out. These fluctuations influence prices pushing them up or down, but there is also a correlation between shares and bonds. Dividends are compared to interest rates. Dividends fluctuate as they depend on company profits and the number of shares, whereas interest is contracted and printed on the bonds when they are issued. However, this nominal rate of interest is modified when the price of bonds is above or below their face-value.

Investments on the stock market move around in search of the best return (1). This mobile demand tends to level the ratio of price to earnings. It is observable in the prices of shares and bonds that move up or down to balance the revenues they generate. If company profits increase, share prices will go up to compensate the rise, but bond prices will go down, thereby increasing interest rates to a new equilibrium. If company profits shrink, share prices will fall and bond prices will rise to reduce interest rates and attain a new average return between the two. This involves investments moving from bonds to shares or shares to bonds. In normal times, company profits determine these fluctuations, with bonds merely reacting. In abnormal times, central banks intervene on the bond market and push interest rates down to zero. And when interest is close to or below zero, an equivalent price to earnings ratio for companies pushes their share prices sky high, even on small profits and dividends. Anything is better than nothing. Central banks have turned the stock market upside-down, and share prices are stratospheric. It is difficult to see how normality can be restored.

1. A fair proportion of transactions on the stock market are just buying to sell or selling to buy, gambling on the way prices will go, up or down. But the revenue from the ownership of shares and bonds used to be substantial enough to fund pensions, insurance and lives of leisure. Those incomes have shrunk to next to nothing, so that share and bond markets are subjected to ever increasing levels of speculation, and the institutions that depended on them are in trouble.

Sunday, November 08, 2020

Origins

There was a time in prehistory when some people began cultivating plants and other began herding animals. These new forms of survival – food, clothing and shelter – were developed slowly and more or less simultaneously, and neither completely excluded the previous practice of hunting and gathering in the wild. Historic hunter-gatherer societies in Africa, the Americas, Australia, or Asia have much in common, whereas herds of livestock and agriculture are incompatible. The two forms of society had to live apart, and this separation brought profound cultural differences. While some people roamed the steppe lands leading and selecting their herds, instead of following and hunting them, others stayed in place selecting and guarding their plantations, instead of gathering them haphazardly. The Neolithic is when humanity stepped out of the environment and began to shape it. Polished stones and baked pottery are the residues of that mental transformation. The rest is conjecture.

The kept herds provided milk, which curdles into cheese or yogurt and can be dried and preserved. The herds were made up of female animals, an adult male and a small number of younger ones to insure his succession when he passed his prime. This is how wild herds function, but it was accentuated by killing new-born males for meat feasts. Humans shaped their herds, and the herds in turn influenced their human masters. Nomadic pastoral societies are polygamous and patriarchal. And culling new-born (firstborn?) boys may not have been uncommon.

The tilled fields provided cereals and legumes, which can be dried and stored. Plants have flowers, and flowers have one pistil that bears the fruit and many stamens. They are polyandrous. Polyandry in human societies has been recorded, but a more general practice seems to have been the matrilineal transmission of property and titles. It is suggested in ancient records and legends. Why was Helen so important that her elopement forced the Achaeans into a long and costly war? Why did Egyptian monarchs wed their sisters? Why does Oedipus have to marry the queen, his mother, to become king? And then there is Malinowski’s careful description of property rights in the Trobriand Islands a century ago. And Jewishness is said to pass on by the female lineage (1).

Herdsmen followed the migratory habits of their flocks, and planters settled the flood plains of great rivers. And these very different cultures came into contact. It may have started by the exchange of goods, cheese for wheat, hides for pots, wool for flax. But, as would often happen in later ages, the trading turned to raiding. And the raids ended in conquest. Herdsmen can attack and retreat. Planters can only defend (2). The fertile valley of Mesopotamia and its cities were periodically overrun by people coming from the eastern mountains or the western deserts. And the Nile valley had to contend with incursions from east, west and south. This meant that the herdsmen’s culture prevailed and the planter’s world was destroyed, leaving just threads in mythology.

It is probable that women started planting crops. They had been doing most of the gathering, while men did most of the hunting, and they would have accumulated and transmitted their knowledge of plants. And women may have stayed to tend the gardens, when men went off on hunting parties (3). Then the meat from the wild was progressively replaced by that of domesticated animals, birds, pigs and pond fish. So men would have learned to participate in the planting. And there would have been the need for protection from incursions by herdsmen. Apart from being mobile the herdsmen may have had a technological advantage. Their peregrinations would have put them in contact with natural elements that were absent in the flood plains, hard stones that could be shaped and polished, and later various metals.

The primeval agricultural societies have not left many archaeological traces. Some early Sumerian figurines represent hairless men dressed in long skirts who seem quite benevolent, but they were not the original inhabitants. The warrior kings came later with the Accadians, Goutians, Amorites, etc. The herdsmen’s patriarchal and warlike culture forced itself on the world and has maintained its rule just about everywhere to the present day. And even women in power have not yet managed to change anything fundamental. Force is the only rule to take and keep power and wealth. And the patriarchal principle moulded all of society. The relationships between fathers and sons, and between men and women, had to be oppressive and totalitarian. The oldest son would inherit and prolong the lineage. For this to happen, he would have to conform to his father’s image in all aspects, and reproduce them for the following generation. Fathers were all powerful, and often had the right of life or death over their children, as in ancient Rome. When all power and most wealth are transmitted from father to eldest son, younger brothers have to fend for themselves, and women are reduced to appendages. They are daughters, sisters, wives and mothers under the dominion of fathers, brothers, husbands and sons. All this existed to insure the certainty of a child’s progenitor.

The herd culture is oppression by force. Might is right. But herds in the wild only have violent and sometimes deadly confrontations during the mating season. The rest of the year they live and let live. Humans do not have that yearly cycle as women are fertile on a monthly basis, hence their long association with the moon. Men had to exert their domination all year round. Herdsmen societies kept a constant high level of violence and lived in fairly isolated units of master, women and servants (4). Planter societies lived together in villages. This close proximity meant reducing violence as much as possible to promote cohabitation. But it made them less able to repulse the attacks by herdsmen (5).

Violent force has determined human relationships for millennia, ever since hierarchical herdsmen imposed their rule on communal planters. This situation is so ancient that it seems natural and unavoidable. However, the primordial opposition is being revived between meat eaters and vegetarians. And raising cattle is such a vast polluting industry that it is a major contributor to climate disruption and environmental destruction. And women are claiming and gaining a more equal role in decision making for all activities. And the hierarchy of power is increasingly perceived as inappropriate for a common shared planet. The habit of obedience and voluntary servitude is deep rooted, and so is government by armed force. But both seem more and more futile in a world ravaged by meteorological disasters, on the cliff-edge of financial breakup and locked down by a pandemic. If humanity is to survive, it will have to invent something different. Humans will have to change their relationships with one another, with other living beings and with the natural elements. Time is running out and the Juggernaut of wealth and power seems as unassailable as ever. Albeit, there are visible cracks in its financial armour, and its collapse from overweight seems more likely than a gradual slimming down to sustainable dimensions. As ever, the future is shrouded in mystery.

1. In Genesis XXIV, Abraham sends a servant back to Mesopotamia to fetch his grand-niece as a wife for his son Isaac. And Jacob goes back to wed a cousin and ends up with two.

2. Julius Caesar conquered Gaulle by campaigning in summer, chasing off village inhabitants and harvesting their crops, leaving them to starve or surrender. This could not work in Germany as people would hide in the forests with their cattle and wait things out.

3. George Catlin described this sort of society during his journey down the Mississippi in 1832.

4. The biblical Abraham is surrounded by family members and anonymous servants, and the pre-biblical Hammurabi “code” found on a stele divides society into freemen, servants and slaves.

5. See the Arab historian Ibn Khaldun.

https://en.wikipedia.org/wiki/Ibn_Khaldun

Perhaps the most frequently cited observation drawn from Ibn Khaldun's work is the notion that when a society becomes a great civilization, its high point is followed by a period of decay. This means that the next cohesive group that conquers the diminished civilization is, by comparison, a group of barbarians. Once the barbarians solidify their control over the conquered society, however, they become attracted to its more refined aspects, such as literacy and arts, and either assimilate into or appropriate such cultural practices. Then, eventually, the former barbarians will be conquered by a new set of barbarians, who will repeat the process.”