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Surprise Discovery - Crony Democracy Has No Rules

Politics / GeoPolitics Aug 07, 2014 - 12:34 PM GMT

By: Andrew_McKillop


You Are A Liar
When somebody said to Socrates “I know that I know nothing at all” Socrates simply told him he was lying, because he did know something! Know nothing democracy, fausse democratie, crony parties and crony government are all lies. Like the crony economy where “imperfect knowledge” creates false value, that doesn't exist. Alternately of course, the markets are imperfect, but we're working on it.

The Oxford English dictionary, cited by Wikipedia says the word “crony” first appeared in 18th century London financial players' talk and meant “long-term” from the Greek word chronios, but it doesn't explain why. Wikipedia then pretends it was an underworld slang word on the basis of one citation in one 1811 English dictionary. Other sources tell us the word already had a double meaning in the late 1700s coffee shops of London that served as betting shops for upmarket financial players.

They bet on which noble or royal hanger-on would die and not pay them back what they lent him or her. They bet on when they'd die and how much of the loan would never be repaid. You can call this the life insurance industry if you want. You can also call it crony finance because the fixers shared their information on the state of health and daily excesses of their debtors and tailored their loan books with special offers to their spend-spend-spend debtors. If they wanted a cheaper loan they could take a paid bet on ship cargoes for example, but maybe the ship had already sunk? They could get a cheaper loan if they put the squeeze on fellow high-rolling debtors, for the loan sharks drinking coffee.

It was crony and it was organized but it was a game and everybody had to lose, in the end, like any game called “of pure or adulterated chance”. Plenty of the loan sharks, for example, died or got killed. Some of the high rollers if not many of them, stayed alive and paid off their loans. Some the ship cargoes they bet on actually existed and arrived in port. But not too many. That's how it was.

Game Theory and Crony Practice
Late 1700s government or what passed as government in England at that time was very crony, but it bears no comparison to what we call crony government today. We don't mean “the stakes are bigger” but we do mean the lack of organization. The coffee shop loan sharks, in their own way, were organized and you could say they had a game plan, even if it didn't work. But today's crony government plays a game where it makes up strange rules all the time, and forgets them all the time.

If its Tuesday, markets have to be up – but we don't know why. So we can forget that on any Tuesday we want. Debt used to be a game that had sort-of rules, but not any more, for example we have to pay ourselves back with money that doesn't exist, which is difficult.When we ran out of royals to lend money they didn't pay back we moved up to Great Corporations, but that wasn't enough. So we moved on to Sovereign Loans to countries that are falling apart. We called it “appetite for risk” but that wouldn't even fool a 1700's coffee shop gambler!

Games need some kind of organization. I could try to play chess with tiddlywinks counters, I suppose, but what are those strange pieces the other guy is using? Some people I know say they always fill out their lottery tickets with the winning combination – from yesterday's draw. They invented a rule which says that some day, there will be two identical six-number combinations in a row, but they don't seem to be very happy with that rule. And they get poorer with the money they waste.

The only way out is to fix the game. There are new rules and they are our rules. So we have to cook up the membership list of “our authorized players”, just like those late 1700s London coffee shop gamblers. Even then however, it caused friction, even duels and fist fights. Poisoned coffee too. And when a loan shark died or disappeared, the royal had gotten a free loan they could re-lend to surviving players in the coffee shop. This all got very complicated, quite fast.

Imagine how it is today!

Chaos Theory and Practice
You can ask John Kerry or his lookalikes why they can't do anything and he will chirrup you a two-word answer “multipolar world”. That sounds so scientific only the churlish would ask for any other explanation. It doesn't only mean he can't do anything, but also means we don't know why. Period. There was a game – call it geopolitics if you like – a long time ago but all the rules got changed.

Gosh oh golly are we going to go on playing! But we don't know the rules. And you call that crony government? The rule book, like the loan book, dissolved at a rapid rate leaving almost nobody in the coffee shop. One useful modern trick is to computerize it all. With spy satellites we can almost see what type of burgers they are eating on the front line in eastern Ukraine, you know. But we had to fake up the missile firing “proof” for MH17. It stands to reason. Same thing for MH370, the computer stuff told us the plane went down somewhere between Vietnam, India and Antarctica. Very instructive!

We urgently need to know when the first 175 000-ton container ship or oil tanker is going to disappear the same way. Those computer-generated images are going to be so wonderful because we can plan the search and salvage operation with them. Can't we?

All we need to know about chaos theory is that it concerns “dynamical systems which are highly sensitive to initial conditions”.Start off with chaos if you like, but don't expect it to all come right in the washing machine on its spin cycle. To be sure we know that a butterfly falling off a branch in Amazonia could cause war in eastern Ukraine – or make your lottery combination the winner – but don't count on it. Try a little organization, please.

For crony government that's like swimming upstream in a raging torrent, downstream. Why try it? Much easier to forget the rules which don't exist anymore.

And pray.

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2014 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

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