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Even Karl Marx, who saw Capitalism as a production system governed essentially by inescapable laws, acknowledged the key role of special actors who made it their job to advertise the benefits of the market. The market, a political project, needs these people to create the “right” environment. Marx often called them “sycophants”, an ancient Greek word denoting servile persons who would flatter potentates, and even denounce their own peers, in order to garner favour.

Christoph Deutschmann’s fascinating new book, which analyses Capitalism as equivalent to a modern secular religion, also sees these actors performing an important function. He views many economists and business “experts” as performing for the market a role equivalent to that of priests in the Christian church – to interpret the signs given by the deity and to make predictions based on them.

Be they high priests or sycophants, the PR workers of global Capitalism (those who haven’t, at least temporarily, defected to the pro-government side, so long as it subsidises business) are getting in gear again – they literally have a world to lose. However, in this present crisis, neither the numbers, nor the facts, nor people’s everyday experience, really speak strongly for the priests’ side. So some turn to a rather “liberal” treatment of the facts.

Take for instance the statement that luxury goods are cheaper than ever thanks to mass-production. True. But most people in the world haven’t had much from this, while they are getting a taste of the flipside; the massive rise in grain prices over the past years is literally causing riots and civil wars in the South (Haiti, Sudan, Congo…).

Grain Prices

Yesterday’s special business section in the German broadsheet “Frankfurter Allgemeine Zeitung” (FAZ) opened with a bleeding-heart appeal for more faith in the market, based on the view that everything isn’t so bad after all. If Capitalism has served us so well for so long, why rebuke it just because of this crisis? Maybe we can bring out the sun simply by wearing sunglasses? Read the rest of this entry »

The financial crisis is turning many things upside down. Nevertheless, it is amazing to see how the positions of key market actors on financial reporting standards have changed since the crisis started. While investment banks, accounting firms, regulators and governments in the heyday of financial market capitalism stood firmly together in unanimous and unfettered support of fair value accounting, this front has been collapsing.

In April 2008, Neue Züricher Zeitung reported Claude Bébéar, president of the French Insurance Group Axa, as saying that mark-to-market rules which require firms to value assets according to (hypothetical) market prices had contributed to the financial crisis. Henri de Castries, CEO of the same group, was quoted as referring to a “conceptual mistake” which had forced companies and banks to write down billions of assets. In September 2008, Newt Gingrich commented on Forbes.com “Suspend Mark-to-Market Now!”, quoting Brian S. Webury, chief economist at First Trust Portfolios of Chicago:

“It is true that the root of this crisis is bad mortgage loan, but probably 70% of the real crisis that we face today is caused by mark-to-market accounting in an illiquid market.”

With the financial crisis lingering on and politicians, regulators and banks still searching for solutions, debates on the pros and cons of mark-to-market accounting have perked up again during the last weeks.

On March 11, 2009, investor Warren Buffet admitted in an CBNC interview that mark-to-market had been “gasoline on the fire” while remarkably equivocally maintaining that Read the rest of this entry »

The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
September 2021
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