Destroying Cultural Capital
Destroying Cultural Capital

It is always flattering when a “noble prize” winning economist agrees with you. Stiglitz has noticed the implications of the foreclosure crisis for the rule of law and property rights:

“The mortgage debacle in the United States has raised deep questions about “the rule of law,” the universally accepted hallmark of an advanced, civilized society. The rule of law is supposed to protect the weak against the strong, and ensure that everyone is treated fairly. In America in the wake of the sub-prime mortgage crisis, it has done neither.

Part of the rule of law is security of property rights” (Stiglitz, November 2010)

Once Stiglitz pursues this line of enquiry further he will be in agreement with USA destroying cultural intangibles:

“The fault at the heart of the MBS security market is further evidence that the US is in the process of destroying the cultural intangible capital that enabled them to grow wealthy. Gone are accounting standards, the rule of law and the certainty of property title. What next?” (Rob, October 2010)

He may then come to agree with Stock markets, they win we lose :

“Let’s add the stock market to the list of cultural intangibles being undermined – accounting standards, the rule of law, property. Talk about wrecking your cultural inheritance. Like the justice system, free market exchange does not just have to be fair. It has to be seen to be fair. With bailouts followed by bonuses and government endorsing or actively participating in the rigging of markets there will be a crisis of legitimacy.” (Rob, October 2010)

Trust is also a cultural intangible that enabled the West to become wealthy. Even if you don’t agree with much of Francis Fukiyama’s Trust, it contains an element of truth. Like many he takes a good idea and pushes it too far. But trust is central. Hence the problem highlighted in TARP damaging trust:

“When Treasury refuses for more than a year to require TARP recipients to account for the use of TARP funds, or claims that Capital Purchase Program participants were “healthy, viable” institutions knowing full well that some are not, or when it provides hundreds of billions of dollars in TARP assistance to institutions, and then relies on those same institutions to self-report any violations of their obligations to TARP, it damages the public’s trust to a degree that is difficult to repair.” (Neil Barofsky).

If you have any doubts at all about the seriousness of what is happening in America then read Hernando De Soto’s The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else:

In the West, standardized laws allow us to mortgage a house to raise money for a new venture, permit the worth of a company to be broken up into so many publicly tradable stocks, and make it possible to govern and appraise property with agreed-upon rules that hold across neighborhoods, towns, or regions. This invisible infrastructure of “asset management”–so taken for granted in the West, even though it has only fully existed in the United States for the past 100 years–is the missing ingredient to success with capitalism, insists de Soto. But even though that link is primarily a legal one, he argues that the process of making it a normalized component of a society is more a political–or attitude-changing–challenge than anything else.

With a fleet of researchers, de Soto has sought out detailed evidence from struggling economies around the world to back up his claims. The result is a fascinating and solidly supported look at the one component that’s holding much of the world back from developing healthy free markets (Timothy Murphy).

Like Fukiyama I suspect De Soto has focused on only one of the reasons for Western growth. There can be multiple supporting factors behind the success of a society or civilization. It does not have to be an either or situation.

But what is quite clear is that as a society the US is eating its cultural seed corn. If the requirements for economic success are removed there will be no economic success. The US is at the risk of validating John Sinclair (1754-1835):

If we go on at this rate, the nation must be ruined. Smith replied: “Be assured, my young friend, that there is a great deal of ruin in a nation” (Adam Smith, Correspondence of Adam Smith, 1977): p 262, note 3, from Sinclair, Corr., i. 390-1).

Residents of Western Civilization must be thankful that Adam Smith was right in this as well as much else. But while there may be a great deal of ruin in a nation, there is a great deal of debt in the US and other developed countries. Everything has its limits.



35 Comments
  1. 893468 514921Hello there, just became alert to your weblog by means of Google, and located that it is truly informative. Im gonna watch out for brussels. I will appreciate should you continue this in future. Plenty of folks will likely be benefited from your writing. Cheers! xrumer 280135

  2. 747953 684967You made some decent points there. I looked online for that problem and found most people goes coupled with with all your website. 370110

  3. 867812 398967I believe other site owners need to take this site as an model, really clean and excellent user pleasant pattern . 186754

  4. 125640 982264I like this blog so much, saved to bookmarks . 662100

  5. 473360 108571Exploring in Yahoo I at last stumbled upon this site.Reading this info. 280161

  6. 427618 454302Hey there! Someone in my Myspace group shared this website with us so I came to take a look. Im definitely enjoying the information. Im bookmarking and will be tweeting this to my followers! Excellent blog and outstanding style and design. 373022

  7. Unlike a medical home, Brookdale Oceanside is an area of condo residences where they are able to have both — plus whatever sort of encouraging aid they need to conduct daily
    responsibilities and sustain, the liberty of a personal home wellness.

    Also visit my blog post … killer pizza from mars

  8. 197598 853034Top rated lad speeches and toasts, as properly toasts. may possibly really properly be supplied taken into consideration creating at the party consequently required to be a bit a lot more cheeky, humorous with instructive on top of this. finest man speeches funny 98085

  9. 641911 716409wohh precisely what I was searching for, thankyou for putting up. 186103

  10. 369156 142613I was looking for this. Really refreshing take on the information. Thanks a lot. 142161

  11. 528976 96870Im impressed, I ought to say. Genuinely rarely do you encounter a weblog thats both educative and entertaining, and let me let you know, you could have hit the nail about the head. Your concept is outstanding; ab muscles something that too couple of men and women are speaking intelligently about. Im delighted i identified this in my hunt for something about it. 606138

  12. Honestly the fashionest and most great lace frontal https://www.youtube.com/watch?v=ny8rUpI_98I I have ever before put on. I love them! Love!

  13. CONS: Florida is not liberal but raving liberal in case you are not liberal.

    Here is my website :: oceanside ca hotels near amtrak

  14. 45708 641603hey there i stumbled upon your site searching around the web. I wanted to tell you I enjoy the look of things around here. Keep it up will bookmark for sure. 96154

  15. 431515 931856As I website owner I think the articles here is rattling superb , thanks for your efforts. 31064

  16. 246915 87927Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point. You obviously know what youre talking about, why throw away your intelligence on just posting videos to your weblog when you could be giving us something informative to read? 207243

  17. It’s perfect time to make a few plans for the longer term and it is time to be happy. I’ve learn this publish and if I may just I desire to suggest you few interesting things or tips. Maybe you could write subsequent articles regarding this article. I wish to read more issues about it!

  18. Aw, this was a very nice post. In thought I would like to put in writing like this moreover – taking time and actual effort to make an excellent article… however what can I say… I procrastinate alot and under no circumstances seem to get something done.

  19. 340813 268437This really is a good weblog i ought to say, normally i don????t post comments on other people???? blogs but would like to say that this post genuinely forced me to do so! 739252

  20. 23729 468446I really like your writing style, good info , thankyou for putting up : D. 195217

  21. 533303 613960This is one very interesting post. I like the way you write and I will bookmark your blog to my favorites. 22982

  22. 820594 440636You completed certain good points there. I did searching on the subject matter and found most persons will go together with your blog 851681

  23. 499777 764055Most beneficial gentleman speeches and toasts are made to enliven supply accolade up to the wedding couple. Newbie audio system the attention of loud crowds ought to always think about typically the fantastic norm off presentation, which is their private. greatest man speaches 192535

  24. 363246 186936This internet site is often a walk-through rather than the details you wanted about it and didnt know who ought to. Glimpse here, and youll certainly discover it. 4708

  25. 385912 920293Really properly written story. It will likely be valuable to anyone who usess it, including yours truly . Maintain up the excellent function – canr wait to read a lot more posts. 655787

  26. Hello! I’ve been following your site for some time now and finally got the courage to go ahead and give you a shout out from New Caney Tx! Just wanted to say keep up the good work!

  27. If you are going for most excellent contents like myself, only pay a visit this site all the
    time for the reason that it presents feature contents, thanks

    Here is my blog :: garcinia cambogia lean body – Ashley

  28. Wow, this artficle iis pleasant, my sidter iis analyzing tthese things, soo I amm
    goinng tto leet knbow her. It’s perfecht tim tto male a ffew plqns for tthe log
    run and it’s ttime to bbe happy. I’ve reqd this pozt
    and iif I maay jhst I wwant to coujnsel you some attention-grabbing
    things or advice. Peryaps youu coulkd write subvsequent articles regarding
    this article. I wish too leaqrn eveen mmore things alproximately it!

    Woah! I’m really enjoying the template/theme off tyis site.

    It’s simple, yyet effective. A lot oof times
    it’s ough tto get that “perfect balance” between sability and visal appeal.
    I muust say that you’ve doe a very good jobb witrh this.
    Additionally, the blig loaes vvery quick forr mme onn Firefox.
    Superb Blog! http://www.cspan.net

  29. Wow, this piece of writing is fastidious, my sister is analyzing such things, therefore I am going to convey her.

    Look at my website garcinia cambogia qatar, Susanne,

  30. 107428 984737But a smiling visitor here to share the enjoy (:, btw excellent pattern . 780194

  31. 287622 403339Right after study several with the content material inside your web site now, we genuinely such as your technique of blogging. I bookmarked it to my bookmark internet web site list and will also be checking back soon. Pls have a look at my web-site likewise and make me aware what you believe. 864115

  32. Do you have a spam problem on this site; I also am a blogger, and I was curious about
    your situation; many of us have developed some nice methods and we are
    looking to swap methods with others, please shoot me an email if
    interested.

    my web site … garcinia cambogia oprah, Christie,

  33. Why viewers still make use of to read news papers when in this technological world all is
    available on net?

    my website – garcinia cambogia at gnc, Delores,

  34. Always a massive fan of linking to bloggers that I really like but dont get lots of link appreciate from.

  35. Here is a superb Blog You might Discover Intriguing that we encourage you to visit.