It was going to happen anyway, so there's nothing wrong with benefiting from it, yes?
If a man with diamond cufflinks and a fat wallet is passed-out drunk on the sidewalk at midnight in a bad neighborhood, he is definitely going to get robbed. Does that mean I should go ahead and rob him myself with a clear conscience?
I guess, according to you and Rhett Butler, I'm just jealous because I didn't pickpocket the last drunk I met.
He was attacking your statement: "Someone was going to a lot of make money when the British government's scheme unraveled."
I think the point is clear, morality has nothing to do with whether something is definitely going to happen or not. If you're taking advantage of a situation and you deem it immoral, whether the end result would have been the same even if you hadn't participated is irrelevant, it's still an immoral action.
Whether robbery and speculation are equivalent is a different point from the one being made. Obviously analogies aren't perfect, I think most people here realize that from the very definition that analogous situations aren't the same. But it's still a useful tool to make an argument with.
To introduce another bad analogy in to the conversation, eating cheese is not immoral but forcing a 10kg block of cheddar into somebody's mouth is.
Black Wednesday still has political and economic consequences more than 20 years later - the UK is not a member of the Euro and the Right may potentially pull us out of the EU altogether. The (de)merits of both positions notwithstanding, Black Wednesday certainly still has a huge psychological effect on our relationship with the rest of Europe.
Another way of looking at it is this: had the pound remained on the ERM, Britain would have remained on-track to join the Euro. Assuming no devaluation of the pound (the incident that caused Britain to leave the ERM), the pound would have become part of the Euro at a ruinously high exchange rate relative to the Deutschmark. In the financial collapse of 2008, Britain would not have been able to lower interest rates or run quantitative easing. This is basically the predicament that Spain, Italy and Greece are in (though Greece has other problems). They have been forced to carry out "internal devaluation" by cutting spending and wages, and due to the sticky prices effect this basically means making very large numbers of people unemployed.
Of course, you could argue another counter-factual, that Britain within the Euro would have tipped the balance of power in the ECB in favour of a much more doveish monetary policy from 2008, and thus saved Europe from calamity. It's really hard to speculate about these kinds of reflexive dynamics.
Except Great Britain is the sole maker of cheese, and forces under threat of violence the citizens of the UK to pay their taxes and other debts in cheese, and it costs Britain nothing to make cheese.
They didn't force a 10 kg block down any ones throat, they choose of their own volition to buy 10 kg of cheese at price they knew to be outrageous, to maintain their manipulated price of cheese because they are the sole maker of cheese.
So as the sole supplier of cheese they fucked up the market by flooding it with cheese, then realizing what they had done bought fuck loads of cheese that costs nothing to produce to maintain their inflated price of cheese. Fuck them.
His premise is something similar to what I was going to write and then didn't for brevity - the general justification touted for Soros doing what he did is that the British government were incompetent and deserved what they got - it's equivalent to saying the drunk deserves everything he gets because he should have known better. A third party's incompetence isn't a moral justification for your proactive exploration of their incompetence.
So in your mind, there's no difference between engaging in a transaction that both parties enter into willingly, fully in control of their faculties, and robbing a drunken, passed out individual? Because that analogy holds those two things to be equal.
When we abstract away the situation, then it all seems simple - we assume both parties (the BoE and Soros) are willing, aware and self-motivated actors in control of themselves.
However, there WERE other parameters. George Soros clearly believed the government to be incompetent/incapacitated (up against a wall), and took full advantage. It's also a zero-sum game where the loser isn't a single, self-motivated individual - it's a body of taxpayers who aren't explicitly consulted or perhaps even aware of the transaction, which calls into question the "willing, self-aware" parameter. Idealised financial transactions end with "win/lose", whereas ruining a whole economy like that results in years of decreased quality of life for other individuals, which has a moral implication. Soros was undoubtedly aware that his transaction would disadvantage a huge number of people, but did it anyway. He could have acted in such a way that netted him lots of money (a million, 10 million, 100 million) whilst still minimising taxpayer losses, but he didn't at all.
So in pure, simplified transactional terms, yeah fair game. In "big picture" we-are-all-human-beings terms, there's a huge moral hole here.
Sure; I won't argue that it was a jerky thing to do. However, being jerky doesn't make it criminal, and when you say "this is analogous to mugging a passed out rich man in the gutter", you are saying that it's criminal.
Was the British government up against a wall? Yes, but only because they put themselves there. They said "We will buy British Pounds, all you want to sell to us". George Soros said "Well, damn; I bet I can get a lot of pounds. Let's do this." and it turned out that George Soros's ability to borrow pounds was greater than the government's ability to buy them. How is an entity, full of ostensibly smart people, who continually say "Bring it on, I'm not done yet" the same or even similar to a drunken, passed out man? How is somebody who says "You will buy British Pounds? I have some pounds right here; would you like to buy them? Oh, you would? Well hold on, I'll be right back; I bet I can get some more!" the same or similar to somebody who sees a passed out man and slips off the dude's watch?
If a car dealer knowingly sells you a lemon, is it a consensual exchange? I don't think was Soros did was absolutely unethical, but its ridiculous to pretend that it was squeaky clean. One party thought this to be an ordinary transaction; the other party knew it would debase the currency.
Two parties took a bet, as in a poker game. They each though they were doing the right thing. Turns out, one of them had a winning hand and one of them didn't.
But since everyone knew the nature of the game, and everyone knew they were making bets, why is it unethical?
Really, I would think more anger should be placed on the politicians who got monetary policy so drastically wrong. Or maybe anger is wrong - maybe I should say "learn from this". Because heaping anger on someone who outplayed you is a great way to mask the fact that you need to learn.
Its not that I think Soros should be "blamed" per say, it just doesn't speak highly of his character. He put profits before the wellbeing of the British people. Clearly he doesn't feel an ethical obligation to them. I would have.
But you're right. Judging Soros gets us nowhere, drawing lessons from this does.
Keep in mind that the dealer was making the offer to sell, so it's like a push pull or drag sale.
So dealer makes an offer saying "We will give you $10,000 for any clunker, no quantity restrictions, if it has wheels and starts we'll give you $10,000" so Mr. Soros thinks to himself, this is a rediculous offer and starts buying everything on craigslist for less than $10,000. He rolls up with 100 lemons and the dealer buys them, then has a press conference saying he has $15 billion dollars on hand an will buy all the lemons in the world for $10,000 a piece.
So George Soros goes and finds $30 billion lemons and it turns out that the gov't couldn't (or didn't want to) come up with $15 more billion for lemons. Yes, the tax payer got fleeced, but the transactions were made in good faith by people who thought buying lemons for $10,000 was a good fucking idea, and was elected on a fucking platform of buying lemons for $10K.
I was under the impression that we frown on screwing innocent people because it's a shitty thing to do, not because it happens to be designated as a crime.
I'm not saying that what Soros did should be illegal, mainly because overregulation can wind up screwing innocent people in all sorts of different ways that I'm not wise enough to predict. But I surely don't understand why he's being held up for praise.
We do frown on screwing innocent people, and it is a shitty thing to do.
Who screwed Britain? If you're going to tell me that it was George Soros, I'd like to hear why you're holding him more responsible than e.g. Helmut Schlesinger, or the reporter who paraphrased Schlesinger's quote and sent the market into a panic?
edit: Or as loso pointed out in a comment above mine, is George Soros more responsible than the members of the British government who put the pound sterling in the terrible position to begin with?
Most (or at least some) of the politicians likely acted in good faith, believing they were doing the best for their country. Soros knew he would leave the people devastated but didn't care.
That may be true, but I don't think it's relevant. The politicians still made bad decisions that led the country to ruin; you can say they didn't mean it, but that doesn't make it not their fault, nor does it mean it wouldn't have happened if Soros hadn't shorted the pound.
And to rephrase the second sentence: Soros knew that the bad policy decisions of the politicians would leave the people devastated, but didn't care. Again, I'm not convinced that's relevant; Soros didn't make the situation, he just profited by it. That doesn't make it his fault.
I agree with CocaKola that this isn't relevant - I'd vote against having people acting in good faith, if the end result is getting screwed.
As to your other point, this is how markets are supposed to work. Soros in effect helped show the incompetency of the government, which was a net good. People got screwed, certainly, but the situation was terrible and no one did anything about it until Soros stepped in.
You could say that he is similar to Snowden or other whistleblowers in many ways. They through the government into chaos, likely endangered a lot of the economy and possibly lives, and they did it all because exposing the bad things the government was doing was more important.
Of course, I'm not arguing that it's the same, as the whistleblowers do this despite the fact that it ruins their lives, and Soros did it to make money. What I am saying is, it's great we've setup a system where people like Soros are incentivized to uncover government screwups, so we can do better next time.
> As to your other point, this is how markets are supposed to work. Soros in effect helped show the incompetency of the government, which was a net good. People got screwed, certainly, but the situation was terrible and no one did anything about it until Soros stepped in.
> You could say that he is similar to Snowden or other whistleblowers in many ways. They through the government into chaos, likely endangered a lot of the economy and possibly lives, and they did it all because exposing the bad things the government was doing was more important.
Grotesque. Soros certainly didn't give a damn about the public good. A better comparison would be somebody blowing a nuclear power plant to make a point that the security measures are insufficient. Should we congratulate terrorists next, because we can "do better" next time in terms of security?
> Of course, I'm not arguing that it's the same, as the whistleblowers do this despite the fact that it ruins their lives, and Soros did it to make money. What I am saying is, it's great we've setup a system where people like Soros are incentivized to uncover government screwups, so we can do better next time.
Really? Let me ask you, why was the situation terrible exactly? Because the pound was overvalued and exposed to the same predatory behaviour Soros demonstrated? Oh, right...
As a comparison, in 1999 Gordon Brown sold the UK's gold before the market moved up, the equivalent of a £9b loss, £13b in today's money. He did this to give the banks an under the radar bailout by manipulating the markets.
As a comparison, in 1999 Gordon Brown sold the UK's gold before the market moved up, the equivalent of a £9b loss, £13b in today's money. He did this to give the banks an under the radar bailout by manipulating the markets.
Gold doesn't pay interest, whereas the cash raised from the gold sale was used to buy (mostly) long term US treasuries to replace the gold in the BoE's asset portfolio. These have performed very well as an investment over the intervening years (look at, eg the BTTRX fund for a rough equivalent in the private sector) so the net loss is much smaller than you'd think.
It's less about the total loss of money and more about the valuation of the currency. The mid-nineties saw the pound drop even further in value and it's only recently begun to grow stronger again.
> Who screwed Britain? If you're going to tell me that it was George Soros, I'd like to hear why you're holding him more responsible than e.g. Helmut Schlesinger, or the reporter who paraphrased Schlesinger's quote and sent the market into a panic?
As I said elsewhere, there's plenty of blame to go around. Lots of people were complicit, some of them more so than Soros. But Soros is the only one who's commonly held up as some sort of heroic capitalist ubermensch, so he's the one I went after.
Soros profited off of a screw up by the British government. And not just one screw up, many if you look at the full history of what happened. I think the British government screwed their people way more than Soros did.
You think the British government is the "most guilty" institution in existence? Unless you cling to the idea that eradicated institutions (such as the Third Reich) don't count this seems more than a little harsh.
And selling bad credit default swaps wasn't a crime either.
So, according to your theory, the perpetrators of the last downturn should have sold as many bogus CDS packages as possible, right? Regardless of the damage?
I'm happy most people don't subscribe to the same law-defined morals that you seem to.
If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings.
The guys selling CDSs they couldn't pay out had none of their own skin in the game, and were profiting from the presence of then implicit (now very EXPLICIT) government backstops. When they lost money, the public was forced to pay through devices like the AIG bailout, TARP, ZIRP, etc.
> If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings.
Well, no. This is explained in the article: If Soros' assumption (that the exchange rate would plummet) hadn't been realised Sterling would've stayed at the lower bound of the ERM and Quantum wouldn't have lost much at all.
We can have reasonable confidence in that assessment in hindsight. At the time, I would have been unwilling to gamble my net worth against the possibility of some unforeseen event causing a spike in the value of the pound. It was a non-zero risk.
There was a lot of fraud involved in the banks and mortgage brokers who made hundreds of thousands of liar's loans: the fact that nobody was prosecuted for that fraud is a failure of the justice and regulatory systems..
I have regularly argued that much of it was, in fact, illegal. At a minimum there was a lot of negligence with regard to fiduciary responsibility. I would also argue that there was a fair amount of fraud from borrowers, mortgage brokers, banks, and so on all the way up to the top financial levels.
> you should feel bad for committing crimes, even if it's clear that if you didn't somebody else would
i don't think edward snowden should feel bad for what he did, even if it's considered a crime.
as for robbing a drunk guy in the gutter, you could argue that you are teaching him a lesson, and that the price of this lesson is the cash he has in his wallet now. it would be a rather aggresive marketing strategy, but hopefully the guy does learn from it.
likewise, you could argue that soros breaking the bank of England is him teaching the people of the world a lesson - you can't prop up a currency indefinitely. people like him - folks with lots of money and more desire to earn money than to support practices they think are unsustainable - will prevent governments from pegging rates indefinitely, just as muggers will prevent people from wandering carelessly through parts of town where no one is watching them.
i'd like to live in a world where people were more interested in gaining a positive reputation by passing on the chance to profit from destruction, even if it's legal. that wish is exactly like wanting to live in a world where nobody gets mugged: both of those situations are inevitable if omnipresent surveillance takes off. if being caught is a certainty, nobody's going to pick a wallet anywhere. if databases of people's responses to your actions are publicly available, many supporters of government-backed monetary policy - as well as the friends and families of those who suffered from his actions - will shun soros and anyone else who helps knock a tower over because 'it was going to fall anyhow.'
I have no idea what you're saying. You're bringing up Edward Snowden, who has literally nothing to do with the conversation at hand. Then you're proposing some form of defense for the idea of mugging the drunk guy. Then you're shifting right to omnipresent surveillance, which again has nothing to do with what we're talking about. Your comment is utterly incomprehensible to me; I know what all the individual words mean, but I can't put them together into a cohesive thought that's relevant.
Can you rephrase yourself in a way that's more understandable?
> You're bringing up Edward Snowden, who has literally nothing to do with the conversation at hand.
That was pretty clearly a response to the line he quoted directly above, i.e. rebutting the notion that an action's morality is solely determined by whether or not that action is classified as a crime.
Ah; I must have missed the part where somebody stated that an action's morality is solely determined by whether or not that action is classified as a crime. I agree that that's a silly metric to use as the sole determination of the morality of an action, but can you do me a favour and point to where that was stated? I'm having trouble finding it.
> Well, no. Robbing a passed out drunk is a crime; you should feel bad for committing crimes, even if it's clear that if you didn't somebody else would. Shorting a stock (or a currency) is not a crime; it's an acceptable thing to do in a market.
If you didn't intend to imply that robbing the drunk is bad because it's a crime, and what Soros did is acceptable because it's not a crime, then you weren't communicating very clearly.
some ideas i got while reading your interesting post, sketched them out and think are interesting and useful for someone to consider but not important enough for me to bother arranging into cohesive structure (and so potentially asis contain some nonsense, lol):
consider/distinguish/define innocence vs unawareness vs incompetence
innocent of what ?
is it ok to eat cows ? distinguish from unconscious / unaware / stupid / mentally challenged humans at a biological level - self reflection in another person ? empathy ? isn't that really selfish.. (is selfishness wrong anyways)
yes law | crime != justice | morality
however
internal sense of justice, morality - some forms of it (internalised socialism/communism) are a heavy burden and disadvantage, objectively wrong
because
thoroughly exploited by weak / lazy / unlucky people and groups, and various degrees of sociopaths
and most of all exploited by the great unaware masses - innocents ? - muppets ?
otoh social cooperation beneficial to all (if that is _the_ goal) only if driven by free will in a way that benefits each member according to his own estimate of his own needs & desires and willing sacrifices to trade .. (benefits vs costs)
is morality guided by relative quantity of beneficiaries/victims & 'quality' of some definitions and scopes of benefit vs harms
relative harm or good, does an objective 'detached' harm / goodness exist without context. (harm / goodness are not nouns, not objects, just results from actions) no 'cold' objective guidelines ..offtopic philosophising
self sacrifice without self benefit = self destruction for someone else's benefit, or no benefit at all - just stupid
re reputation - an external motive, essentially hunger for reward + fear of punishment, at a social level :. potentially a form of hypocrisy, not 'real' internal morality
re omnipresent monitoring - fucking creepy kafkaesque horror show... lol, i think population will creep out waay before it ever happens, privacy awareness is already entering mainstream (snowden, visible hackings, internet driven mainstreamising of countercultures)
..re soros et al: foregoing opportunities to appease the incompetent (or unaware, stupid) is a form of self sacrifice - for people who don't deserve it / appreciate it / fucked over by their own government and muppetry / there's really no reward / stupid and futile
People always underestimate how valuable information is. When you short a stock or a currency, you are not "screwing" someone, but providing information to others saying "this thing is screwed". If you believe something is wrong, you should announce that to everybody, loud and clear. In a marketplace this "announcement" is carried out by a big short, because that's the only kind of message people are able to hear.
And borrowing from your example, if there is a big group of drunk men marching to an abyss and no one would listen to a word you say ( well they are drunk), then maybe the moral thing to do is punch them in the face and run the other way.
If the person is actively pushing the wall over, knowing full well that the wall is structurally unsound, and that there are innocent people behind the wall...yeah, I'd blame the pusher.
If someone takes out a concrete wall with a five-pound sledge, I'm gonna have harsh words for the guy who build the shoddy wall and the guy who deliberately vandalized it.
I think the just behavior would have been to explain to the government what was going to happen, and then to leverage the fund's wealth and financial influence to help solve the greater problem. I know, businesses exist to make money. But I can't help but feel like these people who profit off of the missery of the people are just awful, awful humans.
If a man with diamond cufflinks and a fat wallet is passed-out drunk on the sidewalk at midnight in a bad neighborhood, he is definitely going to get robbed. Does that mean I should go ahead and rob him myself with a clear conscience?
I guess, according to you and Rhett Butler, I'm just jealous because I didn't pickpocket the last drunk I met.