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Mind and culture – Vygotsky’s view May 30, 2009

Posted by thedukeofurl in Culture, Mind, Psychology.
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Culture and mind are closely related, more closely than most of us realize. And the situation has not much altered since Vygotsky’s time – he died in 1934. My summary of Vygotsky’s views are based on his Mind in Society: The Development of Higher Psychological Processes (1978). The mediation that Vygotsky had in mind was not that of either S-R or S-R-S stimulus-response theory so beloved by the behaviorists, but one involving symbolic activity on the part of the person, in particular on sign use. For him, higher complex psychological processes were not reducible to atomistic simple reflexes, as this could not take account of the integrative character of the higher processes. On neural integration, see Goldberg, The Executive Brain (2001).

For the behaviorists, the mediating functions of the brain were considered to be as simple as possible. For Vygotsky, more structure and associated functionality had to be built into our conception of the brain’s activity. Moreover, it was necessary to add brain functioning to descriptions of psychological processes, necessarily at complex levels but also at simple levels when activity other than simple reflexes were involved.

In Vygotsky’s opinion, what was required was a more integrated approach to the analysis of psychological processes that could explain both simple reflexes and the complex higher processes by means of the same framework that did violence to neither. An explanation of complex processes in terms of combinations of simpler processes did justice to neither and was misleading about both. In particular, what needed to be shown was how culture was associated with the higher psychological processes that involved the symbolic activity which was absent in the simpler processes. The reductionist explanations of his time and of ours were, and still are, unable to do this.

Deepak Moorjani, Deutsche Bank, & the NYT May 28, 2009

Posted by thedukeofurl in Economics.
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On 10 May 2009, Zero Hedge published a story about an employee of Deutsche Bank Japan, Deepak Moorjani, who had been trying to get the bank to reform its risk practices and management. In a letter sent to the New York Times and published in their Dealbook section on 16 April 2009, Moorjani sets out his case against Deutsche Bank’s risk culture. Zero Hedge tired to link to the letter but found a 404 error instead – the Times had removed the piece, presumably on advice of legal counsel after being contacted by Deutsche Bank or its lawyers.  Moorjani was involved in litigation with a unit of Deutsche Bank at the time and, presumably, still is. Fortunately, you can find the letter in its entirety here: http://www.scribd.com/doc/14757881/Another-View-Deutsche-Banks-Culture-of-Risk. This document is a damning indictment of Deutsche Bank’s practices.

The removal of this entry by the New York Times is not quite the same action as that taken by the Daily Telegraph in regard to their Patterson report. In the case of the Telegraph, no legal case was being brought by any of the parties involved, although the Telegraph might have had concerns that one might suddenly materialize. It is unfortunate that Zero Hedge did not obtain any legal opinion concerning whether the Times may have had to remove the Dealbook entry for legal reasons.

Moorjani is a rather courageous individual and Deutsche Bank have acted like bullies, employing legal means to attempt to silence him. Fortunately, new Japanese labor law* protects Moorjani from arbitrary dismissal, which is what such dismissal would have amounted to in his case, although DB would no doubt differ with me on this.

* For a summary of Japanese labor protection, see http://www.scribd.com/doc/13453568/DLA-Piper-Legal-Background (provided by Moorjani at Scribd).

Update: There have been reports that Deutsche Bank has been engaged in “naked short selling”, a dubious activity at best, which the SEC has only recently, and reluctantly, decided to address – http://www.deepcapture.com/deutsche-bank-sold-massive-amounts-of-phantom-stock/.  DB have also been accused of fraud – http://www.dbankfraudinfocenter.com/information.php, and the list of bank fraud news sites is uncomfortably long.

Daily Telegraph news story suppressed May 27, 2009

Posted by thedukeofurl in Economics.
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Naked Capitalism, Zero Hedge, and The Analytic are all engaged in trying to discover the truth of a report by Evans-Pritchard that appeared in the Daily Telegraph and which was suddenly removed from the paper’s web site following a complaint.  According to the report, Mark Patterson, chairman of MatlinPatterson Global Advisors, a private equity firm and recipient of initial TARP funding, said in a meeting in Qatar that the Geithner bailout was a sham and that the banks were insolvent.

You can find the report here – http://zerohedge.blogspot.com/2009/05/mark-patterson-its-sham-banks-are.html .

A number of disturbing inferences arise from this case.  One is that web content is inherently fragile and can disappear overnight. Were the paper deposited in a library, some record of it will have been kept (as has luckily happened electronically in this case, but you can’t count on it). An argument for a publically accessible digital archive available into the indefinite future as “hard copy” in principle is?

Another is that a media organization, presumably after consultation with its lawyers, removed a news report simply upon receipt of a complaint, which may never be recoverable from the original source.  There does not appear to be anything to stop the newspaper from digitally shredding the report thereby having it “go missing”.

Should Mr Patterson’s comments be viewed as a matter of private concern although made in a public arena? If what the paper initially published was factually incorrect, as MatlinPatterson claim, then surely the paper should have left the story as is, as it has had to do with the hard copy version, and issued a public apology to Mr Patterson in a subsequent issue of the paper. This would seem to be the most appropriate way of dealing with such conflicts.

The thing is, if Patterson did say what he is reported as saying, he is right.  “Geithner’s put” is rubbish.

It will be interesting to see whether Naked Capitalism, http://www.nakedcapitalism.com/ , The Analytic, http://theanalytic.com/ , and Zero Hedge, http://zerohedge.blogspot.com/ , will be able to get to the bottom of this affair.

Clive Thompson, journalist & blogger May 27, 2009

Posted by thedukeofurl in Uncategorized.
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If you haven’t encountered Clive Thompson before, you have a treat in store. He is principally a science, technology, and culture journalist for NY Magazine, Wired and other publications. His blogs can be found on my blogroll, but an interview from a little over a year ago can be watched via reportr.net: http://reportr.net/2008/02/19/video-clive-thompson-on-blogging/.  He has a number of interesting things to say about blogging and how it might aid in stimulating the creativity and organization of your thoughts.

Check him out if what he does and says seems of interest to you.

This is Thompson on Facebook & Twitter – http://www.nytimes.com/2008/09/07/magazine/07awareness-t.html?_r=3&pagewanted=all.  However, I do not completely agree with his conclusion that the person you see most clearly is yourself.  I would characterize the situation rather this way: that the person you see most clearly is the person you have prepared others, including yourself, to see.

You might actually, as a consequence of incessant preparation, see yourself less clearly than before.  In a certain sense, you are programming yourself and others.  We do this throughout life, but this is highly intense and possibly more continuous.  Unless you take deliberate steps, you may have nowhere to hide, except perhaps from yourself.

Erving Goffman, the role theorist for whom social interaction was like theater, and Charles H. Cooley, devisor of the concept of the looking-glass self, might easily have seen Facebook and Twitter functioning simultaneously as a looking-glass by means of which you continually adjust your presentation and as the theater in which you are almost constantly “on show”.

The Velocity of Money, a thriller May 27, 2009

Posted by thedukeofurl in Economics.
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“Velocity of money” is a term referring to the number of financial transactions in a given moment of time.  For a stock exchange, the time might be measured in minutes, but for the average consumer, it might be a day or a week. The more financial transactions there are per unit of time, the greater the velocity.

However, the title of this post refers only incidentally to financial transactions. It is the title of a thriller by Stephen Rhodes (aka Keith Styrcula) published in 1997. The plot concerns a conspiracy to bring about a crash of the financial markets using a computerized trading program based on the derivatives market, and begins, as thrillers do, with a body dropping out of a window of a skyscraper onto and into the roof of a NY cab, in this case the body of a banker.

What might come to the reader’s mind is an image of the suicides that took place in 1929, the time of the stock market Crash, sometimes referred to as the Great Contraction to distinguish it from the Great Depression. This, of course, is no suicide, but murder.  And the life of our hero, a securities lawyer at a Wall Street firm, is naturally eventually in danger, and his wife is newly pregnant.

The relevance of the novel for our purposes, however, is not its aspects as a thriller, but its prescience in suggesting that the ongoing 1990s bubble could burst, something denied by many at the time, though there was a bit more than a hiccup in this period.  Rhodes worked for an off-shore financial firm and influences for the thesis of collapse are some of the usual suspects, such as John Kenneth Galbraith and Hyman Minsky, but also Alan Greenspan, C. P. Kindleberger (an expert on the Depression), and the computer hacking magazine, Phrack (a recent article is Hacking your Brain: Artificial Consciousness).

The stock market crashed dramatically in October 1929, not as a consequence of some shadowy conspiracy, but through independently converging causal chains, though the precise character of this causal network and it’s role in the disaster is still a matter of hot dispute. Is a conspiracy to bring down an entire financial system plausible, even if it were possible?

It is difficult to see how it would work. Small-scale conspiracies carried out on individual currencies and sets of institutions have taken place historically.  The primary problem of a conspiracy on this scale would seem to be the difficulty of getting everyone, who normally are in competition with one another, to cooperate to bring down a system from which they are gaining enormous benefits. It is difficult to see how any of these individual players could see such an action as being in either their personal or collective interests.

I was happy to suspend disbelief for the enjoyment of the read and, although Rhodes makes the events seem somehow plausible, I thought then and I think now that such a conspiracy is unlikely. Neither the Great Crash of 1929 nor the Credit Crunch of 2007-08 were the consequences of conspiracies to bring the events about, but rather the inevitable consequences of the way business was being carried out in what had become the normal way every day.  While it might be more satisfying to blame a few conspirators for the “interesting” times we are currently living in, it seems that greed, ego, ambition, collusion, incompetence, and even more than a little fraud, according to some accounts (and not just by the Bernie Madoffs), are the primary engines of our current catastrophe.


For an extensive list of such novels, arranged by genre and then by author, see http://projects.exeter.ac.uk/RDavies/bankfiction/bigbang.html by Roy Davies. You may be surprised, as I was, to discover that one of the great expositors of poltical economy, John Kenneth Galbraith, wrote two novels.

Sal Khan of Khan Academy May 26, 2009

Posted by thedukeofurl in Economics.
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I recently came across a variant of the good bank-bad bank proposals that have been made recently over the past few months by Salman Khan and David Leinweber that they published online on 11 November 2008 – “New American Bank Initiative” – http://cift.haas.berkeley.edu/docs/nabi/nabi-Nov11.pdf.  You can also watch Khan explain this plan to a CNN reporter on video using his own educational ‘tool’ – (http://www.youtube.com/watch?v=_ZAlj2gu0eM). In both the paper and in the CNN interview, Khan gives credit for this particular version of the good bank-bad bank solution of the crisis to a univeristy friend, Todd Plutsky.

Khan has set up a youtube affiliated educational web site devoted to explaining visually and in terms that are easily understood concepts in mathematics, physics, finance and banking, and the current credit crisis – http://khanacademy.org.  In Bailout 14: Possible Solution, Khan shows the viewer the letter he received from Plutsky. He is a brilliant expositor of ideas most people find difficult, and he does it in such a way that you will wish you had come across him before. His explanation of his friend, Plutsky’s, solution to the financial crisis is a model of clarity.

If this is such a good idea, why isn’t it being implemented? You may well ask.  The answer is simple.  The bankers don’t like it (although Citigroup has expressed an interest). And they don’t like it for a very good reason from their point of view.

The toxic assets they possess will be eliminated by being passed onto the ‘bad bank’, which will then be allowed to fail, which means that they will receive no remuneration for these toxic assets for which they overpaid.  It also means that the extent of the toxicity due to their poor management of other people’s money will be publically revealed for the scandal it is.

The toxic waste created by these institutions is estimated by some to be over a quadrillion dollars, which is more money than the world has. It can never be paid off, only written off.  Bankers would rather that no one became aware of this for a certainty, if they even know themselves, and some politicians agree with them, especially those who have “palled around” with bankers in the recent past.


Other more technical discussion of the good bank-bad bank solution are: 1) Reorganizing the Banks by Bulow & Klemperer – http://www.voxeu.org/index.php?q=node/3320 ; 2) Willem Buiter’s How to Set Up a New ‘Good Bank’ – http://blogs.ft.com/maverecon/2009/02/how-to-set-up-a-new-good-bank/ which has links to other discussions of this, including his own development; 3) Buiter’s good bank-bad bank illustration – http://blogs.ft.com/maverecon/2009/03/dont-touch-the-unsecured-creditors-clobber-the-tax-payer-instead ; 4) The Right Way to Create a Good Bank and a Bad Bank by Hall and Woodward – http://www.voxeu.org/index.php?q=node/3132.