Posted by: aboutalbion | June 11, 2012

Temple of Albion (5)

I want to continue my series of posts (which use an anthropological checklist for identifying a religion) in order to assess the strength of the case that the United Kingdom is an organised religion.  In other words, is it reasonable to consider identifying the United Kingdom as in some sense as, say, the Temple of Albion?

A fifth guideline on an anthropological checklist is about beliefs which are held on a basis of trust.  And more than that, they are beliefs that are not logical, or empirically demonstrable, or highly probable.

There might be many such beliefs that will occur to me as time passes, but I would like to make a start by inviting an anthropologist to examine the belief in leverage.  This refers to the practice, allowed by law, whereby individual deposits with a UK bank can be multiplied by a number between 1 and (some say 40) and lent out to borrowers who will pay interest on the loans.  Banking flourishes on the difference between the interest charged on the loans and the interest paid on the deposits.

Banks work because the citizens of the UK trust them.  We have an almost total trust that a bank will protect our money, and give it back to us when we ask for it.  And after the collapse of the US (investment) bank Lehman Brothers in 2008, the citizens of the western world have had regular explanations of the banking practice of leverage.

To my mind, the practice of leverage is irrational.  Is it empirically demonstrable, or even highly probable, that all parties will retain their assets in all conditions of ‘the economy’?  The evidence is that it is not.  If everyone goes to the bank at the same time and demands the return of their deposits, then everyone knows that there will not be enough money there.  The ensuing panic, a so-called ‘run on the bank’, evidences the irrationality at the heart of the banking system.

Banks are integral to ‘the economy’.  So another way of making the point about irrationality is to suggest that it is irrational to imagine that an economic game can be invented in which everyone is a winner.  Yet the elite financial professionals who practice leverage give the impression that they have access to a new Garden of Eden where money grows on trees.  I regard the statistic of over three million UK children living in low income households as some evidence of the irrationality of this belief.

So I would submit the practice of leverage to an anthropologist as some evidence of an irrational belief that is held on the basis of trust.


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