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Market prices for currencies reflect what you can buy with them. If a country's economy is strong, they're exporting a lot of things that the world wants to bu

Market prices for currencies reflect what you can buy with them. If a country's economy is strong, they're exporting a lot of things that the world wants to buy from them, and the world wants to invest in a bunch in a number of securities denominated in their currency, the currency will be strong. If the country's economy weakens (relative to other countries in the global economy), the currency will weaken. There could be a lot of potential causes for that. A generation of lazy people who don't work hard. Poor corporate leadership that has people building products that nobody wants to buy. Corruption and misincentives that encourage people to shift value around rather than producing value. The rest of the world suddenly building out their technology and capital stock and catching up to your economy. Britain was the pre-eminent world power up through WW2, so there was a lot of historical inertia propping up the value of the pound. They recovered slowly from WW2, though, lost their position as world leader to America, and had a very rough 70s and 80s. The historical strength of the pound actually hurts in that regard: it makes their exports less competitive, which leads to industry moving away from Britain and a generation that has difficulty finding work. Through their 80s they still had much of their reputation as a world power (the Falklands war was fought over it); by the 90s it was becoming apparent that reality did not match reputation.

ClumsyPilot 7y ago
> "A generation of lazy people who don't work hard" I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? The mantra of "It's important to work hard" needs to die. Today we have fewer friends than ever, population is unhealthy and the biggest killer of young men is suicide. Please don't perpetuate this nonsense. It should be: "Work smart, and look after yourself/ your family"
- nostrademons 7y ago
  It's one of many mutually reinforcing factors. I'm not trying to assign blame here (of which there is plenty to go around), but observing a dynamic. That dynamic is essentially that success begets success. If you have a population that has the experience, from an early of age, of teams where everybody works hard at an uncertain goal and accomplishes their objective, it builds more than just the objective. It also builds trust among the team and the population in general; it builds a number of ancillary skills that were necessary to accomplish the objective; and it builds courage, and the belief that even if obstacles look hard, they can be surmounted. If you set out to build & market a computer game by yourself and fail, you've accomplished a lot more than failure. You've also taught yourself to program; taught yourself game design; taught yourself graphic design; taught yourself marketing and differentiation; taught yourself how to listen to early users and make decisions; and taught yourself perseverance. And conversely, if you have a society where corporate leaders habitually throw young employees into the meat grinder, burn them out on busywork, and pay them little, there will be very little incentive for these employees to do anything other than put in the bare minimum amount of work and spend the remainder of their workday on Facebook or HN. They build no ancillary skills; they learn distrust rather than trust; they learn that perseverance is a waste of time; and they learn nothing about how to break down big goals and make them achievable. Say that a nation full of the former has to compete (either economically or militarily) with a nation full of the latter. Who do you think is going to win? There's nothing wrong with "Work smart, and look after yourself & your family" from the perspective of an individual. There is something gravely wrong with it from the perspective of a nation, which has effectively disintegrated at that point. We're talking about national currencies, which are an abstraction of the national economy as a whole. If there is no national economy, but a bunch of independent producers who search for whatever personal advantages they can get for themselves, that national currency is not going to be worth much.
  - ClumsyPilot 7y ago
    > "If there is no national economy, but a bunch of independent producers who search for whatever personal advantages they can get for themselves" I am surprised to see you argue against it, as its the first tenet of capitalism. I am not clear what you mean. How is the person that "works hard" in your understanding contributing to national economy above an beyond working at a place where he creates the most value, and gets the highest pay? I allege those precious hours are better spent helping the community / the homeless / whatever. It would probably benefit the national economy more and teach you valuable skills. A friend of mine has a pretty successful career in London city, he works at a charity that monitors marine animals in his spare time. It probably leaves him happier as a result.
- andybak 7y ago
  That phrase alone gave me a poor feeling about the whole comment. It was unnecessary and glib.
  - nostrademons 7y ago
    It was chosen deliberately. HN has a wide audience. Of the 4 causes I explicitly listed, most people will shake their heads yes to two of them, feel indifferent to one, and feel insulted by one. This applies regardless of which group you belong to. I have friends that would think "Yes, yes, it's the lazy youth today" and be gravely insulted by the implication that corporate leadership is incompetent; I also have friends (in government) who would agree with both the observations on the lazy youth of today and the corrupt corporate leadership but be gravely insulted by the idea that incentives within our society might not result in the best behavior. The meta-point I'm making is that every group believes our current problems are somebody else's fault, but what we're really facing is a systemic breakdown of the attributes that make for a functioning society. The other comment on this article, "Every empire has created the conditions of its collapse" has it right. When you're inside of the collapse, the idea that the collapse might be an inevitable result of the empire seems inconceivable, because the empire is all you've ever known. So a lot of people go around looking for a human adversary to blame, usually someone who was your countryman until recently, when really the system that created the country makes its demise inevitable.
    - jeanpierre2 7y ago
      Maybe people feel insulted by your claim because it's needlessly hostile and judgemental (and wrong by all metrics). That you can offend many people with it doesn't make it any less counterfactual. > The meta-point I'm making is that every group believes our current problems are somebody else's fault, what we're really facing is a systemic breakdown of the attributes that make for a functioning society I'm sorry that I have to be frank, but that's just wishful thinking and ignorance of history. There was never a time when "values" or "attributes" where such that society magically worked and everyone correctly assumed responsibility for their problems.
    - deleted 7y ago
      [deleted]
- frobozz 7y ago
  We must not forget that this poison has been published by current government front benchers. Worst idlers in the world.
- airstrike 7y ago
  "A nation is born stoic and dies epicurean" – Will Durant, http://bit.do/stoicepicurean http://bit.do/stoicepicurean A more popular corollary is "Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times."
  - ClumsyPilot 7y ago
    I feel most of these social theories have no basis is reality. Similar logic is used to argue that videogames cause violence, or (in Russia) that men become gay because it's cool. They just 'make sence' to the people perpetuating them.
    - airstrike 7y ago
      > Similar logic is used to argue that videogames cause violence, or (in Russia) that men become gay because it's cool. What exactly is the similar logic here? > I feel most of these social theories have no basis is reality. I always think back to a passage from Georges Canguilhem's "The Normal and the Pathological", which is a bit hard to read but hit the nails on the head (and I'll be the first to admit not to be a philosopher or any sort of expert on the topic): In anthropological experience a norm cannot be original. Rule begins to be rule only in making rules and this function of correction arises from infraction itself. A golden age, a paradise, are the mythical representations of an existence which initially meets its demands, of a mode of life whose regularity owes nothing to the establishment of rules, of a state of guiltlessness in the absence of the interdict that ignorance of the law is no excuse. These two myths proceed from an illusion of retroactivity according to which original good is later evil kept in control. The absence of rules goes hand in hand with the absence of technical skills. Golden age man, and paradisiacal man, spontaneously enjoy the fruits of a nature which is uncultivated, unprompted, unforced, unreclaimed. Neither work nor culture, such is the desire of complete regression. This formulation in negative terms of an experience consonant with the norm without the norm having had to show itself in and by its function, this really naive dream of regularity in the absence of rule, signifies essentially that the concept of normal is itself normative, it serves as a norm even for the universe of mythical discourse which tells the story of its absence. This explains why, in many mythologies, the advent of the golden age marks the end of a chaos. As Gaston Bachelard said: "Multiplicity is agitation. In literature there is not one immobile chaos" Lop. cit., p. 59]. In Ovid's Metamorphoses the earth of chaos does not bear fruit, the sea of chaos is not navigable, forms do not remain identical to themselves. The initial indetermination is later denied determination. The instability of things has as its correlative the impotence of man. The image of chaos is that of a denied regularity, as that of the golden age is that of wild [sauvage] regularity. Chaos and golden age are the mythical terms of the fundamental normative relation, terms so related that neither of the two can keep from turning into the other. The role of chaos is to summon up, to provoke its interruption and to become an order. Inversely, the order of the golden age cannot last because wild regularity is mediocrity; the,satisfactions there are modest aurea mediocritas – because they are not a victory gained over the obstacle of measure. Where a rule is obeyed without awareness of a possible transcendence, all enjoyment is simple. But can one simply enjoy the value of rule itself? In order to truly enjoy' the value of the rule, the value of regulation, the value of valorization, the rule must be subjected to the test of dispute. It is not just the exception which proves the rule as rule, it is the infraction which provides it with the occasion to be rule by making rules. In this sense the infraction is not the origin of the rule but the origin of regulation. It is in the nature of the normative that its beginning lies in its infraction. To use a Kantian expression, we would propose that the condition of the possibility of rules is but one with the condition of the possibility of the experience of rules. In a situation of irregularity, the experience of rules puts the regulatory function of rules to the test.
- devnulloverflow 7y ago
  >> "A generation of lazy people who don't work hard" >I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? One generation is unlikely to be much lazier than the last. But the economic policy of post-war Britain was dominated by nationalised industries and, rules made by and for the unions etc. Workers toiling hard in make-work industries or workers refusing work that breaks strict demarcation rules are as unproductive as lazy workers. This sort of thing the generally poor economy of the UK, and why the UK did not produce stuff people wanted to buy. That it translated into a series financial crises depended on other factors.
  - baud147258 7y ago
    Also you can add the unions propping up outdated industries like coal mining
- gnaritas 7y ago
  > I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? They grew up lazy in soft times. It's a never-ending cycle, parents work hard to make kids lives easier than theirs, kids don't get challenged as parents did, grow up soft and lazy and blame the world. They fail, raise kids poor, who get challenged again and grow up hard and make something of themselves, and then raise lazy kids trying to improve their kids life, repeat ad infinitum.
andrepd 7y ago
>misincentives that encourage people to shift value around rather than producing value Isn't that just capitalism? Useless financial operations (shifting value around) are richly rewarded, as opposed to "producing value", which gets scraps as low as the market will bear. You can work your ass off making furniture for 4 decades, you will earn as much as an "investor" does in one week.
- simonh 7y ago
  By and large the investor earns rewards because that capital is doing useful work funding productive businesses. Maybe allowing the software business next to your furniture shop to expand, selling services abroad bringing money into the country, or creating a web site you can sell your furniture on. The sorts of financial engineering you're talking about is of course a real thing, but can also add real value by making other useful transactions cheaper. So for example high frequency trading is used heavily by market makers, that provide a useful service creating liquidity in markets. That makes it easier and cheaper to buy and sell equities and such.

ClumsyPilot 7y ago

> "A generation of lazy people who don't work hard" I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? The mantra of "It's important to work hard" needs to die. Today we have fewer friends than ever, population is unhealthy and the biggest killer of young men is suicide. Please don't perpetuate this nonsense. It should be: "Work smart, and look after yourself/ your family"

nostrademons 7y ago
It's one of many mutually reinforcing factors. I'm not trying to assign blame here (of which there is plenty to go around), but observing a dynamic. That dynamic is essentially that success begets success. If you have a population that has the experience, from an early of age, of teams where everybody works hard at an uncertain goal and accomplishes their objective, it builds more than just the objective. It also builds trust among the team and the population in general; it builds a number of ancillary skills that were necessary to accomplish the objective; and it builds courage, and the belief that even if obstacles look hard, they can be surmounted. If you set out to build & market a computer game by yourself and fail, you've accomplished a lot more than failure. You've also taught yourself to program; taught yourself game design; taught yourself graphic design; taught yourself marketing and differentiation; taught yourself how to listen to early users and make decisions; and taught yourself perseverance. And conversely, if you have a society where corporate leaders habitually throw young employees into the meat grinder, burn them out on busywork, and pay them little, there will be very little incentive for these employees to do anything other than put in the bare minimum amount of work and spend the remainder of their workday on Facebook or HN. They build no ancillary skills; they learn distrust rather than trust; they learn that perseverance is a waste of time; and they learn nothing about how to break down big goals and make them achievable. Say that a nation full of the former has to compete (either economically or militarily) with a nation full of the latter. Who do you think is going to win? There's nothing wrong with "Work smart, and look after yourself & your family" from the perspective of an individual. There is something gravely wrong with it from the perspective of a nation, which has effectively disintegrated at that point. We're talking about national currencies, which are an abstraction of the national economy as a whole. If there is no national economy, but a bunch of independent producers who search for whatever personal advantages they can get for themselves, that national currency is not going to be worth much.
- ClumsyPilot 7y ago
  > "If there is no national economy, but a bunch of independent producers who search for whatever personal advantages they can get for themselves" I am surprised to see you argue against it, as its the first tenet of capitalism. I am not clear what you mean. How is the person that "works hard" in your understanding contributing to national economy above an beyond working at a place where he creates the most value, and gets the highest pay? I allege those precious hours are better spent helping the community / the homeless / whatever. It would probably benefit the national economy more and teach you valuable skills. A friend of mine has a pretty successful career in London city, he works at a charity that monitors marine animals in his spare time. It probably leaves him happier as a result.
andybak 7y ago
That phrase alone gave me a poor feeling about the whole comment. It was unnecessary and glib.
- nostrademons 7y ago
  It was chosen deliberately. HN has a wide audience. Of the 4 causes I explicitly listed, most people will shake their heads yes to two of them, feel indifferent to one, and feel insulted by one. This applies regardless of which group you belong to. I have friends that would think "Yes, yes, it's the lazy youth today" and be gravely insulted by the implication that corporate leadership is incompetent; I also have friends (in government) who would agree with both the observations on the lazy youth of today and the corrupt corporate leadership but be gravely insulted by the idea that incentives within our society might not result in the best behavior. The meta-point I'm making is that every group believes our current problems are somebody else's fault, but what we're really facing is a systemic breakdown of the attributes that make for a functioning society. The other comment on this article, "Every empire has created the conditions of its collapse" has it right. When you're inside of the collapse, the idea that the collapse might be an inevitable result of the empire seems inconceivable, because the empire is all you've ever known. So a lot of people go around looking for a human adversary to blame, usually someone who was your countryman until recently, when really the system that created the country makes its demise inevitable.
  - jeanpierre2 7y ago
    Maybe people feel insulted by your claim because it's needlessly hostile and judgemental (and wrong by all metrics). That you can offend many people with it doesn't make it any less counterfactual. > The meta-point I'm making is that every group believes our current problems are somebody else's fault, what we're really facing is a systemic breakdown of the attributes that make for a functioning society I'm sorry that I have to be frank, but that's just wishful thinking and ignorance of history. There was never a time when "values" or "attributes" where such that society magically worked and everyone correctly assumed responsibility for their problems.
  - deleted 7y ago
    [deleted]
frobozz 7y ago
We must not forget that this poison has been published by current government front benchers. Worst idlers in the world.
airstrike 7y ago
"A nation is born stoic and dies epicurean" – Will Durant, http://bit.do/stoicepicurean http://bit.do/stoicepicurean A more popular corollary is "Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times."
- ClumsyPilot 7y ago
  I feel most of these social theories have no basis is reality. Similar logic is used to argue that videogames cause violence, or (in Russia) that men become gay because it's cool. They just 'make sence' to the people perpetuating them.
  - airstrike 7y ago
    > Similar logic is used to argue that videogames cause violence, or (in Russia) that men become gay because it's cool. What exactly is the similar logic here? > I feel most of these social theories have no basis is reality. I always think back to a passage from Georges Canguilhem's "The Normal and the Pathological", which is a bit hard to read but hit the nails on the head (and I'll be the first to admit not to be a philosopher or any sort of expert on the topic): In anthropological experience a norm cannot be original. Rule begins to be rule only in making rules and this function of correction arises from infraction itself. A golden age, a paradise, are the mythical representations of an existence which initially meets its demands, of a mode of life whose regularity owes nothing to the establishment of rules, of a state of guiltlessness in the absence of the interdict that ignorance of the law is no excuse. These two myths proceed from an illusion of retroactivity according to which original good is later evil kept in control. The absence of rules goes hand in hand with the absence of technical skills. Golden age man, and paradisiacal man, spontaneously enjoy the fruits of a nature which is uncultivated, unprompted, unforced, unreclaimed. Neither work nor culture, such is the desire of complete regression. This formulation in negative terms of an experience consonant with the norm without the norm having had to show itself in and by its function, this really naive dream of regularity in the absence of rule, signifies essentially that the concept of normal is itself normative, it serves as a norm even for the universe of mythical discourse which tells the story of its absence. This explains why, in many mythologies, the advent of the golden age marks the end of a chaos. As Gaston Bachelard said: "Multiplicity is agitation. In literature there is not one immobile chaos" Lop. cit., p. 59]. In Ovid's Metamorphoses the earth of chaos does not bear fruit, the sea of chaos is not navigable, forms do not remain identical to themselves. The initial indetermination is later denied determination. The instability of things has as its correlative the impotence of man. The image of chaos is that of a denied regularity, as that of the golden age is that of wild [sauvage] regularity. Chaos and golden age are the mythical terms of the fundamental normative relation, terms so related that neither of the two can keep from turning into the other. The role of chaos is to summon up, to provoke its interruption and to become an order. Inversely, the order of the golden age cannot last because wild regularity is mediocrity; the,satisfactions there are modest aurea mediocritas – because they are not a victory gained over the obstacle of measure. Where a rule is obeyed without awareness of a possible transcendence, all enjoyment is simple. But can one simply enjoy the value of rule itself? In order to truly enjoy' the value of the rule, the value of regulation, the value of valorization, the rule must be subjected to the test of dispute. It is not just the exception which proves the rule as rule, it is the infraction which provides it with the occasion to be rule by making rules. In this sense the infraction is not the origin of the rule but the origin of regulation. It is in the nature of the normative that its beginning lies in its infraction. To use a Kantian expression, we would propose that the condition of the possibility of rules is but one with the condition of the possibility of the experience of rules. In a situation of irregularity, the experience of rules puts the regulatory function of rules to the test.
devnulloverflow 7y ago
>> "A generation of lazy people who don't work hard" >I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? One generation is unlikely to be much lazier than the last. But the economic policy of post-war Britain was dominated by nationalised industries and, rules made by and for the unions etc. Workers toiling hard in make-work industries or workers refusing work that breaks strict demarcation rules are as unproductive as lazy workers. This sort of thing the generally poor economy of the UK, and why the UK did not produce stuff people wanted to buy. That it translated into a series financial crises depended on other factors.
- baud147258 7y ago
  Also you can add the unions propping up outdated industries like coal mining
gnaritas 7y ago
> I am sorry for derailing, but how does that happen, did they come out like a faulty batch from a factory? They grew up lazy in soft times. It's a never-ending cycle, parents work hard to make kids lives easier than theirs, kids don't get challenged as parents did, grow up soft and lazy and blame the world. They fail, raise kids poor, who get challenged again and grow up hard and make something of themselves, and then raise lazy kids trying to improve their kids life, repeat ad infinitum.

andrepd 7y ago

>misincentives that encourage people to shift value around rather than producing value Isn't that just capitalism? Useless financial operations (shifting value around) are richly rewarded, as opposed to "producing value", which gets scraps as low as the market will bear. You can work your ass off making furniture for 4 decades, you will earn as much as an "investor" does in one week.

simonh 7y ago
By and large the investor earns rewards because that capital is doing useful work funding productive businesses. Maybe allowing the software business next to your furniture shop to expand, selling services abroad bringing money into the country, or creating a web site you can sell your furniture on. The sorts of financial engineering you're talking about is of course a real thing, but can also add real value by making other useful transactions cheaper. So for example high frequency trading is used heavily by market makers, that provide a useful service creating liquidity in markets. That makes it easier and cheaper to buy and sell equities and such.