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Sunday, August 19, 2012

ROBOT ETHICS



Morals and the machine

IN THE classic science-fiction film “2001”, the ship's computer, HAL, faces a dilemma. His instructions require him both to fulfil the ship's mission (investigating an artefact near Jupiter) and to keep the mission's true purpose secret from the ship's crew. To resolve the contradiction, he tries to kill the crew.




As robots become more autonomous, the notion of computer-controlled machines facing ethical decisions is moving out of the realm of science fiction and into the real world. Society needs to find ways to ensure that they are better equipped to make moral judgments than HAL was.
A bestiary of robots
Military technology, unsurprisingly, is at the forefront of the march towards self-determining machines (see Technology Quarterly). Its evolution is producing an extraordinary variety of species. The Sand Flea can leap through a window or onto a roof, filming all the while. It then rolls along on wheels until it needs to jump again. RiSE, a six-legged robo-cockroach, can climb walls. LS3, a dog-like robot, trots behind a human over rough terrain, carrying up to 180kg of supplies. SUGV, a briefcase-sized robot, can identify a man in a crowd and follow him. There is a flying surveillance drone the weight of a wedding ring, and one that carries 2.7 tonnes of bombs.
Robots are spreading in the civilian world, too, from the flight deck to the operating theatre . Passenger aircraft have long been able to land themselves. Driverless trains are commonplace. Volvo's new V40 hatchback essentially drives itself in heavy traffic. It can brake when it senses an imminent collision, as can Ford's B-Max minivan. Fully self-driving vehicles are being tested around the world. Google's driverless cars have clocked up more than 250,000 miles in America, and Nevada has become the first state to regulate such trials on public roads. In Barcelona a few days ago, Volvo demonstrated a platoon of autonomous cars on a motorway.
As they become smarter and more widespread, autonomous machines are bound to end up making life-or-death decisions in unpredictable situations, thus assuming—or at least appearing to assume—moral agency. Weapons systems currently have human operators “in the loop”, but as they grow more sophisticated, it will be possible to shift to “on the loop” operation, with machines carrying out orders autonomously.
As that happens, they will be presented with ethical dilemmas. Should a drone fire on a house where a target is known to be hiding, which may also be sheltering civilians? Should a driverless car swerve to avoid pedestrians if that means hitting other vehicles or endangering its occupants? Should a robot involved in disaster recovery tell people the truth about what is happening if that risks causing a panic? Such questions have led to the emergence of the field of “machine ethics”, which aims to give machines the ability to make such choices appropriately—in other words, to tell right from wrong.
One way of dealing with these difficult questions is to avoid them altogether, by banning autonomous battlefield robots and requiring cars to have the full attention of a human driver at all times. Campaign groups such as the International Committee for Robot Arms Control have been formed in opposition to the growing use of drones. But autonomous robots could do much more good than harm. Robot soldiers would not commit rape, burn down a village in anger or become erratic decision-makers amid the stress of combat. Driverless cars are very likely to be safer than ordinary vehicles, as autopilots have made planes safer. Sebastian Thrun, a pioneer in the field, reckons driverless cars could save 1m lives a year.
Instead, society needs to develop ways of dealing with the ethics of robotics—and get going fast. In America states have been scrambling to pass laws covering driverless cars, which have been operating in a legal grey area as the technology runs ahead of legislation. It is clear that rules of the road are required in this difficult area, and not just for robots with wheels.
The best-known set of guidelines for robo-ethics are the “three laws of robotics” coined by Isaac Asimov, a science-fiction writer, in 1942. The laws require robots to protect humans, obey orders and preserve themselves, in that order. Unfortunately, the laws are of little use in the real world. Battlefield robots would be required to violate the first law. And Asimov's robot stories are fun precisely because they highlight the unexpected complications that arise when robots try to follow his apparently sensible rules. Regulating the development and use of autonomous robots will require a rather more elaborate framework. Progress is needed in three areas in particular.
Three laws for the laws of robotics
First, laws are needed to determine whether the designer, the programmer, the manufacturer or the operator is at fault if an autonomous drone strike goes wrong or a driverless car has an accident. In order to allocate responsibility, autonomous systems must keep detailed logs so that they can explain the reasoning behind their decisions when necessary. This has implications for system design: it may, for instance, rule out the use of artificial neural networks, decision-making systems that learn from example rather than obeying predefined rules.
Second, where ethical systems are embedded into robots, the judgments they make need to be ones that seem right to most people. The techniques of experimental philosophy, which studies how people respond to ethical dilemmas, should be able to help. Last, and most important, more collaboration is required between engineers, ethicists, lawyers and policymakers, all of whom would draw up very different types of rules if they were left to their own devices. Both ethicists and engineers stand to benefit from working together: ethicists may gain a greater understanding of their field by trying to teach ethics to machines, and engineers need to reassure society that they are not taking any ethical short-cuts.
Technology has driven mankind's progress, but each new advance has posed troubling new questions. Autonomous machines are no different. The sooner the questions of moral agency they raise are answered, the easier it will be for mankind to enjoy the benefits that they will undoubtedly bring.


 The Ethical and Social Implications of Robotics
Robots will be all over the place in a couple of decades, not to destroy us in Terminator fashion but to clean our houses, take care of our elderly or sick, play with and teach our children, and yes, have sex with us. If you wonder about the implications of such scenarios, read this book. It contains careful reflections -- sometimes enthusiastic, sometimes cautious -- about the many psychological, ethical, legal and socio-cultural consequences of robots engineered to play a major role in war and security, research and education, healthcare and personal companionship in the foreseeable future. The book contains contributions from many of the key participants in the discussions about robot ethics which began in the twenty-first century. Their papers are significant in their own right, but they gain more value from the clear organization of the book, which presents a succinct overview of the primary strands of the field. In eight parts, each consisting of three chapters, the reader is introduced to a specific topic and then confronted with some of the current issues, positions and problems that have arisen.
The first three chapters provide the reader with a general introduction to robotics, ethics and the various specificities of robot ethics. Together with the second section, on the design and programming of robots, they provide the necessary background for those unfamiliar with the particulars of robot ethics. Especially relevant is Colin Allen and Wendell Wallach's chapter that nicely summarizes the main point of their seminal book Moral Machines (2008)[1]. Allan and Wallach suggest that a 'functional morality', i.e., machines with the capacity to assess and respond to moral challenges, is not only possible but required. In order to perform their complex tasks in everyday environments, robots will need a considerable degree of autonomy. They approvingly quote (on p. 56) Rosalind Picard: "The greater the freedom of a machine, the more it will need moral standards".[2] They go beyond their summary in categorizing the different critiques their book encountered and addressing them in the remainder of the chapter in a refreshingly honest and constructive way. For instance, they admit to being 'guilty as charged' to the criticism that they may have contributed to the illusion that there is a technological fix to the dangers AI poses: "We should have spent more time thinking about the contexts in which (ro)bots operate and about human responsibility for designing those contexts." (p. 65).
There is a similar constructive openness in the other two chapters that explore the close connections between religion and morality. James Hughes attempts to draw lessons from a Buddhist framework for the attempt to create morally responsible machines, but it seems fair to say that his chapter remains quite general and much hinges on the still distant possibility of creating conscious, self-aware machine minds. In contrast, Selmer Bringsjord and Joshua Taylor become very specific and technical in their discussion of a 'divine-command computational logic', a computational natural-deduction proof theory "intended for the ethical control of a lethal robot on the basis of perceived divine commands." (p. 93).
The sentiments of Noel Sharkey that "robots will change the way that wars are fought" (p. 111), coupled with news reports from around the world of 'Predator drones attacking foreign soil,' sets an ominous tone from the outset of Section 3 on military robots. In addition to taking an overview of a number of current technologies like the MAARS (Modular Advanced Armed Robotics System) and the SWORD (Special Weapons Observation Reconnaissance Detection System), and the push (mainly by the US military) for the emergence of fully autonomous robotic weapons, Sharkey in Chapter 7 identifies a number of ethical issues like the proportionality of force and how robotic weapons might fit within current ethical frameworks. One ethical issue which is particularly striking is the question of whether a robot should be allowed to autonomously identify and kill (suspected) enemy combatants. For us at least an inner conflict arises. On the one hand the idea of robots replacing soldiers could be commended from the standpoint of a person who does not want to see their fellow countrymen killed in combat. On the other hand, however, the idea of robots making life and death decisions seems extremely risky, particularly (but not limited to) when we consider the ethical implications if a robot were to make a mistake and kill a civilian.
The idea of combatant identifications is further developed in Chapter 8 by Marcello Guarini and Paul Bello who note that combat identification is exacerbated by today's counter insurgency brand of warfare. Gone are the days of 'total war' where enemies faced each other en-mass on the battlefield in clearly defined uniforms. In today's theatres of war combatants can blend in with non-combatants, meaning one's ability to identify 'who an enemy is' becomes a tricky task. As a result, soldiers are actively being forced to make snap judgments about a person through their behavior by ascribing mental states to them (p. 131). In this type of warfare where intuitions are key, the ultimate question is whether a robot could be as good as a human at sensing and evaluating a situation and acting on intuitions.
The problems noted by Sharkey, Guarini and Bello regarding the ethical implications of mistakes made in the theatre of war seem to reach a natural crescendo in the form of the issue of responsibility, which Gert-Jan Lokhorst and Jeroen van den Hoven tackle in Chapter 9. They provide a rigorous account and overview of responsibility and consider where the line might lie in terms of when responsibility could shift between designers and the robot itself.
Section 4 attempts to cover a wide range of issues regarding the law and governance of robotics. In Chapter 10 Richard O'Meara gives us an insight as to how we could extend current legal infrastructures like the Geneva Convention to robots (as a starting point) in order to create a framework for the governance of robots to account for their growing sophistication and increasingly larger deployment in the theatre of war. In Chapter 11 Peter Asaro considers how a number of crucial legal concepts like responsibility, culpability, causality and intentionality might be applied to new cases of tele-operated, semi-autonomous and fully autonomous robots. It is worth noting that the coverage of all three levels of autonomy of robots is particularly impressive. In Chapter 12 Ryan Calo takes an overview of a number of issues churned up by robots and their implications on privacy. Calo focuses mainly on how the increased risk of hacking, due to more robots in our lives, potentially opens the door for hackers to covertly view and participate in our private lives. He then moves on to how the increasing surveillance potential of robots effects constitutional rights under the Fourth Amendment against unreasonable government intrusions in the private sphere.
Unlike Section 3, where it is easy to find a golden thread between each chapter, the chapters in section 4 seem a little more disjointed from one another. Whilst all the chapters are linked by the idea of governance and regulation, the variety of legal subject matter is very broad. To move from the governance of military robots (chapter 10) to the extension of jurisprudential concepts to robots (chapter 11), and to then jump to robots and privacy (chapter 12), seems like too much material is attempted to be covered with no opportunity for a substantive discussion in either area. This should not be taken as a criticism of the texts themselves; they are all well written, engaging and, in the space the authors have available, very good. But while it might not have been the intention of the editors to make connections between the various chapters, the lack of connection between the chapters means there is a lack of 'oomph' to the section, making it seem a little watered down.
Emotional and sexual relationships between humans and robots are the topic of section 5. Matthias Scheutz clearly identifies the danger that robots specifically designed for eliciting human emotions and feelings could lead to emotional dependency or even harm. Several experiments are discussed that show that humans are affected by a robot's presence in a way "that is usually only caused by the presence of another human." (p. 210). However, in the case of human-robot interaction, the emotional bonds are unidirectional and could be exploited by, e.g., companies that make their robots "convince the owner to purchase products the company wishes to promote." (p. 216). David Levy looks at the issue of future robot prostitutes. After discussing the reasons for (especially) men to pay (mostly) women for sex, Levy considers five aspects of the ethics of robot prostitution. Unfortunately these aspects receive a rather cursory treatment. For instance, he compares sexbots to vibrators and argues from the widespread acceptance of the latter that objecting to the former would be 'anomalous' (p. 227).
However, it seems that he is ignoring the unidirectional emotional bonds discussed in the chapter before by Scheutz. What makes sexbots genuinely different is their ability to tap into our social interaction capacities, sensitivities and vulnerabilities. The importance of this comes also to the fore in Levy's discussion of the ethics of using robot prostitutes vis-à-vis one's partner. He speaks of "the knowledge that what is taking place is nothing 'worse' than a form of masturbation" (p. 228), thereby again missing the fact that these sexbots will have certain looks and behavioral styles that may lead to emotional consequences for both the user and his/her partner. One would expect a discussion of such delicate issues to focus on the potential differences between robotic and standard sex toys (or at least argue they don't exist), and not on the assumption that they will be similar in most relevant aspects.
Blay Whitby directly addresses Levy when he considers how social isolation might drive people to robots for love and affection. Whitby says, "peaceful, even loving, interaction among humans is a moral good in itself", and "we should distrust the motives of those who wish to introduce technology in a way that tends to substitute for interaction between humans." (p. 238). He therefore suggests that robot lovers and caregivers are political topics, rather than simply technological. Whatever one may think about the particular positions and arguments that are presented in this section, the discussion in itself, though possibly distasteful to some, will remain with us for a long time to come.
Section 6 brings us back to, as its introduction states, the "more serious interaction" (p. 249) between robots and humans, in the form of companionship and medical care. Jason Borenstein & Yvette Pearson examine whether robot caregivers will lead to a reduction in human contact for members of society that tend to be marginalized as a result of their impairments. Specifically, they analyze robot care and robot-assisted care from the perspective of human flourishing and Mark Coeckelbergh's differentiation between shallow (routine), deep (reciprocity of feelings) and good (respecting human dignity) care.[3] They express concern about whether human beings will still meaningfully be in the loop as robot caregivers become more pervasive (p. 262).
The care of the vulnerable, young children and the elderly is the main topic of the chapter by Noel and Amanda Sharkey. Robot supervision could lead to a loss of privacy and liberty. For instance, in the case of a young child playing, the problem is in trusting the robot's capacity to determine what constitutes a dangerous activity (p. 272). How do we avoid robot care from becoming overly restrictive? Another issue is that robot care might come as a replacement for human contact. Studies have been done with robot pets, such as Paro, that respond interactively. Although positive effects have been reported, the authors rightly warn, "These outcomes need to be interpreted with caution, as they depend on the alternatives on offer." (p. 277).
To probe our intuitions concerning robot servants, Steve Petersen suggests considering a 'Person-o-Matic' machine, not unlike the food replicator in Star Trek, that can make an artificial person from just about any specifications, from plastics, metals, or organic matter, with potentially any kind of programmable behavior. What would we find allowable or unacceptable about creating 'artificial servants' this way, or the kinds of servants that could be created? Peterson considers several possibilities and concludes "Sometimes I can't myself shake the feeling that there is something ethically fishy here. I just do not know if this is irrational intuition . . . or the seeds of a better objection." (p. 295).
The introduction to Section 7, 'Right and Ethics', is engaging and well-framed, asking the reader the provocative question whether we could one day see a robotic 'emancipation proclamation.' In Chapter 19 Rob Sparrow considers whether a robot could be a person, which he believes would consequently guarantee a robot gaining moral consideration. Sparrow notes that our conception of personhood has been anthropomorphized to the point that being a human has become the condition to being a person. He challenges this view and attempts to demonstrate how a robot can be a person through a test called the 'Turing Triage Test.' Kevin Warwick in Chapter 20 provides a fascinating thought experiment built on research in the field of neuromorphics: He asks us to consider whether a robot with a human brain could deserve personhood. We felt that for Warwick not to take the typical physicalist-functionalist approach to psychological capabilities for personhood meant the article was a refreshing read and helped distinguish it from the abundance of articles that seem to dogmatically restate the physicalist-functionalist argument that psychological capabilities associated with personhood can be distinguished as functional neural activity rather than being tied to a specific biological state.[4]
To finish off Section 7, Anthony Beavers (Chapter 21) takes a metaethical lens to the field and considers the implications that robotic (non-biological) technologies have on an ethics derived from biological agents, and specifically the strain that robots place on these biologically derived ethical concepts. What we found enjoyable about this section is how forward looking it is. No reasonable person would currently argue that any robot is deserving of rights or should be considered a person, but this section takes a futuristic approach to these issues, teasing us with questions of the 'what if?' variety. This section attempts to push the envelope of robot ethics by going beyond the 'state of the art' of today's robot ethical issues to how we might reach the point of a right-bearing robot and the conditions for that robot to be a right holder.
The Epilogue (Section 8) is an excellent overview of the book by Gianmarco Veruggio and Keith Abney. They not only condense many of the hurdles facing robot ethics that are given throughout the book, but also almost set out an agenda of research for some of the key areas and questions that need to be asked and answered within the robot ethics field. One particularly interesting question they raise, which many writers allude to but none really seems to have properly solved, is the question of 'when does a machine become a moral agent?' (p. 353). While no one would reasonably underestimate the difficulty of finding the point at which a machine becomes a moral agent, it does seem clear that once an answer is given many of the ethical issues surrounding robot ethics like moral and legal responsibility, personhood and rights etc will be far easier to give an answer to (or at least easier to justify a position on). We would no longer be asking whether a robot should have rights or whether the robot is a person. If you can argue that a robot is a moral agent, the answer to these types of questions will hopefully be more straightforward. On the other hand, of course, answering the question about a robot's moral agency actually requires a clear and consistent position regarding many if not all of the other issues mentioned. This book is doing us a great service in bringing together so many of the right kinds of questions to ask. They are difficult, but if robot ethics is to meet the demands of the upcoming events in robot technology we need to begin tackling the questions of ethical issues that are likely to arise tomorrow, today.
Patrick Lin, Keith Abney, and George A. Bekey (eds.)

Reviewed byPim Haselager, Donders Institute for Brain, Cognition, and Behaviour, Radboud University Nijmegen, and David Jablonka, University of Bristol



[1] Wallach, W., & Allen, C. (2008). Moral Machines: Teaching robots right from wrong. New York: Oxford University Press.
[2] Picard, R. (1997). Affective computing. Cambridge, MA: MIT Press, p. 19.
[3] Coeckelbergh, M. (2010). Health care, capabilities, and AI assistive technologies. Ethical Theory and Moral Practice, 13 (2), 181-190.
[4] Lewis, D. (1986). On the Plurality of Worlds. Oxford: Blackwell.
 SOURCE  http://ndpr.nd.edu

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Sunday, August 12, 2012

Religion, Politics and the Politics of Religion in Turkey (I)

Introduction

This article is primarily concerned in a power struggle within Turkey for over the last 80 years, leaving aside a much longer one of 200 years. Working on religion, politics and politics of religion anywhere involves varies parties as the state, the society, and the individual of the political body of that given country. In order to try to understand the state-religion relationship in Turkey, I suggest that Presidency of Religious Affairs / Diyanet

İşleri Başkanlığı should be scrutinized as an initial step. Within the Turkish society, there have been existing an increasing friction between two groups that may roughly be defined as laicists1 and Islamists2 during the whole republican era ongoing since 1923, but has become more visible especially in the 1990’s. In this article, I will be debating on the basic and crucial questions, as I perceive it, ‘what is a capacitated democracy and how to achieve it?’ in the context of law and politics in Turkey. Actually, in order to evolve my argument, I will initially be focusing on the development of the relations among the state, the groups in society, and religion in the Republic of Turkey. Then, I will be discussing the need and possibility of a mutually acceptable ground for a peaceful coexistence in this country. Obviously my preference to work on the last 80 years instead of the 200 year span of the phenomenon stems out of my acceptance of the republican times to be a more visible stage of the above mentioned contestation.

The argument I put forward in this essay runs as follows:


a) Initial consideration for laicist policies and legislation of the republican decision making elite were to alter not only the supra-structure of Turkey towards a modern/Western body as their predecessors in the late Ottoman times, but also to transform the whole Turkish society into a modern one. Traditional belief appeared there as a threat for this seemingly ambitious project of modernity. Therefore, the  
Republic of Turkey’s founding elite implemented policies to remove religion from the public realm and reduce it to a matter of faith and practice of the individual, so that the principle of freedom of religion was to protect "individualised religion" only. In fact, many of the strongest supporters of laicism consider themselves religious, and would be offended to be perceived as atheists and/or agnostics etc.
b) Such policies found quite a many devoted followers in society; however yet another part of the society preferred to remain faithful to their traditional beliefs. Also, political Islam, a modern ideology rooted in nineteenth century, has been more and more visible in the political arena in Turkey especially in the last decades. Thus, in more than eighty years, divisions became even deeper in Turkey's political and social   body. However this has was not a ‘revival’3
as many scholars in the field claim as, it has always been a part of the Turkish social body, but has grown in the last decades in parallel with the worldwide resurgence of religion. It is obvious that the internal policies of the 80’s in Turkey also triggered the escalating conservatism.


A Story of the State and Religion in Turkey: " Diyanet"
Diyanet İşleri Başkanlığı (Presidency of Religious Affairs- hereinafter Diyanet) is a secular administrative unit in the Republic of Turkey established in 1924 to execute services regarding Islamic faith and practices. It was designed to enlighten society on the topic of religion as well as carry out the management of places of prayer. In order to explore politics of religion in Turkey, Diyanet is, as I see it, a fruitful case study to make. Thus one of the concerns of this article is to focus on the tensions between its services and the processes of securing secularism in Turkey. This complexity led me to reflect on the representation of the construction (and deconstruction) of Turkish 'modernity' and of 'state and religion'. In order to develop my argument, initially I focus on the legal and bureaucratic structure of the Presidency of Religious Affairs. Here I should clear up an issue first: Translations used for Diyanet İşleri Başkanlığı vary in literature, including terms as Department of the Affairs of Piety, Directorate-General of Religious Affairs, General Directorate of Religious Affairs, Religious Affairs Department, Directorate of Religious Affairs, and Religious Affairs Directorate. For the English term I prefer to use "The Presidency of Religious Affairs", since the Administration uses this term officially. 
Within the context of the worldwide resurgence of religion, Turkey constitutes a sociologically illuminating and theoretically challenging case. To vest sovereignty fully and unconditionally in the nation of the new born state of Turkey founded in 1923, indicated a new political choice of a modernization project that was based on secularism and the nation-state. After the foundation of the Turkish Republic, the state elite, through a series of legal regulations, tried to secure secularism. One of the most important legal tools in this context was the Act dated 3
rdMarch 1340 (1924) no. 429 on the Abolishment of The Ministries of Seriyye (Religious Affairs) and Evkaf (Pious Foundations). The new legislation preferred to place the management of religious affairs in the hands of an administrative bureau, not to a ministry in the cabinet. This was a key part of the overall policy of the founding political decision-making elite of Turkey who wanted to establish a strictly secular state and to transform society into a modern one. They did not want to have a unit within the cabinet dealing with religious affairs. Instead, by assigning religious affairs to an administrative unit, the ruling elite both took religion under their control and at the same time managed to break the potentially sacred significance of the Diyanet.
The first article of Act no. 429 states that, ‘In the Republic of Turkey, the Grand National Assembly of Turkey and the Cabinet which is formed by the Grand National Assembly of Turkey are responsible for the legislation and execution of provisions concerning the affairs of people; and the Presidency of Religious Affairs will be formed as a part of the Republic for the implementation of all provisions concerning faith and prayer of the religion of Islam, and the administration of religious organizations’. This is a reflection of Kemalist laicité which may be indicated to be similar to the French one with a  
Bureau des Cultes 4within their Ministry of the Interior. With this regulation, religious affairs concerning faith and prayer were made the concern of the Diyanet, and all other areas of interest were considered to be under the legislative power of the Grand National Assembly of Turkey, thus sharia as a legal system was abolished.
As per this enactment, in the hierarchal order of the Turkish administrative system, the Diyanet was put under the auspices of the Prime Ministry. The President of Religious Affairs was appointed by the President upon the proposal of the Prime Minister. In this Act, the organizational structure of the Presidency and positions under it were not specified except by the provision that ‘the place where muftis would refer to is the Presidency of Religious Affairs.’ Legal regulations concerning the administrative structure of the
Diyanet organization in this period can be found in the ‘Budget of the Presidency of Religious Affairs’, which was a part of the annual Budget Act.
The administrative structure of the central and provincial organizations of the  
Diyanet was first stated in the 1927 Budget Act. In the ‘Permanent Positions Table’ attached to the Act dated 30th June 1929 no. 1452 on the unification and equation of the salaries of civil servants, which was published in the Official Gazette and went into effect on 30th June 1929, the permanent positions of the Diyanet got stated for the first time, and as per the Article 2 of the said law, this table was considered the organizational law for the Diyanet until a new law was made in 1935. With this regulation, the claims made during the previous meetings of the Assembly, namely, that there was a lack of legal basis, were rendered invalid. Since the management and personnel (hademe) of all mosques and prayer rooms were transferred to the Presidency-General for Foundations by June 1931 with the 1931 fiscal year budget law of the Presidency-General for Foundations, adopted on 8th June 1931 and published in the Official Gazette on 13thJune 1931, the personnel of the Presidency of Religious Institutions and Presidency of Supplies which had been under the central organization of the Presidency of Religious Affairs were transferred with their posts to the Presidency-General for Foundations. Thus the powers of the Presidency of Religious Affairs were considerably reduced. Furthermore, article 7 of the Act stated that mosques and prayer rooms would be classified according to ‘real needs’, and duties that could be combined would be specified in order to determine new positions, so that the personnel were also reduced. Despite all these changes, the legal regulation was passed in the Assembly without any objection. The annulment of article 5 of the Act no. 429, which was inconsistent with the said law, was clearly stated by the Grand National Assembly decision on 4 January 1932.
Act No. 2800 on The Organization and Duties of Religious Affairs that was passed on 14 th June 1935, and published in the Official Gazette on 22nd June 1935, is the first organizational enactment of the Presidency of Religious Affairs. But, more importantly, Act no. 5634 came into effect on the 29th April 1950 after the passing of a draft bill (dated 7th March 1950) on 23rd March 1950, towards the end of the Republican People’s Party government. Thus the Günaltay5   Cabinet changed considerably the organization of religious
affairs. This law is a reflection of a religiously different climate of the late 1940s that affected the 7th Republican People’s Party Assembly in 1947. This change in climate can be observed also in speeches made by various deputies during the debates on this law, in which they stated that they were pleased by the positive changes in religious organization and in the status of relevant individuals.

6The difference in attitudes observed in these proceedings compared to previous related laws is especially interesting. Previous debates were generally just votings on the proposed regulations; whereas now serious debates were held. Also, the statement that took place in the preamble of the Act no. 5634 as, ‘the necessity and need reflected by continuous requests by members in party congresses’ was yet another indication of the same change in climate that was decidedly more sensitive to religious issues. By this legislation, the name ‘Reislik’ was changed to the name ‘Başkanlık’ which reflected a change in the use of the Turkish language (Reis is the Ottoman equivalent of ‘president’, whereas ‘başkan’ is modern Turkish) and several new units were created within the organization. Moreover, the management of mosques and prayer rooms and mosque personnel which had been transferred to the Presidency General for Foundations by the 1931 Budget Act was given back to the Diyanet in 1950.
The organizational and personnel structure of the Diyanet, introduced in 1950 by Act no. 5634, was preserved until 1965. The draft bill related to the organization proposed to the Grand Assembly of Turkey after the adoption of the 1961 Constitution was accepted and enacted after lengthy debates on 22 June 1965. The Act no. 633 on the Organization and Duties of the Presidency of Religious Affairs, which was published in the Official Gazette on 2 July 1965 and came into effect on 15 August 1965, was in my view a sign of a different mentality compared to that of the founding elite. In this regulation the duties of the Presidency of Religious Affairs were stated as ‘to carry out affairs related to the beliefs, prayers and moral foundations of Islam, to enlighten society about religion and to manage places of prayer.’ To create an administrative body to offer services to meet the general, daily needs of practicing Islam may be justifiable as ‘public service’ where about 95% of the population

belongs to Islam; however to assign to this organization a function such as ‘to carry out affairs related to moral foundations’ whose content is legally ambiguous, indicates that the state preferred to use the organization as an ideological tool in a manner different from the original intent of the founding elite. Such a wording in an issue as political as the regulation of religion in a secular state reveals that the state's choice of propagating and protecting a particular religion is completely incompatible with the notion of a secular state. However one may assume that the legislators of the 1960 Constitution aimed to correct the Kemalist mistake of not adequately recognising the role of Islam in the formation of the Turkish individuals’ identity.
After the 1965 enactment, most legal regulations regarding religious affairs took the form of governmental decrees. Since both in the Constitutions of 1961 and 1982 it is stated that the organization shall be regulated by laws, this practice is obviously against the law. However in 1975, the Grand National Assembly of Turkey enacted a new law that altered the existing system regarding religious affairs to a large extent. New legislation titled Act no. 1893 was sent to the President for ratification on 6 May 1975, but President Korutürk, who was then in office, sent the legislation back to the Grand National Assembly of Turkey to be reviewed again, in accordance with Article 93 of the Constitution of the Turkish Republic. During the revision of law No. 1893 in the Assembly, some fundamental changes were made on articles other than the ones that had led the President to return the law. In accordance with constitutional procedures in regards to legislative activities that did not require the President’s approval for a second round, the Assembly enacted the regulations as an Act dated 26th April 1976 No. 1982, and sent it to the Presidency on 30th April 1976 to be published. However this enactment was considered by the Presidency to be a new law because of the changes beyond the scope of the stated reasons for the rejection of Act No. 1893, and it was therefore sent back to the Grand National Assembly of Turkey on 7th May 1976 to be reviewed again. Upon rejection of this demand, the President filed a case against Act No. 1882 by claiming that the procedure was not constitutional, and the Constitutional Court decided that the enactment was "incompatible with the Constitution in form" on 30th April 1979. This Constitutional Court decision was published in the Official Gazette on 11th May 1980, with the requirement that it should be revised one year later. However, neither on this date nor later, was any legal regulation enacted except that, as explained above, the legal domain was regulated by cabinet decrees and other administrative regulations.7

Since there is still no change regarding legislation, a question to be asked is whether the provisions of Act No. 633 are in effect once again. This problem is solved by two decisions of the Council of State. A Third Chamber of the Council of State decision provides that a previous Act does not come into effect automatically, because the duty and authority of enacting and amending laws belong exclusively to the Grand National Assembly of Turkey and the decisions of the Constitutional Court are not retroactive.


8The General Board of the Council of State ratified this decision by decision E.1971/22, K.1971/36 and dated 24th May 1971.9Thus, it cannot be claimed that after the annulment of Act No. 1982 came into effect, Act No. 633 would come into effect. In short, Diyanet can be defined as a legal oddity, which continues to exist as a very powerful administrative unit despite its lack of a technically legal basis.
The absence of a clergy in Islam -unlike Christianity with its church system- is one of the most important facts legitimizing the state’s intervention in religion categorizing it as a public service. Considering that public services can be defined as an activity managed by public legal entities or by private entities supervised by the state for the purpose of meeting a shared and general need which has acquired a certain importance for the people, the state’s involvement in religious affairs is generally accepted in this context as something that does not conflict with secularist principles. An assessment of the duties of the
Diyanet in this context reveals that duties such as ‘the management of places of prayer’ and ‘providing correct publications of the Koran’ are indeed public services fulfilling a collective need. However, the state makes use of the Diyanet as an administrative tool to propagate official ideology regarding Islam while fulfilling duties like "enlightening society about religion" and "religious education". An interesting point here is the differing policies of administrations over time from being strictly positivistic to somewhat religious.
The principle of equality, construed and applied as ‘equality in blessings and burden’ by the Turkish Constitutional Court, requires that all persons eligible for a public service should be able to benefit from such service in a free and equitable manner. The first problem that arises when the subject of public service is religion is that the state is focused on a single religion rather than on services including all religions in the territory. However as concerns
our present subject matter, this problem is relatively easy to deal with, because Islam is the religion of the majority of the people and services related to other religions are provided by the respective communities according to the provisions of the Lausanne Treaty. However, a problem emerges in services to be offered to different Muslim groups having different beliefs.
It has been observed that the religious belief promoted by the State is closer to the Sunnite tradition and that the

Diyanet and its officers or spokespersons have sometimes tended to display hostility towards Alevi and Shiite citizens. A draft law prepared in 1963 for defining the organization and duties of the Diyanet proposed the establishment of a "Presidency of Religious Sects." This proposal, however, was criticized on the grounds that it could "pave the way for official separation" and was never implemented.

The   

Diyanet claims that Alevis and Sunnites are not subject to discrimination because, except for certain local customs and beliefs, there are no differences between these two sects regarding basic religious issues hence this indicates a denial of a separate ‘Alevi’ religious identity. The fact that Sunnites constitute the majority apparently appears to be justifiable to Turkish republican laic elite, as the state disregards other sects. The Diyanet pretending to be unaware of the religious belief of the Alevi population, and its building of mosques in Alevi villages, is a pressure exerted by the state to implant the Sunnite belief in this section of society.10
The existing legal structure provides a dual nature to the Diyanet. On one hand, religious life is being controlled by the secular state. This is assumed in so far as the Presidency is directed by managers loyal to the secular state. However, the extensive network of the Diyanet all over the country, which no other administrative body enjoys, is a great opportunity for all governments to perform power, regardless of their political positions. thus the Diyanet as an administrative organism may indirectly obtain power over the government. However paradoxically, in this context, the state employs in Turkey the Diyanet against religion and its influence on the socio-political level.


(TO BE CONTINUED)


İştar B. Gözaydın

NOTES
1 I use the term laicists for ones that prefer the state’s control of religion as opposed to secularism which implies the separation of state and religion. As Rex Ahdar and Ian Leigh point out, "The longstanding French policy of laicité exemplifies … desire to restrict, if not eliminate, clerical and religious influence, over the state. The French Parliament’s ban in 2004 of conspicuous religious clothing and insignia in public schools – aimed at the wearing of Muslim headscarves- illustrates this suspicion of religion and is an attempt to avert the growth and influence of an incipient Muslim fundamentalism in that nation. The modern Islamic society of Turkey is similarly an example of a state founded on strongly secular principles where restrictions on individual religious liberty have been introduced to prevent pressure being exerted by the predominant religious group" (Ahdar & Leigh, 2005: 73). For a comprehensive argumentation on the terms laic and secular, and their derivatives, see Davison, 2003. I totally agree with Davison in his arguments, thus I prefer to use the term ‘laicist’ for republican state practice in Turkey. Furthermore, laiklik (laicité) is the concept that is preferred by the Republican decision-making elite of turkey in all legislations and other legal regulations.
2 Islamists are typically defined as those who advocate the shari’a (Islamic law derived from the Qur’an) as basis for a system of government. In order to be consistent, an Islamist has to prefer the shari’a. However, in Turkey, the term also encompasses a group that prefer more religious references in daily life like according dressing codes, rituals etc., but not necessarily a shariatic order. A survey dated May-June 2006 indicates that in Turkey a majority in Turkey define themselves as Islamist (48.4%), as opposed to laicist (20.3%). (www.tesev.org.tr/etkinlik/Presentasyon-2006.pdf)
3 For some such usage see, Esposito (1985); Davison (1998); Howe (2000: 7, 8, 15, 305); Kramer (2000:55-84); Karpat (2001: 527); Nachmani (2003: 90). I assert that ‘revival’ may limitedly be used for the revitalizations of the religious orders (see Mardin, 1989: 149) in the 19th century that was part of emergence of political Islam which in fact was completely a modern ideology. (see Türköne, 1991)
4For an interesting argument on this "central office of organized religions" see. Bowen (2007) 22-28.
5founder of the "six pillars (republicanism, nationalism, laicism, popularism, statism, reformism)" of the republican Turkey. In 1914 Günaltay became a professor of Turkish history and Islamic nations at Darülfünun/ Faculty of Letters, and then got appointed as the dean of the Divinity School. He got into politics in 1915 as a member of the Parliament. He took posts in the Anatolian Movement. He was in the Parliament again from 1923 to 1954 as a member. He got appointed as the prime minister on January 16, 1949. His cabinet was in power until May 22, 1950, when the Democrat Party got a vast majority of the votes in the elections. He published very many books on Islam and politics, appearing to be bringing together a republican approach with religious sensitivities.
6 For speeches by the Seyhan deputy Sinan Tekelioğlu and the Erzurum deputy Vehbi Kocagüney see TBMM Zabıt Ceridesi (GNA proceedings) VII, 25 (1950), 838.
Şemsettin Günaltay (1883-1961), Turkish prime minister from 1949 to 1950 was a graduate of Lausanne University, Faculty of Natural Sciences. In 1900’s he started working on the Turkish history, under the influence of Ziya Gökalp, a prominent sociologist, that he met in those years. Gökalp was the theoretical

7 Actually, this currently remains to be one of the wonders of the Turkish socio-political system, especially from a legal anthropological point. On a purely legalistic ground, it is not easy at all to perceive how any 
administrative unit remains technically without proper regulations for over 35 years, let alone one concerning a very sensitive issue like religion that all interested parties seem to be totally obsessed with. I believe that a thorough survey on the legal mentality of the decision-making elite in Turkey would be very interesting and useful in trying to understand the politics in this country.

8 State Council Third Department, E. 1970/444, K. 1971/10, T. 9 January 1971. Danıştay Dergisi (State Council Journal), 4 (1972) 69-70.
9 For this decision see Danıştay Dergisi (State Council Journal), 4 (1972) 71-75.

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Wednesday, August 01, 2012

THINKING IN THE BOX (B)

(BEING CONTINUED FROM 19/06/12)

A)The Gold Standard, Deflation, and Financial Crisis in the Great Depression:

An International Comparison


With its accumulation of gold. France should have been expected to inflate;


but in part because of the restrictions on open market operations discussed


above and in part because of deliberate policy choices, the impact of the gold

inflow on French prices was minimal. The French monetary base did increase

with the inflow of reserves, but because economic growth led the demand for

francs to expand even more quickly, the country actually experienced a wholesale  price 

deflation of almost 11% between January 1929 and January 1930.



Hamilton (1987) also documents the monetary tightening in the United


States in 1928, a contraction motivated in part by the desire to avoid losing

gold to the French but perhaps even more by the Federal Reserve's determination

to slow down stock market speculation. The U.S. price level fell about

4% over the course of 1929. A business cycle peak was reached in the United

States in August 1929, and the stock market crashed in October.

The initial contractions in the United States and France were largely selfinflicted

wounds; no binding external constraint forced the United States to

deflate in 1929, and it would certainly have been possible for the French government

to grant the Bank of France the power to conduct expansionary open

market operations. However, Temin (1989) argues that, once these destabilizing

policy measures had been taken, little could be done to avert deflation and

depression, given the commitment of central banks to maintenance of the gold

standard. Once the deflationary process had begun, central banks engaged in

competitive deflation and a scramble for gold, hoping by raising cover ratios

to protect their currencies against speculative attack. Attempts by any individual

central bank to reflate were met by immediate gold outflows, which forced

the central bank to raise its discount rate and deflate once again. According to

Temin, even the United States, with its large gold reserves, faced this constraint.

Thus Temin disagrees with the suggestion of Friedman and Schwartz

(1963) that the Federal Reserve's failure to protect the U.S. money supply was

due to misunderstanding of the problem or a lack of leadership; instead, he

claims, given the commitment to the gold standard (and, presumably, the absence

of effective central bank cooperation), the Fed had little choice but to

let the banks fail and the money supply fall.

For our purposes here it does not matter much to what extent central bank 
choices could have been other than what they were. For the positive question

of what caused the Depression, we need only note that a monetary contraction

began in the United States and France, and was propagated throughout the

world by the international monetary standard.4




If monetary contraction propagated by the gold standard was the source of

the worldwide deflation and depression, then countries abandoning the gold

standard (or never adopting it) should have avoided much of the deflationary

pressure. This seems to have been the case. In an important paper, Choudhri

and Kochin (1980) documented that Spain, which never restored the gold

standard and allowed its exchange rate to float, avoided the declines in prices

and output that affected other European countries. Choudhri and Kochin also

showed that the Scandinavian countries, which left gold along with the United

Kingdom in 1931, recovered from the Depression much more quickly than

other small European countries that remained longer on the gold standard.

Much of this had been anticipated in an insightful essay by Haberler (1976).

Eichengreen and Sachs (1985) similarly focused on the beneficial effects of

currency depreciation (i.e., abandonment of the gold standard or devaluation).

For a sample of ten European countries, they showed that depreciating

countries enjoyed faster growth of exports and industrial production than

countries which did not depreciate. Depreciating countries also experienced

lower real wages and greater profitability, which presumably helped to increase

production. Eichengreen and Sachs argued that depreciation, in this

context, should not necessarily be thought of as a "beggar thy neighbor" policy;

because depreciations reduced constraints on the growth of world money

supplies, they may have conferred benefits abroad as well as at home (although

a coordinated depreciation presumably would have been better than

the uncoordinated sequence of depreciations that in fact took place).5

Some additional evidence of the effects of maintaining or leaving the gold

standard, much in the spirit of Eichengreen and Sachs but using data from a

larger set of countries, is given in our tables 2.2 through 2.4. These tables

summarize the relationships between the decision to adhere to the gold standard

and some key macroeconomic variables, including wholesale price inflation

(table 2.2), some indicators of national monetary policies (table 2.3), and

industrial production growth (table 2.4). To construct these tables, we divided

our sample of twenty-four countries into four categories6:
1) countries not on 
the gold standard at all (Spain) or leaving prior to 1931 (Australia and New  Zealand);
2) countries abandoning the full gold standard in 1931 (14 countries);

3) countries abandoning the gold standard between 1932 and 1935 (Rumania

in 1932, the United States in 1933, Italy in 1934, and Belgium in  1935); and 4) countries still on the full gold standard as of 1936 (France, Netherlands, Poland).7
 Tables 2.2 and 2.4 give the data for each country, as 
well as averages for the large cohort of countries abandoning gold in 1931,

for the remnant of the gold bloc still on gold in 1936, and (for 1932-35, when

there were a significant number of countries in each category) for all gold
standard and non-gold standard countries. Since table 2.3 reports data on four

different variables, in order to save space only the averages are shown.8

The link between deflation and adherence to the gold standard, shown in

table 2.2, seems quite clear. As noted by Choudhri and Kochin (1980),

Spain's abstention from the gold standard insulated that country from the general

deflation; New Zealand and Australia, presumably because they retained

links to sterling despite early abandonment of the strict gold standard, did

however experience some deflation. Among countries on the gold standard as

of 1931, there is a rather uniform experience of about a 13% deflation in both

1930 and 1931. But after 1931 there is a sharp divergence between those

countries on and those off the gold standard. Price levels in countries off the

gold standard have stabilized by 1933 (with one or two exceptions), and these

countries experience mild inflations in 1934-36. In contrast, the gold standard

countries continue to deflate, although at a slower rate, until the gold standard's

dissolution in 1936.

With such clearly divergent price behavior between countries on and off

gold, one would expect to see similarly divergent behavior in monetary policy.

Table 2.3 compares the average behavior of the growth rates of three monetary

aggregates, called for short MO, Ml, and M2, and of changes in the

central bank discount rate. MO corresponds to money and notes in circulation,

Ml is the sum of MO and commercial bank deposits, and M2 is the sum of

Ml and savings bank deposits.9
The expected differences in the monetary polices

of the gold and non-gold countries seem to be in the data, although somewhat

less clearly than we had anticipated. In particular, despite the twelve

percentage point difference in rates of deflation between gold and non-gold

countries in 1932, the differences in average money growth in that year between

the two classes of countries are minor; possibly, higher inflation expectations

in the countries abandoning gold reduced money demand and thus

became self-confirming. From 1933 through 1935, however, the various monetary

indicators are more consistent with the conclusion stressed by Eichengreen

and Sachs (1985), that leaving the gold standard afforded countries

more latitude to expand their money supplies and thus to escape deflation.

The basic proposition of the gold standard-based explanation of the

Depression is that, because of its deflationary impact, adherence to the gold

standard had very adverse consequences for real activity. The validity of this

proposition is shown rather clearly by table 2.4, which gives growth rates of

industrial production for the countries in our sample. While the countries

which were to abandon the gold standard in 1931 did slightly worse in 1930

and 1931 than the nations of the Gold Bloc, subsequent to leaving gold these

countries performed much better. Between 1932 and 1935, growth of industrial

production in countries not on gold averaged about seven percentage

points a year better than countries remaining on gold, a very substantial effect.

In summary, data from our sample of twenty-four countries support the
view that there was a strong link between adherence to the gold standard and

the severity of both deflation and depression. The data are also consistent with

the hypothesis that increased freedom to engage in monetary expansion was a

reason for the better performance of countries leaving the gold standard early

in the 1930s, although the evidence in this case is a bit less clear-cut.
















































Author: Ben Bemanke, Harold JamesConference Date: March 22-24,1990

Ben Bemanke is professor of economics and public affairs at Princeton University and a research
associate of the National Bureau of Economic Research. Harold James is assistant professor
of history at Princeton University.

The authors thank 
David Fernandez, Mark Griffiths, and Holger Wolf for invaluable research
assistance. Support was provided by the National Bureau of Economic Research and the National
Science Foundation.


Notes
4. Temin (1989) suggests that German monetary policy provided yet another contractionary
impetus.

5. There remains the issue of whether the differences in timing of nations' departure

from the gold standard can be treated as exogenous. Eichengreen and Sachs (1985)

argue that exogeneity is a reasonable assumption, given the importance of individual

national experiences, institutions, and fortuitous events in the timing of each country's

decision to go off gold. Strong national differences in attitudes toward the gold standard

(e.g., between the Gold Bloc and the Sterling Bloc) were remarkably persistent

in their influence on policy.

6. The countries in our sample are listed in table 2.1. We included countries for

which the League of Nations collected reasonably complete data on industrial production,

price levels, and money supplies   (League of Nations'  Monthly Bulletin of Statistics 
  
and Yearbooks, various issues; see also League of Nations, Industrialization and  1945).  

     

Foreign Trade,Latin America, however, was excluded because of concerns
about the data and our expectation that factors such as commodity prices would play a


more important role for these countries. However, see Campa (forthcoming) for evidence

that the gold standard transmitted deflation and depression to Latin America in a

manner very similar to that observed elsewhere.

7. We define abandonment of the gold standard broadly as occurring at the first date

in which a country imposes exchange controls, devalues, or suspends gold payments;

see table 2.1 for a list of dates. An objection to this definition is that some countries

continued to try to target their exchange rates at levels prescribed by the gold standard

even after "leaving" the gold standard by our criteria; Canada and Germany are two

examples. We made no attempt to account for this, on the grounds that defining adherence

to the gold standard by looking at variables such as exchange rates, money

growth, or prices risks assuming the propositions to be shown.

8. In constructing the grand averages taken over gold and non-gold countries, if a 
country abandoned the gold standard in the middle of a year, it is included in both the

gold and non-gold categories with weights equal to the fraction of the year spent in

each category. We use simple rather than weighted averages in the tables, and similarly

give all countries equal weight in regression results presented below. This was done

because, for the purpose of testing hypotheses (e.g., about the relationship between

deflation and depression) it seems most reasonable to treat each country (with its own

currency, legal system, financial system, etc.) as the basic unit of observation and to

afford each observation equal weight. If we were instead trying to measure the overall

economic significance of, for example, an individual country's policy decisions,

weighted averages would be more appropriate.

9. The use of the terms Ml and M2 should not be taken too literally here, as the

transactions characteristics of the assets included in each category vary considerably

among countries. The key distinction between the two aggregates is that commercial

banks, which were heavily involved in commercial lending, were much more vulnerable

to banking panics. Savings banks, in contrast, held mostly government securities,

and thus often gained deposits during panic periods.

SOURCE The National U.S.A. Bureau of Economic Research,chapter parts from the book
Financial Markets and Financial Crises




B)Why the U.S. Has Launched a New Financial World War -- and How the Rest of the World Will Fight Back

Finance is the new form of warfare -- without the expense of a military overhead and an occupation against unwilling hosts.

What is to stop U.S. banks and their customers from creating $1 trillion, $10 trillion or even $50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other assets for sale in the hope of making capital gains and pocketing the arbitrage spreads by debt leveraging at less than 1 per cent interest cost? This is the game that is being played today.
Finance is the new form of warfare - without the expense of a military overhead and an occupation against unwilling hosts. It is a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain the usual objective (monetary wealth and asset appropriation) simply by financial means? All that is required is for central banks to accept dollar credit of depreciating international value in payment for local assets. Victory promises to go to whatever economy's banking system can create the most credit, using an army of computer keyboards to appropriate the world's resources. The key is to persuade foreign central banks to accept this electronic credit.
U.S. officials demonize foreign countries as aggressive "currency manipulators" keeping their currencies weak. But they simply are trying to protect their currencies from being pushed up against the dollar by arbitrageurs and speculators flooding their financial markets with dollars. Foreign central banks find them obliged to choose between passively letting dollar inflows push up their exchange rates - thereby pricing their exports out of global markets - or recycling these dollar inflows into U.S. Treasury bills yielding only 1% and whose exchange value is declining. (Longer-term bonds risk a domestic dollar-price decline if U.S interest rates should rise.)
"Quantitative easing" is a euphemism for flooding economies with credit, that is, debt on the other side of the balance sheet. The Fed is pumping liquidity and reserves into the domestic financial system to reduce interest rates, ostensibly to enable banks to "earn their way" out of negative equity resulting from the bad loans made during the real estate bubble. But why would banks lend more under conditions where a third of U.S. homes already are in negative equity and the economy is shrinking as a result of debt deflation?
The problem is that U.S. quantitative easing is driving the dollar downward and other currencies up, much to the applause of currency speculators enjoying a quick and easy free lunch. Yet it is to defend this system that U.S. diplomats are threatening to plunge the world economy into financial anarchy if other countries do not agree to a replay of the 1985 Plaza Accord "as a possible framework for engineering an orderly decline in the dollar and avoiding potentially destabilizing trade fights." The run-up to this weekend's IMF meetings saw the United States threaten to derail the international financial system, bringing monetary chaos if it does not get its way. This threat has succeeded for the past few generations.
The world is seeing a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. This financial grab is occurring without an army to seize the land or take over the government. Finance is the new form of warfare - without the expense of a military overhead and an occupation against unwilling hosts. Indeed, this "currency war" so far has been voluntary among individual buyers and the sellers who receive surplus dollars for their assets. It is foreign economies that lose, as their central banks recycle  this tidal wave of dollar "keyboard credit" back into low-yielding U.S. Treasury securities of declining international value.
   

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy . He can be reached via his website, mh@michael-hudson.com


(TO BE CONTINUED)

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