What makes Kilkenny different from Davos - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 11 November 2013
What makes Kilkenny different from Davos A  A  A

Kilkenny, Ireland

Behind every great fortune is a crime, said Balzac. Before the age of capitalism - which gave people the means to build their fortunes without taking any thing away from others -- that was largely true.

So, what lay behind the fortune with which Anthony van Sallee used to buy up much of Long Island, New York, in the 17th century -- larceny, murder, or slavery?

All of the above. This ancestor to the Vanderbilts...and to the Whitneys...and through their mother to our own children was, in the language of Baltimore's street life: "one mean *****."

What did he do? Where was he from? The name gives us a clue...

The 'van' part is Dutch...like most of New York's early settlers, he carried the 'van' which means 'of' or 'from' to tell us that he was from Sallee. But where is that? Ah. Check the map. You will find no Sallee anywhere near Amsterdam or Liege. In fact, it is not to be found anywhere in Europe. Instead, it is a city in North Africa. On what was known as the Barbary Coast, the center of the white slave trade.

What follows is a discussion of involuntary servitude, capitalism and how to explain it to a hundred or so drunken Irishmen crammed into the back of a Kilkenny bar...

Travel does not always take you where you want to go or where you expected to be. But you often end up where you ought to have gone in the first place.

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Our trip took us to Kilkenny, Ireland, where we were to attend a conference loosely described as "Davos without the hookers." In fact, it was not much like Davos in any way, except that a few people who called themselves economists tried to tell others what to do.

First, Kilkenny has little in common with Davos. The former is a tiny, quaint medieval Irish town. The latter is a chic resort in the Swiss Alps.

Second, the focus of the discussion was not on how to improve the world, but on how to give the limping Irish economy a boost.

Third, the conference organizer - David McWilliams - did not invite Janet Yellen or Paul Krugman. Instead, he invited your editor, which we took for a sign of desperation. Or else, there is something wrong with him. As a precaution, we avoided the tap water.

Kilkenny is a charmingly Irish town. There is a pub on every corner and two or three down the street. A man in need of another pint has only to haul himself a few steps in any direction.

We had just come from a discussion with economists. Every economist knows that people always act in their own rational self-interest.

Inside Cleere's the discussion had been on the nature of capitalism. How could it be kept on the 'straight and narrow?' was the question were meant to address. But the crowd had already been drinking for hours before we began. No two people had the same idea about what capitalism actually was. And our opponent was as well prepared with persuasive air.

"These dreamers...these idealists... imagine a perfect world of commerce, invention, and freedom," he began, pointing in our direction. "But it doesn't work that way. In practice, they get a world where money talks...and it tells us all what to do. They preached deregulation...and brought about the worse financial crisis since the Great Depression. They're always complaining about the government, but if it were not for the government this crisis would have turned into another Great Depression. Without the government, we'd all be completely unprotected against these greedy, rapacious rich people. Besides, they would be nothing without the government. The government provides the infrastructure. It provides a system of laws and justice that makes it possible them to earn their fortunes. Government is the source of major innovations too. It wasn't the free market, for example, that developed the internet; it was the government. Private companies were offered the opportunity to develop it themselves. They refused. Because they couldn't figure out how to make a profit on it.

"So I say, stop bellyaching about the government...stop pretending that the free market is the source of all good things...and sit down and figure out how we can get these banksters off our backs...and make this mixed system, of capitalism with some measure of state control, work better."

This opening salvo drew a warm applause. He had scored a direct hit a-midship. He had the drunks on his side. We hadn't said a word and we were already taking on water.

More tomorrow...

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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