The King’s Two Bodies

This looks like a good book:

Private outposts in the state and public outposts in finance, central banks have historically moved back and forth between very different institutional forms: private, public and various combinations of the two. Far from constituting a rational-functionalist formation, they have performed widely diverse and often barely related functions—from the administration of state debt to the issuing of currency and the supervision of private banks—cobbled together more or less ad hoc according to political expediency… Central banks, Vogl argues, constitute a fourth power, overshadowing legislature, executive and judiciary, and integrating financial-market mechanisms into the practice of government.

Central banks’ claim to autonomous authority is based on their assumed, and asserted, technical competence. As they and their aficionados in the media and in economics departments are fond of telling us, central bankers know things about the economy that normal people, inevitably overwhelmed by such complexity, cannot even begin to fathom. … Central bankers themselves have always been aware … that what they sell to the public as a quasi-natural science is in fact nothing more than intuitive empathy, an ability acquired by long having moved in the right circles to sense how capital will feel, good or bad, about what a government is planning to do in relation to financial markets. (Economic theory is best understood as an ontological reification of capitalist sensitivities represented as natural laws of a construct called ‘the economy’.) At critical moments, such as when the Bank of England went off the gold standard in 1931 …, central banking relies on the trained intuition of great men and their capacity to make others believe that they know what they’re doing, even when they don’t. At a university event in London almost a decade after the 2008 crash, Alan Greenspan was remembered by an enthusiastic admirer as having had ‘a complete model of the American economy in his body’.

Short-Termism, Climate Edition

Apparently, the lords of finance are now concerned that fossil-fuel companies are planning too much for the transition from carbon, at the risk of leaving dollars in the ground.

[Shell chief executive Ben] van Beurden told investors last month that Shell is no longer an oil and gas group, but is an “energy transition company” — a nod to its shift towards a low-carbon energy system. It is a statement that would have been unthinkable just a few years ago. But persistent cost-cutting and mounting climate concerns have left many in the sector worried that the industry is making a miscalculation. They fear it is turning its back on many big oil and gas projects before efficiency gains, renewables, electric cars and efforts to conserve fossil fuels are able to cap consumption.

By “the sector,” to be clear, what the Financial Times writer means is the sector of finance with claims against energy producers.

I don’t believe energy executives have any principled commitment to the survival of the planet. But they may  have a commitment which is cognate to it: to the survival of their businesses as ongoing entitities, which means committing money today to prepare for a post-carbon world. That’s where the conflict with finance comes from. Here’s Nick Stansbury, representing some financial conglomerate that owns a big chunk of Shell and BP:

Oil groups should, he says, avoid projects that take 10 or more years to become profitable… Instead they should focus on maximising returns to shareholders, including eventually returning capital rather than trying to transform themselves into renewable companies.

Funny how that’s so often the answer.