MF Global - the scandal explained

I'd like to point you at an article here that explains exactly what is so scandalous about the collapse of MF Global and the (seemingly standard) practice of re-hypothecation.


In effect, it means that any assets you own but hold via a bank, may not end up being yours if something happens to that bank.


If you don't want the big boys to get first dibs on your property, you'd better be very sure that the bank you've chosen is solvent, prudently run, and does not indulge in re-hypothecation of customer assets...

Education is a wonderful thing...

...If you would like a high-level introduction to what's about to happen in Europe (and by a natural consequence of having a global economy, the rest of the world) please view the video located here, where Kyle Bass gives an accurate picture of exactly what 2012 will bring.

In my opinion, the only possible alternative to an EU break-up as posited by Bass, will be a 'second' European currency (ECU2) which can be pegged much lower than the Euro.

Germany will resist this, as it would cause the 'primary' Euro to soar, hurting Germany's exports on which it depends.  So what will it be, the devil or the deep blue sea?

Pausing from my revision...

...to highlight this article.  It is genuinely as helpful as the majority of articles on the subject that I've seen in the broadsheet and tabloid press of our country.

Why are we so badly informed and unable to pin down the root cause of our current problems?  Because the information we would need to make sense of the situation is not being widely disseminated.  Why is the information not being disseminated?  I don't know.  As much as there is a small but growing ground-swell of genuine anger at politicians for protecting a small number of 'haves' at the expense of a large number of 'have-nots', I can't help but feel that journalists are at least equally culpable for not explaining the clear facts of how the financial system operates to the public.  The first step to change, is to admit that you have a problem.

Journalists such as Robert Peston (who in the UK is probably the most read financial journalist by some margin) does a great job of dancing around the periphery of what's going on, while somehow managing to never dig into the real meat of what's happening in the world of finance.

After a while, such studied ignorance starts to look about as convincing as James Murdoch's protestations that he:

a) doesn't read his email.
b) managed to go through a meeting the following week on the subject of the email that he didn't read, without getting an inkling that something might be wrong.

Hannah Arendt - Ideology and Terror (seminar)

For my seminar paper this semester I've been looking at 'Ideology and Terror', which forms the concluding chapter of Hannah Arendt's work The Origins of Totalitarianism.  In this chapter, Arendt tries to sum up exactly how totalitarianism worked in the cases of Stalin's Russia and Nazi Germany.

The chapter itself is quite dense and involved, I will first attempt to list the key points below and then expand upon them where necessary:

• Totalitarianism is essentially different to other forms of political oppression (such as tyranny and dictatorship)
• While other forms of oppression tended to leave a states existing social, legal and political structures in place, totalitarianism effectively destroys these structures and replaces them with a single ideology and hierarchy.  
• Totalitarianism is a means and end to itself, it does not seek the approbation or understanding of other, rival, schools of thought.  A totalitarian state has its own self-contained set of values and rules, that operate within a single ideology.  Arendt defines an ideology as '...isms which to the satisfaction of their adherents can explain everything and every occurrence by deducing it from a single premise...' (Arendt, p603)
• A totalitarian state prefers citizens who cannot tell the difference between right and wrong to a thinking citizen that agrees with the state.  
• A totalitarian state expects each citizen to be able to perform one of two roles:  Victim or Executioner.  If the state perceives that certain citizens are enemies, it relies upon the other citizens to identify these enemies and execute them, thereby protecting the state as a whole. 

Let us examine an example of how a Totalitarian state has worked.  Hitler was greatly impressed by Darwin's Theory of Evolution.  In desiring Germany to be populated by the Aryan ideal, Hitler believed that he was acting to increase Germany's future strength by weeding 'undesirables' out of the gene pool for future generations.  The appeal to German citizens was simple;  'Do you love Germany?'  

If you answered yes, you were on the side of the state.  If you answered no, you were an enemy of Germany and to be eliminated.  However, due to the Nazi ideology, if you were saying yes to loving Germany, the Nazi ideology implied that you were also saying yes to Nazi policies.  The Nazi party would say, 'We love Germany, we want Germany to be strong.  We wish to rid Germany of those foreigners and weaklings who plot against it and those who do not serve it well.  We wish to prevent Germany from being perceived as weak internationally, and need to expand its borders in order to provide Lebensraum (translates as 'living space') for the German people.  We believe that in order to make Germany strong we should encourage our genetically strong families to raise the next generation of Germans, and prevent the gene pool from being sullied by undesirable characteristics.'

If you were somebody who claimed to love your country, but did not necessarily agree with ideas such as ethnic cleansing or the expansion of Germany's borders, you would be held up as a hypocrite who contradicted themselves.  The 'logic' of the Nazi ideology was such that if you said 'I love Germany', you were also acquiescing to the Nazi policies.  How could you claim to love Germany without agreeing that Germany needed more living space, had been betrayed by Jews and liberals within the country, or that the next generation of Germans should be good-looking and strong?

Especially with his ideas regarding the Aryan master race, Hitler was taking the scientific ideas of Darwin, and attempting to apply them across Germany.  He was the first political leader to attempt eugenics on a national scale.  His efforts to influence (and effectively 'speed up') the effects of natural selection were similar to techniques used by those who breed pedigree animals in an effort to keep particular characteristics throughout a breed.  The German people who matched the required criteria were expected to become the 'executioners' who would weed out and help destroy the undesirable German 'victims' who were weakening Germany and preventing its growth.  

Please note that there was no serious attempt to depose Hitler from within Germany, his hold on power remained absolute even when the tide of war turned against him.  Hitler had managed to fire the imagination of ordinary Germans everywhere to such an extent that they believed that by following the quasi-scientific Nazi ideology they were doing what was right.  As you can perceive, 'Do you love Germany?' was a loaded question at the time of Nazi rule.  

So, how was this state of affairs achieved?  According to Arendt, it is the seeming logicality of the ideology combined with the fear of self-contradiction that enabled the Nazi party to exert the level of control that it did  over its citizenry.  Germany was still recovering from the effects of the first world war and hyperinflation that had occurred in 1922-1923.  Liberal governments had failed to provide solutions that enabled Germany to recover to its former prosperity.  As such the German people were ready to listen to somebody with something radically new to say.  In his oratory, Hitler provided the two things that people wanted to hear.  Firstly he pointed the finger of blame.  Second, he promised strong decisive action, something that had been notably absent from the previous governments.

By absolving the ordinary German people of blame, he had the popular support necessary to implement controversial changes, thus beginning the process of turning Germany into a Totalitarian state.  Arendt believes that by holding each individual in terror of being seen as an enemy of the state, instilling in them a fear of questioning or discussing their feelings with others and isolating them away from alternative political views, the Nazi party was able to strengthen its grip to such an extent that the German political system was transformed from a weak democracy to became a totalitarian state. 

This leads to the question of why doesn't this happen more often?  Will Greece or Portugal be taken over by such a system?  The economic circumstances seem favourable for a coup of this kind.  

It is my personal belief that this form of coup is less likely (though not impossible) today.  To begin with, the lessons of Nazism and Stalinism are recounted regularly across the western world as a warning to others.  Secondly, the world is much better connected in terms of social media allowing alternative viewpoints to the state to be heard, even in countries that try to filter out external influences.  Lastly, a side-effect of globalisation is that each economy is dependent to some extent on others.  A state can no longer exist in complete isolation without inflicting considerable hardship on its citizens.  

How Western Democracy ended

If you want to understand what's happening in Western financial markets right now, then I strongly advise you to read this fantastic article by Nomi Prins.


It explains how it is that national governments right here in Europe have been taken over by Goldman Sachs, and now have unelected leadership whose sympathies lie with international financial institutions, rather than their own populations.


Also, do you really think we're immune, or is it just not our turn yet?  I can't help but feel that once the Eurozone is picked clean, we will almost certainly become the next international plaything.  Still, as long as somebody's earning their bonus, eh?

Economics - The Dismal Science

The title is a quote from Thomas Carlyle who described Economics as such in an 1849 writing titled Occasional Discourse on the Negro Question (in which Carlyle was arguing for the re-introduction of slavery!)


Economics pre-Keynes was labelled Classical economics, and its main proponents were Adam Smith (remember 'the hidden hand of the market'?) as well as David Ricardo, Thomas Malthus and John Stuart Mill.


These economists believed that the market was self-correcting, and that if a problem arose in supply and demand it could be remedied without state intervention.  


John Maynard Keynes however, believed that:


1.  Economies sometimes suffer from lack of demand, which in turn leads to unemployment.
2.  That the economy itself is slow to correct issues.
3.  State intervention can kickstart demand and reduce unemployment.
4.  In certain cases, the private sector will not increase spending, and therefore the state must step into the breach.


For example, public sector (state) jobs are currently being lost in order to implement the austerity policies of George Osborne and the coalition government.  This is leading to increased unemployment.  Despite the government agreeing lending targets with the financial institutions that it had to help during the economic crisis of 2008, there has not been an upsurge in jobs created by the private sector.


This is why there was an announcement made by the Prime Minister today announcing that the Government would take on some of the risk of people applying for 95% mortgages to buy a new home.  It is hoped that by doing this, home-building levels will increase, thereby keeping a greater number of builders and tradespeople in employment.  David Cameron has today acted in a manner that would make Keynes proud.  


The question is, will it work?  It's too early to tell.  However, this is all just a sideshow distracting from what's happening in the Eurozone and US, as we wait to see which European government is the next to see its cost of borrowing rise past the magic 7% mark, and then find out who's holding all those IOUs....

Three statements...

An interesting challenge set in HCJ this week; to find out what is important about three individual statements and blog about them.

'The evening star is the same thing as the morning star'

This relates to the work of a German logician, mathematician and philosopher called Gottlob Frege, who wanted to give an example of the difference between 'reference' and 'sense' in logic.

Please consider the statements below:

1.  The morning star = the morning star.

2.  The morning star = the evening star.

As you may or may not know, both the 'morning star' and the 'evening star' refer to the planet Venus.  However, the first statement appears superfluous, while the second appears to be giving additional information to the reader.  Frege argues that both statements are equally true, but because the referenced object in each component expression of both statements is identical (the planet Venus) the sense of the component expressions are what determines the informativeness of each statement.  Thus statement 1 seems distinctly unhelpful, while statement 2 provides the reader with additional information.

'The present king of France is not bald'

This was a logical problem set by Bertrand Russell who intended to build upon the work done by Frege.

Western logic is binary in nature, that is, it only allows for two states:  'true' or 'false'.

Russell argues that if a statement such as 'The present king of France is bald.' is examined, it can be split into three separate assertions:

1.  That there is an x, where x is a present king of France
2.  For every x that is a present king of France, and every y that is a present king of France, x = y (i.e. there can only be one present King of France at most)
3.  For every x that is a present king of France, x is bald.

Given that France is a republic, and as such does not have a king, the statement is provably false, as the first assertion is clearly false.  Now consider the following statement:

'The present king of France is not bald'

This second statement is a negation of the first statement, but logically it presents some problems.

This is due to the ambiguity present in the negation.  If you read this statement as saying 'the present king of France is not bald, because there is no present king of France', the statement is true.

However, if you were mistakenly under the impression that France currently had a king, then the negation could, in logical terms, mean 'there is something that is the present king of France, and it is the only present king of France, and that present king of France is not bald.'

Read in the latter manner, the statement is logically false.  One of the primary laws of logic are that a statement can only be 'true' or 'false'.  Yet 'The present king of France is not bald' appears to be both....


There was nobody on the road

I couldn't find this precise phrase discussed directly, but am choosing to believe (possibly incorrectly) that Chris was paraphrasing from Chapter 7 of Lewis Carroll's famous work 'Through the Looking Glass'.

Specifically:

`I see nobody on the road,' said Alice.
`I only wish I had such eyes,' the King remarked in a fretful tone. `To be able to see Nobody! And at that distance, too! Why, it's as much as I can do to see real people, by this light!' 

There is a logical absurdity in the idea of being able to see nobody, which is hopefully visible to all!  

Freud and psychoanalysis

Sigmund Freud was born on May 6 1856 in a place called Freiberg that was at that time part of the Austrian Empire.  His interest to the world is mainly in the field of psychoanalysis, which he pioneered and championed throughout his life.

Freud looked at a person's mind as being composed of three parts (in a similar way to Plato's Tripartite Theory of the Soul)  with the mind being split into:

Id (our 'animal' brain, made up of base desires)
Ego (the rational part of our minds)
Super-Ego (our internal policeman, that perpetually berates us for our actions or inaction)

Freud was a pessimist, and believed that the Ego was hopelessly out-gunned by the Id and the Super-Ego.  He believed that only by psychoanalysis could the Ego be helped to hold its own against this two-pronged attack.

However, Plato argued that the soul was split into Appetitive, Rational and Spirited parts, and that it was possible for the rational part of the mind to control the more appetitive and spirited parts of the mind.

At the time of Freud's work becoming available, it was considered ground-breaking and exciting, Freud gained a great deal of popularity and his work was initially widely accepted with little criticism.  It was only after careful study that criticisms of his work began to surface, in some cases among former students who had previously followed him avidly.

Freud is not held in such high regard today.  It was found upon attempting to repeat his techniques, that the results of some of his case studies may have been falsified, and that psychoanalysis does not, in fact, offer the benefits suggested by Freud.

In addition, Freud's attitude to, and explanations of, female sexuality are without merit, except as an example of misogyny at work.

Freud's concepts of the Id, Ego and SuperEgo remain popular and widely used today, but his views on sexuality generally, and female sexuality in particular, have been dis-proven as conjecture.  In reading his work today, you'd be forgiven for suggesting he should see a therapist...

Citizen Kane

In the HCJ lecture on 29th of October, we were introduced to modernism.  Modernism marked a move away from the passion and fervour of the Romantic period and back towards a scientific world view that was similar in some respects to the enlightenment.  However, modernism, as the name suggests, was concerned mainly with 'newness'.  Modernism sought to eradicate unnecessary tradition and was obsessed with finding new ways of creating and interpreting art, literature and the world around us.

Modernism was the age of Nietzsche and Freud, of Joyce in literature, and of Wagner in music.

During this period, an American press baron (one of the first of the modern type) grew to prominence in the United States.  His name was William Randolph Hearst, and his life formed the starting point for the screenplay that became Citizen Kane.  As such, although it is possible to view Citizen Kane as simply a well-written motion picture, the viewer should be aware that they are watching a thinly disguised biography of the life of one of the first press barons ever to grace America.  It is interesting to note how 'proactive' the tabloid press became under Hearst's leadership, when it came to getting news stories.

Again with the Daily Mash....

Every now and again, the Daily Mash publishes an article that is absolutely spot on.  One such article is linked to here.

Marx and Engels - Manifesto of the Communist Party

Karl Marx was born in Germany on May 5th 1818, to a wealthy middle-class family.  He began to study law at university, but later switched to philosophy.  After completing his studies, Marx worked as a journalist, writing for and editing 'Rhienische Zeitung', a radical newspaper.  The paper was suppressed by the German authorities for its radicalism, and Marx left Germany to study socialism in France.  It was in Paris that Marx met Friedrich Engels, with whom he co-wrote some of his later works, including the Manifesto of the Communist Party.

The Manifesto of the Communist Party was written by Marx and Engels in Brussels, and presented to the Communist League in London in 1848.  As a work it is split into four main sections.

The first section is 'Bourgeois and Proletarians', this section is mainly concerned with what has already happened, and discusses in detail the rise of the bourgeoisie, how they have dismantled the feudal systems that preceded them, and effectively managed to simplify class antagonisms to 'a two horse race'.  These are the bourgeoisie (who have power) and the proletariat (who have none).   Marx argues that the bourgeoisie have reduced human interaction and worth to being considered purely on financial terms.  He also points out the most obvious fault of the capitalist system, in that for it to continue to succeed, it needs perpetual growth.  As such, it continually needs to be fed by either gaining new markets, or by finding methods by which it can further saturate existing markets.

Marx argues that another effect of the rise of the bourgeoisie has been to concentrate wealth in a few hands.  He states "The lower strata of the middle class -- the small tradespeople, shopkeepers, and retired tradespeople generally, the handicraftsmen and peasants -- all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialised skill is rendered worthless by new methods of production."

I think the above is a statement that could be ratified by anybody who has witnessed the growth of Tesco across the UK in the last few years, especially when they launched 'Tesco Express' and moved into providing 'local' stores that displaced many sole traders trying to run an independent village or suburban store.  Another example would be the independent record shops or bookshops, that were first attacked by Virgin, HMV, Waterstones and WH Smith, who are now themselves being out-muscled by Amazon.

It is simply impossible for a sole trader or small company to compete with the economies of scale that a highly capitalised market leader can call upon.  If Tesco open a new store near an existing general store, they can afford to run that store at a loss for several years if necessary, often providing more convenience by offering longer opening hours and better stock levels than the competition.  The sole trader cannot afford to run at a loss, if they slash their prices to compete, they make a loss and have to close.  Similarly if they try to keep the store open longer, they have to pay more in wages/lighting/heating and have to put their prices up, making Tesco even more attractive to the shopper and losing them their regular custom.  In short, they can't win.

The second section is entitled 'Proletarians and Communists', and deals mainly with the relationship between the Communist Party and the proletariat.  Marx asserts that "In what relation do the Communists stand to the proletarians as a whole?  The Communists do not form a separate party opposed to the other working-class parties.  They have no interests separate and apart from those of the proletariat as a whole."

This, for me, is where Marx runs into trouble.  The statement above contains one massive unproven assumption.  It assumes that the proletariat speak with one unified voice, and call for the same things.  Just from my own personal experience, it is obvious to me that everybody that I've met, regardless of their wealth or social status, has to one extent or another had their own individual opinions on almost every subject.  The idea that all working people without property would have identical views on how a nation, or even the world, should be governed, strikes me as hopelessly idealistic, despite Marx's protestations to the contrary.

The second section also details the changes that the Communist Party would make to everyday life.  These include the abolishment of private property (Locke would be spinning in his grave) as well as changes to education (children to be raised and educated by the state, living in state homes, not with their parents)

In effect, Marx argues that by workers producing sufficient for everyone, there will be no need for wages, each will be provided for and able to develop the skills and work in the areas that interest them.

Again, my personal belief is that Marx has once again failed to take human nature into account, as well as Adam Smith's laws of supply and demand.  If ninety-nine percent of the population wanted to be doctors, who's going to collect the rubbish?  Also, how many of the people that want to be doctors actually have the required intelligence, analytical skills, steadiness of hand, and personality to make a good doctor?  Marx does not suggest a mechanism by which he could actually deliver on what he's promised in terms of career choice.

Likewise, suppose an individual decides they want to be something public facing, such as a pub landlord.  Among the regular customers are some people that the landlord likes and considers friends, and some other people that the landlord dislikes.  The principles of communism suggest that everybody should be treated equally, but there is no profit motive to make the inn appealing to the widest possible customer base, so what incentive does the innkeeper have to not simply make the place entirely to his own tastes, and drink with his friends every evening ignoring (as far as possible) other customers.

In a city, people can just move to another pub, but in a village a partisan landlord could render the local pub unpleasant to all but a favoured few.  This is just one example of how an individuals natural tendency to favouritism, renders the system Marx suggests as unlikely to succeed.  In order to work, communism would require workers with no strong personal attachments, with the strength of will to consistently refuse their friends, and who were all incorruptible.  It's my belief that very few such people exist, and that they are certainly not a majority.

The alternative would be to have inspectors, or officers, who travelled the communist state, judging the impartiality of each establishment.  However, this would actually raise the inspector or officer above the proletariat, causing the communist party to have effectively created its own bourgeoisie.  Again, I believe that such an inspector would require an iron will to not succumb to the many offers of bribery that would be certain to come their way.

The third section of the Manifesto is entitled 'Socialist and Communist Literature', and is devoted largely to the categorisation and criticism of various types of socialist and communist literature.  Marx uses this section of the manifesto to attack other forms of socialism.  In it he describes reactionary socialism as being motivated by those who want to take the world back into the feudal system.  

Marx also describes Conservative or Bourgeois Socialism, as being designed by those who "...want all the advantages of modern social conditions without the struggles and dangers necessarily resulting therefrom.  They desire the existing state of society, minus its revolutionary and disintegrating elements.  They wish for a bourgeoisie without a proletariat."

Lastly, Marx tackles the literature of Critical-Utopian Socialism and Communism.  Far from being critical of Critical-Utopian Socialist literature, he embraces it regardless of the fantastic and utopian nature of some of the remedies it proposes.  He does this because "...these socialist and communist publications contain also a critical element.  They attack every principle of existing society.  Hence, they are full of the most valuable materials for the enlightenment of the working class."

The final section of the Manifesto is perhaps the least interesting to the modern reader, as it deals largely with Communist Parties relations with opposition political parties at the time that the manifesto was written.  As Marx and Engels remarked in the preface to the 1872 German edition "...it is self-evident that the criticism of socialist literature is deficient in relation to the present time, because it comes down only to 1847; also that the remarks on the relation of the Communists to the various opposition parties (Section IV), although in principle still correct, yet in practice are antiquated, because the political situation has been entirely changed, and the progress of history has swept from off the earth the greater portion of the political parties there enumerated."

Having read the manifesto in its entirety, my personal feeling is that Marx's observations on the flaws within the capitalist system are well researched, accurate and still applicable today.  The UK's current financial crisis is to some extent the natural result of the concentration of wealth in the hands of a small number of global companies (rather than individuals)  

However, the communist remedies for capitalism seem to me, to present at least as many problems as they solve, requiring the slavish obedience of every individual within the system for it to work correctly.  It's my personal belief that there would have to be a significant fundamental shift in human nature before the communist system became workable, an opinion that seems to have been borne out by those countries that have experienced communism first-hand.

Kant and Hegel

Kant (1724-1804) was educated to believe in Leibniz, but rejected Leibniz's teachings in favour of Rousseau and Hume.  Kant considered Hume an enemy, and it was in partly in order to be able to reject Hume's teachings that Kant worked to master his own philosophy.

Rousseau had a much deeper effect on Kant, inflaming Kant's liberal leanings and causing him to embrace the ideas of the Romantics when forming his own philosophy.

Kant's most important work is generally considered to be 'The Critique of Pure Reason', which was first published in 1781.  Of particular importance are Kant's views on space and time.  Kant argues that each object that exists, does so partly due to the external object itself, but partly due to our perceptive apparatus (eyes, ears etc.)  He holds that all of the qualities of an object are subjective.  Kant calls the act of perceiving an object a phenomenon, which he claims can be split into two parts.  First, is the part of the phenomenon that is due to the object itself, which he describes as the sensation.  Secondly, there is the part that is due to our subjective apparatus, which Kant describes as the form of the phenomenon.

Kant states that the form is not part of the sensation, and that as it is with us at all times, it is a priori as it is not dependent upon our personal experiences.  In fact, Kant argues that both time and space are a priori knowledge, which is an interesting viewpoint.

Personally, I am not certain that I was born with a pre-existing knowledge of time, though it must surely be one of the first things of which every sentient creature becomes aware.  If time and space did exist a priori in the human mind, how is it that among the many different disorders with which the human mind can be afflicted, there is no evidence of a condition which leaves the sufferer with a different interpretation of time to the norm?  I find it difficult to believe that this knowledge could be  in a part of the brain so resistant to injury that there is not one recorded case of a person becoming 'chronologically dislocated'.

The absence of any scientific evidence to support this theory, even after many years of detailed medical histories being recorded on the majority of psychiatric and head trauma patients, suggest that Kant is wrong on this point.  In fact the closest point of reference I can find to this idea is Old Mother Dismass in Witches Abroad.  (I apologise to those allergic to Terry Pratchett)

Moving from Kant to Hegel, Georg Hegel (1770-1831) was a critic of Kant, who nevertheless relied on Kant for a starting point in his philosophy.  Hegel believed that there was a 'whole' that was purely spiritual, and that Hegel calls 'the Absolute'.  In Hegel's view, nothing is real except 'the Absolute', and everything else is just a facet of the Absolute.  Given that nothing but the Absolute is real according to Hegel, everything that is can be determined by using Hegel's most famous contribution to modern philosophy, which is the dialectic.  Hegel stated that a dialectic consisted of thesis, antithesis and synthesis.

For example, if you state 'the Absolute is a sister.', that becomes a thesis.  However, the fact that there is a sister implies that there is at least one sibling, so the antithesis of this would be to conclude 'The absolute is a sibling.'  As this antithesis contradicts the thesis, it is then necessary to form a synthesis that encompasses both the thesis and antithesis, such as 'The absolute is a sister and a sibling.'

The above is still clearly incomplete, as the existence of a sister and a sibling implies that there must be a Mother (and a Father) as well, so a new thesis must be formed.  In Hegel's view, if you carried this step by step through to its logical conclusion, you would have catalogued everything that exists within the Absolute.

Dialectics may be an OCD list-maker's dream, but is of little practical use as has been proven when used by Marx to formulate his political theories on what the future would look like, as it takes no account of the whims and desires of humanity.

It should also be noted that Hegel was fiercely nationalistic, glorifying Germany to the point of idolisation.  Despite this, Hegel contended that America was where the final embodiment of the 'Absolute Idea' would reveal itself, "perhaps in a contest between North and South America".  Hegel greatly admired conquering heroes, and spoke of the ability of individuals with the ability to shape world history.  Examples given by Hegel included Caesar and Napoleon, suggesting that Hegel valued military prowess over other thinkers.

Rousseau - Romanticism

Rousseau (1712-1778) was born in Geneva, but came to France in 1743, when after a quarrel with his employer (the French Ambassador to Venice) over unpaid wages, he travelled to Paris to obtain justice for himself.

His first literary work was not published until 1950, it was an essay on the question:  'Have The Arts and Sciences conferred benefits on mankind?'.  Rousseau argued that they had not, and did so with such success that he was awarded the prize.

Rousseau's argument was that science, letters and the arts were the enemy of morals, and that by creating desires in people, they led away from a peoples 'natural' state of being.  Believing that science and virtue were incompatible, Rousseau argued that the 'noble savage' was the closest to a human ideal, and that everything that made up civilisation was to be despised and deplored, as it led to great evil.

Rousseau followed up his first essay with a second entitled 'Discourse on Inequality' which was published in 1754.  In this he stated 'man is naturally good, and only by institutions is he made bad'.  Rousseau sent the essay to his contemporary Voltaire, who responded 'I have received your new book against the human race, and thank you for it.  Never was such a cleverness used in the design of making us all stupid.  One longs, in reading your book, to walk on all fours.'

Rousseau's belief in natural instinct over rational thought is still very much with us today and used frequently in advertising and by politicians, when making an appeal to the emotion, rather than logic.  Just as one example, watch this advertisement for a mobile phone, in which some overly photogenic young people frolic in a variety of settings, while the voice-over extols the virtues of impatience.  Do we believe that it was impatience that led to the development of that mobile phone?  Or is it possible that hundreds of years of scientific advance have contributed towards this particular device?

Rousseau's most important work was his 'Social Contract', published in 1762.  In which he speaks of 'general will' in relation to democracy.  Rousseau also speaks of 'The Sovereign', in this work, but does not mean an individual, such as a king or leader.  Instead he means that the people of a state, will form the sovereign and determine the general will.

Rousseau's democracy is a 'true' democracy, where all the people of the state come together to form the sovereign and determine what the 'general will' might be.  In Rousseau's world, this could lead to somebody who held a viewpoint that ran contrary to the general will, being 'forced to be free'.  E.g. being forced to act contrary to their own will and inclination.

Rousseau's argument for this system, was that if each individual is forced to vote alone, acting only for their own self-interest, then the result of such a vote, would be the best possible outcome for the state as a whole, as the majority of people would have their interests looked after.

The obvious downside of such an approach, would be that anybody who's viewpoint differed from the general will, would be forced to follow the general will, or presumably leave the state.  I do not believe that Rousseau himself offered any alternative to following the general will.