"Between Debt and The Devil" by Adair Turner

     This is a content review of Adair Turner's book "Between Debt and The Devil". Mr.Turner is an ex-chairman of Financial Services Authority of England, appointed 5 days after Lehman Brothers collapse. He wrote this book as his perspective of what is happening on financial system right now. The cause, analysis and suggestion given within 15 chapters, 251 pages.

     In the beginning, the book depicts that 40 years before the 2007-2008 crisis, finance grew far faster than the real economy, private credit grew faster than GDP, trading volume soared and as a result financial system become more complex. Experts confidently said these complex financial system will lead the market to completion, efficiency and stability. In April 2006, only 15 months before the onset of financial crisis, IMF's Global Financial Stability Report noted with approval the "growing recognition that dispersal of credit risk by banks to a broader and more diverse group of investor, has helped make banking and overall financial system more resilient". This assumption generated by the idea of economic growth driven by credit and control of interest rate from central bank to achieve low and stable inflation. However financial markets are different from other markets, thus even though financial intensity plays crucial role in a market economy, the relationship is not linear and limitless.

     Financial Markets have their own hysteria and the volatility is inexplicable in terms of economic fundamentals. Five factors were explained in this book which are irrational decision making, influence of the irrational belief, theory of rational arbitrageurs will bring the price back, irrational result whatever the decision is, uncertain result of mathematical risk model. Financial activity also might burden economy with the dead weight of additional and unnecessary cost. Increasing intensity also generates market volatility or in other ways made the economy less stable.

     Debt contract plays an important role in this matter, especially the institution that issues this, Banks. It always seen as a ride of financial system as its liquidity and mobility of the capital. The emerge of Industrial Revolution is a prove that debt contract in capital market, banks and equity market is a good injection for economic growth. However, although debt contract and banks play economically valuable roles, the very character that make them valuable is the reason why it is very harmful. First, debt contract is risk fixed means that it does not depend the value of the underlying asset.Then, it can creates a sudden stop in economics and resulting in depression and deflationary debt overhang effect.

     Banks now, on the other hand, have evolve from household saving place to power purchaser by creating credit and intangible money. They make loan to borrowers to be repayable at a later date with some sort of 'risk' payment and use it as their purchasing power. It expand in all aspect of household and business, makes all the transaction is going through banking system. As a result, once bank money has been created by extension of new credit, it is almost certain to remain in the banking system: very little is taken out and used is the form of notes and coins. As a comparison, the money circulation appears in United Kingdom that takes form of notes and coin is only 2% while the rest used in the banking system. This makes 'Too Big To Fail' situation in banking sector while the its role is harmful in the economy.

     to be continued.

"Bio Fantasy" Tribute to Chairil Anwar by Melissa Sunjaya

Bio Fantasy by Melissa Sunjaya

     This art exhibition was tribute to Indonesian maestro Chairil Anwar who give Melissa Sunjaya different perspective in seeing object of poem that he made in his early life. She translated Chairil's work by using her talent on graphic design as well as story telling. Her presentation actually really amaze me yet confusing. With the imagination of using biological cell to represent Chairil's poem, Melissa gave the audience another side of Chairil Anwar which rarely seen. This event was conducted at gallery of Komunitas Salihara, Jakarta.

    Melissa first introduce her artwork with some kind of fictional story located in the future space. It shows the situation that humanity face in the future time when people all fighting for their own interest. Given some imaginary places and condition, this story is really eye catchy and for me personally it depicts a basic value of social activity.

The Tale of Bio Fantasy

     After the opening tale, Melissa gave us the main course of the day. It is all the artwork that she made in these past 2 years. She interpret 45 (as the year of Indonesia independence day) of Chairil Anwar poet into some kind of graphic design art. One thing that really interesting me the most is the sense of contemporary touch that she gave in her work. It is an appearance of some verse in the portrait when audience viewing it using specific lens. The combination of all of that simply impressive.

  Diponegoro - Without Lens

Diponegoro - With Lens

The Art Work Display

     Overall, this exhibition has amaze me. All the abstract paint, illustration portrait, science fiction story and videography are better than good to describe who Chairil Anwar is. Although at some point it was too complicated, the message of the work is easy to understand. Good.

Gatel (Itchy). Tribute to Chairil Anwar by Melissa Sunjaya.

All the art work can be find on:
http://www.tulisan.com/blog/2015/09/a-tribute-to-chairil-anwar/
http://www.salihara.org/programs/visual-arts/exhibition/detail/bio-fantasy-a-tribute-to-chairil-anwar

al-Ahkam as-Sultaniyyah by Abu'l-Hasan al-Mawardi

     This book is one of the major works of al-Mawardi, the famous Islamic scholars in political science. It explains a lot about various aspect of the deen of Islam which are the concern and responsibility of chaliphate, amirs, wazirs and deputies. In the other words, this book talks about the system of leadership, or we can say that the system of governance.

     In the book, al-Mawardi really dig in into details. He was not only use Quran and Sunnah as the references, but also he shows a real life example in the past for how the leadership system has to be done. It gives the reader a clear picture about the condition of Quran and Sunnah that had been interpreted. This book depicts a stage of development of Islam which in this early date, was already manifesting toward strong governance and bureaucracy.

Ahkam al-Sultaniyyah

     What I like to highlight in this book is the system of leadership that al-Mawardi offered. In this book, al-Mawardi spend a lot to explain of the relationship between Imam and Wazirs. He wrote that there are two ways to choose an Imam which the first is chosen by the previous Imam and the second is elected by majority vote. However, wazirs or ministry, is a position that must be appoint by the Imam. Meaning to say, wazirs is a tool for Imam to control his government.

     Furthermore, the situation that happen now is there are many wazirs that have more power than the Imam. This situation is usually happen in the monarchy system with the King/Queen as the Imam and the Prime Minister as the delegation wazirs. For instance the Brexit situation that happened recently. Royal Family has done nothing over this situation and it literally nothing as they do not even have a right to vote for the Brexit. Moreover, it get worse when all the blame over this circumstances is taken by David Cameron, The Prime Minister. This situation is really contradict with the Islamic value that explain in this book. Because in the end of the day, the one that took judgement for all the decisions taken within the nation is not the wazirs (prime minister), it is the Imam.

     In the liberal country, this value is more practicable since their Imam is The President and the wazirs is more on the execution, not delegation. Hence, when the time the President elected, he appoint some people to represent him in the field they expert on which for example appointment as Minister of Finance or Minister of Education. However, this system relatively easy affected for sudden change of leadership style. For example the transformation of Bush Era to Obama. This means there will be some unstable political situation within the country and it affect any decisions taken. We still remember in 2008 that politics has bailed out the wall street, which people who think themselves as an institution that 'too big to fail'.

     In conclusion, al-Mawardi really gives some insightful writing in this al-Ahkam as-Sultaniyyah. All the ideas that came form Quran and Sunnah makes this book as a proof to people that everything has an answer and we just have to believe for what is right.