Quote of the day

Serge Halimi, editor of Le Monde Diplomatique, wrote:

Some revelations come as little surprise. It’s not really news that some politicians love money and like to spend time with those who have lots of it. Or that they sometimes behave like a caste that is above the law. Or that the tax system favours the affluent, and that the free circulation of capital enables them to stash their cash in tax havens.

The disclosure of individual transgressions should lead to scrutiny of the system that created them. But in recent decades, the world has been changing at such a pace that it has outstripped our analytical capacity. With each new event — the fall of the Berlin Wall, the emergence of the Brics (Brazil, Russia, India, China, South Africa), technological advances, financial crises, Arab revolutions, European decline — experts have fallen over themselves to announce the end of history or the birth of a new world order.

Beyond these premature birth and death notices, three main, more or less universal, tendencies have emerged which warrant initial exploration: the marked rise in social inequality, the disintegration of political democracy and the decline of national sovereignty. Every new scandal is like a pustule on a sickly body: it allows us to see each element of this trio re-emerge separately and operate together. The overall situation could be summed up thus: governments allow their political systems to drift towards oligarchy because they are so dependent on the mediation of an affluent minority (who invest, speculate, hire, fire and lend). If governments balk at this abandonment of the popular mandate, international pressure from concerted financial interest ensures they topple.

Oligarchy, Halimi suggests, is scarcely incompatible with a modern democracy. Both can coexist within a social system. This point, the uncomplicated compatibility of oligarchy and democracy, has slowly moved to the forefront since December, 1991, the moment at which Bush the Elder’s New World Order emerged in its purest form. Our modern oligarchs rule indirectly, by capturing a political elite which, although elected by the demos, depends on the former for resources and guidance. The oligarchs thus rule because of the political power generated by their enormous wealth.

The United States, of course, provides a special case of this general condition. Today it is the only global empire, an unmatched military colossus and a country which sits beyond the rule of law, according to its self-understanding. It also remains exceptionally wealthy and provides the world with its commonly used reserve currency. Sheldon Wolin depicted it as having an inverted totalitarian system, that is, as an ‘as if’ democracy embedded within an empire and a stagnant economy. Democracy in America today produces results that mostly affirm oligarchic demands, a system of markets strongly distorted by finance capital and the prerogative powers of the security-surveillance apparatus. A political commitment to economic austerity and massive wealth inequality, to the imprisonment of the poor as a means of social control and to imperial domination at home and abroad makes the United States a leader among the many countries committed to this kind of democracy. Democratic elections remain in effect. They are, however, ineffective mechanisms for holding the powerful accountable. They are, instead, noisy spectacles which generate a weak kind of political legitimacy for the governed and a politically effective legitimacy for the social system as a whole. This system legitimating originates in the common realization that little to nothing can be done to successfully resist the irresistible force which is society.

Americans ought to consider these points before they vote, whenever they listen to their political leaders and when they wonder how they can make it through the year.

Recommended: Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II

Wage Slavery plus debt peonage — these are the fates awaiting the ‘better off’ members of the 99%, Alan Simpson’s “lesser people.” The ‘worst off’ shall continue to find themselves existing on city streets, squatting in vacant land and buildings, suffering one of the many prisons which pockmark the body politic or dying from untreated illnesses. These fates — wage slavery, debt peonage and social outcaste — should not be considered accidents of history. They have obvious systemic causes. The economist Michael Hudson explains in the second of a four-part series:

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.

The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

What is truly astonishing about this situation is the nature of contemporary finance capital. In essence, it is functionless. It does not exist to generate capital for investment in the real economy. It does not provide safe storage for pension funds, insurance monies, personal savings, etc. It does not even provide the common investor with rational investment programs. Rather, finance capital today is just a system specific mechanism (or, better, set of mechanisms) which extracts massive quantities of wealth from the world. Profit taking — that is its sole purpose. Moreover, it is omnivorous and perpetually famished. It cannot be satiated. Its appetites thus put everyone at risk. It lacks a home, a national identity. It cares not for people, their cultures, societies and well-being. It is everywhere and nowhere.

It is, in a word, the vampire about which so many Americans fantasize.