Replacing Economic Democracy with Financial Oligarchy

By Michael Hudson

But if a country is still not delivering, I think all would agree that the second stage has to be different. Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged? Jean-Claude Trichet, President of the ECB on receiving the Charlemagne prize for European unity (Aachen, 2 June 2011)

Soon after the Socialist Party won Greece’s national elections in autumn 2009, it became apparent that the government’s finances were in a shambles. In May 2010, French President Nicolas Sarkozy took the lead in rounding up €120bn ($180 billion) from European governments to subsidize Greece’s unprogressive tax system that had led its government into debt – which Wall Street banks had helped conceal with Enron-style accounting.

The tax system operated as a siphon collecting revenue to pay the German and French banks that were buying government bonds (at rising interest risk premiums). The bankers are now moving to make this role formal, an official condition for rolling over Greek bonds as they come due, and extend maturities on the short-term financial string that Greece is now operating under. Existing bondholders are to reap a windfall if this plan succeeds. Moody’s lowered Greece’s credit rating to junk status on June 1 (to Caa1, down from B1, which was already pretty low), estimating a 50/50 likelihood of default. The downgrade serves to tighten the screws yet further on the Greek government. Regardless of what European officials do, Moody’s noted, “The increased likelihood that Greece’s supporters (the IMF, ECB and the EU Commission, together known as the “Troika”) will, at some point in the future, require the participation of private creditors in a debt restructuring as a precondition for funding support.”[1]

The conditionality for the new “reformed” loan package is that Greece must initiate a class war by raising its taxes, lowering its social spending – and even private-sector pensions – and sell off public land, tourist sites, islands, ports, water and sewer facilities. This will raise the cost of living and doing business, eroding the nation’s already limited export competitiveness. The bankers sanctimoniously depict this as a “rescue” of Greek finances.

What really were rescued a year ago, in May 2010, were the French banks that held €31 billion of Greek bonds, German banks with €23 billion, and other foreign investors. The problem was how to get the Greeks to go along. Newly elected Prime Minister George Papandreou’s Socialists seemed able to deliver their constituency along similar lines to what neoliberal Social Democrat and Labor parties throughout Europe had followed – privatizing basic infrastructure and pledging future revenue to pay the bankers.

The opportunity never had been better for pulling the financial string to grab property and tighten the fiscal screws. Bankers for their part were eager to make loans to finance buyouts of public gambling, telephones, ports and transport or similar monopoly opportunities. And for Greece’s own wealthier classes, the EU loan package would enable the country to remain within the Eurozone long enough to permit them to move their money out of the country before the point arrived at which Greece would be forced to replace the euro with the drachma and devalue it. Until such a switch to a sinking currency occurred, Greece was to follow Baltic and Irish policy of “internal devaluation,” that is, wage deflation and government spending cutbacks (except for payments to the financial sector) to lower employment and hence wage levels.

What actually is devalued in austerity programs or currency depreciation is the price of labor. That is the main domestic cost, inasmuch as there is a common world price for fuels and minerals, consumer goods, food and even credit. If wages cannot be reduced by “internal devaluation” (unemployment starting with the public sector, leading to falling wages), currency depreciation will do the trick in the end. This is how Europe’s war of creditors against debtor countries turns into a class war. But to impose such neoliberal reform, foreign pressure is necessary to bypass domestic, democratically elected Parliaments. Not every country’s voters can be expected to be as passive in acting against their own interests as those of Latvia and Ireland.

Most of the Greek population recognizes just what has been happening as this scenario has unfolded over the past year. “Papandreou himself has admitted we had no say in the economic measures thrust upon us,” said Manolis Glezos on the left. “They were decided by the EU and IMF. We are now under foreign supervision and that raises questions about our economic, military and political independence.”[2] On the right wing of the political spectrum, conservative leader Antonis Samaras said on May 27 as negotiations with the European troika escalated: “We don’t agree with a policy that kills the economy and destroys society. … There is only one way out for Greece, the renegotiation of the [EU/IMF] bailout deal.”[3]

But the EU creditors upped the ante: To refuse the deal, they threatened, would result in a withdrawal of funds causing a bank collapse and economic anarchy.

The Greeks refused to surrender quietly. Strikes spread from the public-sector unions to become a nationwide “I won’t pay” movement as Greeks refused to pay road tolls or other public access charges. Police and other collectors did not try to enforce collections. The emerging populist consensus prompted Luxembourg’s Prime Minister Jean-Claude Juncker to make a similar threat to that which Britain’s Gordon Brown had made to Iceland: If Greece would not knuckle under to European finance ministers, they would block IMF release of the scheduled June tranche loan package. This would block the government from paying foreign bankers and the vulture funds that have been buying up Greek debt at a deepening discount.

To many Greeks, this is a threat by finance ministers to shoot themselves in the foot. If there is no money to pay, foreign bondholders will suffer – as long as Greece puts its own economy first. But that is a big “if.” Socialist Prime Minister Papandreou emulated Iceland’s Social Democratic Sigurdardottir in urging a “consensus” to obey EU finance ministers. “Opposition parties reject his latest austerity package on the grounds that the belt-tightening agreed in return for a €110bn ($155bn) bail-out is choking the life out of the economy.” (Ibid.)

At issue is whether Greece, Ireland, Spain, Portugal and the rest of Europe will roll back democratic reform and move toward financial oligarchy. The financial objective is to bypass parliament by demanding a “consensus” to put foreign creditors first, above the economy at large. Parliaments are being asked to relinquish their policy-making power. The very definition of a “free market” has now become centralized planning – in the hands of central bankers. This is the new road to serfdom that financialized “free markets” are leading to: markets free for privatizers to charge monopoly prices for basic services “free” of price regulation and anti-trust regulation, “free” of limits on credit to protect debtors, and above all free of interference from elected parliaments. Prying natural monopolies in transportation, communications, lotteries and the land itself away from the public domain is called the alternative to serfdom, not the road to debt peonage and a financialized neofeudalism that looms as the new future reality. Such is the upside-down economic philosophy of our age.

Concentration of financial power in non-democratic hands is inherent in the way that Europe’s centralized planning in financial hands was achieved in the first place. The European Central Bank has no elected government behind it that can levy taxes. The EU constitution prevents the ECB from bailing out governments. Indeed, the IMF Articles of Agreement also block it from giving domestic fiscal support for budget deficits. “A member state may obtain IMF credits only on the condition that it has ‘a need to make the purchase because of its balance of payments or its reserve position or developments in its reserves.’

Greece, Ireland, and Portugal are certainly not short of foreign exchange reserves … The IMF is lending because of budgetary problems, and that is not what it is supposed to do. The Deutsche Bundesbank made this point very clear in its monthly report of March 2010:

‘Any financial contribution by the IMF to solve problems that do not imply a need for foreign currency – such as the direct financing of budget deficits – would be incompatible with its monetary mandate.’ IMF head Dominique Strauss-Kahn and chief economist Olivier Blanchard are leading the IMF into forbidden territory, and there is no court which can stop them.”[4]

The moral is that when it comes to bailing out bankers, rules are ignored – in order to serve the “higher justice” of saving banks and their high-finance counterparties from taking a loss. This is quite a contrast compared to IMF policy toward labor and “taxpayers.” The class war is back in business – with a vengeance, and bankers are the winners this time around.

The European Economic Community that preceded the European Union was created by a generation of leaders whose prime objective was to end the internecine warfare that tore Europe apart for a thousand years. The aim by many was to end the phenomenon of nation states themselves – on the premise that it is nations that go to war. The general expectation was that economic democracy would oppose the royalist and aristocratic mind-sets that sought glory in conquest. Domestically, economic reform was to purify European economies from the legacy of past feudal conquests of the land, of the public commons in general. The aim was to benefit the population at large. That was the reform program of classical political economy.

European integration started with trade as the path of least resistance – the Coal and Steel Community promoted by Robert Schuman in 1952, followed by the European Economic Community (EEC, the Common Market) in 1957. Customs union integration and the Common Agricultural Policy (CAP) were topped by financial integration. But without a real continental Parliament to write laws, set tax rates, protect labor’s working conditions and consumers, and control offshore banking centers, centralized planning passes by default into the hands of bankers and financial institutions. This is the effect of replacing nation states with planning by bankers. It is how democratic politics gets replaced with financial oligarchy.

Finance is a form of warfare. Like military conquest, its aim is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attack may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight.

This attack is being mounted not by nation states as such, but by a cosmopolitan financial class. Finance always has been cosmopolitan more than nationalistic – and always has sought to impose its priorities and lawmaking power over those of parliamentary democracies.

Like any monopoly or vested interest, the financial strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance and protect finance capital and “the miracle of compound interest” that keeps fortunes multiplying exponentially, faster than the economy can grow, until they eat into the economic substance and do to the economy what predatory creditors and rentiers did to the Roman Empire.

This financial dynamic is what threatens to break up Europe today. But the financial class has gained sufficient power to turn the ideological tables and insist that what threatens European unity is national populations acting to resist the cosmopolitan claims of finance capital to impose austerity on labor. Debts that already have become unpayable are to be taken onto the public balance sheet – without a military struggle, needless to say. At least such bloodshed is now in the past. From the vantage point of the Irish and Greek populations (perhaps soon to be joined by those of Portugal and Spain), national parliamentary governments are to be mobilized to impose the terms of national surrender to financial planners. One almost can say that the ideal is to reduce parliaments to local puppet regimes serving the cosmopolitan financial class by using debt leverage to carve up what is left of the public domain that used to be called “the commons.” As such, we now are entering a post-medieval world of enclosures – an Enclosure Movement driven by financial law that overrides public and common law, against the common good.

Within Europe, financial power is concentrated in Germany, France and the Netherlands. It is their banks that held most of the bonds of the Greek government now being called on to impose austerity, and of the Irish banks that already have been bailed out by Irish taxpayers.

On Thursday, June 2, 2011, ECB President Jean-Claude Trichet spelled out the blueprint for how to establish financial oligarchy over all of Europe. Appropriately, he announced his plan upon receiving the Charlemagne prize at Aachen, Germany – symbolically expressing how Europe was to be unified not on the grounds of economic peace as dreamed of by the architects of the Common Market in the 1950s, but on diametrically opposite oligarchic grounds.

At the outset of his speech[5] on “Building Europe, building institutions,” Mr. Trichet appropriately credited the European Council led by Mr. Van Rompuy for giving direction and momentum from the highest level, and the Eurogroup of finance ministers led by Mr. Juncker. Mr. Trichet’s speech refers to “the ‘trialogue’ between the Parliament, the Commission and the Council.”

Europe’s task, he explained, was to follow Erasmus in bringing Europe beyond its traditional “strict concept of nationhood.” The debt problem called for new “monetary policy measures – we call them ‘non standard’ decisions, strictly separated from the ‘standard’ decisions, and aimed at restoring a better transmission of our monetary policy in these abnormal market conditions.” The problem at hand is to make these conditions a new normalcy – that of paying debts, and re-defining solvency to reflect a nation’s ability to pay by selling off its public domain.

“Countries that have not lived up to the letter or the spirit of the rules have experienced difficulties,” Mr. Trichet noted. “Via contagion, these difficulties have affected other countries in EMU. Strengthening the rules to prevent unsound policies is therefore an urgent priority.” His use of the term “contagion” depicted democratic government and protection of debtors as a disease. Reminiscent of the Greek colonels’ speech that opened the famous 1969 film “Z”: to combat leftism as if it were an agricultural pest to be exterminated by proper ideological pesticide. Mr. Trichet adopted the colonels’ rhetoric. The task of the Greek Socialists evidently is to do what the colonels and their conservative successors could not do: deliver labor to irreversible economic reforms.

Trichet states:

Arrangements are currently in place, involving financial assistance under strict conditions, fully in line with the IMF policy. I am aware that some observers have concerns about where this leads. The line between regional solidarity and individual responsibility could become blurred if the conditionality is not rigorously complied with.

In my view, it could be appropriate to foresee for the medium term two stages for countries in difficulty. This would naturally demand a change of the Treaty.

As a first stage, it is justified to provide financial assistance in the context of a strong adjustment programme. It is appropriate to give countries an opportunity to put the situation right themselves and to restore stability.

At the same time, such assistance is in the interests of the euro area as a whole, as it prevents crises spreading in a way that could cause harm to other countries.

It is of paramount importance that adjustment occurs; that countries – governments and opposition – unite behind the effort; and that contributing countries survey with great care the implementation of the programme.

But if a country is still not delivering, I think all would agree that the second stage has to be different. Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged? … (my emphasis)

The ECB President then gave the key political premise of his reform program (if it is not a travesty to use the term “reform” for today’s Counter-Enlightenment):

We can see before our eyes that membership of the EU, and even more so of EMU, introduces a new understanding in the way sovereignty is exerted. Interdependence means that countries de facto do not have complete internal authority. They can experience crises caused entirely by the unsound economic policies of others.

With a new concept of a second stage, we would change drastically the present governance based upon the dialectics of surveillance, recommendations and sanctions. In the present concept, all the decisions remain in the hands of the country concerned, even if the recommendations are not applied, and even if this attitude triggers major difficulties for other member countries. In the new concept, it would be not only possible, but in some cases compulsory, in a second stage for the European authorities – namely the Council on the basis of a proposal by the Commission, in liaison with the ECB – to take themselves decisions applicable in the economy concerned.

One way this could be imagined is for European authorities to have the right to veto some national economic policy decisions. The remit could include in particular major fiscal spending items and elements essential for the country’s competitiveness. …

By “unsound economic policies,” Mr. Trichet means not paying debts – by writing them down to the ability to pay without forfeiting land and monopolies in the public domain, and refusing to replace political and economic democracy with control by bankers. Twisting the knife into the long history of European idealism, he deceptively depicted his proposed financial coup d’état as if it were in the spirit of Jean Monnet, Robert Schuman and other liberals who promoted European integration in hope of creating a more peaceful world – one that would be more prosperous and productive, not one based on financial asset stripping.

Trichet continued:

Jean Monnet in his memoirs 35 years ago wrote: “Nobody can say today what will be the institutional framework of Europe tomorrow because the future changes, which will be fostered by today’s changes, are unpredictable.”

In this Union of tomorrow, or of the day after tomorrow, would it be too bold, in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the Union? Not necessarily a ministry of finance that administers a large federal budget. But a ministry of finance that would exert direct responsibilities in at least three domains: first, the surveillance of both fiscal policies and competitiveness policies, as well as the direct responsibilities mentioned earlier as regards countries in a “second stage” inside the euro area; second, all the typical responsibilities of the executive branches as regards the union’s integrated financial sector, so as to accompany the full integration of financial services; and third, the representation of the union confederation in international financial institutions.

Husserl concluded his lecture in a visionary way: “Europe’s existential crisis can end in only one of two ways: in its demise (…)

lapsing into a hatred of the spirit and into barbarism ; or in its rebirth from the spirit of philosophy, through a heroism of reason (…)”.

As my friend Marshall Auerback quipped in response to this speech, its message is familiar enough as a description of what is happening in the United States: “This is the Republican answer in Michigan. Take over the cities in crisis run by disfavored minorities, remove their democratically elected governments from power, and use extraordinary powers to mandate austerity.” In other words, no room for any agency like that advocated by Elizabeth Warren is to exist in the EU. That is not the kind of idealistic integration toward which Mr. Trichet and the ECB aim. He is leading toward what the closing credits of the film “Z” put on the screen: The things banned by the junta include: “peace movements, strikes, labor unions, long hair on men, The Beatles, other modern and popular music (‘la musique populaire’), Sophocles, Leo Tolstoy, Aeschylus, writing that Socrates was homosexual, Eugène Ionesco, Jean-Paul Sartre, Anton Chekhov, Harold Pinter, Edward Albee, Mark Twain, Samuel Beckett, the bar association, sociology, international encyclopedias, free press, and new math. Also banned is the letter Z, which was used as a symbolic reminder that Grigoris Lambrakis and by extension the spirit of resistance lives (zi = ‘he (Lambrakis) lives’).”[6]

As the Wall Street Journal accurately summarized the political thrust of Mr. Trichet’s speech, “if a bailed-out country isn’t delivering on its fiscal-adjustment program, then a ‘second stage’ could be required, which could possibly involve ‘giving euro-area authorities a much deeper and authoritative say in the formation of the county’s economic policies …’”[7] Eurozone authorities – specifically, their financial institutions, not democratic institutions aimed at protecting labor and consumers, raising living standards and so forth – “could have ‘the right to veto some national economic-policy decisions’ under such a regime. In particular, a veto could apply for ‘major fiscal spending items and elements essential for the country’s competitiveness.’ Paraphrasing Mr. Trichet’s lugubrious query, “In this union of tomorrow … would it be too bold in the economic field … to envisage a ministry of finance for the union?” the article noted that “Such a ministry wouldn’t necessarily have a large federal budget but would be involved in surveillance and issuing vetoes, and would represent the currency bloc at international financial institutions.”

My own memory is that socialist idealism after World War II was world-weary in seeing nation states as the instruments for military warfare. This pacifist ideology came to overshadow the original socialist ideology of the late 19th century, which sought to reform governments to take law-making power, taxing power and property itself out of the hands of the classes who had possessed it ever since the Viking invasions of Europe had established feudal privilege, absentee landownership and financial control of trading monopolies and, increasingly, the banking privilege of money creation.

My UMKC colleague, Prof. Bill Black commented recently in the UMKC economics blog: “One of the great paradoxes is that the periphery’s generally left-wing governments adopted so enthusiastically the ECB’s ultra-right wing economic nostrums – austerity is an appropriate response to a great recession. … Why left-wing parties embrace the advice of the ultra-right wing economists whose anti-regulatory dogmas helped cause the crisis is one of the great mysteries of life. Their policies are self-destructive to the economy and suicidal politically.”[8]

Greece and Ireland have become the litmus test for whether economies will be sacrificed in attempts to pay debts that cannot be paid. An interregnum is threatened during which the road to default and permanent austerity will carve out more and more land and public enterprises from the public domain, divert more and more consumer income to pay debt service and taxes for governments to pay bondholders, and more business income to pay the bankers.

If this is not war, what is?


[1] Mark Gongloff,“Moody’s Downgrades Greece,” Wall Street Journal, June 1, 2011.

[2] Helena Smith, “The Greek spirit of resistance turns its guns on the IMF,” The Observer, May 9, 2010.

[3] Reuters, “Greece PM fails to win austerity reform backing,” Financial Times, May 28, 2011.

[4] Roland Vaubel, “Europe’s Bailout Politics,” The International Economy, Spring 2011, p. 40.

[5] “Building Europe, building institutions.” Speech by Jean-Claude Trichet, President of the ECB on receiving the Karlspreis 2011 in Aachen, June 2, 2011.

[6] Z film

[7] Tom Fairless, “Trichet Calls for Tougher Debt Intervention,” Wall Street Journal, June 2, 2011.

[8] Bill Black, “Bad Cop; Crazed Cop – the IMF and the ECB,” New Economics Perspectives, May 30, 2011.

This post originally appeared on Michael’s personal blog at

  1. Gopa- Natascha Gleeson says

    a brave new tommorrow and the kids wont even notice, what with the dullard nature of youth an all.

  2. Anonymous says

    Affluent Are Preposterously Stupid—

    Have the Evidence!

    revolution has been fired up! When I showed to Northamerican friends
    my article, Incontrovertible
    Proof That Citizens of the DisUnited States of Northamerica Are So
    Sorrowfully, So Sanctimoniously Stupid
    was somewhat disillusioned: they all agreed with me!
    Northamericans, and their other gang members, have all along known,
    “subconsciously,” for decades, that they have been doing
    something wrong, bloody iniquitous, and that one day their stokes of
    luck would fag out. Their fingers are no longer crossed. Are we
    approaching some sort of day of reckoning? I doubt it, but there is
    certainly going to be a considerable measure of “restructuring”
    to tend with as we are obliged to conform to an entirely new set of
    criterion. At
    least à
    la manière socialiste!
    sooner we begin to stop encoding our misfortunes in purely
    financially viable terminology with spectacular pleas to some Lord
    Above, the better it will be for all of us. The once powerful DUS,
    forever the “abroad protectionist,” runs the risk of becoming the
    “at home isolationist.” Does this mean war?

    “divine revelation” might be attributed to many causes not the
    least of which is the intense, rather hostile, competitive pressures
    that are being set against the DUS from the outside world and which
    are confounding the DUS’s religious
    belief in itself that it is the globe’s economic and political King
    of the Mountain. The DUS’s penchant for arrogance has not improved
    its chances. Northamericans are in for a vulgar testing of their
    mettle. They, international interlopers and so much akin to
    such-and-suches such as the DisUnited Kingdom and France, have hardly
    any global friends. The world’s industrial nations have been
    living off the sweat and blood of the weak, the disadvantaged—and
    for far too long to now expect that handouts will win fifs (funny
    inside feelings) on their behalf. This is not an exclusively ethical
    issue. It is straightforwardly a matter of being intelligent or
    imprudent. The DUS and its chums have consistently chosen to be
    ludicrously obtuse. It is deplorable that during the 2008 DUS
    presidential campaign, all candidates made diminutive mention of the
    DUS’s position in the world, and they scarcely made note of other
    nations, besides their own, presenting the perception that the DUS is
    unique and omnipotent when most know it is not.

    It is
    important, at this crucial juncture in humankind’s story, to try to
    identify clearly and distinctly the reasons why we have arrived at
    this stage of disgusting foolhardiness, and then with some cloudless
    way of thinking seek to rectify the mess we have created. My fingers
    are crossed. There are innumerable motives to which we may allude,
    but in this article I prefer to attack one that is on everyone’s
    mind, everyday: the wealthy, the elite, the corporatists.

    the affluent are in the minority, they kindle in us a curiosity and,
    often, a deviant craving to imitate them for what we think we should
    have what they possess. The well-heeled have an unjust and
    extravagant hold on financial power, and they solidify their bases
    vis-à-vis potent media and communications outlets. Poor people, who
    Oscar Wilde said were more attached to money than the prosperous
    because that is all—if very little—they have to hold on to, will
    even go into debt on occasion to mime the well-off! Therefore, in
    this essay using deductive reasoning, going from the general to the
    particular, the line of reasoning will proceed from the very moneyed
    and then work down, and further, demonstrate that those rolling in it
    have even distorted those underprivileged below them. I have in mind
    to make the comfortable look incredibly dim-witted—even wicked,
    even unwell. It will be easy for you to figure out what I think.
    And I will bet there are billions in this world now cheering me on!

    are four considerations one should be aware of in the exploration of
    the topic at hand:

    rich might be divided into two sweeping categories: those who have
    inherited their lucre; and, those who have generated (stolen!) it on
    their own. (These two categories will not be delved into to any
    great extent in this essay.)

    this treatise we will deal with “the very rich” and not “the
    rich.” The Big Rich. Not The Little Rich. I have known
    personally, even intimately, some fabulously rich individuals—some
    of them recognized all over the world for their material goods. In
    Venezuela, I was in the thick of the economic and political
    corruption, but in Italy I am away from Rome and out of the center
    of Italy’s self-defeating political “naughtinesses.” Only
    once did I befriend, in Florence, an Italian political person later
    to be transferred to Rome to serve as a director of the Italian
    secret service! Nevertheless, in Tuscany, the headquarters of the
    world’s first bank, I have encountered many silly Little Rich
    characters ever on the hunt to be better off and still better off.

    am not Big Rich or Little Rich. I pride myself in that and consider
    it an attestation to my intelligence that I am not. I have about
    €7000 in an Italian bank (I hope!), and I do not possess health
    insurance or a pension. Nonetheless, I am terribly curious to know
    that if I were Big Rich, even Little Rich, would I be as stupid as
    the moneyed “stupids” I have been on familiar terms with….
    (Maybe I should sell THE RICH ARE STUPID! T-shirts and become a

    am a legal citizen of the DisUnited States of America even though I
    renounced my citizenship and prefer not to return ever again to my
    birthplace. Wherever I have resided outside the DUS (principally in
    Venezuela and Italy), I have been considered an ”American.” And
    that means I have been frequently taken, automatically, for being
    abounding. A burden I have had to support for decades. The fact
    that I was a first lieutenant in the DUS Army and am a Vietnam “War”
    veteran, it is assumed by most people that I possess some kind of
    stipend for life designated for my DUS military service. I do not.

    would like now, to get started, to refer to John Ruskin and his
    lecture, The
    Work of Iron, in Nature, Art, and Policy, delivered
    at Tunbridge Wells, England, 16 February 1858. JR is known for his
    defence of individual artistic freedom, and his disgust for the
    mass-production of art as it was cloned vulgarly all through the
    Victorian era. He was a stern, extremely moralistic individual, and
    a brief sampling of his thoughts will now give you an inkling into
    his meditative processes:

    must either make a tool of the creature,

    a man of him. You cannot make both…

    happy nation may be defined as one in which

    husband’s hand is on the plough, and the

    on the needle…

    look with so much indifference upon dishonesty

    cruelty in the pursuit of wealth…

    definite result of all our modern haste to be

    is assuredly, and constantly, the murder of

    certain number of persons by our hands every year.”

    lived in another period marked by a distinctive character or reckoned
    from a fixed point or event. His “first principles” are not
    those which we adhere to in our own epoch. They belong to a
    particular set of circumstances just as, for example, Iosif Stalin’s
    coined first principle about his time declared that “one man’s
    death is a tragedy, but the death of a million people is history”—a
    maxim which fit the ethical destitution of his era. Another case in
    point is Jean-Paul Sartre’s thought-up first principle: “Hell is
    other people.” J-PS also suffered that horrible stage in the
    world’s expansion.

    is no way JR could have envisaged, for 2009, that the planet’s
    population would be coming within reach of 7,000,000,000 people.
    Just too many ploughs and needles. Today it is astonishing for us to
    connect JR’s parochial vision of his life with our own. And if we
    recognize his convictions for what they really are, we are further
    staggered by the fact that in 1860 there were no more than an
    estimated 1,300,000,000 individuals living on his orb. JR’s
    generation was not as complex as ours. Ruskin would be stymied if he
    could witness how we have survived—for almost 150 years after—with
    so many people inhabiting the Earth and in such close electronic and
    physical acquaintance.

    from JR’s fanatical religious pretentiousness, we find in him
    certain confidences which abide even today in our own inner selves.
    JR is a meat and potatoes fellow. He does not mix his Scotch with
    water, seltzer, milk or even iced cubes. He shaves with cold water.
    He takes the bus. If he smokes, he snaps off the filters of his
    cigarettes. Puts half a teaspoon of sugar in his tea or coffee.
    Walks a lot. Never puts whipped cream on his strawberries. Turns
    off the water when he cleans his teeth. Returns his metal
    coat-hangers to the dry cleaner’s. Breaks down his packing
    materials before he places them in rubbish bins. In short, JR is
    a minimalist. He is seeking to preserve what he possesses. He is
    not possessed to consume. He does not wish to waste. His feet are
    on the ground. Ours are not. For these qualities we may admire JR’s

    first broadside I long to pile into The Big Rich, more than anyone
    else, is their propensity to accumulate useless items, lots of them,
    and waste the natural resources we might think, in a civilized
    society, pertain to all of mankind and not just a finicky cream of
    the crop. Whether it be land, water, petroleum, electricity, food,
    precious jewels, et
    the well-to-do ones are quick to hoard their supplies of these
    reserves forever in excess of what more often than not a normal
    individual would require and/or acquire, and they do so outrageously
    without worry for the requirements of others whether they be deprived
    or not. They dig extra wells on their land fearful of drought. They
    illegally hide away currency in foreign banks “just in case.”
    They give their wives and lovers expensive diamonds and gold “just
    in case.” They buy three or four cars “just in case.”
    Everything in glut. Just in case. Sustine
    et abstine are
    negative concepts for these pathetic characters. I do not know of
    any other group that lacks so much conviction in the method that has
    offered them so much turnover! They advance no loyalty to the
    money-spinning arrangement that tenders them their cornucopia of
    material benefits! Confidence is more precious than gold say the
    Chinese. And even donkeys know they cannot chew on bullion. But not
    The Big Rich and their confreres, The Little Rich, who often go very
    far out of their ways to ape The Big Rich. Monkeys see, monkeys do!
    The Big Rich, The Little Rich and those who emulate them are “running
    against the walls of their cages,” as Ludwig Wittgenstein would

    I would
    think, my dear reader, that “…the murder of a certain number of
    persons by our hands every year” is still ringing in your head!
    And it is accurate to agree with that reflection. I could write a
    book on the injustices that I have caught sight of and which have
    caused the death—both physical and emotional—of untold
    unfortunate individuals slaving for the dog-eat-dog economic
    hierarchy set so overenthusiastically in place in the DUS, Vietnam,
    Venezuela and Italy—locations I have frequented. I ask myself:
    What is the purpose of this master-slave routine, this
    “delicately-distributed suffering” ( JR ) that nowadays is
    sugar-coated with perks, bonuses, and tie-less Fridays…all cheap
    gimmicks to keep workers hanging on until the next slowdown, the next
    massacre of layoffs? Were all of these “scallywags,” these
    made-redundant-ones under some supernatural illusion when they threw
    their lives at their corporation’s buoyant promise of an eternity
    of sustaining profit?

    would not take Charles Dickens very long today to cut through the
    bogus mesmerising that innocent victims have had to endure especially
    during, at least, the last fifty years. Only a simpleton—Winston
    Churchill was not an imbecile, he just might have been drunk or his
    brain fogged up with Cuban cigar smoke—would have the pluck to
    unabashedly pronounce that the lesser of two evils we are welded
    with, Judeo-Christian Democratic Capitalism, is the best at our

    Look at
    The Big Rich and The Little Rich quoting outrageous minds such as
    Milton Friedman and the “old” Jeffrey Sachs! They parrot these
    money-making lords of a funny money plumbing industry, and under
    their armpits, they carry the notebooks and case histories of
    University of Chicago and Harvard Business School’s sacred,
    doctrinaire tenets which have caused more havoc the past century than
    any other time in the history of this “better than nothing”
    fraud, this Tyranny of a Minority which benefits the few at the
    expense of the majority. Are people ever going to wake up and trade
    in their illusions for some hard facts? Are people ever going to
    become gutsy? Are people ever going to stand up for their
    Why are we feigning to be content with a technique that causes so
    many so much injustice? Indeed, we are a strange lot!

    Oh, I
    must be crazy! Out of my mind. Rich? How could I have used that
    word? There are no rich in this world! I swear to it now that I
    have lost my insanity. I have never known one person who ever called
    himself or herself rich. They will tell you that what they are worth
    is only paper! Yes, cash, stocks, bonds, savings accounts and
    treasury notes! All sheets of nothing! I knew one multi-millionaire
    who told me he had to borrow $100 from his wife one morning to buy
    his lunch! Get it? They are just like you and me! They have no
    money. Just paper. And who is going to buy the titles (paper!) to
    the lands they own if an economic downturn forces them to become like
    the rest of us—unfortunate?

    should have qualified more before my definition of The Big Rich.
    Please excuse me? The Big Rich have armed bodyguards and
    bullet-proofed and armoured limousines to chauffeur them around. Can
    you think of anything more repugnant than that? They do not even
    have the courage to walk alone on a crowded street. Their yachts are
    manoeuvred and serviced by people they wish they can trust and who
    are usually lousy cooks. Their airplanes are piloted by who knows
    who, and when they embark to fly off to some business meeting or
    rendezvous, they hope the navigator is not drunk or high on cocaine.
    Their bodyguards usually have not even finished high school, and
    being thick as mud, they wonder if they will be quick enough to be at
    the ready to protect their precious assignments. And maids and
    butlers? You should hear them talk about those humble souls! Behind
    their backs, they gossip about them as if they were some inferior
    race. And, woe to him or her who forgot to shine His or Her
    Majesty’s shoes properly, or missed dusting the bedroom lamp table,
    or, worse, was late delivering their breakfasts in bed! Life

    is one thing good I can say about the affluent. They change their
    clothes abnormally, and because they have money to buy expensive
    perfumes and colognes, they usually smell nice!

    by Anthony St. John

    Postale 38 50041 CALENZANO FI Italia

    January 2009

    * *

  3. DavidLazarusUK says

    I suspect that the periphery will have to default. The populations of Greece and Portugal will revolt, and Ireland will probably rebel in their own way. Governments can only rule when they have the confidence of the population to govern. Now I do not see them electing a right wing government in response but I do see them effectively forcing the peripheral nations to default. What will probably come to pass is reimposition of capital controls and mass defaults. All the bailouts have been to extend and pretend regarding the core nations bad loans. Once the periphery default then I would see crises in the core nations as their banking system collapses. It is only a matter of time. 

  4. Anonymous says

    I suspect that the periphery will have to default. The populations of Greece and Portugal will revolt, and Ireland will probably rebel in their own way. Governments can only rule when they have the confidence of the population to govern. Now I do not see them electing a right wing government in response but I do see them effectively forcing the peripheral nations to default. What will probably come to pass is reimposition of capital controls and mass defaults. All the bailouts have been to extend and pretend regarding the core nations bad loans. Once the periphery default then I would see crises in the core nations as their banking system collapses. It is only a matter of time. 

  5. Guillermo López Kaltenegger says

    No such thing as demoracy for the next few decades it seems.

  6. Guillermo López Kaltenegger says

    No such thing as demoracy for the next few decades it seems.

  7. Credit Writedowns says

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