Some readers of the blog may have got the impression that I'm a pretty smart guy; if so, I'm about to disabuse you, by talking about something I don't fully understand: the great economic collapse, how and why it is happening and what to do about it. Why? Because unless I spell out my tentative and possibly mistaken perceptions, I won't have a chance to correct or develop them.
Probably the most important post-World War II development has been the freeing of finance capital from its former bonds. As long as there have been markets, even before the birth of capitalism in England in the late middle ages (E.M. Wood, The Origin of Capitalism), there has been credit — "finance" —in some form.
But even as late as Marx (who died in 1883) or even Lenin (1924), there were some constraints on finance capital, national loyalty being one of them. Thus J. P. Morgan was hailed for his "civic responsibility," demonstrated most dramatically in the Panic of 1907.
But finance capital has broken free and now dictates to its former masters: trade, state, local authorities of all kinds, traditional loyalties. It is a collective organism, like an anthill or a beehive or a city, e.g., London today, where the impulse toward mass action overcomes whatever rationality or notion of self-preservation its individual components may possess. Finance capital no longer recognizes any nation, but acts on its own only to aggrandize itself. And since it thinks of nothing but its own appetite, it does not hesitate to consume and destroy the industrial and commercial systems on which it feeds. If left entirely uncontrolled, the parasite will destroy its host — and then even bankers and security traders will despair.
Which is why things may not go quite to this extreme, that is, to the total self-destruction of the system. But we're getting close. Some financiers are able to raise their heads above the tumult (see links to Soros below) and see the dangers and may be willing to cede some control. But the forces of destruction are so strong and states (national governments) so timorous they (states and financiers) are acting too late to prevent great devastation — high unemployment in Europe, starvation in Africa, and turmoil everwhere.
And that of course is what is stimulating other and opposite movements of mass organisms, collective movements impelled more by rage than by sense, also overwhelming the rationality of individual participants and also possibly destroying the systems that sustain them. From Somalia to Athens to London and many other places. O, if we could just channel all that furious energy into a real revolution, establishing a truly sustainable system for reproducing social life! It will happen, surely, but — if we continue to behave as our species has over the millennia — only at the last possible moment.
(See Ford Releases Report on German Subsidiary and WWII.) These days, such operations — financing all sides in a war, for example — seem to be simpler to execute. And with the ease of moving money instantly, globally, through the Internet, patriotic concerns and the powers of states to regulate transactions have all but evaporated.
Three steps to resolving the eurozone crisis | George Soros
Germany must defend the euro | George Soros
America, a Spark Away From Riots of Its Own
Empire’s Last Gasp — A Two-Act Scenario; Charles Degelman returns to classic texts by Marx and Lenin
It is probably true, as Charlie Degelman suggests, that Marx and Lenin provide pointers, but a lot has happened since them and so we're going to have to try to figure this out without them.
For my earlier comments on "good and bad capitalism" and related issues, click on keyword "capitalism" below.
And here's something to listen to while you ponder these problems: Ry Cooder: No Banker Left Behind - YouTube