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Brexit Coup d’Etat: Tracking the Overthrow of EU Rule of Law in Britain

Historical Note

This analysis was researched and written days before the snap June 8 UK election which was about to lock in the electoral minority of the ‘Brexit referendum’ with no public understanding of the immense historical stakes and dominant powers involved behind the political scenes. Least of all recognised was that the hard Brexit led by the now minority-government Tories allows massive de-regulation of the most powerful transnational private financial and agri-food interests in the UK and the EU. Yet no sooner had I completed the body of the following analysis than the London terror attack struck on Saturday night June 3, with PM Theresa May pointing at all opposition who sought causal understanding of the terrorist attacks as showing “far too much tolerance”.  The first pages of the analysis below bring this pre-election turn of events into explanation of the slow-motion ‘Brexit coup’ that continues today before it is fully understood. While the June 8 2017 election turned against the Tory-May government as anticipated by this June 5 diagnosis in media res,  the global struggle for life-protective law still remains under more systemic threat than since 1945. The purpose of this publication (the article has  been published widely in post-election form) is to share with fellow scholars how thinking-through within the immediacy of events can make an historic difference before a managed turning point of history is instituted into a no-turning back de-regulation attack on life-protective laws and common life assets to serve only very powerful financial interests with the public and opposition kept blind to, in fact, the biggest single attack on the civil commons of Britain in its history.


In the Midst of the London Terror Attack

It is June two days before the snap June 7 UK General Election is set to lock in a referendum to leave the European Union unsupported by a vast majority of British voters and – with little or no notice – reversing 50 years of evolved financial, labour rights and environmental regulations. These little discussed facts are spelled out in depth ahead. All the dots are joined from the start of the Leave campaign whose overthrow objective, strategists and behind-the-scenes money and interests are only beginning to be known.

It might seem too late for British voters to do anything about it, but much that is unexpected has occurred since the snap election was called and whited out in the press until recent days. The 24-point lead for new PM Theresa May and the Tories over grass-roots Labour and Jeremy Corbyn long seemed a sure thing, and so it was planned. But the lead has collapsed towards less than a few points and still dropping.  Then the London terrorist massacre on Saturday night June 3 struck on cue. For the public was awaking to the dressy mock-up Margaret Thatcher, and the rising Jeremy Corbyn opposing her is a near unique leader in British politics – an honest man based on a grass-roots movement for workers and the poor.



The Corbyn Labour Threat

Corbyn is not only honest, which none have denied. He has showed himself over a year capable of standing up to a non-stop corporate media barrage of official loathing. He has not backed down from the near public ruin of his grass-roots movement in which war-criminal Tony Blair and his ‘New Labour’ ilk have led in trying to sabotage his movement – barking out front, ostentatiously resigning from cabinet, tearing apart the reclamation of the Labour Party from the corporate boardrooms where it had become Blair’s Murdoch-press lap-dog and a neo-liberal shell. The reason Corbyn was and remains an enemy of the ruling castes in the media, politics and the boardrooms is that he unapologetically stands for traditional socialist values. His program is not contaminated as almost everywhere else by trendy post-modern culture, saucy relativism and politically correct diversions from economic life substance. Even worse to official media-and-political culture and its submergence in capitalist globalization with no alternative, Corbyn and his politically grounded movement actually stands for British workers’ interests, the public sector, social services, and environmental safeguards as developed within the European Union – all of which are on the chopping block now in Britain and across the world.



The Ruling Agenda

The problem is that majority of citizens in the world support these long-developed and popular social infrastructures and life standards. So the only way of continuing to defund, privatize and erase them is by pretending there are much more modern and flexible marketable versions for corporate and bank profit. One way or another, and there are many ways, this process consists in historical reversal and laying waste to over a century of social evolution and life standards as the ruling agenda of establishment political parties in power. This hidden agenda has increasingly spread and ruled the world. All the degenerate trends of extreme inequality, private money power over all, rising youth unemployment, pervasive state corruptions, massive dispossessions, override of long-established workers’ rights, and multiplying ecocidal production and products stem from it.  The vast profile of one-way degeneration of social systems across borders is, however, never connected across the dots by corporate media, states or the academy itself. Rather the underlying agenda euphemized as ‘globalization’ is put on fast-forward.



New Right-Wing Nationalism is Another Brand for the Same Hidden Agenda

It may seem that the erupting new ‘nationalist’ movements in US and Britain, Eastern Europe and Russia, and so on, are the great swing back against corporate and bank globalization. This is the Great Illusion of our time. What is hardly yet seen is that, in fact, these ‘nationalist’ movements, as in Tory Britain or Trump US racing ahead today, do nothing to connect or to solve any of these life-and-death social system problems and the cumulative pollutions and razzings of organic, social and ecological life organization across the globe. They are only a speed up of the global eco-genocidal processes under new operations and pretexts of new national recovery and freedom. Yet always the same transnational corporations and banks make even more money than before, mostly from transferring public wealth to themselves by vast tax-cuts, increased subsidies, steep cut-backs on social services and spending, and elimination of everything that is not needed for short-term profit cycles. Of course the opposite is pretended in many ways varying with cultures, but always good for the working people. Still, one can always tell the real agenda by whether or not the ecocidal processes and products are effectively ruled out rather than accelerated in fact, and whether or not societies are so governed that more citizens become better off in life work security and free development rather than the opposite in fact.  This is where the facts as opposed to pervasive system rhetoric and claims show systemic degeneration and dispossession in human and ecological life terms. Seek exception in scientific fact. Seek anywhere that Tory (or Republican) rule meets even one of these problems rather than diverting from them in endless ways – most of all today, by Islamic terrorists. They are the ever-recurring Enemy to be waged war against – and typically is when the popularity of the ruling party is dangerously in question.



London Terror Spectacle 5 Days before Election as Brexit-Tory Polls Collapse  

The June 3 massacre of innocent and unarmed Saturday revellers on iconic London Bridge and Borough Market came at such a time. PM Theresa May and Tory party polls for the snap June 8 national election were in free fall as Corbyn Labour support unexpectedly and dramatically rose by over 20 points from the surprise Spring date that the new and secretively advised PM May had called against all prior commitment and earlier schedule of May 7 2020. Although only 7 people died – in Moscow at the same 9 people were murdered without much notice – the absolute panic of the central city of London and Europe was unprecedented.  A white van ran over people on London Bridge’s festive and pub-crowded Saturday night, and many were seriously injured – though fewer than in US drone or air strikes happening in Arab countries on a regular basis. The modus operandi was quintessentially monstrous in action. It could have come from an ISIS video – of which there has been many with no evident interruption by the immense counter-terrorist operations, advanced electronic capabilities, and ever-rising budgets for war upon ISIS terrorists.  The three soon-dead men were maniacal as if drugged, but no drug tests were ever reported. They not only viciously ran over as many people as they could with the signature white ISIS van in the 10 PM Saturday night happy hour, but they leapt out of this careening kill van with long Arab stabbing, cutting, slitting throats, multiply stabbing one young women, and – in short embodying the most murderous nightmare conceivable on all in London and around the world soon watching the globally televised aftermath including the dead bodies.



The Most Basic Questions Are Never Asked

Strangely, the suicide murderers wore fake suicide vests, never explained. Certainly the theatrical touch fitted the stereotype for both sides. Yet no-one in all the total coverage everywhere ever mentioned the abundant evidence of US-led funding, arming and orchestration of ISIS – although the mystery still remained of how their original appearance in spanking-new white vans lined to the horizon waving machine guns could have escaped the notice over the endless parade in a highly surveilled open desert area not far from Israel’s borders. In any case, the horrific downstream event and mysterious origins and orchestrated funding, training and arming of the very same terrorist organization perpetrating one atrocity after another with uninterrupted e-video broadcasts and propaganda over years were all unmentioned in all the allied analysis from the major networks across the globe. Only the international outrage and absolute denunciation pouring in and out from every quarter continued around the clock for days all the way to the two days left before the election. Since the main question was and remains how to stop these horrible terrorist spectacles, there was no time for causal analysis. There never is. Somehow the evidentiary matters of including who funded, armed, trained and orchestrated the terrorists are never investigated by those who report on and benefit from the terror attacks. Somehow the terrorists’ very accessible propaganda, videoed columns of ferocious operatives, internet movies of killings, and strange coincidence of attacks with falling popularity of state leaders are not connected by anyone in official society or mainstream media or even scholarly journals.

That all this has kept happening from years ago in full view of television and internet audiences around the highly militarized Western world is not an issue which is publicly raised. Even when the murderous terrorists have been known and identified immediately afterwards, from the 9-11 bombings on, still there are no questions in the pervasive media coverage of the events, including in the June 3 London massacre. How they were and are identified so very quickly, even after such an historic surprise attack as 9-11 and even when the bodies of the alleged terrorists have been completely incinerated, how and why are these issues never mentioned?  Cui bono? – the first question of forensic justice – is never posed of anyone after the murderous terrorist spectacles. Failing parties and leaders who benefit enormously from such show-stopping distractions which put them in far more command of popular support and power than before the attacks, are never even slightly exposed to this question.  It is taboo to do so. Not even opposing politicians dare to ask the question. This gives us the clue to why all the other issues are not raised.  No such basic forensic question is ever posed because it cannot be publicly asked without every media of record accusing the questioner of folly or menace, thus perfectly diverting the issue again from the ruling taboo subject. There is no evident way through this closed circle. It is foolproof. So it follows that this is well known in ruling circles as well as by those interested in truth. Why would it not be used by a national regime whose public support is falling just before an election?

Free-Falling Tory and PM Polls and the London Terrorist Attack

Scientific hypothesis looks for disconfirming evidence more than confirming evidence in order to test it. This is why science works when it does. It takes all the relevant facts into account, forms an hypothesis, and tests it against the best possible counter-evidence.  (Corporate science and regime propaganda do the opposite. They look only for what confirms their claims to profit them. So coming just 5 days before the snap British general election which her regime called when it was 24 points ahead in the polls – now continuously falling days before election – this  regime has very good cui bono reason to re-set the polls upwards.  The known best way to do this with no questions asked is for a terrorist attack to occur on the regime. A terrorist attack usually guarantees a spike of citizen solidarity with national government, from France to Turkey to 9-11 Bush US. No-one dare pose the cui bono? Question in any case. It is known that a grisly terrorist attack, and a strong condemnation of it from the regime in power, along with allied regimes in unanimity, will produce a significant rise in the next poll. In this case, the poll of the June 8 British general election comes less than 5 days later.  This does not mean that the front political leader, now – PM Theresa May, the longest Home Affairs minister in memory, plans the terrorist attack, or even knows about it. It would be better that she did not, so as to carry through without compromise or leak. But she knows the territory of Home Affairs very well and the dark state’s capabilities, as well as British public opinion over many years as a cabinet minister.

If her polls are suddenly collapsing, as the polls of the long-belittled Labour leader Jeremy Corbyn rise just as fast, it makes very good sense for her regime to find a terrorist attack incomparably useful just before the election. She can stand tall and resolute as the lead warrior of the British people, like Margaret Thatcher against the Generals of Argentina over the Falklands. But here the enemy is far more immediate, visibly evil and mass murderous before our eyes – the archetypal enemy of Islamic terrorism, threatening and murdering Britons inside the very celebrating centre of their most populous and globally popular city, spreading mass panic to thousands in a barbarously brutal killing and wounding rampage that no-one will ever forget. It also provides the ideal opportunity to excoriate the poll-closing Jeremy Corbyn and Labour, who can be insinuated into the terrorist menace by his connection of terrorism to past government actions.



PM May Leaps to Attack Democracy as the Unseen Brexit Coup Closes In

PM May has all the credentials and image to rise to this occasion, and to pull off what no-one has really yet seen –the greatest reverse of British social and environmental standards and law in history that is about to be locked in by the June 8 election. The half century of evolved EU workers’ rights, life-protective laws, and scientific environmental norms is about to be overthrown. The London terror massacre occurs on June 3 as Tory and PM May polls  relentlessly slide down and the turning-point snap election is just hours away. State authority is restored in a blinding flash of action. Police command people “to run for your lives and hide”. They  command people to lie down in the areas they control, and to hold their hands over their heads as they are herded in large obedient numbers. Loud explosions are heard all over the place where there are no terrorists, and it is only 8 minutes before the terrorists are all dead for all to see on TV. Dead men cannot speak. PM May is strict and aggressive to rally the masses against the Enemy – and to reverse the Labour opposition’s rising polls. Election campaigning is suspended. PM May accuses those who sought have causal   understanding of the terrorist attacks as showing “far too much tolerance”. She warns that there is “a new trend in the threat we face” – although there is none evident, except raising the indisputable facts of its causation, as Corbyn had done just before his polls began to overtake her. PM May scolds, “Enough is Enough”.  The same old circle of blame-the-enemy while doing nothing effective to stop it is redrawn deeper than before. But she darkly warns others that things “cannot continue as they are”. She suggests that “pluralistic British values” are at fault. She leaves the cause of the endless terrorist spectacles behind to accuse the free internet itself, demanding once again the new Tory policy of sweeping new state regulations across citizens and borders, rather than honing in on ISIS and other long scot-free channels. “There is”, she says, “to be frank, far too much tolerance of extremism in our country”. “So we need to become far more robust in identifying it”, she proclaims in police-state code, “and stamping it out across the public sector and across society”.

Public sector? Across society? Is this a declaration of war against those in the public sector who dissent from the program? Is this a foreshadowing of the social-sector stripping to come with the Brexit coup d’etat? Where does the attack end? It does not. There are no definitions, no criteria, no evidence. There only more insinuations of who must be labelled and stamped out as ‘too tolerant’. There are only more demands for more state powers diverting completely from every issue involved not only in terrorist killing, but in the end of EU rights and laws in Britain. Most of all and most profoundly, every word and position of PM May, the Tory party and the forces behind them have distracted from the ultimate geostrategic game afoot that the London terrorist spectacle has diverted from and covered up. What could the huge and unexamined stakes be here that none discuss? Who alone stands to benefit from every step since PM May was promoted?



Why Brexit?

There has been endless commentary on Britain’s “Stay or Leave the EU” referendum and the narrow victory of the ‘Leave’ side after 44 years of partnership in which Britain’s GDP, human and workers’ rights,  and environmental protections have only increased, and by far more than the US. Even in gross market money terms, the record is clear in fact. In a letter to the London Times one year ago, Oxford researchers Professor Sir David Hendry, Professor Doyne Farmer, and Dr Max Roser refuted with no reply the Leave EU campaign led by financial and political playboy Boris Johnson. “Since 1973, the  year in which the UK joined the EU, the per capita GDP of the UK economy grew by 103%, exceeding the 97% growth of the US. Within the EU, the UK edged out Germany (99%) and clobbered France (74%). The UK’s growth has exceeded the US while tracking it, even since the crisis of 2008”.

Yet Leave the EU still narrowly won the UK referendum a year ago with nothing to go on except propaganda, and its very dubious result is about to be cemented into British government and history by the June 8 election in 3 days. On every level on which we analyse this decision now being led by PM May and the Tory state, it is a fails every smell test. But the real motive force and private money-party interests behind it are all but invisible to the public – not only in Britain, but around the world. There is virtually no recognition that the snap June 8 election in three days is going to reverse every life-serving law and regulation that has lifted Britain up over half a century from the doldrums of the early 1970’s when Britain was regarded as ‘the sick man of Europe’ in economic performance. How could this happen?

To begin with the referendum itself, the original wording of the ‘Brexit’ referendum was (italics added) “Britain should remain in the EU – Yes or No”. Few observed that this framing of the Tory question appeals directly to the tidal wave of popular resentments that have built up against transnational trade treaties and mass immigration everywhere, Britain included. “Should remain” is re-set to “Leave” as the dominant choice in this negative social context with, in fact, no connection to life co-ordinates. On the surface, the visible movement of foreign-speaking cultures into everyday rural Britain for new benefits and low-wage competition with British workers has widely inflamed anti-passions, as anyone familiar with British culture knows.  The near daily featuring of Islamic ‘terrorist attacks’ has stigmatized the EU system along with such continuous disorders as the torturous financial ruin of Greece. Leave on the ballot in a mysteriously well-funded and media-captivated campaign triggered enough of a primordial anti-EU sentiment that a very slim majority was won. It did not matter that false claims and demagogic showmen were given immense publicity in the Leave campaign in which the most important issues were completely out of the discussion. Nor did it not matter that the Leave vote was mainly rural England, nor that remaining Scotland was thereby propelled into breaking up Great Britain itself. There were no editorials exposing the facts that the new-PM Theresa May had herself warned UK voters that Brexit was “dangerous” and could have seriously damaging effects on the economy, the security, and the survival of the United Kingdom.  There was no media memory that she had said that leaving the EU would be “fatal for the Union with Scotland” and that she had formerly proclaimed “as Home Secretary [that] remaining a member of the European Union means we will be more secure from crime and terrorism”. Nothing seemed to matter except the new fait accompli of Britain ending its half-century partnership in the European Union on the flimsy basis of a referendum for which the overwhelming majority of citizens did not vote or approve.



Minority Brexit Vote = Massive De-Regulation of Finance and Food 

No-one seemed to report that this Leave vote itself (17, 410,742) represented only 37% of the total electorate (46,500, 001) as enumerated by the Electoral Commission. No mainstream media featured the 12, 948,018 voters left out of the count, over two-thirds the number of those who voted Leave. Only one source clearly reported that those whose votes were not cast in the single June 23 event voted 2:1 against leaving once the results were known (cf. http://blogs.lse.ac.uk/brexit/2016/10/24/brexit-is-not-the-will-of-the-british-people-it-never-has-been/). Most deeply and unspeakably, there was no hint of media attention to the first question of forensic inquiry, cui bono or who stands to gain most from British government leaving the European Union all its common regulation? Even up to June 2,  no-one has joined the dots that show the Leave EU referendum and vote has been an ideal political bludgeon to force Britain’s departure from the historical European Union just as its long-evolved Directives are in the process of enforcing policies and regulations on all-powerful London private banks and finance, and on industrial Big Agriculture and GMO-contaminating crops and fake foods . What no-one has evidently understood is that Brexit ensures that the very same dominant financialization forces that have hollowed out Britain’s working people, the productive economy and its green environment since 1979 are now freed from any EU regulation or accountability just as effective new financial oversight mechanisms as well as organic agricultural and food policies are due to be further implemented, monitored and enforced. This is the undertow historical meaning of the near-hate campaign that has been waged for endless months on the ‘EU bureaucracy’ larded in selective anecdotes without principled substance. Such is the standard method of big-money campaigns against public regulation for the public life good. If more private profit is not fixed into the new regime, it is relentlessly attacked and denounced as ‘suffocating red tape’ and a ‘ruinous burden on business’. This is the signature demand and condition of transnational corporate rule.



Cui Bono? Remembering the Past to Now

The rootless global money party centred in London has long run Britain with flagrant Thatcherite governance for transnational banks and corporations, overthrowing the post-War labour-capital settlement in Britain. Big London money backed by the Murdoch press was then consolidated in Blair’s ‘New Labour’ capitulation to corporate power through Gordon Brown Labour-light to the election of financier-scion David Cameron. PM Cameron then took the Brexit spectacle as the occasion to resign to avoid, insiders say, the outing of his unexposed financial fraud as PM. Now the government of Great Britain is in the hands of a secretively advised Theresa May. Although as Home Secretary she was unequivocally anti-Brexit, something happened. Despite the very dubious results of the leave-the-EU referendum, she reversed field from support of the EU once in the PM office, and was instantly re-branded as full-square behind Leave as “Brexit is Brexit” and “the irreversible decision of the British people”. Now-PM  May has led official erasure of the fact that the winning vote was only by (official Electoral Commission tally) 37 % minority of voters. In the same vein of memory-hole command, PM May and her backers  ignored the LSE scientific survey reporting that non-voters polled 2-to-1 against Leave once they learned the outcome. The reigning protocol, as with Trump with whom she became bonded in ‘the special relationship’ of the US and the UK that runs British politics, is to annihilate life-protective regulations as new freedom, and enforce follow a bigger corporate tax-cut than Reagan or Trump to a 10% level. Where did the mandate come from for such radical hollowing out of government capacities to govern on behalf of the common interests of society, citizens and their environment? There has been no mandate, but only a one-off 37% popular referendum result with no legally binding force until it is locked into the ‘Great Repeal Act’ and June 8 UK election to legitimate it with no public understanding of the meaning.

The die had been cast behind the scenes. A 37% vote against the considered will of the majority to stay in the EU was going to be used as a no-alternative mandate for massive deregulation and de-taxation of big money powers across the UK without public debate on these issues or even recognition of them.  An Orwellian erasure of facts and totalitarian silencing beneath conscious choice continued right up to the election without anyone evidently knowing it. The PR cover-up since the ever-more lavishly suited Theresa May became PM  has been to brand her office in Maggie-2 resonance as a resolute and honourable defender of the democratic will  of the British people and an anchor of stability to steer Britain’s new future. PM May and advisers have accordingly changed the 2017 general election –she had committed to 2020 before her behind-the-scenes management took over – to an ad hominem vote over her character as PM, not about the radical de-regulation of finance, the environment and the tax code to, in essence, serve the rich while dispossessing the great majority of their labour, social and environmental protections and rights. It is the sort of action from the top that the original Magna Carta stopped by regulating an out-of-control King, only now the unaccountable ruler is bank and corporate money profit seeking even more unequal and total rights over the soon- to-be rump England. The money party cares nothing for nation including  Great Britain except as it fits their divide-and-rule agenda over the trillions of dollars they control daily in play for more asset control over the world. Now firmly in the supreme office with cabinet and media support, PM May’s office has masterfully managed transition to doing the opposite of what she formerly stood for. The Brexit program for private money control over public forces and rules of how society is to live has remained unflagged by even the Opposition and radical left voices.  None see through to the ultimate ruling party behind political scenes, nor to the ultimate fact that it is not economically efficient or even productively capitalist. Its hidden financialization forces and anti-labour-and-ecological agenda of radical de-regulation are, in principle, counter-productive, parasitic and self-multiplying against the common interest of its social and environmental life hosts.


The Unasked Questio: Who Wins Now?

On the PR face of it, Theresa May is the clergyman’s daughter soundly risen to PM office. But she is, more deeply, the perfect foil behind which to sneak a Brexit end to the threat of EU regulation of the most life-destructive private money powers of Britain. Brexit is in sinister parallel with the life-blind deregulatory forces of the Trump/Republican forces letting the ruling money party run free to become multiply richer while stripping scientific environmental regulations, monitoring and prevention of cumulatively ecocidal externalities of global financialization and environmental toxification. The difference is that the English financial and factory-food lords are far stealthier and unseen in their demonstrable strategic plan to Leave the EU because it leads the world in scientific method, life-protective regulation and implementation. No-one seems yet to recognise this in the UK, unlike the rising US awareness of at least the Trump-Republican threat to the US and global environment and – more specifically – the Environmental Protection Agency and even the century-evolved and world-leading US national parks. “Making America great again” excludes the life ground. When PM Theresa May now hard-presses Leave the EU even when formerly opposed to it – most of all because of its weakening of Britain’s defences against terrorism – who can doubt something has re-motivated her to reverse the agenda.

The tell-tale avoidance of truth is seen when she lashes Jeremy Corbyn for even  connecting the terrorist operation of Manchester back to the facts of Britain’s war-waging in poor foreign nations from which the suicide bombers come. “Many experts, including professionals in our intelligence and security services,” Labour leader Corbyn  observes, “have pointed to the connections between wars our government has supported or fought in other countries, such as Libya, and terrorism here at home.  Joining the dots is taboo.  In such closure to facts, PM May implicitly justifies government actions on the basis of the legitimacy of past state actions which are war-criminal under international law, and – beneath notice again – stopped Libya specifically from its gold-dinar Bank of Africa plan based on oil revenues to lend to other African countries without the debt enslavement long coveted by London-connected private financing of states (including the British government itself). Who do these actions of repression of war-criminal facts and seizure of other people’s assets serve?

In this light, consider PM May’s capacity to carry Leave the EU as PM compared to its most charismatic leader on the ground, Boris Johnson. Although he has long been London finance’s man as Mayor as well as leader of the Brexit campaign, the master plan cannot go forward with him any further because, as a known liar and bounder, he is completely unfit as a credible finisher in PM office. Those who lead here know very well how to rule behind effective public relations to keep their control acceptable on the public stage– as Wall Street has done with one elected US president after another. This is why the known libertine and shameless US-born self-promoter Boris Johnson was – however charming and useful – stopped for the job of ‘Prime Minister of Great Britain’. He might indeed provoke cross-party reaction against pushing a onetime minority poll into a reversal of modern British history which took away the EU passports and future opportunities of England’s young professional classes.

There is much to cover up here that needs a steady woman ruler with a better manner and more socially just in bearing. So Prime Minister Theresa May it was. Thus the sole regulatory powers in place keeping the private financial superpower of London in check against another 2008 emptying of the public treasury and pensioners’ incomes – not to mention the deregulation de-greening of England by an industrial factory frankenfood system – escaped the public’s attention. To credibly cover up what nobody knows while believing in her mission is made-to- order for PM May, and so the Trump-like mega de-regulation and de-tax agenda has gone all the way to days before the June 8 British general election with far less fuss. Boris was meanwhile made Foreign Minister to insult the EU onto their heels in England’s revolution backwards for the unproductively and villainously rich. Few noticed that all these political shenanigans served a unifying function. The new EU financial regulations on London’s big banks could not be implemented, monitored or enforced with Brexit stopping it all in its tracks.  EU Organic Agriculture Regulations protecting the environment and natural ecosystems from genetic contaminations and industrial clearances of green life was simultaneously terminated with hardly any notice. That foods themselves are released from safe and scientific EU standards has remained a non-issue. For poignant household example, British demands for hygiene standards to be changed to US rules so as to permit chicken meat sanitized only by chlorinated water, to allow beef raised with growth hormones, and to free genetically engineered substitute foods or GMO’s from production and label restrictions have all been stopped dead by Brexit.

With London finance as well as industrial agriculture and false foods freed from codified norms of responsibility to the common life interest long evolved, tested and instituted within Britain and the European Union, the most predatory and counter-productive forces in Britain are allowed to run free with no public notice before the June 8 general election.  EU labour rights (eg., 48-hour week), human rights (e.g., employees’ and prisoners’ rights), financial oversight of any independent kind (as we have seen), and virtually all environmental standards developed beyond the US model, all  are discontinued by  the Great Repeal Act. With no evolved EU standards of economic, social or environmental protection legally obligatory and enforceable any more, the June 8 election will lock it all into the future with no way back that can be reasonably relied on without electoral reversal. With all the historical bearings and force of precedent, independent adjudication and law left behind by Leave, a US-UK deregulation and de-taxation orgy can proceed as ‘democratic’ if PM May wins the election. This is why PM Theresa May as the first head of state to visit the White House came out of their private meeting holding hands with Donald Trump. Demonstrating its confidence in the liberated financial rule of Britain as the Great Repeal Bill proceeded, Goldman-Sachs simultaneously committed to a $500-million headquarters in central London.



London Finance with Goldman-Sachs Escapes All EU Financial Regulation

The very definition of the EU Central Bank’s mandate to investigate and supervise “the business model, risk management, and capital, liquidity and funding”of private-profit bank and financial institutions including London  (via a rigorous Supervisory Review and Evaluation Process by elite teams of professional accountants)  is anathema to the long unregulated US-UK financial system. London finance like Wall Street is very used to increasingly devouring public treasuries, pensions and savings to become 40% and rising of the entire economy. They have done this through the global financial meltdown they have caused to multiply their money-demand control of the planet in a myriad of algebraically concealed ways with no oversight supervision, no independently verifiable standards, and no real reforms. The European Central Bank has finally moved to institute common standards across the Union – what was done after the Great Depression but has been reversed since. Private London-Wall Street banks and finance will do anything to stop this regulatory reform to protect their many trillions of assets and liabilities running free to continue unimpeded in the greatest unearned and still rising transfer of wealth to the rich in history. The economic stakes are unprecedentedly high, and so the silencing of any notice of the reforms to regulate them has in the UK been total in the mass media and even in Labour policy recognition. Consider the vast treasure involved. “Existing financial rules” in London banks have been officially judged by independent experts as “woefully inadequate”, and all of London’s foreign currency trading (globally dominant and largest in Euros) remains unregulated and untaxed.

Vast investment banking, cross-border sales of securities, Euro liquidity to clearing houses, non-performing loan recognition, coverage and write-offs also escape independent regulation by Brexit and the Great Repeal Act. Revenue-cap norms on skyrocketed financial pay to executives, standards of internal audit, deferred tax assets and credits masked as capital, capital adequacy, liquidity requirements and ability to pay liabilities are all also blocked by post-referendum laws. Unnoticed too are overdue binding norms on regulating the competence of new members of management and key function holders (say, Boris Johnson) and oversight of collective investments in transferable securities by captive states and unilateral tax advantages gained by their public issue and sale for profit. In sum, the Capital Requirements Directive and Regulations are set on fire by the Great Repeal of European Union obligations, now to be locked in by the June 8 election. What are boasted as ‘elegant and sophisticated innovations of investment instruments’ and so on, are in fact systemic methods of fraudulent diversion with no qualified, independent accounting authority allowed into check their schemes fixed to maximally profit powerful private financial dealers against transparency and liability, elected government accountability, and the common interests of everyone else.



The Great Silencing

This whole joining of fateful dots has been covered in silence. Big London bank and finance has so far got away with veiled abolition of all the overdue EU financial rules, monitoring and enforcement to regulate them after the 2008 financial meltdown in which an estimated $26 trillion of public money has been swallowed by the transnational private banking system led by Wall Street and London. In faint contrast, there has been a slight exposure of the Brexit reverse of evolved EU environment protections, monitoring sciences, directive laws, and feed-back enforcement processes. But here too any information has occurred only in fragments, with no connections to the EU’s life-protective binding rules on industrial farming, GMO products, and industrial chemical pollutions and toxins. For example, you will not see in any government press release or corporate mass media any mention of the European Union’s world-leading environmental protection by its Organic Agriculture Regulations setting out “the principles, aims and rules of food production and labelling”. No-one mentions in the media or government that these regulations are precisely what are eliminated from monitoring, feedback and enforcement in Britain once the Great Repeal Act is legitimated by the June 8 election.   In similar vein, there is a white-out of pre-and-post-Brexit reference to EU’s historic and definitive Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). It is by far the most advanced environmental and human health protection system scientifically validated in existing government and the world. But it too is made invisible in the ruling discussions and debates. Such jam-it-through strategy with no public understanding and almost all the primary life-protective common legislation effectively concealed has been shrouded throughout in the pervasive media image of PM May vs. hapless Corbyn Labour. This is the only issue raised for voters in the June 8 election. The global media too have consciously or unconsciously collaborated in making this most important election in British history in financial and environmental terms, a non-issue. Yet even all this has not been enough for the great cover-up still in motion. There has been a Lobbying Act to stop informed NGO’s – but not any of the London-based big transnational banks and corporations – from lobbying before the June 8 election, a new law which has frightened them into silence with Greenpeace already convicted and fined.



What Does Not Fit the Life-Blind Program?

One underlying principle governs beneath the political scenes, speeches and choral commentaries on stage. It also governs the UK-US ‘special relationship’ and Wall Street-London axis at the same time, in different ways: De-fund and de-regulate all life-protective laws, agencies and enforcements that cost public and corporate money, and subsidize instead the unproductive or counter-productive private money party’s multiplying growth.

The method is the same at base. Private Wall-Street and London banks behind the scenes print the world’s money by debt issue for maximum profit to the top while producing nothing but multiplying their private money demand over all that exists.   Transnational corporate money sequences funded by the banks, in turn, strip and pollute life bases on all levels to produce and sell profit ever more commodities priced for maximum private profit with few or no life standards to govern their extractions, productive processes, products, wastes and life-destructive externalities. For all its faults, the European Union has gone much further than any other unified jurisdiction in human and ecological regulations of these material phases, and the financial drivers behind them. This is ultimately why the UK private money party, especially its non-productive and counter-productive investors, have repudiated EU regulations of them on other pretexts. In general, the connected global forces of life and life means destruction are screened out by the established framework of meaning which is in principle life-blind. In consequence, private financial and corporate forces are released from what modest public regulation has developed to protect organic, social and ecological life systems, and the systemic despoliation of global life-organisation continues to run down biodiverse energy capacities on all levels. The UN Paris Agreement on ‘climate change’ is intended to meet the most dangerous consequences of this system. But it is selective, and ‘climate change’ euphemises hydrological-cycle destabilization and pollution that is the baseline force of world life and life means destruction. Again unifying principles and concepts are screened out of public discussion as well as silo disciplines.

Jeremy Corbyn’s back-to-the basics Labour movement is hopeful in that it is not bound like Tony Blair’s ‘New Labour’ to the dominant Murdoch media and big corporations controlling the agenda via government committees and PFI’s.  And this is why Corbyn’s grass-roots leadership is pervasively belittled in the dominant media, and also why the while historic stakes of the June 8 election have been systematically blinkered out. The ruling framework of meaning presupposes the life-blind system, rules out what does not conform to its money-value logic, and attacks what seeks to reform it. So as the stakes keep getting higher as June 8 approaches, they are kept out of the discussion. There has been a systemic blocking out of all the momentous issues in the campaign before ‘Brexit’ and after it to today. The meta program is mind-locked, and compulsively proceeds even when its political leaders have no legitimate ground to proceed, but only a transient minority vote for Leave the EU in a largely apathetic and cynical referendum with no binding force. The Great Repeal Act of  EU regulations follows in lockstep fulfilment of the meta program, and an unscheduled snap election while Tory polls are still far ahead is set to cement it all in before the public wakes up to the meaning. Thus proceeds the greatest system-wide reverse and financial boondoggle in modern English-speaking economic history and social-ecological evolution.



There is No Alternative

The re-grounded Labour movement does the best it can for the working people and dispossessed across Great Britain, the only organised institution to do so in the country. But this too is ridiculed and condescended to in the corporate press. And still the deeper and historic issues remain completely out of view. In recent days, nonetheless, Labour has stood for returning the looted national railway system and other privatized utilities to a productive public direction, for taxing the rich more to fund falling public services, and for connecting Britain’s terrorist problem to its armed-force actions in other countries.  This has given a spike in the polls to Corbyn labour. Yet still the profound major issues of ‘Brexit’ itself remain covered over. The dots of the essentially phoney Leave the EU referendum are not yet joined. The holus-bolus financial and environmental deregulation by the Brexit scheme remains undefined. The basic outline for the historic hoax has remained undetected into June. “There is no alternative” has thus been reconstituted into the 2017 election. The underlying driver to cement the unaccountable private money power demanding ever more into a de-regulation bonanza remains unnamed. Not even the master slogan of ‘Brexit’ is deconstructed as a public relations mask of the greatest backward move in life-protective norms in historical record: all to serve life-means destroying or unproductive money-party powers that are fronted by photogenic leaders on all planes. The rationally self-maximizing growth of private-profit power over all existing assets is built into the meta program. But it is not comprehended. It exactly follows the inner logic of ruling economic, military and strategic game theory in models and calculations, but there is no linking across the simultaneous phenomena which are life blindly forming the future. The conversion of organic, social and ecological life organisation into more money demand for fewer is now being rapidly instituted into place.




The June 8 British election is set to lock in the big-money coup against long- evolved regulations and norms protecting human, social and environmental life.  The crisis is incomprehension of the meaning. A corrosive cynicism of EU capacity to govern for the public interest (Greece the continuous demonstration), media-debased public perceptions suppressing the historic stakes involved, a US presidency demonized in all the corporate media,  NATO-supported Nazism in Ukraine as Western freedom, and other degenerate trends have not been connected in their unifying pattern – within which UK money-party reversal of post-War socio-economic evolution is taking place. PM Theresa May is the political face of the great leap backwards.  So far the ruling politics of one distracting spectacle after another has worked right up to the June 8 election, fortified by a diabolical terrorist attack on London 5 days before the vote. y.. Yet there is a growing intuition of the fast slippage of social and ecological life order into chaos with no human centre of gravity in charge.  The British public may still see through to the underlying radical program of government de-regulation, de-taxation, and de-funding to further empower the financial looting and life-despoiling forces at work. Joining the dots behind the scenes reveals the emerging plot of meaning. The Great Brexit:

(1) stops the EU Central Bank Regulators and Supervisors from finally checking out the models, risk culture methods, inadequate reserves and so on of big London banks involved including Goldman-Sachs in the 2007-8 financial collapse, and

(2) eliminates the binding force of all the long-evolved and scientific EU regulations structured to prevent, in particular, the corporate industrial food system’s polluting and despoiling US-led methods undermining the British people’s health and environment.  

Brexit’s Great Repeal Act and PM May’s snap June election is the only way to achieve (1) and (2) without negotiation or exposing public issue. London financial accountability has most of all been silenced as an issue. Its growing trillions of nano-second fast-dealing to enrich the already rich by unregulated methods and calculations remain immune from any independent oversight. Similarly, the very aims and principles of the binding, monitored and still developing Organic Agriculture Directive are anathema to Britain’s US-led Big Agriculture and Food lobbies, not only around GMO restrictions – which US trade authorities and British GMO ‘science’ have made war on for over 15 years – but around every EU restriction on pesticides and herbicides to clear-cutting environments for monocultural factory methods to commodity motor rackets and pollutions to norms of licensed “food quality” in the corporate market. The very governing EU objectives of “biodiversity”, “animal protection”, and “organic natural systems and cycles” are a threat to Big Food production and products when attached to exactly defined, inspected and enforceable life standards. Long used to pervasive public relations sales pitches of “feeding the world” in place of accountable, life-protective environmental and nutrition standards, this very powerful British lobby is next to London Big Finance as the covertly moving major profit-first force behind the Brexit coup d’etat. Both are in principle life-blind in their mechanical financial models. Both are governed only by self-maximizing private money sequencing in exponential growth with no life-coherent ground or norms to stop their march across the world through organic, social and ecological life hosts. Both have led the Great Repeal of developed EU life standards beneath the radar of media coverage, parliamentary diagnosis, and academic silos. The June 8 2017 UK general election will open or close Britain’s life future under the rule of life-protective law.

Nicholas Walton, Genoa “La Superba”. The rise and fall of a merchant pirate superpower (London: Hurst and Company, London, 2015)

Genoa is just a name for a place; the Genoese are an interesting people. Liguria is arguably the most isolated region of Italy, along with Sicily and Sardinia. The Genoese tend to go their own way in their view, ahead of their fellow Italians, to whom this simply confirms the reputation of the Genoese for being an arrogant and aloof people. […] Genoa led in the rise of capitalism, slavery, and colonization in the Middle Ages, international public finance in the sixteenth century, poor relief in the seventeenth century, republicanism in the nineteenth century. […] Genoa marched to the proverbial beat of its own drummer.

These quotations, taken from the Preface of another book about Genoa, can easily represent all the topoi of Genoese history that can also be found in this short introduction to the Ligurian capital. Genoa “La Superba” is an enjoyable mix of history, analysis, anecdotes and portraits of some Genoese historical figures (Andrea Doria, Giuseppe Mazzini, Giuseppe Garibaldi). This is not (only) a tourist guide and clearly not an academic book. In less than 220 pages, Nicholas Walton provides a vivid portrait and an accurate short biography of a City – forgive me the oxymoron – well-known for being unknown. Or – if not unknown – at least underrated.

Genoa and his historical relevance seem to have gone unnoticed largely because of the pride (some would say arrogance) of its inhabitants. It may seem paradoxical, but it is probably true. Locked between a harsh orography and a deep sea, Genoa managed to rise from obscurity to one of the richest and most powerful European city-states. Devoted mainly to financial and commercial interests, the Genoese played a key role in European history until the 18th century. However, during this time, Genoa remained largely a Republic of families, based on clans and tribal relations, and on the primacy of the private over the public: a peculiar political body whose key institution was the powerful Bank of Saint George, a unique financial organization which combined government function and the running of a public bank. Perhaps because of this mix of pragmatism, economic soft power, near-Calvinist austerity and a characteristic egocentric pride, Genoa remained for centuries in the shadow of the other historical Italian cities, such as Rome, Florence and its secular nemesis, Venice. Today, even if its role has been recognized by historians, Genoa remains largely underrated by the broader public.

Genoa “La Superba” can be particularly appealing to those interested in discovering Genoa and its history, since it provides a useful and quick guide for beginners. The book spans ten centuries, from the rise of the Genoese thalassocracy, during the First Crusade, to the present days, including the financial golden age in the 16th century and the industrial era between the 19th and the 20th century. As Roberto Sabatino Lopez once said, a city is, first of all, a state of mind. In this sense, some excursus to “ethnological” aspects (such as a chapter devoted to the pesto sauce, a symbol of cultural identity, or another devoted to the Genoese attitude towards football) can be a useful way for introducing the reader to the “spirit” of the city. In the same way, some apparent oversimplifications (such as the definition of Andrea Doria as “the Steve Jobs of the Mediterranean”) can be considered as useful analogies for exemplifying – for a broader public – a much more complex historical reality.

Nicholas Walton sketches the history of a “merchant pirate superpower” with a brilliant, humorous and sympathetic style. Indeed, due perhaps to his familiar ties with Genoa, Walton shows throughout the pages of this book some display of Genoese pride, such as in the pages dedicated – not surprisingly – to the Museo navale of Venice, full of scale models from the golden age of transatlantic shipping:

Again and again, the ships catch the eye with their elegance and that special aesthetic only generated by mechanical and industrial ingenuity. The Conte di Savoia is there, as is the Cristoforo Colombo – the sister ships of the Rex and the Andrea Doria respectively. Other names are just as evocative, like the Virgilio and the Michelangelo. It was an era when Italy began to take on the industrialised giants of the Western world, and do it in style. But again and again, the ships displayed in the museum in that great Adriatic city carry the name of its Tyrrhenian rival across their sterns: GENOVA.


The Crash Course from Iceland

I. Preamble

In October 2008 dramatic events unfolded in Iceland when it became apparent that its economy could no longer sustain the sensational economic growth the country had experienced in the previous years. To most of the public the news of the downfall came as a frightening surprise. The country’s banking sector, which had led the growth of the economy and expanded to over ten times the gross domestic product (GDP) in a short time span, collapsed almost completely. Nearly all of the largest companies in Iceland were owned by the notorious financial Vikings, who owned the controlling shares in the oversized banks. Iceland’s crash was in part so drastic because of the unhealthy cross-ownership of companies and banks. As a result, share values in the country’s stock market were nearly erased. Iceland’s independent micro-currency, the Króna (ISK), that had attracted a lot of foreign hot money seeking high returns during the boom, was all of the sudden in free fall. Unemployment, which was unheard of during the boom (1%), went all of the sudden to 9% and some analysts worried that it could spiral upwards even more as events unfolded. The instability was underlined with interest rates and inflation moving upwards to a staggering 18 per cent and GDP predicted to fall around 10%.[1]

On the streets people were angry and wondered: How had it come to this? Everything was in tatters. Nothing captures this as well as the story of Landsbanki, traditionally a State-owned bank, which had functioned as a cornerstone of Iceland’s economy since 1885 and played a part in the country’s road to independence in 1944. Under State ownership the balance sheet of the banks had remained for decades modest in relation to GDP and yet stable even though the country did experience some turbulent times. Iceland’s economy is massively reliant on fisheries and the bank had seen difficulties when fish stocks suddenly fell or even when whole stocks like herring disappeared completely. External factors like two World Wars and the Cod Wars against the British did also have their impact. In 2003 the bank was fully privatized in an attempt, as the politicians of the day would phrase it, ‘to unleash the powers of the free market’, which is precisely what happened. In the years from 2003-2008 Landsbanki, under their new ownership, managed to expand its balance sheet from under 50% of GDP to over 250% of GDP, when it eventually collapsed. Such massive expansion was also experienced by the other two main banks, Glitnir and Kaupthing, whereas the banks not only expanded in Iceland but led an outvasion in acquiring huge assets and leading ventures abroad. This was duly felt in the United Kingdom where the financial Vikings grabbed headlines with investment in known brands on the high street as well as English football clubs.[2] One of the main owners and chairman of Landsbanki, Björgólfur Thor, made a trademark oligarch move and bought West Ham United in 2006; he became chairman in 2007, until he lost the club after the crash in 2008. This event raised eyebrows since, given the size of Iceland’s economy, the room their businessman were taking in the UK and elsewhere was considerable.

The country asked assistance from its Nordic neighbours and the International Monetary Fund in order to stop further deterioration of the economy and avert a total collapse. Not only did Iceland face a banking crisis, but also a currency crisis and a huge economic crisis. Politicians in other parts of Europe, where dark clouds were gathering overhead, stressed that although they might have problems of their own, at least they were definitely not Iceland. Such voices have now been silenced, since the country has experienced a remarkable turnaround in economic terms. In August 2011 the country completed its successful IMF programme and the fund concluded that key objectives had been met and the government had stabilized the economy. Growth resumed with numbers that many troubled countries in the Europe would give a lot for (2,7% in 2011, 1,5% in 2012, 3,3% in 2013). The budget deficit was turned into a surplus, unemployment was reduced to 5% and continues to fall, interest rates went down by 12%, inflation was maintained at under 4%, the currency was stabilised albeit under capital controls. Growth for 2014 is predicted to be 3,7%.

Although several economic problems remain, the country has emerged from its deep crisis. New banks were successfully resurrected that are dwarfed, however, in comparison with the monsters that emerged during the financial Vikings’ era. Both private and public debt stabilized and is on a downward trajectory with the sovereign successfully entering capital markets again in 2011. Iceland’s economic crash and recovery has sparked huge interest in this tiny economy of 300.000 inhabitants, which managed banks whose bankruptcies are among the largest in history. The before- and after-crash tale is dramatic, full of surprises and extravagances.



II. Success stories

The success stories told of how Iceland bounced back from its near-death economic experience are many. Here is an example of something I have in mind:  

In contrast, Iceland avoided a public health disaster even though it experienced, in 2008, the largest banking crisis in history, relative to the size of its economy. After three main commercial banks failed, total debt soared, unemployment increased ninefold, and the value of its currency, the krona, collapsed. Iceland became the first European country to seek an I.M.F. bailout since 1976. But instead of bailing out the banks and slashing budgets, as the I.M.F. demanded, Iceland’s politicians took a radical step: they put austerity to a vote. In two referendums, in 2010 and 2011, Icelanders voted overwhelmingly to pay off foreign creditors gradually, rather than all at once through austerity. Iceland’s economy has largely recovered, while Greece’s teeters on collapse.[3]


There are various versions, but what they have in common is that they attribute success to the fact that Iceland did not bail out the banks. Some of them thank not the people for halting a bank bailout, but the government at the time. From this supposed fact Iceland did not have to impose austerity policies that are thought to have had a further negative impact on crisis-ridden countries such as Portugal, Ireland, Italy, Greece and Spain (PIIGS). In Iceland policy-makers seem to have escaped an IMF bailout package conditionalized upon imposing austerity and recapitalized oversized banks with toxic assets. [4] This in turn is given as an explanation as to why Iceland experienced a rapid recovery while the other countries, especially Greece, have seen very little progress.

I think there is a need to urge for caution in comparing economic crises of different countries. Greece and Iceland had very different problems leading to crisis. Greece did not have a banking crisis like Iceland and Iceland did not have a public debt crisis before the crash like Greece. Ireland had a banking crisis like Iceland, but the former has the Euro as currency and the latter the independent Króna. Putting to one side the need for caution in these circumstances, then this Icelandic saga of a heroic escape from the bad banker is just a myth and lacks any factual basis. Iceland attempted a bank bailout, but it failed, and the cost of the Icelandic crash has been considerable both in economic and social terms. Although Iceland escaped better from the circumstances than many had envisaged, the impacts of them are still being felt.



III. The mini-crisis of 2006

The tragedy in the Icelandic case is that so much harm could have been averted if the authorities had only taken measures in a mini-crisis, called the Geyser crisis, that hit the economy in 2006. Analysts, especially outside of Iceland and most notably from Denmarks Danske Bank, gave out warnings that Iceland was heading for disaster as its banking sector was seriously unstable.[5] This is what economist Gudrun Johnsen calls the ‘missed opportunity’ for Iceland and points out that, rather than taking this criticism to heart, domestic politicians and bankers responded to it by shooting the messenger. They maintained that the analysts had ill intentions as they were in competition with the banks or that they did not understand the Icelandic banking miracle. So, instead of reviewing the fundamentals of the financial system and asking questions about the direction of the banking outvasion, all the wrong lessons were learned from the Geyser crisis. Bankers and politicians agreed that in order to correct the misperceptions over the banks, a PR campaign was needed as well as a restructuring of how they financed themselves so that they could continue to grow. The bank managers saw that they could not only rely on the international bond market, as the view was getting more commonplace that all was not fine in Iceland. Funding was getting harder and more expensive by the month, which these heavily leveraged banks could not withstand. Most notably, this meant the banks moved into introducing high-interest-rate accounts. Landsbanki, for example, introduced the now infamous Icesave online accounts out of their branches in the UK and the Netherlands. It managed to accumulate billions of pounds in deposits in just over a year. However, when the accounts became unavailable due to the collapse of the bank in October 2008, the UK authorities used anti-terrorism laws to freeze all Icelandic assets on UK soil, sparking a hefty row between Iceland and the UK that ended before the EFTA court in 2011. In 2013, however, the EFTA court came to an interesting verdict, acquitting the Icelandic State of any claims made by the UK and the Netherlands to reimburse them for moneys paid to depositors of the failed branches of Landsbanki. Rather, the UK and Dutch insurance deposit schemes stand to get reimbursed by the winding-up process of the failed bank but, importantly, the Icelandic State is not liable.



IV. Contingencies

After the 2006 Geyser crisis, the banks did not only change their strategy and turn to the pockets of depositors. In addition to accumulating deposits, the banks manipulated their access to the Central Bank of Iceland and the European Central Bank for funding when international markets closed on the Icelandic banks. As Johnsen notes, ‘[i]nstead of using their existing asset portfolio (which was depleted), they issued new unsecured bonds in the domestic market at a favourable rate, then colluded on exchanging these bonds among themselves. Another bank could then use them as collateral against short-term lending from the Central Bank’.[6] Or to put it simply, the banks were taking money out of the Central Bank in exchange for IOU tickets they had exchanged among themselves. These tickets became known as “love letters” in Iceland. In effect, they were printing money, and on a massive scale. One of the results of this is that the Central Bank of Iceland became de facto bankrupt, with losses estimated at 11.1% of GDP, which is another peculiarity of the Icelandic case.[7] A court case is currently ongoing in Iceland where the CEO’s of Kaupthing are charged for financial transactions and loans made in the final weeks leading to the crash. Part of the money used in those transactions, 500 million Euros, was a large portion of Iceland’s currency reserve loaned to the bank by the Central Bank of Iceland.


The years between 2006 and 2008 are key in understanding the Icelandic case. One of the main questions one gets when discussing the lessons from Iceland is: Was the quick recovery due to how the country ‘burned’ the creditors? Myth has it that when things got tough for the banks, the Icelandic government denied to bail them out and the country therefore escaped the difficult long-term consequence felt by, for example, Ireland. But that is a serious distortion of what happened. The Icelandic banks were on Central Bank life support from 2006 to 2008. After the Geyser crisis, the banks got the funds needed in order to continue their ventures. Paradoxically, what turned out to be Iceland’s luck in the circumstances was that heads of other Central Banks did not abide to the demands of their colleague in Iceland, Davíð Oddsson, for a loan to continue funding the banks. In all actuality, it turns out that it was the Icelandic authorities that were the last to spot the ill health of their own banks. In a response to a letter from the Governor of the Bank of England Mervyn King, where he proposes the need for a downsizing the banking system and that more funds are not what is needed, Mr. Oddsson writes:

The Icelandic banks are well capitalized but they are dealing with a problem of perception. The signals we receive from the markets are that a swap facility for the Central Bank would contribute immeasurability to the alleviation of the problem. I hereby kindly ask you to reconsider this matter.[8]


Mervyn King did not reconsider nor did any other Governor of a Central Bank in Europe, which then meant that the authorities, out of necessity, had to switch to plan B i.e. to split up the banks and make them go into administration. For admirers of historical contingences, this case is a treat. Iceland did not take a calculated decision to let the banks fail, but an attempted bail-out failed. This meant that that its tackling of a banking crisis took an unexpected turn, as banks were put into a winding-up process, a move only considered in the face of failure. If drastic measures against the banks had been taken in 2006, then Iceland would offer a role model for averting crises. But then an interesting political question arises. The banks fuelled sensational growth. What politician would stop the promoters of such growth and who would vote for him? And in a political climate of complete confidence in the self-regulation of markets, the role of regulators gets very small.



V. Iceland’s bad/good bank move

Iceland’s bank manoeuvre has received a lot of interest because it deviates in important ways from the current orthodoxy in crisis response in Europe, where the argument for a bank bail-out is the standard. The recipe needs mentioning. In response to the crisis, the Icelandic Parliament passed emergency laws in 2008 that gave the financial services authority (FME) the tools to take drastic measures and intervene in the financial market. An important part of the legislation was to give all depositors (wholesale and retail) priority status over other creditors such as bondholders. On this basis domestic deposits were moved into new banks that received a capital injection from the State and assets and loans from the old banks matcing the deposits. The failed banks were then put into administration, which makes this a good/bad bank split. And even though Iceland did not deliberately choose this route, it turned out to be beneficial, which proves an important point that alternatives to bank bailouts are possible. One should also note, however, that the good bank / bad bank move is based on sound principles that are sadly overlooked by policy-makers in Europe. If the State finds it necessary to salvage a financial institution, then State funds should only be allocated to such bail-outs provided that the assets of the financial institution are sound and important for the functioning of society. Rather, it may be sensible to seize the opportunity to minimise risk by downsizing the banks and eliminating toxic debt. A bank that faces default is doing so for a reason and the government needs to ensure that it is not throwing good money after bad money. The argument that banks should always receive tax-payer money because of systematic importance and contagion fears should not be accepted as a wholesale argument. The State does not of necessity need to bail out the banks in the exact shape they are in when they seek assistance.


So, although Iceland stumbled upon the correct route eventually, the attempt to sustain the banks since 2006 became immensely costly. Despite the much-praised route taken by Iceland, the total cost of the economic crisis for the State has surpassed Ireland’s, which was thought to be the very bad case, in terms of GDP (Ice 70% Ire 60%).[9] The most recent IMF report discusses this surge in debt and estimates it for Iceland even higher than previously assumed, stating that ‘the collapse of the banking system led to an increase of Icelandic public-sector debt to almost 100 percent of GDP’.[10] The reason is that the pure size of the banking system was such that even though a late good/bad bank manoeuvre rescued Iceland from complete economic annihilation, the crash remained immensely costly for the tax-payer. But there are also important caveats to stress here. The fiscal costs are in part caused by the refinancing of the new banks. A lot of the increase in public debt is due to establishing an adequate foreign reserve of currencies to support the Icelandic Króna. The State also recapitalised the new banks and so the majority of the financial sector is now largely owned by it. And as Iceland’s economy is growing again, the assets of the banks are improving and the State will in the future be able to receive considerable revenue from the banks to repay its own capital contribution. Hopefully, it will all be repaid in full and with interest, which would make up for some of the costs of the crisis. Nevertheless, Iceland did not miraculously escape the crisis; although its recovery has been positive.



VI. Emerging from crisis

There are many factors that explain Iceland’s emergence from the crisis. Economists would point to the stabilizing and downward path of private and public debt and stabilization of currency, which brought down inflation. Another peculiarity of the Icelandic case is the introduction of capital controls in an IMF programme, which helped stabilize the currency. Some would point to how the depreciation of the currency helped hasten the recovery for an export-driven economy. But keeping in line with the peculiarities of the Icelandic experience, I want focus on other factors that I consider pivotal in its recovery. Bergmann notes that in terms of the recovery, a key component of it was that it was welfare-orientated.[11] One of the main aims of the government was to do as much as it could to protect Iceland’s Nordic welfare system and the consolidation measures implemented after the crash were based on social principles.[12] Cuts in the budget were curtailed to shelter the most important elements of the welfare structure. To meet the rising costs of such a social protection scheme after the crisis hit, in addition to falling revenue, considerable tax reform was introduced. An increase in income tax on the highest wages was introduced instead of a flat rate. Capital and corporate income tax rates were raised, new special wealth taxes and a bank levy introduced, environmental and carbon emission taxes launched. The capital controls also helped by preventing capital flight once they were set in place and they also retained the assets of the creditors of the failed banks. A special resource rent tax on the export-driven fishing industry that targeted substantial increases in profits resulting from the depreciation of the Króna was introduced. This and running a deficit to fund certain social programs necessary to soften the impact of the crisis were important in achieving economic progress. For example, in 2011 and 2012, 1% of GDP each year was used to subsidize interest rates to indebted households and a special social stimulus package was introduced in 2011 which increased wages and benefits. Both the IMF and OECD have pointed to this social emphasis with the latter claiming that “[c]onsolidation policies appear to have been designed in an overall equalising manner.”[13]


As a result Iceland was the only country within the OECD where the average income of earners at the top of the scale fell more than that of those at the bottom of the scale. During the boom inequality increased significantly, making Iceland an interesting test case for the debate surrounding Professor Thomas Piketty’s claims on wealth inequality and the development of capitalism.[14] But in tackling the crisis, socially just principles contributed to Iceland’s recovery. The Icelandic authorities were terrified of the prospects of a double-dip crisis which could have easily become the reality if funds were not redistributed through the tax system and social protection shielded from cuts. Strong moral arguments support such an approach, as measures should focus on getting the whole of society through the crisis and not just financial institutions, but they are also economically sensible. The focus should be on maintaining as much as possible the purchasing power of low- and middle-income groups. A counterproductive move would have been to cut unemployment benefits when it peaked, in the name of cost-cutting, and then introducing extra costs in areas people highly rely on, such as education or health services. Austerity not only hurts the individual who lost his job, but also the community that relies on him as a consumer, as his diminished income needs to pay for public services he previously did not have to.


The Icelandic boom, bust and recovery story offers a fascinating study for policy-makers, journalists, academics or just anyone interested in understanding financial crises. The big question is whether Iceland can offer any lessons to other countries that face a crisis. I think the verdict is mixed. There are lessons in the failures leading up to the crisis and in what made the country emerge from crisis. It is right to stress that every country faces a different set of circumstances, even though they are all lumped together as countries facing economic crisis in discussions on “crisis”. But maybe the most important lesson from Iceland is that when tackling a crisis there are always more possibilities available than are usually laid on the table. Even when facing serious consequences, taking the unexpected route is not so disastrous.





Baruchello, G. (2013a), ‘The Picture—Small and Big: Iceland and the Crises’, Nordicum-Mediterraneum, Vol. 9, no. 3, available at: http://nome.unak.is/nm-marzo-2012/vol-9-no-3-2014/73-conference-paper/480-the-picture-small-and-big-iceland-and-the-crises


Bergmann, E. (2014). Iceland and the International Financial Crisis: Boom, Bust and Recovery. Palgrave Macmillan.


Byrne, E. & Thorsteinsson, H. (2012):‘Lessons for Ireland from Iceland’s financial crisis?’, in Lucey, B., Larkin, C. & Gurdgiev, C. (eds): What if Ireland Defaults?, Dublin, Orpen Press, pp. in press.


Halldórsson, Ó.G. & Zöega, G. (2010): Iceland’s financial crisis in an international perspective. Economic Institute Working Paper Series W10:02. Reykjavík, University of Iceland Economic Institute.


Huijbens, E. & Thorsteinsson, H. (forthcoming): Maintaining welfare in the wake of collapse – the case of Iceland‘. Geografiska Annaler B


IMF (2011): ‘Iceland’s Recovery – Lesson and Challenges’ The International Monetary Fund, 27th October, retrieved from: http://www.imf.org/external/np/seminars/eng/2011/isl/index.htm, 9th November 2011.


IMF (2012): Iceland 2012: Article IV Consultation and first post-program monitoring discussion. Washington, D.C., International Monetary Fund.


IMF (2013a): Baltic and Icelandic Experiences of Capital Flows and Capital Flow Measures. Washington, D.C., International Monetary Fund.


IMF (2013b): Fiscal Monitor April 2013 Fiscal Adjustment in an Uncertain World. Washington, D.C., International Monetary Fund (World economic and financial surveys, 0258-7440)

IMF(2014): Iceland: Fourth Post-Program Monitoring Discussions-Staff Report; Press Release; and Statement by the Executive Director for Iceland. Washington, D.C., International Monetary Fund. .


Johnsen, G. (2014). Bringing Down the Banking System: Lessons from Iceland. Palgrave Macmillan.


Lane, P. R. (2012). The European sovereign debt crisis. The Journal of Economic Perspectives, 26(3), 49-67. Chicago


Karanikolos, M. (2013) et al. “Financial crisis, austerity, and health in Europe.”The Lancet 381.9874: 1323-1331.


Konzelmann, S. J. (2014). „The political economics of austerity“. Cambridge Journal of Economics, 38 (4): 701-741


Loftsdóttir, K. (2010). The loss of innocence: The Icelandic fnancial crisis and colonial past. Anthropology Today, 26(6), 9-13.


Magnússon, G. (2010): Lessons from a small country in a financial crisis or Dr. Minsky and Mr. Ponzi in Iceland. Economic Institute Working Paper Series W10:03. Reykjavík, University of Iceland Economic Institute.


OECD (2011): OECD Economic Surveys: Iceland. Paris, OECD.  


OECD (2013): Crisis squeezes income and puts pressure on inequality and poverty. Paris, OECD.  


Ólafsson, S. and Kristjánsson, A.S. (2012): Skýrsla I: Umfang kreppunnar og afkoma ólíkra tekjuhópa [Report I: The scope of the recession and returns to different income brackets]. Reykjavík, University of Iceland Social Research Centre.  


Thorsdottir, T. K. (2013). Iceland in Crisis. Women and Austerity: The Economic Crisis and the Future for Gender Equality, 102.


Piketty, T. (2014). Capital in the Twenty-first Century. Harvard University Press.

Wade, R. and Sigurgeirsdóttir, S. (2010): ‘Lessons from Iceland’, New Left Review, 65: 5-29.


Wade, R. and Sigurgeirsdóttir, S. (2012) “Iceland’s rise, fall, stabilisation and beyond.” Cambridge Journal of Economics 36.1: 127-144.



[1] For an overview of main economic indicators before and after crash see IMF 2011, 2012 & 2014 and Halldórsson & Zöega 2010.

[2] Financial Vikings are discussed in Loftsdóttir 2010 and see Baruchello 2014 for discussion on the neoliberal ethos during the boom years.

[3] Stuckler & Basu. “How Austerity Kills”. New York Times. May 12, 2013. See also Karanikolos et. al. 2013 and see discussion in Byrne & Thorsteinsson.

[4] See Lane 2012 on crisis packages for European countries especially p. 57-59. On the history of the idea of austerity see Konzelmann 2014.

[5] Christensen 2006

[6] Johnsen 2014:93

[7] Byrne & Thorsteinsson 2011. See also Magnússon 2010.

[8] Johnsen 2014:185

[9] IMF 2013b

[10] IMF 2013b: 11.

[11] Bergmann 2014:159

[12] For detailed argument consult Huijbens & Thorsteinsson forthcoming.

[13] OECD 2013: 3. Gender issues are discussed in Thorsdottir 2013. See also Ólafsson & Kristjánsson 2012 for discussion on how changes in the tax system sheltered low income groups.

[14] Piketty 2014.

Jón Ólafsson (ed.), Lýðræðistilraunir. Ísland í hruni og endurreisn [Democratic experiments. Iceland in collapse and renaissance] (Reykjavík: Háskólaútgáfan, 2014)


The indications are that the costs are 44% of Iceland’s GDP, meaning that it is internationally the third costliest financial collapse ever (Luc Laeven og Fabian Valencia. 2013. Systemic Banking Crises Database. IMF Economic Review, 61, pp. 225-270). The series of events leading to the collapse and what has happened afterwards has had serious consequences for Icelandic society and government. The most obvious sign of these consequences is that trust levels within Icelandic society have declined. The banks enjoy least trust of all Icelandic institutions, as is to be expected, as only 10.2% of Icelanders said in October 2014, six years after the financial collapse, that they trust Icelandic banks (MMR Market and Media Research). Just 12.8% trust Alþingi, the Icelandic Parliament, according to the same source.


One of the consequences of the financial collapse was that in 2009 the Icelandic republic had the first left-wing government in its history, i.e. since it was established in 1944. This government had to deal with all the most serious consequences of the financial collapse. On top of that, it tried to engineer changes to important Icelandic social institutions like the fishing quota system, which has been controversial since its inception in 1983, and the Icelandic constitution. The reasons behind the changes to the quota system were based on justice and fair allocation of natural resources. The reasons behind changing the constitution were not as clear, but it seems to me that the best construal of them is that the attempt to change the constitution was a confidence-building measure, an attempt to reconstruct the most important legal document of the republic´s legal system and secure general trust in governmental institutions. According to the same survey firm as referred to above, the legal system as a whole enjoyed the trust of 28.9% last November, but in November 2013 the same measurement was 38.1% and in October 2009 the trust in the legal system as a whole in Iceland was 36.5%. There is no reason to read too deep a meaning into these measurements, but they are some indication that the preparation, writing and rejection of the draft constitution have not affected public trust in the legal system. Some may think that we can infer from this that the whole affair surrounding the drafting of a new constitution was in vain. But this may be too hasty.


What actually happened in this process? First, there were public protests against the sitting government ending in its fall in early 2009. Second, after the general election in 2009, the first left-wing government in the history of the Icelandic republic was established. The prime minister of that government had long been of the opinion that the constitution needed revision. Third, some general meetings were arranged early in 2009, trying to find out which were the most important values of Icelanders. The government organised a similar meeting in early 2010 to figure out those values that should govern the revision of the constitution. Fourth, the government established a committee gathering data and evaluating various ideas about such a revision, thus preparing the work of a constitutional assembly. Fifth, the government decided that an assembly should be elected by the general public to write a new constitution or revise parts of the existing one. Sixth, the election to the constitutional assembly was declared null and void by the Icelandic Supreme Court after a legal challenge. The government decided then to establish a constitutional committee with the same mission and the same individuals as voted onto the assembly. Seventh, the constitutional committee delivered in four months a draft of a new constitution. This draft was never assented to twice by the majority parliament with a general election in between, as it must do according to the rules laid down by the present constitution.


This book is a collection of essays in Icelandic about this whole process and other democratic experiments in Iceland’s recent years. It is written by two Icelandic authors and six international authorities on democracy and democratic developments. Jón Ólafsson edits the book and writes an introduction describing the development of the constitutional project and other democratic experiments in Iceland. James Fishkin analyses some of the processes that took place in the constitutional preparation and the drafting of the new one, and he evaluates to what extent deliberation and rational discussion were features of them. His conclusion is that neither the general meetings nor the constitutional committee reflected the general population and we should be careful about drawing any conclusion about the views of the meetings and the committee coinciding with the views of the population as a whole. He is also critical of the lack of rational discussion both in the preparations and the drafting of the new constitution.


Hélène Landemore examines the process of preparing and writing a new constitution in Iceland from an epistemological point of view. She is interested in: how the constitutional committee dealt with the problem of writing a constitution; and how it used “crowdsourcing”, meaning the competence and the intelligence of the general public, especially in writing the draft of the new constitution. She is critical of the role of experts in writing and editing the draft of the new constitution; she believes that the process had serious drawbacks, as she thinks that the general public and its representatives are capable of writing a constitution upon the condition that as many as possible take part in the process. She believes that the current Icelandic method for establishing a change to the present constitution or adopting a new one is too restrictive. Tom Ginsburg and Zachary Elkins approach the preparations and process of writing the draft of the new Icelandic constitution from a comparative point of view. They review various views of transparency in such a process, as well as the role of experts. They are, like the other experts writing in this book, favourable to the opening up of the process for preparing and writing a constitution and the government process in general, but they realise that there is no simple solution or simple recipe for a constitutional process, in Iceland or anywhere else. Thus, they ask the difficult question: If the new constitution was the result of a grassroots movement, why was it so easy to stop it in parliament? Why were those parties that opposed the new constitution elected as the new parliamentary majority in 2013? There is no simple answer to that question and there are two appendices to their article that are informative and interesting.


Paolo Spade and Giovanni Allegretti write about novelties in democracy or new initiatives in democracy, especially participatory financial budgeting as practised in a number of Brazilian cities. They explore the connection between these new initiatives and the new possibilities that have opened up on the net. They realise that these connections are complex and they can easily become counterproductive from the point of view of participation, if not used carefully. Democratic experiments in other places are drawn into the discussion such as Portugal, Germany and the United States, and in Reykjavík, Iceland. This is not directly relevant to the process around the constitution but the discussion broadens the picture of new initiatives in democracy. The last article is by Kristinn Már Ársælsson and is an overview of democratic initiatives in Iceland in the years 2009-2013, i.e. the years of the first left-wing government of the Icelandic republic. These include the preparation and the writing of the draft constitution, plus two national referenda on the Icesave agreements between the Icelandic government and the British and Dutch governments. These referenda were engineered by the refusal of the Icelandic president to sign two laws supported by the majority of parliament. In both cases the general public voted against these laws. These were the first national referenda since 1944, when it was decided to establish a republic. He also discusses the initiatives taken by the city council in Reykjavík.


All these articles are interesting, make important points and throw light on the events that have taken place in Iceland in the last five years. This is of particular value for a small society like Iceland, because very few people outside the country can understand what happens here and why. Icelandic scientists are a part of their own society and sometimes find it difficult to analyse what actually happens. The critical distance of foreign scientists can bring benefits.


This distance has its drawbacks too. This is clear from the discussion of the constitutional process. There is no attempt to relate it to the political culture in Iceland. What is most interesting about this process, which elected a constitutional assembly from members of the general public, is also a major break with the Icelandic tradition of politicians and legal experts discussing and drafting changes to the constitution. Part of this tradition is that all the major parties have had to agree to the changes put forward. Even though this is not literally true of all the changes proposed, it is true of most of them. This has guaranteed that the changes proposed and consented to in parliament before it is resolved, are consented too unchanged in the newly elected parliament. This threshold to changes to the constitution has not proved to be serious or impossible in the Icelandic context. Changes have regularly been made to the Icelandic constitution. It is not fashionable nowadays to take Icelandic political culture seriously, since its vices rather than its virtues have been more prominent in recent years, but it seems to me that one of the reasons working against the new constitution was that there were serious political disagreements about it. Pushing it through parliament would have been a serious break with the national consensus tradition. You may not think very much of this tradition, but it is an historical fact; besides, traditions in political cultures have to be reckoned with.

Sustainable Liberalism: A Modest Proposal for Global Recovery


Actually the same crisis, apparently caused by a severe drop of investors’ faith, given the huge amount of national public debts, has already devoured the other so-called “Pigs” (Portugal, Ireland, Greece and Spain), and even the iron economy of Germany, as ECB’s Governor Dr. Mario Draghi has recently pointed out, seems to be threatened by this European plague. In turn, global economic growth shows signs of indisputable weakness: along with Europe and the USA, almost all emerging countries – with the notable exception of Brazil, for now – experience a substantial slow-down in their glorious path towards well-being.


That’s the story. At least, the story we have been told in the last five years. And it conveys a bunch of sickening, although necessary, consequences: cuts in the public budget, decline of welfare-State policies, shakeups in the labour market, higher taxes etc. Will this strategy carry us out of the crisis, soon or later? Honestly, I’m afraid it won’t. Quite the reverse, we should seize the day and reconsider the most basic patterns of our social and economic model.


It is a common belief that market liberalism, whose dictatorship seems to mark the last three decades, led to the complete deregulation of global financial economy, together with a growing emphasis on capital gains as the main source of wealth and the corresponding decrease of labour incomes – not to speak of the continuing depredation of natural resources that caused a long series of catastrophic environmental tragedies. We should question, however, if those achievements be really consistent with core liberal principles.


Rather correctly, French economist Valérie Charolles has stated that “we are indeed widely persuaded to live in a liberal world, while the variety of capitalism that governs us has little to do with liberal theory”. In fact, “the liberal model doesn’t serve as the basis of the system. It merely provides a justification for the liberalization of public services, but it is quickly put aside in the face of too rapid a process of concentration undergone by the private sector. These processes blatantly contradict the theoretical corpus of liberalism, which claims competition to act as a tool capable of multiplying the number of actors and limiting any position of power” (Charolles 2006: 13, 52).


Furthermore, classical liberals were perfectly aware of the dangers – though social, moral and political – posed by an endless economic growth. And even when they did support development and progress, as in the case of David Hume and Adam Smith, the most negative consequences were never forgotten nor ignored.[1] If Hume strongly encouraged commerce, since “it increases frugality by giving occupation to men, and employing them in the arts of gain, which soon engage their affection, and remove all relish for pleasure and expense”, promoting “the greatness of a state, and the happiness of its subjects”, he soon added that “a too great disproportion among the citizens weakens any state”, so that “every person, if possible, ought to enjoy the fruits of his labour, in a full possession of the necessaries, and many of the conveniencies of life” (Hume 1987: 255, 265, 301). Similarly Benjamin Franklin, trying to preserve Americans from European corruption and depravity, advocated “a general happy mediocrity” by which, obliging people “to follow some business for subsistence, those vices that arise usually from idleness, are in a great measure prevented” (Franklin 1959: 274, 282).


Not merely inequalities did Smith fear indeed. True, “no society can be flourishing and happy, of which the far greater part of the members are poor and miserable”; but, although “commerce and manufactures gradually introduced order and good government, and with them the liberty and security of individuals” (Smith 1981: 96, 412), an extensive division of labour could produce serious moral and psychological consequences on “the great body of the people”, preventing a conscious citizenship and their natural search for “happiness [which] consists in tranquility and enjoyment” (Smith 1982: 149).[2] His friend Henry Home, Lord Kames, was far more categorical: “great opulence opens a wide door to indolence, sensuality, corruption, prostitution, perdition” (Kames 2007: 333).


We should, then, try to disclose the hidden roots of the present crisis – and I believe that, in so doing, we’d be forced to go back and back in time. We can find many traces of the path taken by the global economic system in the last 40 years: the end of the new gold standard in 1971, the great oil crisis of 1973-74, the emergence of neo-conservative policies along with the election of Margaret Thatcher and Ronald Reagan, the deregulation wave of the 1990s (culminated in 1999, when the Glass-Steagall Act was finally repealed by President Bill Clinton), the growth of international investment banks and the naissance of computer-managed financial dealings. 


Therefore, the greatest crisis since 1929 has been prepared by a long series of economic mistakes, as well as by an intentional implementation of misleading public (and private) policies. While most scholars and policymakers silently accepted such a new paradigm, few voices were raised to warn against the likely dangers. Among these, the case of Michel Albert still deserves some consideration: a social economist and former CEO of Assurances Générales de France, in his brilliant book Capitalisme contre capitalisme (1991) he foresaw the aftermaths of an economic regime – notably dubbed “the Anglo-Saxon model” – relying more on financial means and less on production and trade of goods and services, with growing inequalities and a troublesome lessening of social security (Albert 1991: chap. viii, ix).


But there is something more – so much more, indeed – he did not foresee: that such a model has reached quite soon the point of no return, becoming no longer sustainable upon a strictly financial, as well as social and ecological, view. How to reconcile economic development, human flourishing and the preservation of natural capital? How to settle a dynamic and free economy with the promotion of labour and a structural safeguard of biodiversity? A contribution to unravel this intricate puzzle might come from an approach that I will call sustainable liberalism: an attempt to revive the ethical, political and economic discourse of classical liberalism in strict dialogue with contemporary sustainable-development theories.


It must surely sound quite bizarre, since liberal economists and philosophers mostly look with a skeptical eye at any effort to sketch a theoretical framework capable of merging individual liberty with social equality and a systematic protection of the environment. However a number of scholars, by the middle of the 20th century, had tried to reconsider the feedback of economic growth on social and natural organisms within the wider context of a novel humanistic philosophy, claiming that every measure was to be implemented à la taille de l’homme. Among these ‘neo-liberals’ – as they labeled themselves to avoid any association with Hobhouse, Keynes and Beveridge’s new liberalism – were Walter Lippmann, Wilhelm Röpke, Luigi Einaudi and many more, who had tied up ethics, politics and economics in a comprehensive design of the ‘good society’.[3]


Their most cherished aim was, for sure, the reestablishment of political and economic freedom after the tragedy of totalitarianism; even so, they did assume that “we [humankind] represent by no means the dizzy summit of a steady development; that the unique mechanical and quantitative achievements of a technical civilization do not disembarrass us of the eternal problems of an ordered society and an existence compatible with human dignity” (Röpke 1950: 2). In their view, “economic liberalism, true to its rationalist origin, exhibited a supreme disregard for the organic and anthropological conditions which must limit the development of capitalist industrialism unless a wholly unnatural form of existence is to be forced upon men” (Röpke 1950: 52).


Hence they advocated an extensive program of social, political and economic reforms aimed at restoring justice, equality of opportunities and social market economy, given that “progress and economic development rely much more on moral values than on mere efficiency” (Einaudi 1987: 48). Such a development, however, should absolutely avoid “the rape of irreplaceable natural reserves [whose] consequences are already making themselves felt in many instances and in an alarming manner», among which they pointed at «the annihilation campaigns against the forests on all continents and against the whales of the oceans”, not to speak of “the inevitable consequences of the excessive use of artificial manure and the progressively more serious problems of every country’s water supplies” (Röpke 1950: 144).


 Curiously enough, their intellectual heirs weren’t (and still aren’t) ready to capture the spirit of such an innovative attitude. Quite the reverse, after the pioneering warning launched by the Club of Rome in 1972, sustainable-development theorists (almost) alone have tried to handle – at both levels, normative and practical – the overwhelming burden of forecasting a transition towards a ‘humane economy’, as Röpke called it once. The truth being that “we have, today, reached the end of a template for life and business that, for 200 years, has been extremely successful – one that worked quite magnificently under the old conditions. Those conditions – namely the availability of an entire planet for a small part of humanity and its economic model – however, no longer exist” (Welzer 2011: 33).


We need, then, an integrate approach to economics, since “the conventional wisdom is mistaken in seeing priorities in economic, environmental, and social policy as competing. The best solutions are based not on tradeoffs or ‘balance’ between these objectives but on design integration achieving all of them together – at every level, from technical devices to production systems to companies to economic sectors to entire cities and societies” (Hawken – Lovins – Hunter Lovins 1999: xi). Whatever opponents may think of it, there would still be room for economic liberty. Bill McKibben has recently reminded us in his remarkable book Deep Economy, devoted to advocate a large-scale reform centred on a huge process of downsizing, that “shifting our focus to local economies will not mean abandoning Adam Smith or doing away with markets. Markets, obviously, work. Building a local economy will mean, however, ceasing to worship markets as infallible and consciously setting limits on their scope. We will need to downplay efficiency and pay attention to other goals” (McKibben 2008: 2).  


Other goals, by the way, require new tools for their own analysis, study and measurement. That’s why, in recent times, the former President of the French Republic, Nicholas Sarkozy, appointed a Commission led by Professors Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi in order “to identify the limits of GDP as an indicator of economic performance and social progress [and] to consider what additional information might be required for the production of more relevant indicators of social progress”.[4] The Commission’s report, lengthy and well-reasoned, is nonetheless crystal clear on the absolute inadequacy of the conceptual background underneath contemporary economics; so that, for instance, “choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance” (Stiglitz – Sen – Fitoussi 2009: 7).  


Sustainable liberalism should not pretend to stand as the sole theoretical framework, nor to provide the most useful solutions. It is, rather, an intellectual approach that might help social scientists and policymakers, as well as every citizen on Earth, to imagine new life-styles and eventually put up an alternative scenario, in which individual liberty, equality and preservation of the biosphere could really walk side by side towards the only, valuable end of social and economic life: the well-being of every sentient organism on our planet.




– Albert, M. (1991), Capitalisme contre capitalisme, Paris: Editions du Seuil.

– Audier, S. (2012), Néo-libéralisme(s). Une archéologie intellectuelle, Paris: Bernard Grasset.

– Bruni, L. and Porta, P. L. (eds., 2005),  Economics and Happiness, Oxford: Oxford University Press.

– Charolles, V. (2006), Le libéralisme contre le capitalisme, Paris: Arthème Fayard.

– Einaudi, L. (1987), Le prediche della domenica, with an introduction by G. Carli, Turin: Einaudi.

– Franklin, B. (1959), Autobiography and Selected Writings, edited by D. Wecter and L. Ziff, Toronto: Rinehart and Co.

– Hawken, P., Lovins, A. and Hunter Lovins, L., (1999), Natural Capitalism. Creating the Next Industrial Revolution, Boston: Little Brown and Co.

– Hume, D. (1987), Essays. Moral, Political and Literary, edited by E. F. Miller, Indianapolis: Liberty Fund.

– Kames, H. Home Lord (2007), Sketches of the History of Men, vol. I, edited with an introduction by James A. Harris, Indianapolis: Liberty Fund.   

– McCoy, D. R. (1982), The Elusive Republic: Political Economy in Jeffersonian America, New York and London: W. W. Norton & Co.

– McKibben, B. (2008), Deep Economy. The Wealth of the Communities and the Durable Future, New York: Times Books/Henry Holt & Co.

– Rasmussen, D. C. (2006), “Does ‘Bettering Our Condition’ Really Makes Us Better Off? Adam Smith on Progress and Happiness”, The American Political Science Review, Vol. 100, No. 3.

– Röpke W. (1950), The Social Crisis of Our Time, translated by A. and P. Schiffer Jacobsohn, Chicago: The University of Chicago Press.

– Smith A. (1981), An Inquiry Into the Nature and Causes of the Wealth of Nations, edited by R. H. Campbell and A. S. Skinner, Indianapolis: Liberty Fund.

– Smith A. (1982), The Theory of Moral Sentiments, edited by A. L. Macfie and D. D. Raphael, Indianapolis: Liberty Fund.

– Stiglitz, J., Sen, A. and Fitoussi, J.P. (eds., 2009), Report by the Commission on the Measurement of Economic Performance and Social Progress, www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais

– Welzer H. (2011), Mental Infrastructures. How Growth Entered the World and Our Souls, Berlin: Heinrich Böll Foundation.


[1] For a concise yet complete overview of this approach, see especially McCoy 1982, 13-47.

[2] Here I follow the sketch drawn by Rasmussen 2006.

[3] On neo-liberals, their saga and place in American and European culture see Audier 2012.

[4] Individual and common happiness could fit perfectly into the agenda. The theoretical connections between economics and happiness have been largely investigated by economists, psychologists and philosophers alike; a rich collection of essays on these topics may be found in Bruni – Porta (2005).


Michel Chossudovsky and Andrew Gavin Marshall (eds.), The Global Economic Crisis / The Great Depression of the XXI Century (Montreal: Global Research Publishers, 2010)

Its outstanding advance is in laying bare what analysis of all stripes has avoided for a long time – the unconstitutional control over credit and currency by private financial institutions whose global debt-control centre, Wall Street, is responsible for the 2008 economic meltdown and the ruin of countless people. The main victims are public sectors and workers’ pension plans across the U.S. and Europe, while the Goldman-Sachs empire on top of Wall Street and the U.S. Treasury has become far wealthier and more monopolist by the collapse. Presidents and Congress, “the best that money can buy”, have poured endless public-debt money into the greatest fraud in history. This book provides a wide-lensed explanation of the greatest-ever transfer of wealth to the rich from governments and citizen majorities and the systematic brutalization and impoverishment of the world on other planes at the same time. In this crisis alone, $12.3 trillions of public dollars to fill the black hole in the U.S. have already been committed with the U.S. Federal Reserve – in fact, a private bank system except for the Chairman – selling government bonds at a frantic pace to keep the ultimate looting system afloat and, along with speculators, inflating food prices at the same time. At the system level as a whole, the book  explains, Wall Street-US Treasury is connected to the U.S. military empire is connected to the IMF is connected to collapses of societies which are connected to the mindless equilibrium models of contemporary ‘economics’.

The DNA of this system is turning money into more money for those who have no need of it, which systematically impoverishes the world’s majority while wasting and destroying life capital at every level. This underlying meta pattern and the progressive alternative to it, however, are rather lost in the trees by the distinguished analysts who include Ellen Brown, Michel Chossudovsky,  John Bellamy Foster, Michael Hudson, Fred Magdoff, AG Marshall, James Petras, Peter Phillips, Peter Dale Scott, and Claudia von Werhof.  All provide expert analyses, but while the ruling system’s deranged effects are trenchantly exposed, the life-blind inner logic propelling them is not.  There is no life-value ground to understand the system’s anti-economy in principle, and no life-coherent alternative of capital and production emerges. Karl Marx himself began Capital with a definition of the commodity which explicitly ruled out life value as an issue, and economics left and right, orthodox and critical have stayed within this life-blind frame before and since. No known economics is based on what all economics is meant to be about – non-wasteful provision of life goods otherwise in short supply. Instead analyses are locked into priced commodities for profit with no principle of life-need – organic or ecological – ever involved.

This book’s analyses identify the disastrous social effects, but the exponential private money circuits which have hollowed out the world are still assumed as “capital” although they are the opposite. They produce no new wealth, but only more financial demand on existing wealth to appropriate and cumulatively depredate it. While these political-economic critiques lay bare the disastrous economic consequences which the sleepwalk of orthodoxy blinkers out, they do not penetrate the deranged meta program at its core. So-called “overproduction”, “over-accumulation” and “stagnation” are much discussed but with no life-grounded meaning to them. While such categories dominate contemporary critical economic theory, they are disconnected from the real economy of life-goods security and provision – exactly what the ruling money-sequence system is destroying through generational time. How can there be “over-production” when most people in the world are increasingly without the means they need to live? How can there be “over accumulation of capital” when the world is in ever more ruinous deficit of natural capital? How can system “stagnation” be a problem when the system’s growth is carcinogenic in nature? The cumulatively threatened ground of all production and distribution – ecological bases and the nature of universal human life needs – are essentially abstracted out.

Yet the book bursts with what standard academic texts and corporate media do not discuss: a massively destructive and collapsing world empire, hair-raising growth rates in inequality and poverty, global narcotics trade linked through the banks, systematic plans to integrate Canada and the U.S., the reason Eliot Spitzer was politically assassinated, the HAARP weather destabiliser, the EU Bolkenstein amendment, Ben Franklin on the repressed reason for the American Revolution, terminator-seed forced on all Iraq agriculture, and an ever more brutal war on the poor by an unaccountable global class dictatorship. Much is explained which has been kept under wraps. The pervasive dumb-down propaganda of the transnational money party destroying society’s life support systems at every level is given no comfort here.

Emergence of a new paradigm: Towards a post-crisis cosmopolitanism

1. Introduction

The current, tense “post-crisis” situation is considered by many intellectuals, politicians and citizens to be a simultaneous aggravation of much older financial, political and environmental crises that have been challenging the international community. At the same time, it has also been described as a perhaps unexpected hope for the emergence of a real cosmopolitanism based on a genuine possibility of emancipation and dialogue about world problems in the international community.

We will begin by discussing briefly the causalities of the recent financial crisis, which can be seen as a crisis of neo-liberal capitalism following the original mortgage crisis in the USA and the following economic depression in many countries. In this context we can also mention political elements of the crisis and further explore its threatening relation to the environment. Finally, the same crisis can be considered as a crisis for cosmopolitanism. Some pundits have interpreted the crisis as a crisis of cosmopolitanism of human rights, where it has not been possible to create a new world order of strong international governance.

On the basis of these causalities the paper will discuss whether we can see a potential “new beginning” or qualitative shift towards a new regime of a social ethics including: (1) the emergence of a community economy, e.g. state intervention and civil society responsibility in connection with corporate citizenship and business ethics; (2) the emergence of a new ethical cosmopolitanism including a paradigm shift towards a renewed conception of justice as concerns the common good in the world community.

2. Crisis causalities

What happened? Why did this world crisis come around and how should we explain the crisis causalities? There have been many arguments or diagnoses trying to explain the worldwide financial crisis. I can mention the following, very different, but mutually dependent explanations:

1. The crisis is due to neo-liberal capitalism.

This explanation focuses on the financial breakdown based on the American mortgage crisis and the following depression in many countries. It was the neo-liberal processes of globalization (e.g. privatizations, liberalizations, financializations) that led to the development of risky financial products and the resulting credit crunch, for they were based upon the dogma of the neo-liberal economic system, whereby the paramount goal is quite simply to increase economic gains in the business at all costs. This model for risky business did not only concern banking and economic investments. The most important factor that played a pivotal part in the economic crisis was the emergence of the use of houses for sales and risky mortgages of houses, so that houses became primary objects of investment. The dominant narrative in this explanation is neo-liberal “greed”, as exemplified by Madoff’s pyramid Ponzi scheme, which resulted in his imprisonment and so well symbolizes the basis for this kind of explanation of the crisis. The narrative of “greed” involves that the crisis is due to a brutish conception of human nature as a kind of profit-maximizing individual, who lives only or mostly according to his or her own narrowest self-interest. This explanation is based upon taking into account the fact that neo-liberalism was the dominant economic ideology after the end of the cold war. With this explanation of the crisis we have an explanation that is conceived exclusively in economic terms, and primarily as a breakdown of the international financial system.

2. The crisis is due to changed relations between major powers in the world.

This explanation focuses on the relation between the US and other countries, notably China. In this context the crisis may be considered as a shift in world powerhouses. We may argue that such a shift is the real reason of the credit crunch and the ensuing economic depression. It can be argued that the Chinese, after the massive economic crises in the east of Asia in the 1990s, realized that they would have to build up a strong financial system. After longer than a decade, the savings of China were so large that the country was able to resist the 2008 financial crisis, which showed instead the real vulnerability of the US and Europe. In addition, the crisis can be explained as a result of the economic problems of the US after the Asian wars in Iraq and Afghanistan since the early 2000s. It can be argued that the result of the wars was the weakening of the US as a superpower and that the credit crunch was just a symptom of this changed situation of the West in relation to the East in economic terms, where China is emerging as the main power in the world. With this explanation of the crisis we move from a purely economic explanation towards an explanation in terms of international politics too.

3. The crisis arises from a clash of civilizations.

Here we can focus on the confrontation between world cultures, in particular the tensions between radical Islam and the West, leading to the wars of Iraq and Afghanistan. How can we interpret the crisis in terms of the “clash of civilizations” described by Samuel Huntington? Since 2001 and 9/11 in particular, the confrontation between civilizations has been very present in international politics. The concept of the clash of civilization was developed as a response to Francis Fukuyama’s idea of the end of history, i.e. the end of the struggle of recognition, when the liberal world order has been victorious. We may say that the clash of civilizations is a response to this situation, where the end of the struggle for recognition is not ending in dialogue, but exactly in a clash between civilizations. In fact we may say that a challenge for a post-crisis situation would be to develop a kind of intercultural philosophy building upon a dialogue between civilizations, as opposed to the clash of civilizations. The clash of civilizations is in particular a challenge to the belief in the universality of the Western values of democracy and human rights. We can argue then that the recent crisis is a crisis of these values, following the events of 9/11 and of the wars in Iraq and Afghanistan.

4. The crisis is a crisis in the policies to respond to an environmental crisis.

We can argue that the recent crisis was a crisis of the realization itself of the climate problem. The question is: have recent agreements led to hope for environmental justice or do we only experience new inequalities between developed and developing countries? In the neo-liberal paradigm before 2008 the climate issue was dealt with as a matter of utility and sustainable use of resources. It can be argued that the recent crisis is a crisis for the utility-based conception of the environment, for it appears that CO2 reduction is more than utility, but something that is fundamental with regard to the possibility of life in the world. We can argue that the crisis is a crisis for a civilization that has no understanding of the climate issue as fundamental for human survival. The Danish environmental sceptic Bjørn Lomborg may be considered as a representative of this view. In fact it can be argued that the opposite view of Al Gore, who stresses that the climate issue is about the continuation of the human species, represents an alternative to the view of Bjørn Lomborg, which emerges out of the crisis of the neo-liberal conception of the environment as utility: rather than admitting defeat in front of overwhelming evidence, blind denial is preferred.

5. The crisis is a crisis for cosmopolitanism.

Some have interpreted the recent crisis as a crisis of cosmopolitanism of human rights, where it has not been possible to create a new world order of strong international governance. In fact, it can be argued that the dream of the neo-liberal position was a world order with universal governance. As described by Michael Walzer, we can say that we need a new world order where we have to find the right balance between world government and total anarchy. It may be argued that the concept of the world order as a universal order with a world government is in crisis with the global crisis. What is needed is a new conception of the global order that is both beyond state sovereignty, but also beyond the idea of a world government. We may argue that we have to look for models of cosmopolitanism that deal with world politics without referring to a concept of a global world government as the basis for international politics.

3. The cultural and social background of the crisis

On the basis of the five causalities described above, the issue may be addressed as follows: how really should we define the recent crisis? What does the crisis imply and what does it relate to?

From a phenomenological point of view, we meet the crisis in our own lives when our family, ourselves or our friends lose their job or have to go from their houses because the mortgage rent is too high. In fact, the pre-crisis atmosphere in the Western world was marked by a strong narrative of greed and of spending, in particular a raise of luxury spending. We can then use the concept of hyper-modernity in experience economy, as proposed by the French sociologist and philosopher Gilles Lipovetsky, to take into account this pre-crisis, but indeed also the crisis atmosphere.

Hyper-modernity or hyper-modern society is conceived as an escalation of modernity, i.e. a kind of creative construction of experience where the creativity of human beings as makers of metaphors and symbols moves in the forefront of capitalist production. We are searching for more than maximization of pleasure preferences in the cultural industry. We want to become new human beings when we eat at restaurants, travel, go to the theatre, read magazines or books, or even when we buy ordinary products in the grocery store or in the supermarket. We want to experience happiness and authenticity in all aspects of our lives as consumers. Consumption shall help us to construct our identities. I shop therefore I am. It is the creativity of the producers and designers of experiences that is needed to fulfil this search for meaning in the experience economy. The conditions of possibility of the experience economy are based on the historic changes of the meaning of creativitiy in human societies. Today, with a hyper-modern society of creativity, creativity means something else than it was the case earlier in history. What is essential is that creativity no longer is based on a higher divine reality, but instead it refers to the entrepreneurial genius of the human creative spirit. With no divine meaning left, it is therefore the job of the creative class to fill the empty space of the loss of meaning in post-modernity or hypermodernity, and because there is no pre-given meaning dependent on a metaphysical reality, also the consumer must be creative and create meaning through experiences. Human beings are now primarily defined as hyper-consumers and their appearance as citizens is derived from this condition of consumption.

Hyper-modernity expresses a metamorphosis of liberal culture. We live in a consumer society that has become global and international. In the hyper-modern society we can talk about a new system of consumption that has become universalized. What characterizes hyper-modern society is the development of a world culture of consumption. We can talk about universalization of the brand market economy: the West, Asia and China, South America and Africa. The global market culture is a culture of global media and of global commercial culture. Hyper-modern society is made possible with the neo-liberal ideology of the free market and private happiness through consumption, and it was accelerated with the global revolution of information technologies.

In his 2006 work on hyper-modernity Le Bonheur paradoxal (Paris: Gallimard), Lipovetsky describes the three phases of the development of hyper-modern consumer society:

1. the period from 1880 to the second world war

2. the period from the 1950s to the 1970s

3. The time starting with the 1970s-80s (where we really see that consumer society fully developed).

We have been facing hyper-modern society since at least the 1980s. This is a society where consumption is democratized and made available to nearly everyone. Whereas the first phase of industrial society is signaled by the the emergence of industrial society for an elite, the second phase is marked by the increased generalization of consumer society as well as by increased individualization of consumption, for example by the generalization of luxury products like perfumes, media appliances, etc. However, it is only with the emergence of hyper-modern society that we really face the individualization of products.

In this individualist society we see how individuals are able to organize their space and time on the basis of their individuality. Accordingly, we can argue that with the individualization of consumption, combined with the focus on individual experience, makes immaterial experience and pleasure the focus of product promotion and product content. This new society of hyper-consumption is marked by a break with the conformities of class society. Although the class differences still exist, there is no specific class culture. In this sense, the consuming individual is utterly liberated from the traditional institutions and from the cultural bonds of society. We can say that the consumer of the experience economy is a “turbo-consumer”, a capitalist consumer who is no longer regulated by strong ethics and who is free to consume as much as he or she wants.

A very good example of this “Turbo-consumer” in hyper-modernity is the consumer of great international brands. The brands are expressing the global logic of hyper-consumption. Through global marketing brands appeal to the dreams of having authentic experiences. Consumers of hyper-society are not particularly loyal to one particular brand, but they are loyal to the promise of happiness in the brand economy that activates their dreams and emotions. The global brand economy expresses the logic of experience as emotional rather than bound to the materiality of the products. Hyper-consumption is a continuing renewal of the sensations. It is travel in experience. The turbo-consumer wants the most intense experience and in order to get this experience the turbo-consumer overcomes traditional limits of time and space that are taken over by the commercial logic. There is a close link between the brand economy and the search for happiness as the ultimate imperative of hyper-consumption society.

Together with Jean Serroy in La culture-monde. Réponse à une société désorienté (Paris: Gallimard, 2008), Lipovetsky discusses globalization of culture in the perspective of hyper-modernity. We can mention fashion, advertisements, tourism, art, the star-system from Hollywood as aspects of a world culture that has become dominating in hyper-modernity and manifests itself as a cultural hyper-modernity aiming at satisfying the search for satisfaction of experiences by consumers in hyper-modern society. But at the same time this globalization of culture in the framework of an experience economy is marked by the paradoxes of increased complexity and increased collective and individual disorientation.

The capitalist market experience economy is supposed to respond to the dark sides of increased individualization and narcissism. Because of individualist mass society with less common references to give a sense of meaning and community, the world culture of brand consumption is supposed to be the compensatory device that can give individuals meaning and fullness in their individual lives, which are increasingly devoid of meaning. World culture promoted through experience economy is the only tool left to give meaning and sense to individual lives, yet it is far from certain that it is succeeding in its task.

4. Towards a new beginning: Emergence of a new cosmopolitanism

With an economic crisis in the middle of hyper-modern consumer society, we can see how the whole foundation of this society is shaken. Therefore it is also interesting to ask the question about what happens after the crisis. Can we see a “new beginning” or qualitative shift towards a new regime of social ethics of responsibility as a kind of new event emerging out of the crisis, or should we just say that the crisis is nothing more than a confirmation of the logic of hyper-modernity, or alternatively is it possible to argue that the crisis opens for new meanings that help us to move beyond hyper-modern society? What does it mean to speak about paradoxes of a post-crisis situation that challenge the pre-crisis relations? We can observe the following aspects of a post-crisis situation that helps to mark qualitative breaks with the pre-crisis situation.

1. The emergence of a community economy

State intervention and civil society responsibility in connection with corporate citizenship and business ethics signal the emergence of a community economy. We can argue that the business ethics movement based on corporate responsibility and corporate social responsibility replaces within this context the confrontation from the cold war between communism and capitalism. Moreover, the end of neo-liberalism shows that we need a better relation to the economy and a better conception of the content of the economy. Business ethics and corporate social responsibility represent a response to the situation of crisis of business organizations in the sense that it is a new way to deal with the capitalist system.

Business ethics deals not only with ethical responsibilities of corporations but also with a responsible way to deal with economic and legal activities. Therefore we can talk about the economic, legal and ethical responsibilities of a corporation. The different responsibilities must be integrated into the strategy of the corporation, according to the new paradigm of corporate social responsibility and in close coherence with the strategy of the corporation. Business ethics can be considered in close interaction with the idea of hyper-modern society because in hyper-modern society ethics and corporate social responsibility are integrated into the experience economy. This means that ethics is considered as a virtue that is closely related to the self-construction of the individual. Accordingly, the individuals in the business corporation want to have a meaningful work and they want to be accountable and trustworthy as a part of their personal identity. Therefore business ethics is not in contrast to hyper-modernity, but rather a consequence of the culture of this kind of society. So the post-crisis scenario of intensified business ethics and corporate social responsibility is not necessarily in contrast to the culture of globalized hyper-modernity.

In this context we can argue for a movement towards an ethical cosmopolitanism within the field of business, as I have argued in my book Responsibility, Ethics and Legitimacy of Corporations (Copenhagen Business School Press, 2009), which the reader can find reviewed in the present issue of Nordicum-Mediterraneum. An important aspect of this movement is the idea of republican business ethics, defined as involvement of corporations in and for the common good, the res publica, which are expressed in the concept of corporate citizenship with integrity and responsibility. Integrity matters as the self-imposed norms of international corporations can ensure accountability and trust. Integrity is analyzed as a function of the business ethics of corporations, especially in the normative guidelines for international business.

With this cosmopolitan approach I have argued that the corporation can contribute qua world citizen to solve the important problems of hyper-modernity. This can be viewed as the application of the important concepts of the virtues of responsibility and cosmopolitanism. As actors at the global level in a time of interstate interdependence with regard to world ecological, economical and political problems, it is a challenge of the corporation to contribute to building up an international community of virtue and protection of basic rights.  We can define this vision of universal corporate citizenship as the World ethos of business ethics. The corporations shall not only protect universal human rights, but they shall also give those rights meaning in relation to the particular cultures in the countries where they operate.

2. Cooperation replaces conflict.

We may ask the question whether the post-crisis scenario is opening for a new era of cooperation that is in contrast with the idea of conflict that was dominating in the cold war times and in the times immediately after the cold war. An argument from globalization is that the financial crisis has been a reminder of how we now really live in “one world” in economic, cultural, social and political terms. In this sense it can be argued that we need scenarios of cooperation with new interactions between major powers in the international community, which is establishing a regime of problem solving rather than confrontation.

With Hannah Arendt, we can argue that we are searching for a political conception of international relations that move beyond the legalistic conception of the international community. Hannah Arendt’s work after the second world war presents a critical discussion of Kantian cosmopolitanism. She offers novel views on human rights and the rights of citizens and she discusses the possibility of an international tribunal to deal with crimes against humanity. Also, her philosophy implies a critical reply to a naive “juridification” of international relations as marked by legal structures alone. Arendt proposes a solution for the reintegration in the political community after the fight with the wrongdoers. The international political community needs a dimension of civil society, as proposed by Arendt, to find a possible mediation of the double edge of cosmopolitanism. We can argue that Hannah Arendt understood the importance of a political foundation of the respect for the naked human being beyond the political relations of the nation state. This is what Arendt argued for when she coined her famous term of the foundation of human rights as the “right to have rights”.

In her 2006 book Another Cosmopolitanism (Oxford: Oxford University Press), Seyla Benhabib seems to propose a new version of Arendt’s older position. According to Benhabib, modern cosmopolitanism is not only about hospitality but also about the political and legal institutions to govern our world in order to deal with circulation of persons, capital, commerce, pollution, information, labor, goods, viruses, etc. Cosmopolitanism is about building political relations at the international level, so that people can enjoy the right to have rights in the international community. In particular, Benhabib defines human rights as universal ethical obligations that go beyond national sovereignty and are formulated within a form of law.

Benhabib argues that the challenge we face today is the construction of a jurisprudential theory that is able to reconcile the universality of human rights with the partiality of positive law. She deals with the problem, as Hannah Arendt also did, by focusing upon the rights of persons who reside within a state but who are excluded from its polity, i.e. legal and illegal aliens. Thus, Benhabib takes up the challenge of the double edge of cosmopolitanism by arguing for the search of a legal foundation of cosmopolitan citizenship beyond positive law alone.

When Benhabib deals with the double edge of cosmopolitanism she answers this question by drawing on Kant’s doctrine of cosmopolitan rights, which she attributes to Kant’s thesis that ”The law of world citizenship shall be limited to conditions of universal hospitality” – hospitality covering the relationship between states and strangers. With Benhabib we can argue that the double edge of cosmopolitanism lies within the confrontation between republican national law and international relations, because the law of hospitality intersects with the positive law of the state. Specifically, Benhabib focuses upon the point of intersection between these two dimensions. On the one hand we have the Republican opening towards the international community in the republican public sphere; on the other hand we have the mediation between the cosmopolitan norms and the republican community.

Benhabib argues that we can propose a solution to the tension of the double edge of cosmopolitanism by means of a cosmopolitan law that emerges from increasingly conscious public debates in democracies, where the norms of cosmopolitanism are accepted as basic human rights into the positive constitutions of republic societies. In this sense universal norms are mediated into the will formation of democratic societies, so that cosmopolitan norms are becoming integrated into the republican framework of democracy.

An illustration of this kind of democratic development of the cosmopolitan norms and of the “democratic iteration” is for example the European Union, where citizenship is expanded in a cosmopolitan direction. However, the contradiction between the universality of ethics and the particularity of law can never fully be overcome and there is always room for national sovereignty where laws are made.

When we talk about a civil justification for the emergence of cosmopolitan norms, we can argue that this justification of cosmopolitan hospitality emerges within the framework of democratic community because people are becoming more and more acquainted with others beyond their national borders and cultures with norms of reciprocity and respect. In this perspective there is a genuine hope that cosmopolitan norms are internalized in local cultures, democracies and populations. However, this is not enough according to legal theorist Seyla Benhabib. Cosmopolitan norms must also be based on a legal framework. In Another Cosmopolitanism, for example, Benhabib discusses the case of European citizenship as a token of the increased movement towards the development of such cosmopolitan norms.

Still, there remains the danger of a cosmopolitan stateless future. Benhabib argues that we should imagine a future where ”civil, social and some political rights” are not related to national belonging. In this context, universal cosmopolitanism is situated between law and ethics, universality and particularism, nation and international community. When we search for a philosophical foundation of these cosmopolitan norms, we can look back at the philosophy of Hannah Arendt who argued, as we have already said, that the most important thing is the right ” to have rights”.

We can say that Hannah Arendt’s book about the Eichmann trial — Eichmann in Jerusalem. Essay on the Banality of Evil (London: Penguin Books 1964/1981) — was fundamentally a book about cosmopolitanism and international law. This is true in particular when Arendt deals with crimes against humanity, where genocide is conceptualized as the crime against humanity, or rather the crime against humanness or the right to be human. The issue of the cosmopolitan double edge, i.e. how to mediate between national legal structures and moral universalism, can be answered by reference to the Eichmann trial. This trial marks the beginning of cosmopolitan norms. It is a trial for crimes against humanity that goes beyond the traditional boundaries of legal positivism.

If we look more closely at Arendt’s book about Eichmann and follow Seyla Benhabib at the same time, we can argue that cosmopolitanism is not only the Kantian horizon that as we may infer from Arendt’s letters to Karl Jaspers — Jaspers being himself a Kantian cosmopolitan — but an ideal of civic republicanism combined with a vision of political self-determination as the foundation of true hospitality in cosmopolitanism. So the emergence of global civil society as the movement from international to cosmopolitan norms of justice can only be accomplished as long as it draws with it principles of civic republicanism.

Concepts such as ”the right to universal hospitality” and ”the right to have rights” are certainly Arendt’s legacy of Kantian cosmopolitanism. Yet she adds a normative force that can emerge only within a republican, democratic framework of legal norms. These concepts, in other words, should have a binding power. The idea is that the ”right to have rights” indicates rights of universal hospitality that triumphs over positive law, but can also be within positive law, because it is founded on republican self-governance and autonomy.

We need more than the formal political construction of the cosmopolitan norms of human rights. The international human rights regime, crimes against humanity, humanitarian interventions and transnational migration norms should all be based on civic republican recognition of the right to have rights. So cosmopolitan justice must be based on a kind of nationally sanctioned international law of peoples, where the tension between sovereignty and hospitality is overcome through the act of self-legislation as an act of self-constitution under a cosmopolitan perspective.

Benhabib says that ”Liberal democracies must learn to negotiate these paradoxes between the spread of cosmopolitan norms and the boundedness of democratic communities”: according to her, the development of cosmopolitan norms is characterized by democratic Iterations between the local, the national and the global.

5. Conclusion

Following Hannah Arendt and Benhabib, we can argue that cosmopolitanism emerges as the power of democratic forces within a global civil society and this helps to a construction of international norms that goes beyond the tension between cosmopolitanism and national sovereignty. What is characteristic of the new cosmopolitanism, at least according to this view, is that citizenship and political membership are no longer based on culture and collective identity. As exemplified by the case of the European Union, the conflict between sovereignty and hospitality is no longer so important. Accordingly, a new discussion of politics implies the search for new forms of political agency in cosmopolitan times, where we recognize what Benhabib calls the “democratic iterations” of the concept of democracy and citizenship. And this recognition will help to develop new foundations of democracy in international politics.

Moreover, by protecting universal rights that are dependent on the charter and declarations of the United Nations, corporations can act for good international relations that go beyond the interests of particular communities of republics and nations. By doing this, corporations, when they really want to appear as good citizens, can help to build a world community that implies the universalization of the procedural virtues of liberal society. Corporations can at the same time be cosmopolitan and situated in particular societies, in the sense that they foster universal principles while making those principles work in concrete practice. In this sense, the post-crisis scenarios can be a development of a new cosmopolitanism in both international politics and in the activities by corporations and other organizations and institutions helping to build up an international civil society.

Eight Noble Opinions and the Economic Crisis: Four Literary-philosophical Sketches à la Eduardo Galeano


Until control of the issue of currency and credit is restored to government and recognised as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile… Once a nation parts with control of its credit, it matters not who makes the nation’s laws… Usury once in control will wreck any nation.

            William Lyon Mackenzie King

Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future.

      Albert Einstein

Philosophers are often and rightly accused of dealing too much with the past, pondering endlessly upon origins, reasons and causes, and too little with the future, leaving hardly any room to proposals, solutions, or calls to arms. To prove myself capable of the latter kind of activity, and despite the unavoidably old noble opinions quoted above, I shall keep Minerva’s owl nailed to a perch. Though Pythonesque, this little cruelty should delay any backward-looking blathering of mine, which is to come eventually in the other sketches.

After all, we are facing a dramatic twofold crisis, ecological and economic, which even uninfluential public figures like the current UN Secretary and US President have acknowledged and denounced as deadly. As for the title under which I allow myself to do so, I shall be content with declaring myself a professor of philosophy who has studied value for some time, i.e. what is important and what is not. In this pursuit, which I regard as valuable, I have reached a fairly simple conclusion: that which keeps all of us and our descendants alive and well is very, very important indeed. Those who deny it or claim my claim to be unscientific can do so because they are tacitly doing all that is necessary in order to stay alive and well enough to be able to talk a lot of nonsense.

But let us dwell no further on this simple subject, about which I have written around fifteen complicated essays in the past ten years—I need another nail… Worthy of Epicurus, I can offer a tetrapharmakos to today’s world, confident to be received by no-one in useful time, for that seems to be the fate for all who dare criticise—as I am going to do—large-scale private banking, the profit motive as paramount,  the private ownership of strategic resources, deregulation, and the managerial mind. Some may even call me a “socialist”, as though it were a derogatory and disqualifying term, similar to “criminal”, “pervert” or “rascal”. Probably, given the notoriety of Italians and academics, “old pig” or “bore” would be more fitting insults. Politically, however, I would describe myself as “life-grounded”, not “socialist”. Still, I shall not mind and endure the epitaph with grace, even gratefulness. I shall keep company with Claude Henri de Rouvroy, Comte of Saint-Simon, Albert Einstein, and Bertrand Russell. An aristocrat, a physicist, and a logician…


First, fundamental medication, upon which all else depends: nations should establish, or in most cases re-establish, good public banks. Why? Well, here is something that should have become obvious to anyone who has eyes to see and a fat wallet. As stated by Russian President Vladimir Putin when speaking last year at the World Economic Forum in Davos, the economic crisis that we are witnessing today has destroyed, in about one year, approximately twenty-five years of pecuniary wealth, i.e. the sort of wealth that our intrepid yet “virtual” capitalists were aimed to produce in the first place. Private banks and financial institutions, left to their own devices by prolonged tidal waves of worldwide deregulation, brought themselves down and, with them, much of the world’s “real” economy. Do you remember the real economy? If it goes down, down go also the starving children of unemployed sub-Saharan family fathers. Down into the earth they go, whilst shareholders moan for lost profits and fire a few more people to ease their pain.

Clearly, many private banks cannot do their job unaided. As they were busy concocting mathematically byzantine derivatives and variously vehicled securisation packages in the deregulated shadow of global finance, they forgot about honest bookkeeping, sound reserves, mutual trust, and other basic old-fashioned principles of chronically anachronistic banking. They even forgot about that primitive slave invention, morality. Alas! Such is the genius of the invisible hand free from State direction or, as Icelandic philosopher Mikael Karlsson dubs it, “the invisible brain.” This is not meant to be an insult to anyone, unlike “socialist” or “pervert”. The so-called “Free Market” promoted by “deregulators” has no visible brain, insofar as State-centred social and public planning is regularly rejected as anathema. Still, who came to the rescue of self- (and other-) destructive private banks? The State.

Turned into the banks’ pork-barrel, the State has thrown trillions at the banks in order to keep them afloat—in the Land of the Free, in Great Britain, in Benelux. Was it necessary? No, for the State could have simply taken over the banks. Was it desirable? No, for public banks, still run in communist countries such as China and North Dakota, can spur development, employment, and take far fewer risks than private ones.

It must be emphasised that it is not enough for the State to own the banks; these must be run like public banks i.e. banks for the public good. Some morality is required in the process. Prudently restricted by various strings, these public banks can respond more easily to the needs and aims of actual populations, rather than to the whims and fancies of absentee owners or of their volatile servants, that is to say their bonus-benefitting managers.

What am I saying? Have public banks and run them as such. They must spur real development, not inflate bubbles that transfer wealth from the bottom to the top. Will it hurt the shareholders and wealthier customers of private banks? Certainly. They have already enjoyed the State’s helping hand; it may be time to repay the State with gratitude. Doesn’t anyone remember how to do it? Read history books, study the European Payments Union of the 1950s, ask retired Italian or French bank managers, use your imagination. A few rules of thumb may assist those who lack enough imagination:

(a)  Ban financial and currency speculation, at least within and via public banks: the casino belongs to “competitive” gamblers. Yes, people who used to claim that they would succeed or fail like Promethean heroes… Before they all asked for help to the Great Nanny, of course, lost as they were on their er-rand. And please, let the State never again salvage these hypocrites from their own myopic greed. They are now trying to wash their guilty conscience by returning one hundredth of what they have received from the public purse, whilst re-filling their pockets at the State’s expense, with fierce bearish appetite

(b)  Lubricate the real economy, if forward-looking, so as to launch much-needed public works, create long-term employment, and generate steady streams of income within the nation. Public banks can do so, at low interest rates: they must be profitable, but not at all costs

(c)  Monitor inbound and outbound capital flows, so as to direct investments to socially beneficial areas, and counter tax evasion as well as tax avoidance: far too much has been denied in the past to the very public purse that has then saved the incompetent affluent from themselves. And remember that a stable currency and genuine economic sovereignty can only be secured by abandoning the disastrous freedom of capital flows that has flooded the world with crisis upon crisis since the 1980s: tequila, vodka, whiskey or brennivín, ouzo, they all taste the same

(d)  Secure reserves by compelling the capitals of public bodies, pension and social security savings, and the revenues of public banks to be invested in the public banks themselves. The State must be as free as possible from the bondage and the blackmail of its current masters i.e. foreign direct investment and international bondholders

(e)  Pay bank managers State salaries comparable to those of other leading promoters of public wellbeing—surgeons, health-&-safety inspectors, judges—and avoid attracting the covetous, self-indulging, big-jet and big-penthouse penis-length-comparing “best and brightest” who plunged the world into a massive crisis. Communities need not such beastly best and brittle brightness. Forget them and their barbaric macho ethos—made of turrets of money, performance-enhancing bonuses (as though they alone were working), fee-demanding buddies-consultants, and PR companies using invariably words like “aggressively” and “targets”.

Finally, do not underestimate the fact that it is difficult to deal with cronyism by voting new governments into office. Yet it is much more difficult to do the same thing by waiting for anonymous and short-lived shareholders to reform their servants, who are so free from supervision as to jot down any number they like in the books without anyone finding out. As Adam Smith forewarned us some time ago, the corporation is amongst the least competitive and the most corruptible of human institutions, hence amongst the most damaging to the proper functioning of capitalism.

And inflation? Don’t worry. Nobody talks about it—a sudden silence. After all, common people are no longer able to buy anything, not even on credit. If anything, the real problem to come will be deflation. Besides, more than 90% of the money circulating around the globe is the result of financial leverage by private institutions. Still, old-fashioned, knee-jerk reactions may be reoccurring soon: pensions and salaries must not go up, for the poor must repay the money lost by the rich; States must rein in public expenditures, which they have been doing for thirty years, unless there was a war to be fought; public assets must be privatised, so as to further enrich the incompetent and further weaken their only saviour; cheap money must stop (now), lest we tax the wealthy to give some jobs to the restless youth, etc. By the way, how is it that bonuses for bank managers could always go up? It must be the same people who think that only private firms can be valid multipliers…

It is ironic that, after two decades during which we had been told that the State and, for that matter, its independent Central Banks could not issue money for schools, hospitals, public works and social projects, quite mysteriously they started printing so much money. Sure, they now tell us that we need private banks to keep credit flowing, for credit is the life-blood of the economy. Without it, there shall be no green-spanning across the meadows. And yet, enterprises and households worldwide are still struggling to get the credit that they need. In truth, the selectively generous Central Banks’ cheap money benefits financial speculation, which is where the trouble started in the first place. How could ever a heartless economy pump any actual life-blood?

Indeed, in California, the local government is at risk of being terminated by the refusal of private banks to subscribe local public bonds because “unsafe” i.e. the State of California could go bankrupt. “What a cheek!” my mother would say, and she has dealt with banks for most of her life. The banks refusing to purchase these sunny bonds today are the same banks that were saved by public money yesterday, when it was raining. But there is more.

Were even these banks to provide enterprises, households and public authorities with the credit they need, they would not do it for free, for the common good, or for a little interest; they would do it for profit, and for as much of it as they can get. Thus, things would be so arranged and, sadly enough, they are being so arranged, as to have public money given very prodigally to private banks, so that these banks may give it to the public far less prodigally.

What is more, in order to be worthy of the bailed-out banks’ money:

  • Enterprises have been reducing their workforce to be more “competitive”
  • Households have been returning their homes to banks that had sold highly reliable mortgages towards the purchase of… homes
  • The State has been thinning out its already skinny body in order to be attractive to the banks, which the State has just rescued from themselves

After decades of TINA-like reduction of all that is public, public money is being given to glaringly incompetent private banks so that their losses be made public and their profits, which were always private, recover and be still private. In the process, public money is not used to counter dwindling employment, secure houses, and, say, fund hospitals, schools, university research, care for the elderly and the mentally ill, public gardens, public football fields, archaeological preservation programmes, amelioration of penal institutions, better garbage collection, sanitation and, why not, aid to starving children. How many tramps will get trapped in the revolving doors of the wealthy’s tower?

That the State may have money for the bankrupt banks but not for its own social functions, it is something that defies imagination, morality, and even legal obligations. Many of them ratified the International Covenant on Economics, Social and Cultural Rights, didn’t they?


Second, life-saving medication: if you skip the middle man, operate good public banks, and have money to use for the common good, then launch a vast programme of green public works. More severe and threatening than the economic crisis itself is the ecological crisis. Ask the United Nations about that. The former crisis threatens fat wallets at the top and starving children at the bottom, yet at different degrees of dangerousness. The latter crisis threatens all equally with death. The grim reaper is the great leveller. Since so much private enterprise has caused the ecological crisis in the first place—the smoky days of the Industrial Revolution—and has continued it in the face of scientific alarm calls as old as Britney Spears, then it is advisable that the State be able and willing to step in and, both by regulation and by direct economic action, reverse the tide.

Forget speculative carbon emission quotas and reduce carbon emissions; ban outright or force rapid conversion of the most obvious forms of life-destructive economic activity; tax the remaining polluting activities and de-tax non- or less-polluting ones; have a major public company undertaking proper refitting of houses on a massive scale so as to make them less energy-consuming; create large public recycling facilities so as to counter illegal dumping of waste at large; found and fund new public research centres for the development of green technologies, free from the yoke of short-term corporate desiderata; ration carbon-based power and use it only for vital and life-enhancing activities…

There are so many tokens of environmentally constructive planning, yet so few that have not been resisted as “too costly”, “too rigid”, “too much for us, who have already done so much”, etc. Were only the people uttering such phrases to consider seriously the fact that they can be so garrulous because the environment is still, barely, able to support them, their bodies, their minds, and the natural and social infrastructures that have allowed them to grow, socialise and, limitedly, mature…

In addition to a life-enabling aim and a counter-cyclical alternative to depressing austerity, politics would also regain its dignity by having a green mission. Strangled by powerful yet incompetent lobbies, and fettered by incompetent yet powerful central banks, politics has been reduced for far too long a time to day-to-day management of production costs in the domestic market and salesmanship in the foreign ones.


Third, important medication: since some neighbours may not like your policies and your currency, then they might respect your resources. States should increase or secure public control of strategic assets: water, oil, gas, the knowledge of its own population—this knowledge having been fostered by public education, healthcare provision, and cultural activities.

Whether by safeguarding the revenues originating in natural resources that would otherwise enrich few and often foreign shareholders, or by reclaiming a knowledge-based industry that would otherwise be outsourced by corporate giants, the State must secure a steady source of income for itself and for the nation’s economy. This income alone should help democratic governments to respond to their constitutional sovereigns, not to rating agencies and “markets” whose lords regularly reside offshore.

As Norway’s long experience in State-run oil extraction and refining illustrates, it is the one and only “trickle-down” strategy that has produced tangible results for an entire nation. States’ assets are not a factor of market distortion, but a factor of production—and one that can help businesses to grow by providing cheap goods and services, as opposed to the endless and costly bloodsucking of postmodern privatised economies. Ideally, it would be good for States to regain control over money-creating central banks, but there are limits even to one’s dreams.

Incidentally, even the many wars paid by the American public purse to secure control over other nations’ oil, or at least force its trade in US dollars, indicate that the public control of strategic assets is not so foolish an idea. And yes, also that getting bombed may be a risk for the nations pursuing the path recommended hereby. Apart from the landowners, cunning agents and financial moguls who have charged prices well over any real cost of production, for all others there is no such thing as a free lunch—Miltons have always known the devil very well.


Fourth, integrative medication: since some powers-that-are may not be pleased with your plans, make sure you can deal with them. Create a just fiscal and regulatory framework, which empowers the population at large and weakens the usual lobbies: close tax loopholes and tax breaks for the usual lobbies; withdraw passports and freeze assets of tax fugitives; tax rents (land, inheritances, capital gains) and de-tax hard work, so as to reward merit and distinguish sharply between earned and unearned income; end subsidies, legal privileges (e.g. limited liability) and tax-breaks to private companies, lest they never compete in a truly free market; nationalise the companies that are too big to fail, as John Kenneth Galbraith advised us to do long ago; reclaim research and development grants and whichever other public credit given to private firms leaving the country; confiscate the assets of companies outsourcing to countries with lower labour and environmental standards; put regulatory agencies and grassroots associations on the boards of private and public companies to fight corruption; inspect constantly and reward those inspectors who discover illicit activities.

Taxes matter. Especially when there is an ever-richer tiny elite of super-rich whose fortune comes as a long free lunch over accumulated wealth, whether in property or capital. They hardly ever pay taxes. They pay fewer than most, since someone else paid taxes before them: those who actually earned that property or capital in the first place. In truth, they may quite simply avoid taxes by shoring their assets off to tiny islands or Alpine valleys. The members of this tiny elite are above and beyond the common citizen, whilst their trusted and highly paid managers rarely go to jail when guilty of fraud or cheating. Above-and-beyondness is a transferrable asset too. If and when hijacked by this elite, States are likely to commit suicide by taxing those who work instead. And if the people sweating and bleeding don’t have enough money, then State activities are to be reduced in the name of, say, the Big Society–of the hopeless and of their hopeless resilience.

In brief, internalise costs that have been externalised regularly and mercilessly at the expense of natural and societal well-being; and effectively re-regulate the disastrously de-regulated playground of the free enterprise–especially but not exclusively of the virtual type–whose only known freedom is that which cages every possible aspect of reality into the life-blind logic of profit-making.

Will anyone undergo this cure? History will tell. And history is full of surprises. Who would have ever thought, for example, that little furry animals could outlive giant dinosaurs and become the first species ever capable of destroying the ecological structures that allow them to live!


Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation.

         John Maynard Keynes

There are two ways of conquering a foreign nation. One is to gain control of its people by force of arms. The other is to gain control of its economy by financial means.

       John Foster Dulles

In the year 2003 I published a review of Value Wars, written by Canada’s leading value theorist John McMurtry. In it I provided an account of the stunning whistle-blowing by World Bank Chief Economist Joseph Stiglitz vis-à-vis “deregulation” and “globalisation”, two terms that had been dominating economic and political discourse for some time. Quite unexpectedly, and rather shockingly, a well-connected, mainstream, Nobel-prize-winning economist denounced the World Bank and the International Monetary Fund for implementing over a period of at least twenty years a merciless four-step process of re-colonisation of independent nations by international private capital. This was the sort of suspicion that radicals like pop singer Bono Vox and Polish actor Karol Woitila, better known as Pope John Paul II, had been voicing for a long time. As for John McMurtry, he took due notice, since Stiglitz’s revelation was consistent with his own description of world affairs as directed by the profit-motive of the few versus the vital interests of all others. Preferring truth to originality, I endeavoured to spread this description of world affairs around me. In fact, I had given lectures about it, also in Iceland, before 2003.

Nobody seemed to care, however, at least here in the north. Stiglitz’s views were not widely discussed and even less were they taught at the university level, except by a few—sometimes foreign—eccentrics. McMurtry’s views, hadn’t it been for the same eccentrics, would have been left to gather dust in local libraries. Meanwhile, the policies of deregulation and enthusiastic participation in globalisation were not halted. On the contrary, in the year 2003, the three largest public banks were privatised. Immediately, they started to sail the seas of international speculation, never seen before in Icelandic history. “Carry trades” and “financial leverage” became mantras recited on the first page of all newspapers, whilst the businessmen who were dubbed the “new Vikings” set out to raid foreign banks, enterprises, supermarkets, and football clubs, with money that they did not have. But such is late- (or post-) modern capitalism, or “the Icelandic way of doing business”, as I was told back then. Besides, it would appear that only professional economists are entitled to teach about why they, unlike a mere philosopher like McMurtry, got it so wrong. And there’s so much to learn!

What did Stiglitz’s whistle-blowing describe? And how does it apply to the Icelandic case?

First, the permeability of the nation’s borders to private foreign capital is increased by deregulating capital trade and privatising strategic national assets. Barriers, bottlenecks, and “obsolete” protections are removed, whether material or immaterial. Nobody quite remembers why they were there, and even fewer wonder why. Above all else, money must flow. That’s the consensus, at least in the district of Columbia, which is obviously populated by zealous reformers. Their principles are crystal-clear: “public is bad, private is good.” They believe in “The Free Market”, whatever that may be thought to be; and they believe in it so ardently and unflinchingly that Stiglitz and others refer to them as “market fundamentalists.” They even set complicated rules at roundtables to force dissenting markets to be free. Anyhow, this very first step, which may take some time, is achieved by lubricating slow-moving and slow-thinking local politicians, business leaders, present and future ideologues with adequate amounts of grease. Grease, yes, such as co-opting these people into the international jet- and yacht-set, promising or securing that they will have their own golden toilets, washing their brains at spectacular conferences and exclusive think-tank meetings, baptising their best and brightest first-borns in the sacred founts at the sacred shrines, stirring their simmering jingoistic sentiments, or bribing them straightforwardly—indeed Stiglitz talks of this process as “briberization”.

Secondly, money flows into the country. A bubble ensues; in fact, a cyst. Depending on the country’s economic conditions, the cyst can take different forms, but all of them eventually become painful. In the case of a reasonably well-off country, glittering streams of foreign capital inundate the land, turning modest entrepreneurial fields into a glorious harvest of unprecedented projects. Thus refreshed, the local currency and the local shares pupate into surprisingly light-winged and seemingly fertile young fairies, whose well is said to be full of diamonds. Moreover, the nation’s financial institutions become large fountains that can quench the thirst of anyone who is eager to drink from them, including those who do not need it, but have the misfortune to possess a belly. New buildings spring up like mushrooms in the vast new wetlands, luxury and consumer spending—mostly dependent upon credit—fly high like gleaming droplets out of a geyser’s mouth. So mesmerising is this sight, that more permeability is actively sought.

Then, the cyst bursts. As swiftly as it flew in, so does the money flow out. A rumour, a token of gossip, an unfortunate diplomatic incident, a well-paid expert report, or a speculator’s premeditated signal to his colleagues rapidly reverses the tide. The flood ends. A drought follows. Projects—and buildings—remain unfinished, half-mast, like flags at a funeral. The wombs of local currency and local shares reveal themselves sterile; it was all make-up, they now say, even the wings; you should never trust the books. The well in the garden is dry, and full of stones. Moreover, the fountains are dry too. Around them, stunned, jobless, emaciated peons, indebted up to their eyeballs, drown into whirling sand clutching their plasma TV sets. And their TV heroes have not come to save them, be they crusading party leaders or Viking raiders. Who will?

Nobody is without friends, especially after having become part of the international jet- and yacht-set, educating his own children in the best schools, or attending eye-opening conferences and meetings. Not to mention those friends who have already proven so generous in the past. In truth, after having advised on how to render the country prosperous, they now spare no saliva explaining what can be done in order to rescue it from its unfortunate plight. Thus, money is poured back into the nation. High interest rates are, however, de rigueur. One does not give much to drink too easily to a friend who has already drunk too much. What kind of a friend would he be?

The third step is therefore to make up for the mistakes of the past and repay one’s generous friends. Whatever wealth remains must be scrupulously collected so as to honour the debt—or so as to secure further loans. Debt gives salvation from debt, as gamblers understand so well. Certainly, the wealth of the wealthy is better left untouched: they are the producers, the life-givers, blessed fountainheads of the nation’s wellbeing, which needs them so badly under the burning sun of the new sad day. They must be treated kindly, lest they or their wealth be forced to flee by too rapacious and visible a hand—some have already fled, they whisper. The wealth of the poor—or of the poor-to-be—is a better starting point. After all, they may have little, but there are many of them. Besides, since they have little, they cannot flee as easily as the rich, nor can their wealth flee. And whereas the wealthy can go bankrupt and be resurrected cleansed of their debt, like the imperishable Phoenix, ordinary mortals honour their debts, willingly or not. They may protest, but law and order are the last two public sectors whose resources are cut off, unless successful ways are found to privatise them too.

Finally, as the nation struggles in debt and turmoil, groaning so loudly as to disturb its neighbours, the generous friends come back to help. They cannot remain untouched in the face of so much poverty and violence. They have new “plans”, “strategies” and “packages” to sort things out. Yet, to implement them, national borders must be removed completely and an iron framework of conditions for investment and development must be imposed in order for the nation to become a proud participant in fully liberalised, multinational free trade. For example, its tax environment must be suited to foreign investors—may God bless them—and its population as flexible as unthinking reeds in gushing new brooks, to which they contribute sweat and tears.

By the way, where does Iceland stand now? Probably it stands at the threshold of deciding whether to plunge headlong into step three, with signs of the fourth step already lurking behind the waterfalls harnessed for hydropower.


In all normal civilisations the trader existed and must exist. But in all normal civilisations the trader was the exception; certainly he was never the rule; and most certainly he was never the ruler. The predominance which he has gained in the modern world is the cause of all the disasters of the modern world.

  Gilbert Keith Chesterton

The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that.

  Lawrence “Larry” Summers

It has been long known that Europe catches a cold whenever the United States sneezes. Yet things get even worse when the immune system of rules and restrictions to international capital and currency trade has been removed altogether. Iceland and some young, yet already former, free-market miracles on the Baltic Sea did catch pneumonia this time. Ironic indeed, as they are just another group of market miracles turned into meltdowns—Asia had a few of them in the 1990s. Miracles seem short-lived these past few decades… Though if truth be told, even Lazarus died, after having been brought back to life.

Historians of the future, if there shall be any and if they will be honest, are going to wonder and ponder upon how such intelligent and highly educated “knowledge economies”, capable of the finest mathematical-financial wizardry via the fanciest computer technologies, could bestow upon themselves so much avoidable pain, destroying in the process not solely further scores of planetary life support systems, but also man-made social infrastructures that have generated, depending on the country, genuine welfare for up to three or four generations. These future historians will be at pains to conceive of powerful, well-off, democratically elected representatives who listened to foreign bankers, and not to their own citizens, rushing to implement, whenever they could, multilateral agreements on investment robbing their own cabinets of much of their power.

These future historians will probably fail to empathise with and understand such bizarre people, very much like Voltaire, who could not really explain why our forefathers were willing to slaughter one another over the correct interpretation of the Holy Trinity. After all, they had never seen it (or them?) and Jesus himself had never said anything clear, if anything, about it (or them?). Not to mention the centuries that humankind spent warring, raping, disembowelling, burning, maiming, chaining, flogging and excommunicating one another because of errors of interpretation. Obtuseness is incredibly resilient. And we are not so different today. Check the Athenian cradle of our civilisation if you don’t believe it.

Yes, embodied and expressed by the very same conventional people at the helm of the world’s public and private financial affairs, the wisdom arising from the ashes of the current crisis is astoundingly similar to the one that caused the crisis. Are you indebted? Take on another loan. The private banking sector has betrayed you? Restore it with public money and run it as before. The world’s economy is a gilded cage run on behest of under-taxed oligopolists, tax-evading rentiers and idle absentee owners that squeeze money out of the real economy through banking charges, debt repayments, service fees, monopoly and land rents? Keep it going and call it a “free market”. People are suffering, jobless, and with their tax money siphoned to the creditors that inflated the bubble? Show them tough love and deprive them of further healthcare, education, culture, wages, pensions, childcare, subsidised water and power. Austerity measures turn a crisis into a depression? Implement more of the same measures. The environment is running amok in the so-called free-market environment? The market will fix it; in the meantime, profit will keep being extracted from increased prices in oil, gas, polluting consumer goods, and cancer treatments due to the ecological collapse of the planet. Apparently, the only green rules acceptable are those that transfer further money from the public purse into private pockets. All others are resisted as “costly”, “distorting”, “rigidifying”, “liberticidal”, which may be true—and good. The one and only truly binding international environmental regulation that, so far, has saved us from extinction, preventing excessive UV-irradiation, was a top-down imposition from Montreal.

But life, not to mention a happy and healthy life, has never been the paramount goal of the pursuit of profit. War was and still is a major source of profit, towards which public subsidies to private firms are given generously… Well, they call them “research & development” grants or “national security” strategies… Disease-causing pollution has been mostly an externality that had nothing to do with profit, until pharmaceutical conglomerates found a way to exploit that too. Slaves and their children were most profitable for many, many centuries. Wage slaves… Oops! The flexible working poor and their children are very profitable today too.

And for what must all this wisdom be endured? To give money to people who have money. They have enough, one would believe. They should start communicating it to those who have nothing… little… less. Jesus and Aquinas regarded this as obvious. No, it is not obvious. Money is never enough, especially to those who need yet another fancy dress. But why are these people non-satiable? Why do they complain, lobby and shift electoral allegiance whenever taxation on capital gains is vented? Why do they transfer their fiscal residence to tax havens, whilst benefitting from handouts of the State they are deserting? Why do they outsource productive structures to countries squeezing labour out of turnips, if youngsters are not available? Why do they say that “they have already done enough” whenever life-saving regulation is discussed? Why do they care more about the interest rate they can get, than they care about how their money is invested? Why do they oppose healthcare, old-age pensions, education and culture for all, while they enjoy it for themselves?

It is competition, they answer. There isn’t enough around for all of us, only for the really tough ones, who can then live in much-deserved luxury. But why do people compete for having more for themselves, instead of, say, competing for beauty, generosity, selflessness, equal distribution, full employment? There can be so many different and more constructive competitive aims in life: just look around. Nuns, school teachers, barefoot physicians, rocket scientists, marine biologists, old fishermen, young artists… They may not all dislike some cash, but they do not live for it, or at least they try not to. Since Divine Will is out of fashion, and if you press them long enough, the luxury-deserving competitors are going to tell you, eventually, that we are cruel wolves. How naïve was I! I thought that they were cruel wolves… The world is a cruel place—those ferocious nuns… Nobody waits for those left behind—and they don’t. The market forces accept no barrier. As one of their fairest ideologues so frequently stated, there is no alternative; it is human nature. A hidden philosophical anthropology…

And yet, none less than their poorly understood hero Adam Smith taught us long ago something very different in the opening page of his greatest book, The Theory of Moral Sentiments:

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.

This is certainly not the one and only betrayal of Smith by current capitalism. After all, his market was meant to be free from rentiers, who now run the show. Anyhow, why so much mercilessness, then? Have we become worse human beings? Have we lost our humanity? Have we found ways to outcruel the cruel, underfed, superstitious peasants, who, when not breaking skulls in the name of God or King or Country, killed and maimed animals on a farm? Well, as modern and proud of our science-technology as we can be… Well, yes… Overall, subtly, we have. The thinning of solidarity that embraces the whole humankind, which a German-sounding French warmonger studied in depth, is a weaker barrier to the undergoing evil drives.

Or, at least, we have done our best to train impressionable young minds to being ordinarily callous and participating in the most spectacularly life-destructive economic system ever seen on Earth—a system that, as denounced by the scientific community for the past thirty years, has turned the survival of our species into a big question mark. Much is done in this direction, routinely, thousands of times a day, so that our youth may become more beastly than ruffians and more abrasive than criminals. But how? Simple. We (mis-)educate them, and we have tools for (mis-)education that no emperor or church of old has ever owned or mastered. Only a couple of totalitarian dictators gave it a go or two in the blood-drenched century of Charlie Chaplin and Woody Allen… But how, where? Open your eyes. Watch.

Our TVs and media are replete with commercials. They are meant to accompany you from the cradle to the grave. Selectively and scientifically trained marketing strategists, creative psychologists and advertising gurus are paid to induce desires in the subtlest and most effective manners, starting with our children’s delicate souls. These desires will blossom into poisonous “new needs”, as these “experts” call them. These weed-like flowers being sheer wants perceived as genuine individual needs, the delayed satisfaction of which is to generate a sense of inadequacy, anguish, frustration, isolation, or envy towards those who do satisfy them. And these are the only flowers that must grow; hence they are everywhere. Children no longer need an imagination. Marketing strategists make sure that the only pictures that children can have in their mind are those that sell. They speak already like TVs: why shouldn’t they replicate TVs in their brain? Eventually, as grown-ups, these children will be branded, like slaves of old, or cattle still is today. Perhaps, like the slaves of old, they will enjoy freedom one day a year. Or maybe all the days will have been taken away by marketing strategists, who wish to celebrate the sales of Valentine’s Day, Mother’s day, Father’s Day, Marketing Strategist’s Day…

You don’t believe me? Go to any primary school and you will meet hordes of little creatures dressed according to the latest fashion code, or pestering their parents to be so dressed. Those who are not there, because they are busy sewing the actual fashion items, may well try to rob them from the horde one day. These little brats! They want and want and want scores of items that they do not need, the possession of which, moreover, does not grant happiness at all, despite the glittering promises. Were it so, no new purchase would be “needed”, and that would be bad for business. Certainly, one may learn to control such a powerful impetus, but it takes years of self-re-training. Not even hunger and utter destitution placate it. Not even the full awareness of not being able to afford those consumer goods. Nothing will ever erase the deep-rooted psychological mechanisms implanted into our souls when we were little. Is this enough? No, there is more to it.

Our TVs and media are replete with role models—and the medium is the message. Rich and wanna-be-rich people of all sorts shine even when performing the most ordinary activities, such as shaving or concealing their stench with perfume. From slutty heiresses to pimping rappers, from cosmetically mummified bad actors to ignorant footballers, from divorce-addict hair-died tycoons to soon-to-be-millionaires answering questions or showing their private parts in public—these are the saints and blessed inspirers of the modern secular creed. They may be confessing their own sins to a TV host, confident that their words will be forgotten. What remains, instead, is the scent of money that perspires through their placenta-creamed pores. A powerful aura.

The same aura surrounding the action hero, who fights, kills and kidnaps for the sake of justice, peace and freedom…  There he comes! Dressed in an Armani suit, he jumps out of a Mercedes, talking briefly on his Nokia. He checks his Rolex, then gets into a Ferrari and drives to Chez Maxim’s. There, he meets a beautiful young lady, whose Valentino dress will soon be ripped at the Hilton’s. And there he’ll kick the guts out of the villain, smashing his Patek Philippe and ruining forever his Dolce & Gabbana jacket… Justice is served. Peace is conquered. Freedom triumphs. That’s the message, isn’t it? And if not much of the beautiful young lady is shown, then children can watch too.

Poor people are less frequently shown. They don’t sell as well as our hero. Moreover, they don’t buy. There exist notable exceptions, though. Poor men and poor women are sometimes on display, like animals at the zoo, to be observed, mocked and, on Christmas day, to feel sorry for. Other times, they are actively humiliated on screen by policemen, judges and other masters of entertainment. Crime, ignorance, savagery: what a show! Once again, as long as it sells, keep it up. There, in the spotlight, for less than fifteen minutes and amidst commercial ads, the poor can shine like greasy piglets on spits, or like the tin their most unfortunate children collect in garbage dumps.

What is the result of this Blendungsroman? Go to any secondary school and you will meet cell-phone-talking walking replicas of the rich, parading themselves in the corridors. Give them an opportunity to put down a “loser”, and they will savour it like their own parents, whose SUVs and triple-mortgaged houses are punches into the Joneses’ stomachs. Even poverty is a risk worth taking to cast the rich’s aura.

The silent walking replicas of the poor are usually in other schools, unless they have dropped out of school already to find a job that will secure their poverty. Some are hiding in the toilets. They are poor and they know it. They look poor. It is not only their clothes that say it, but their bodies. They have bad teeth, small tits, big noses. Their parents have wrinkles. They can’t get fixed, like those people on TV, or their replicas and the replicas’ parents. To cope with this obvious inferiority, they breathe in. In Italy, they sniff cocaine to think that they too are rich. In Rumania, they sniff glue to think that they too are sniffing cocaine.

Either way, none of these kids must worry about being politically active. It is too dangerous. Yes, youngsters still remember how to bark: they haven’t been beaten up into silent submission, yet. Some will have to be locked up, so that trade be free. Don’t give them any wrong ideas. That’s socialism—or any bad “ism” of the day. Don’t give them hope. That’s socialism. Politics is best left to corporate employees, who siphon public money to their shareholders and, God be gracious, to their own bank accounts. That’s the free market. These employees alone are capable of understanding why unemployment is natural and inequality good. They’ve got talent. They’ve got the degrees that get you good jobs. Therefore, unless they are corporate employees, not even the kids’ parents have to worry about politics. Like these happy few, the kids’ parents can take happy pills too or, if pills are too expensive, drink themselves out blind.

Drunk, the poor parents can cope better with the trauma of seeing their children die. Each country has its own special way of sending new winged angels to God. In high-tech market-miracle India, they die of cholera in open-air sewers, where they were looking for edible scraps. In coup-idity-ruled Honduras they die poisoned by pesticides in a free-market plantation, so that the bananas people eat in Canada be not too pricy. In revolutionary France they die stabbed by an angry pusher in a dark alley, but they were not really French after all. In peace-loving America, they die fighting for human rights in another country, since their own country denied them a future. How was it possible? They had trained them at killing people since they were three, on a stolen X-box… Maybe they should have trained them at doing something else, but there is no videogame that teaches you how to free a political party from corporate diktats or join a trade union… Is this enough? No, there is more.

Our TVs and media are replete with experts telling us that greed is good. They are the most interviewed and consulted members of the intelligentsia of our community. Sometimes they even become our presidents, ministers, mayors and godfathers. Go to any university. Some of them feed on tenure and enjoy healthcare and pension benefits, whilst arguing that you shouldn’t have them. You will discover that there is an entire discipline built upon that notion.

If truth be told, a few of its adherents do remind their students, on leap years, that the profit-motive of the homunculus œconomicus is just one drive amongst many. This drive becomes one and insatiable for the sake of toying with mathematical formulae, not for the sake of describing reality, which never works quite like the models do. Facts can be so obstinate. Theory is much more flexible. Occasionally, on elective days, these beautiful souls mention even mysterious, metaphysical, unscientific words: “ethics”, “morality”, “duty”, “respect”, “goodness”, “virtue”, “governance”, “responsibility”… They don’t fully grasp them, though, for they slip out of books and balance sheets. Sometimes they even get their students to learn some history, thus half-stuttering what sort of devastation this homunculus and its leit-motive have caused. Still, these are exceptions, divagations, and the students, between the end of their studies and the beginning of their careers, know it very well.

Our MBAs and the many branches of science and engineering dependent upon private sponsors and future corporate employers are the convent-barracks where our crusading novices, more or less geeky and asocial, are told that only numbers really matter. The fate of a paterfamilias and of his family does not. They are told that persons are not persons: they are costs, opportunities, capital, markets… They are all sorts of things that can be converted into monetary units—numbers, in fact—though most definitively they are not persons. In fact, such things, be they free individuals or free communities, can turn into dependent variables. And if some of these things are laid off by a firm that rationalises an otherwise irrational workplace—what a madness it must have been!—then it may be time to invest money in that firm. If the right numbers go up, then things are just as they should be. If they don’t, they can be massaged. If they still don’t, they can be fixed. If they still refuse to go up, then a couple of hospitals plus half a university, as long as they are public, can be sacrificed to a return to growth.

In the streamlined world there can be recoveries without jobs, business opportunities in famines, increased flexibility via insecurity of employment and future bread, full employment at the natural unemployment rate, goods that do a lot of bad things, and market miracles that melt into destitution because of something bad but the pious market. What lesson is learnt? Everything in the world exists in order to maximise the money of investors and/or their managers. Even old, wrinkly countries must be attractive to such people or face their own demise. Make the rich richer. That is the one and paramount commandment. Such merciless homunculi are no fiction; they are science-fiction: they drive around in Dalek machines. Indeed, to those who do not simply rob and run, being merciless is a fiduciary duty. Apart from this, everything else goes.

Yes, everything else, unless you get caught and cannot pay the best lawyers—what a shame. Business words of the business world tell no lies: lack of scruples is “determination”, mercilessness is “having balls”, inhumanity is “being committed”, callousness is “professionalism”, locust-like behaviour is a “hedging”, stealing traditional knowledge is a “patent”, depriving people of knowledge is a “copyright”, poisoning the destitute is “mutually beneficial trade”, taking public-sector resources to guarantee private profits is “hard work”, threatening employees with unemployment is “personnel management”, gambling is “trading futures” and other cabalistic formulae “over the counter”, oligopolies are “economies of scale” and cartels are “free markets”, sending knowingly drivers to die because of a few faulty cars is a “cost-saving measure”, sending knowingly air passengers to die because of reduced safety controls is a “cost-saving measure”, corruption of inspectors is a “cost-saving measure”, corruption of politicians is “lobbying”, and rent-exacting parasites are “the productive class”. The list goes on and on. Read the news and enjoy the game: destroying peoples is “restructuring”, keeping them poor is “preventing inflation”, colonising a nation is “opening markets”, withdrawing rights is “reform”… By the end of it, you almost believe what they say.

Has any student still doubts or feels uneasy? Then he is told that all is well, for all ends well. Yes, those things that we unscientifically call “people” may seem to be suffering, poor things. And the others, crony criminals who have nothing to do with the free market, are the exception, though the rule just wants to be like them. After all, those exceptional exceptions were on the cover of glossy magazines like Capital, the Cosmopolitan of people who “have balls”… Don’t worry. Everything will be alright. Just wait—that’s what my old priest and the party commissar would say… The invisible hand of the self-regulating market is going to look after all of them. Free from State intervention and from trade unions—for only capitals may associate and go on strike if they don’t like a government—the invisible hand is to generate endless bounty for all—the invisible bounty? Most of the world’s trade is virtual, after all…

Such is orthodoxy today, for which even a Pope’s distribution chests are heresy, utter hilaireous bellocs… If you claim that small is beautiful, the giants get angry: go make your shoes elsewhere! Today, you no longer need to be red to be a danger. It is enough to be as white as a dove. The Market God likes hawks, whose endless preying is the source of all that is good. His transparent hand turns into water all the blood that these hawks spill. As to the tallest shrines, they are no longer erected for the glory of the Sun, Athena or Almighty God, but for the likes of Morgan Stanley. Behind all this, a hidden theology… Maybe Divine Will should be in fashion again.


The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

   Franklin Delano Roosevelt

 To avoid glaring inequality or widespread misery I am ready to sacrifice some, or all, of my freedom… I should be guilt-stricken, and rightly so, if I were not.

Isaiah Berlin


The child empathises with the dying bird. The adult empathises with the starving child. The nurse attempts to ease the pain of the terminal patient. The teacher smiles patiently at the pupils playing in the courtyard. The schoolmaster hides his unease as the ancient oak is felled. The gardener watches wildlife documentaries on the TV. The mayor goes on holyday to his cottage on the lakeside. None of them likes to be ill. All of them fear death. All of them experienced curiosity or elation as they held a newborn creature in their arms. All of them have been compassionate at some point. All religions have praised divinity as the fountainhead of all that is. Whether physically, emotionally or mentally, all of the above have exemplified the ultimate source of all values.

Years of research about value have led me to conclude that nothing is more valuable than that which allows value itself to emerge: life. Without life—biological, emotional and mental—there can be no value, whether ethical, aesthetic, economic or political. Those that deem life’s value instrumental acknowledge its value nevertheless. Besides, none of them seems likely to prefer beauty or other values to eating every day and being in good health: take away their bread, and they will sell their dearest painting… Of all crazy philosophers ever alive, only a handful rejected life as a value and one alone behaved in a way that denounced actual indifference to life: Pyrrho the sceptic, whom his friends prevented from walking under carts and falling off cliffs. One. As for the few who told us that life is a valley of tears and an endless stream of horrors, none of them ever stopped eating, drinking, and philosophising, i.e. one of the activities that they clearly enjoyed the most. But what can the lives of crazy philosophers teach us about economic matters?

As usual, philosophy can reveal the heart of an issue. If life is so crucial, indeed the source of all values, then it can be inferred that a successful economic system provides universal access to vital goods across generations. Economic efficiency means that the lives of all benefit from it and nothing is spoiled to the point that those who come after us may not benefit too: resources are left for others the way in which we would like to have them left for us, if not better. Improvement is a possibility. An economic system that achieves its vital aims more effectively, thus opening the door to a richer fulfilment of planetary and human potential, is yet a better system. On the contrary, an economic system that does not fulfil its vital aims, either because access is limited to few or some, past or present, or because it delivers goods that are deadly, detrimental to life or irrelevant to life needs, whilst leaving some of these needs unanswered, is a failure.

The current economic system is a failure. As repeatedly denounced by the international scientific community at its highest and most representative levels, human civilisation has become for the first time in its history a threat to the planetary environment that allows for humanity’s own existence. There is no aspect of the Earth’s environment that has not been depleted in the three centuries that have seen the affirmation of capitalism worldwide: the biosphere-protecting Ozone-layer, breathable-air-producing and reproducing pluvial forests and oceanic life-systems, self-regenerating water aquifers, nourishing-food-producing arable spaces, and natural-equilibrium-maintaining and science- and technology-inspiring biodiversity. The continuation of life as we know and enjoy it is at risk.

Much has already been destroyed beyond repair, to the point that bioengineering is being discussed as a tool to cope with the most tragic consequences of “development” awaiting us. Emblematically, one nation of the world is planning already the purchase of land in India in order to transfer its entire population there upon the day when the ocean will have swallowed their ancestral islands. And yet, in the face of current profit losses, all this is treated as secondary. Just read the news and you shall see that the focus of collective action is upon a “return to growth”, as though the sad and deadly harvest of greed were not still vivid before our eyes.

What is more, the mantra of competition goes on unchallenged. But competition for what? To generate profits? And why? Why should rich people become richer? There’s more than enough to go around. Even more ludicrous is the idea that schools, healthcare, free time, old-age security, peace of mind and all those gains for life that people acquired in decades of blood and humanity should be dismantled so that competition be won. By whom? What sort of victory is the augmentation of the money heaps of people who already have it, whilst the quality of life and the living conditions of most are worsened?

F.D. Roosevelt told us seventy years ago that greed is not only bad morals, it is also bad business. When business’ sole purpose is to make as much money as possible as soon as possible, then the somewhat constructive role that business may play in society disappears altogether. It doesn’t matter if any private business actually makes a lot more money, gets bigger internationally or pervades even more diffusely the lives of millions: the standards of evaluation and appreciation for the constructive role of private business belong to the sphere of public wellbeing. And public wellbeing cares about long-term indicators: happy workers retiring in good health, healthy mothers making plans for their children’s education, educated youngsters looking forward to playing on the beach with their grandchildren. If this horizon disappears, then you’d better start to worry. Private business is known to have played far too often a destructive role, as everything, the long-term survival of private business included, can be sacrificed to man-eating Baal.

Short-termism, combined with the relentless pursuit of profit, characterised roaming Goths, wooden-legged pirates and cigar-loving gangsters. The entrepreneur, the glorious creation of modern capitalism, has always been expected to be something different. Restrained by family and personal pride, religious morals, annual dividends, trade unions and other 20th-century legal suasions, his horizon has been defined as a somewhat distant future, his playground the real world of flesh-and-bone persons like him, his reward the admiration of affluent or fully employed fellow citizens that participate in and benefit from his endeavours.

As long as alternative economic systems were either widely discussed or experimented with, the entrepreneur had to justify his existence by creating some tangible, albeit sometimes debatable, token of social worth, such as employment, community networks, or nice new gadgets. Only the speculator, hardly distinguishable from fraudsters, trotted relentlessly upon a different path. But speculators were said to be the exception, not the rule…

Yet the day came when Gordon Gekko and his friends got to control more than three quarters of what is still incautiously dubbed “world trade”. The decades of my life, infested by Maggies, yuppies and wall-less oligarchs, launched “The Financial Revolution”, a pivotal process in contemporary history that no historian has yet so baptised: let this label be my grand legacy to international scholarship.

An equally bombastic historian used this term in the 1960s to describe the emergence of public creditors in 18th-century England… It doesn’t quite compare, I’m sorry. We’ve just witnessed thirty long years of national barriers coming down—and how long it took for both nations and their barriers to come into existence!—so as to allow for a gigantic flood of miraculously leveraged liquidity springing out of… books and vast pools of capital formed by privatising public money in all of its shapes, squeezing profit from de-unionised workforces threatened by—what a coincidence!—unbarred international competition, and such ingenious tokens of financial engineering that only professional mathematicians could make sense of them. All this money travelling much faster than any good or service ever before: computers have replaced the pens and ink of old. The world of Gekko and other reptilian inhabitants of city hedges and wall streets is indeed a very bizarre world.

Originally, these creatures were meant to trade pieces of paper granting a share of the profits made by fairly large private companies. It is something that had begun in Genoa a long time ago and that their trading partners, the Dutch, had brought to the North Sea around the year 1600, sailing thence to the New World, another Genoese discovery… But a share of the profits may be less remunerative than profiting from shares. Gekko’s forefathers started betting on rises and falls in the price of those pieces of paper, sometimes causing them by moving massive amounts of money or dropping a few words into the nearest ear…

In the days of poor old Nixon, in the Big Apple, they traded about 20 million stocks every day. Today they trade 1600 million or so—and there’s more fruit in the basket than just a big apple. Also, as of Nixon’s time, they started playing games with the world’s currencies, namely the money with which common people buy their bread. Again, they started slowly, about 20 billion USD a day, but now, after “freeing” trade worldwide, they are up to 2 trillion. It is by far the largest chunk of trade in the world and it has one severe drawback: it makes the form of trade that normal people think of when they hear the world “trade”—buying and selling bananas, timber, cars, computers, etc.—much more complicated. Not to mention buying bread. But the reptiles don’t worry: they own the future. They buy and sell it.

Actually, they take bets—only a tiny fraction of trade in existing “futures” fulfils the official excuse that these are ways to hedge against risks on purchases of actual goods—on nearly anything that can be grown, mined or brought into existence, influencing the price of all sorts of goods, including the bread that common people wish to buy. Still, since even this casino was not big enough, the reptiles added onto the table the so-called “derivatives”, which are pieces of paper whose value is derived—hence the name—from something else, whether another piece of paper or a price arising from combining a few of them. Anything goes. Also because you can buy or sell these pieces of paper any way you like—over the counter, under the counter, beside the counter… You can actually buy and sell the option to buy or sell them, for short-termism can be so short that, to spare time, it allows certain persons to sell what they don’t have.

Is this too complicated? Too silly? Well, today, around the globe, there’s an ocean of derivatives, for a value of about 500 trillion USD. It is a lot of money… Strangely enough, however, the reptiles that invented them also felt the need to insure themselves against any risk that may ensue from trading in… derivative paper. So they started buying “credit default swaps” from insurance companies and let their friends and colleagues, the bankers, pile them up as assets, claiming that these “swaps” were as sound and good as gold itself. Probably they would have started taking major bets on them as well, had the entire mathematically engineered and economic-science-backed system failed from collapsing under its own virtual weight. Too much genius had been spent for the business world to bear. Under so much talent and foresight, the reptiles’ joints felt suddenly empty of market force. Amazingly, the invisible hand was nowhere to be seen. Fortunately, the State ran to their rescue and gave them a visible, reinvigorating bailout with other people’s money, lest the bank’s own mouthpiece uttered “BBB” or some other silly rating. And that’s where we stand today. The real suffering surrounding us, from the unemployed Spanish worker to the starving Senegalese farmer, is due to a virtual catastrophe. And if the starving Senegalese farmer tries to move to Spain, he shall meet a wall and possibly drown in the sea, while frustrated unemployed Spaniards, trained by modern corporate journalists, will hate guts those that didn’t. Strangely enough, these migrants are to be loathed, not the freely migrating virtual capital that cannibalised both Senegal and Spain.

Like all human endeavours, business can be either good or bad. To know what makes it good or bad, what is nobler than money, means to know how to measure real growth, real development, real utility, real goodness. Who, though, after Pareto’s Protagorean reinvention of economics, is allowed to know what real value is? Certainly not serious economists, who can only acknowledge preferences… The Pope may know, perhaps. He claims to be right like no-one else and that’s maybe why so many people cannot stand him: who likes an old moralising grandpa, in an age in which we are told by our media gurus to give into any juvenile urge of ours that can make them a buck?

Or maybe any living creature knows: they’re all God’s creatures, after all. Yes, even by watching slugs and bugs we can evince something important, which degree-honoured geeks may have neglected while sitting in front of an inanimate computer screen. They are not forgivable, though: no matter how much you masturbate, avatars are not human beings. Here comes the slap; Zen masters should love it: entomology can rescue economics from its value slumber. Vade ad formicam. What a twist! Or maybe not. It all started with Mandeville’s bees, to be honest…

Let me be brief and clear on this. What consistent pattern of behaviour can be observed amongst slugs and bugs? Watch them in your garden, if you have one. Or go and watch them in a public garden, if it hasn’t been sold to developers. As small and allegedly stupid as they are believed to be, all invertebrates try to do their best to survive at all times. And when they take risks, it is because they either look for food, shelter, safety, or attempt to ensure the survival of their species. As economically irrational as animals can be, these small beings can even sacrifice individual utility—one’s safety, food or head—for the sake of keeping, indeed at times just making, their young. Future generations matter, to them. Some seem even to care for their fellows in the anthill, hive or nest in which they live… Life, in truth, matters to living creatures, and yet life can be sacrificed, for more life may thus ensue. The only higher value that life acknowledges is, in fact, life.

And yet, in today’s world, money is still prioritised over life. Listen to our leaders, and with the exception of a pair of Caribbean politicians that corporate media describe regularly as lunatics, what matters most to most who matter most is to keep “growth” going. Capitalism or the “free market”, as they like labelling it despite its dictatorial logic, must keep generating profit, free from State intervention, which does not serve that one paramount end. All this is held, despite the well-known biocide implications of such a process. Yes, capitalism is responsible for the ecological degradation that we are living in with, and leaving to, our children. Has nobody really put together the Industrial Revolution and the collapse of the planet’s life support systems?

I shall help you: the causal link between the pursuit of profit and environmental degradation becomes visible every time environmental regulation is resisted as “too costly” or by-passed by illicit behaviour or by off-sourcing to countries that have actually little such regulation or none at all. Unless business is forced forcefully to comply with existing regulation, which is much more difficult in a barrier-free worldwide market, common praxes show that the primacy of profit persists over, say, not killing other people by dumping toxic waste onto them.

Indeed, in economics, it is methodologically impossible to address the environmental preconditions that make life possible and can secure its long-term flourishing. To the eyes of the economic observer, bread is as much and legitimately a “good” as nuclear waste, as long as a lawful market exists for both of them. It is only through direct State intervention that a bad “good” becomes officially what it is: a bad—and that is just the first step, for enforcement is yet to be secured from lobbying and bribes.

States alone can ban slavery, organ trafficking, child labour, exploitation, air pollution or aquifer poisoning as the bads they are. States alone can make the real economy and earned income primary, and the virtual economy and unearned income secondary. There is nothing intrinsic to market mechanisms leading to that and we have known it for nearly two hundreds of years. Read Charles Dickens’ subversive novels to get a clearly bleak picture. Also, ecosystems are “externalities”, as the language of economics reveals, at least as long as they are not turned into a cost by environmental legislation, into a loss of profit by reduction in reputation and actual sales, or into a market opportunity by persistent spoliation of it—see the oxygen cans sold in the subway in Tokyo.

Protecting life and the environment is something that runs against the logic of profit, even if some business leaders may themselves desire it ardently. Profit can only relate to the value of life instrumentally: as a means to further profit. Money is a fetish, and one that eats living creatures and their dwelling spaces if that generates revenue. Nothing leads profit-driven “rational” agents to doing that which is necessary for planetary survival and, for that matter, for a decent social life on a vast scale. Even public health, the most obvious case of socially beneficial public agency, is opposed as unprofitable hence bad. Not to mention all the money that is made by “growth” via sales of carcinogenic “goods”.

As the world’s money is controlled by gargantuan private institutions and managed to enrich their rich shareholders, even if it means strangling debt-ridden public authorities and diverting resources from public sewers to private coffers, there is little hope that the dominating logic may change. Some used to argue that money should be controlled by public authorities and managed for the public good, as written in certain constitutions… But we have already talked about such a peculiar notion. For the moment, let’s see whether the Philosopher-Kings of Greece will crumble because of the Goths, after being failed by Chelsea-resident haven-seekers and the advice of Goldmen-sackers.

The Transcendental Character of Money: An Exposition of Marx’s Argument in the Grundrisse


The recent economic crisis has certainly raised a number of questions about the conception of free markets and the neoconservative economic theories on which the capitalist nations have relied. Free marketeers like former Federal Reserve Chairman, Alan Greenspan, have acknowledged that unregulated markets have enormous costs and in the end could be damaging to the welfare of our citizens, the financial health of our economic institutions, and to the fiscal strength of our nation states.[1] In a National Public Radio interview, Greenspan even went so far as to call this crisis a “credit tsunami,” admitting that “the free market ideology may be flawed.”[2] Still, despite this painful admission, Greenspan had very few suggestions for regulating or correcting the failures of the free-market system.[3] Other observers of global capitalism have been concerned for some time about the boding dangers of the free market system. John McMurtry, for example, who locates the origins of capitalism in the work of John Locke and Adam Smith reminds us that both of these thinkers developed their economic theories out of their ethical philosophies. But how has economic thought moved so far from ethical and moral considerations? Presumably, the free market was justified because it led to human happiness. As Mary Rawson states in her review of McMurtry’s Unequal Freedoms: The Global Market as an Ethical System, the question is: “If the market system was to bring a better life to all, why can we find everywhere armaments, killing fields, malnutrition, brown water, and the disappearance of species? Why do we find, not life, but death?”[4] Citing Robert Lane’s The Loss of Happiness in Market Democracies, McMurtry argues that, although most current economic theory would not agree, “human satisfaction actually declines as income and commodity consumption rise beyond need.”[5] Furthermore, since our government leaders are tied to large corporate interests, the public interest is completely ignored.

As Governments decline into ‘the best democracies that money can buy’ there is no public authority left to protect the common interest. Our political leaders assume market growth is essential to society’s development. So public welfare is sacrificed to ‘more global market competiveness’ – and more life-system depredation. To name the causal links remains taboo.[6]

Additionally, recent economic theory has claimed that the market is “objective,” “value-free.” Some have complained that we have made the market into a god. As George Soros argues, however, “by claiming to be value free, market fundamentalism has actually undermined moral values.”[7]

In February, 2009, George Soros, founder of Soros Fund Management LLC and a philanthropist, claimed that the current global economic problems, sparked by the mortgage crisis, have “damaged the financial system itself.”[8] Extremely pessimistic about the success of the Obama administration’s attempts to respond to the crisis, by October, 2009, he cautioned his audience that the recovery from the current crisis “may run out of steam”; and he feared a “double-dip” in 2010 or 2011.[9] While he distinguishes the current crisis from the collapse of the Japanese economy because the current problems are not confined to one country, Soros distinguishes it from the “Great Depression” because the world economic system has not been allowed to collapse completely; it has been propped up by various national governments. Soros predicts that a “new world order … will eventually emerge” and it “will not be dominated by the United States to the same extent as the old one.”[10] Summing up his position, Soros maintains that “a global economy demands global regulations. … Regulations must be global in scope.” Echoing these concerns, Joseph Stiglitz asserts that “the truth is, most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.”[11]

Obviously, those who have suffered from this crisis are angry; many want to know: Who is going to jail? For how long? And when? While those who have been personally affected by this recession have suffered loss of jobs and homes with foreclosures, taxpayers have been bailing out the large Western banks that, according to John Lanchester, have been allowed to become “Too Big to Fail.”[12] Indeed, this was “the most important lesson” of the failure of Lehman Brothers – these institutions are “Too Big to Fail.” Truly, we are living with a “monstrous hybrid,” Lanchester continues, “in which bank profits are privately owned, but are made possible thanks to an unlimited guarantee against losses, provided by the taxpayer.” He agrees with German Chancellor Angela Merkel, “No bank should be allowed to become so big that it can blackmail governments.”[13] If capitalism is about assuming risk, i.e., “about ‘creative destruction,’ and the freedom to fail,” then we no longer have free market capitalism, but an economy dominated by the “banksters”; or, to speak precisely, Lanchester concludes “the most accurate term would be ‘bankocracy.’”

Others argue that the recent crisis is not an exception to the rule, but that these kinds of crises are endemic to the nature of capitalism; they belong to the logic of the capitalist system because once a means of exchange, money, when it becomes capital, becomes an end in itself. In other words, the economic system no longer serves to produce various products required to make human beings happy, but the system serves to produce one commodity, i.e., capital, and the problem for the corporations and the banks is how to produce, control, and accumulate capital. There are two questions here. The first is the historical question: when in the development of the capitalist economic system was there a concentration of production and the emergence of monopolies that led to the enormous accumulation of capital in the hands of a few large banking concerns? Citing the German economist, Otto Jeidels’ Relation of the German Big Banks to Industry with Special Reference to the Iron Industry, (Leipzig, 1905), V. I. Lenin answers this question: “Thus, the twentieth century marks the turning-point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital.”[14] Clearly others would answer this question differently; most would probably go back to the beginning of the twentieth century, but would look more specifically to contemporary problems relevant to the current capitalist system. This paper, however, is not concerned with these historical questions; rather, this essay is concerned with a second question: how, according to the logic of capitalism did money which served as a means of exchange become capital? My paper will address this question by examining Karl Marx’ argument in the Grundrisse.

Written during the winter of 1857-58, the Grundrisse[15] was authored by Karl Marx between the 1848 publication of the Manifesto of the Communist Party and the 1867 publication of the first volume of Capital. The text is a series of seven notebooks in which Marx strives to gain conceptual clarity on a number of fundamental economic concepts, including production, distribution, exchange, consumption, and money. Although the Grundrisse was not published during his own lifetime ? indeed, the work was not even published in the nineteenth century[16] ? this work is essential for our understanding of the nineteenth century, because in it Marx articulates one of the most important transitions for modern bourgeois capitalism, namely, the transition from money as a medium of exchange to money as a commodity. In this paper, I shall examine Marx’s argument for this transition under the heading of the transcendental character of money. To achieve this end, I have divided my discussion into three parts. The first part is a brief consideration of what Marx calls “the scientifically correct method” of political economy (Grundrisse 100). Before exploring the concept of production in general, I shall consider how Marx justifies beginning his reflection with this concept. Then, I shall reconstruct the way in which Marx understands the concepts of production, distribution, exchange, and consumption in his “Introduction” to the Grundrisse.[17] Finally, I intend to identify the conceptual moments of money as it moves from a mere medium of exchange to a commodity necessary for the productive process.

“The Method of Political Economy”[18]

Reflecting on the method of political economy, Marx distinguishes two approaches to this science: the historical method of the seventeenth century political economists and “the scientifically correct method,” i.e., “the theoretical method.” Marx criticizes seventeenth century political economists for beginning scientific reflection with an indeterminate abstraction like “population.” For if we begin with population, we must “move analytically towards ever more simple concepts [Begriff], from the imagined concrete towards ever thinner abstractions until [we reach] the simplest determinations.” In other words, if we begin with population, we shall have to consider the classes that constitute the given population. But according to Marx, the concept of “classes” has no content unless we understand “the elements on which they rest” such as “wage, labor, capital, etc.” And since “these concepts in turn presuppose exchange, division of labor, prices, etc.,” those political economists who start with the concept of “population,” make the mistake of beginning with “a chaotic conception [Vorstellung] of the whole.”

Rejecting this confused approach, Marx claims that “the scientifically correct method” of political economy is one that begins by sorting out “a small number of determinant, abstract, general relations” ? and here Marx is thinking of “labor, money, value, etc.” ? which he calls “the simplest determinations” (Grundrisse 100 and 101). These determinations, however, are not yet concrete. Once “these individual moments [have] been more or less firmly established and abstracted,” Marx writes, “there [begin] the economic systems, which [ascend] from the simple relations, such as labor, division of labor, need, exchange value, to the level of the state, exchange between nations and the world market” (Grundrisse 100-01). This is not the mistaken historical method of the seventeenth century political economists that begins with the “imagined concrete” (e.g., population); rather, according to the scientifically correct method, the concrete is something to be attained. “The concrete,” Marx argues,

is concrete because it is the concentration of many determinations, hence unity of the diverse. It appears in the process of thinking, therefore, as a process of concentration, as a result, not as a point of departure, even though it is the point of departure in reality and hence also the point of departure for observation [Anshauung] and conception.[19]

Reality is not transparent to the understanding; it is not immediately accessible to political economists. To attempt to comprehend reality in terms of the most immediate determinations only serves to confuse; reality is over-determined, i.e., as having so many determinations that we cannot sort them all out in theoretical discourse. Instead, reality must be understood. Beginning with the simplest determinations, the political economist brings to conceptual clarity chaotic conceptions by identifying “a small number of determinant, abstract, general relations” which “lead towards a reproduction of the concrete by way of thought” (Grundrisse 100 and 101). Hence, political economists do not produce reality as the product of thought; rather, they proceed correctly by conceptualizing reality in thought.

Reconstruction of Production, Distribution, Exchange, and Consumption

Production in General

Marx employs this scientifically correct method in his own work when he takes up the concept of “production” (Grundrisse 85-88). In any reflection on production, we always refer to “production at a definite stage of social development — production by social individuals” (Grundrisse 85). Because of this, Marx argues, there would seem to be two possible ways to speak of production. If we are to “talk about production at all we must either pursue the process of historic development through its different phases, or declare beforehand that we are dealing with a specific historic epoch such as[,] e.g.[,] modern bourgeois production.” But to start in this manner would once again lead us down the thorny path of the historical method; beginning with “the chaotic conception of the whole,” we would have to search for the simplest determinations that constitute production.

Alternatively, Marx suggests that we can begin with “a rational abstraction,” i.e., “production in general” because “all epochs of production have certain common traits, common characteristics.” The difficulty, however, is that production as it appears has many determinations. In fact, it could be characterized in its specificity as being over-determined. Furthermore, not all of these determinations belong to every epoch as identifiable moments. “Some determinations belong to all epochs, others only to a few. [Some] determinations will be shared by the most modern epoch and the most ancient.” If we are to develop this kind of theoretical discourse, Marx argues, we must allow certain determinations to be stripped away and removed from this process of abstraction, the residuum, albeit an abstraction will not be an indeterminate abstraction; rather, it will be a concrete abstraction. And the scientifically correct method demands that we begin our theoretical reflection with a concrete abstraction, i.e., a concept of production which includes just those clearly articulated, essential moments that all specific instances of production have in common. Consequently, we shall begin the present discussion with the concrete abstraction of production in general.

If we simply consider the concept of production in general, it appears in the first instance to be the making of products. In production, human beings appropriate nature “within and through a specific form of society” (Grundrisse 87).[20] Production in its immediacy, however, assumes the three following moments: 1) human activity, i.e., work; 2) the subject of the work, i.e., the material worked on, and 3) the instruments through which the work is accomplished, i.e., the instruments of production.[21] Moreover, the products of production belong to someone; they are property which fulfill human needs. “An appropriation which does not make something into property,” Marx writes, “is a contradictio in subjecto” (Grundrisse 88).[22] “In production the members of society appropriate (create, shape) the products of nature in accord with human needs”; Marx calls this “the obvious” or “trite notion” of production. Furthermore, “production, distribution, exchange, and consumption,” according to Marx, “form a regular syllogism: production is the generality, distribution and exchange the particularity, and consumption the singularity in which the whole is joined together” (Grundrisse 89). However, this does not mean that “production, distribution, exchange, and consumption are identical, but that they all form the members of a totality, distinctions within a unity. Production predominates not only over itself, in the antithetical definition of production, but over the other moments as well” (Grundrisse 99). What then is the relationship of each of these determinations ? distribution, exchange, and consumption ? to production?

“Consumption and Production”[23]

Marx distinguishes three “identities between consumption and production” (Grundrisse 92): (1) “Production is consumption, consumption is production.” And he calls this first identity “immediate identity”;[24] (2) Production “appears as a means for” consumption and consumption “appears as a means for” production. [25] (3) “Each of them … creates the other in completing itself, and creates itself as the other.” [26] Marx does not name the last two mentioned identities. In keeping with the Hegelian vocabulary he employs here, however, I shall refer to the second and third identities as mediate identity and self-mediated identity, respectively. Let us consider each of these identities in turn.

The Immediate Identity of Production and Consumption

“(1) Immediate identity: Production is consumption, consumption is production.”[27] Production which appears immediately as consumption, Marx maintains, is “twofold consumption”; it is both “subjective and objective” (Grundrisse 90). It is subjective because the producer “develops his abilities in production”; it is objective because the producer also “expends” these abilities ? “uses them up in the act of production.” In producing the product, “the means of production” are consumed; they “become worn out through use” in the productive process. To illustrate his point, Marx appeals to the image of combustion. While fire and heat are produced in combustion, the material that supports combustion is consumed. Similarly, in production “the raw material” surrenders “its natural form and composition by being used up.” “The act of production,” Marx argues, “is therefore in all its moments also an act of consumption. Production as directly identical with consumption, and consumption as directly coincident with production, is termed … productive consumption.”

At the same time, “consumption is also immediately production.” Drawing an image from nature, Marx argues that just as a plant produces itself by consuming certain nutriments, so too a “human being produces his [or her] own body” by consuming nourishment. And this, Marx continues, “is true of every kind of consumption which in one way or another produces human beings in some particular aspect” (Grundrisse 90-91). Consumption that is immediately production, according to Marx, is “consumptive production” (Grundrisse 91). Consumptive production, however, is “secondary” because it involves the “destruction of the prior product” in the productive process. In production, “the producer objectified himself”; in consumption “the object he created personifies itself.” Hence, productive consumption is to be distinguished from “production proper.” For although production is immediately consumption and consumption is immediately production, their “immediate duality” remains unaltered; each process retains its unique character and is independent of the other.

The Mediate Identity of Production and Consumption

“(2) [In the sense] that one appears as a means for the other, is mediated by the other.”[28] According to Marx, a “mediating movement” occurs between the two processes ? production and consumption. These two processes are “related to” and “indispensable to one another”; Marx insists on “their mutual dependence” that “still leaves them external to each other” (Grundrisse 93). Each process is “a means for the other” ? each “is mediated by the other.” “Consumption,” Marx argues, “mediates production” because “it alone creates for the products the subject for whom they are products” (Grundrisse 91). “Without production, no consumption; but also, without consumption, no production; since production would then be purposeless.” Indeed, “consumption,” Marx argues, produces production in two ways. First, consumption produces production because it is only by being consumed that a product “becomes a real product.” A product achieves its “‘last finish’ in consumption.” A product that is not consumed is not actually a product at all; it is only potentially a product. For example, “a railway on which no trains run, hence which is not used up, not consumed,” Marx insists, “is a railway only ??????? [potentially], and not in reality.” This means that a product is quite different from a natural object. While a natural object simply is what it is, the product “becomes a product only through consumption.” “Only by decomposing the product,” Marx maintains, “does consumption give the product the finishing touch; for the product is production not as objectified activity, but rather only as object for the active subject.”

Second, consumption produces production “because consumption creates the need for new production, that is it creates the ideal, internally impelling cause for production which is its presupposition.” In other words, consumption produces production by creating “need” that will be satisfied by production. As the object of production, however, need is not external to the productive process; rather, need is understood “as internal object of production, as aim”; the goal of production is to fulfill need created by consumption. Hence, according to Marx, consumption is understood as “the aim of production”; consumption motivates production by creating “the object which is active in production as its determinant aim” (Grundrisse 93 and 91). If it is true that production “offers consumption its external object,” then it is equally true, Marx contends

that consumption ideally posits the object of production as an internal image, as a need, as drive and as purpose. It creates the objects of production in a still subjective form. No production without a need. But consumption reproduces the need (Grundrisse 92).

At the same time, Marx identifies three ways that production mediates the process of consumption. First, production “produces the object of consumption.” In production, products are produced for no other reason than to be consumed; “production creates the material, as external object, for consumption” (Grundrisse 93). Without an object to be consumed, consumption would not be consumption at all. It is by supplying the material to be consumed that “production produces consumption” (Grundrisse 92).

Second, production produces “the manner of consumption.” Previously, we observed that only in consumption does the product achieve its final finish. Similarly, production does not merely create a product for consumption; rather, it “also gives consumption its specificity, its character, its finish.” Production does not create any object or “an object in general.” In the productive process, specific objects are produced. Because production produces the product, and because the product is the product that it is, i.e., a specific product, production also produces the way in which the product is to be consumed. Hence, “the object,” Marx argues, “is not an object in general, but a specific object which must be consumed in a specific manner.” Marx appeals to an example of satisfying one’s hunger. The need to gratify our hunger is the same in any context. After all, “hunger is hunger.” But there is a difference between our “bolt[ing] down raw meat with the aid of hand, nail, and tooth,” and our satisfying our hunger “by cooked meat eaten with a knife and fork.” Since production produces a specific product, and since production produces the manner in which the product is to be consumed, Marx argues that “production thus creates the consumer.”

Finally, production produces “the motive of consumption.” Motivated by need, production creates the material to satisfy need. But production also “supplies a need for the material.” As it first appears, consumption exists in its immediacy ? “a state of natural crudity.” However, consumption is “mediated as a need for the object” produced by production. Hence, production not only creates the material object for consumption, and it not only creates the manner in which the material object is to be consumed, but it also creates the need for the material object. In other words, production creates “the perception” of need. Borrowing an example from the arts, Marx maintains that in this there is no difference between an “object of art” and any other product. For just as an artifact produces “a public which is sensitive to art and enjoys beauty,” so too, in the creation of every other product, production produces a perceived need. “Production thus not only creates an object for the subject, but also a subject for the object,” i.e., the consumer.

The Self-Mediating Identity of Production and Consumption

In addition to the two previous identities ? the immediate identity of production and consumption and the mediate identity of production and consumption ? production produces consumption and consumption produces production, and in so doing “each of them … creates the other in completing itself as other” (Grundrisse 93). For its part, consumption creates production because in consumption the product is consumed. If the product were not consumed, it would not be what it is, namely, a product. In the activity of the product being consumed, consumption not only brings the product to completion, but it also produces the need for production and re-production. Insofar as the process of consumption brings the product to completion, and insofar as the process of consumption produces the inclination for production and reproduction, consumption completes the process of production by producing the producer. “Consumption,” Marx argues,

accomplishes the act of production only in completing the product as product by dissolving it, by consuming its independently material form, by raising the inclination developed in the first act of production, through the need for repetition, to its finished form; it is thus not only the concluding act which the product becomes product, but also that in which the producer becomes producer (Grundrisse 93).

Hence, consumption creates production by bringing itself to completion; and in this way consumption is distinguished from production.

For its part, production completes the productive process by producing consumption. Insofar as production produces both “an object for the subject” and “a subject for the object,” production creates consumption

(1) by creating the material for it; (2) by determining the manner of consumption; and (3) by creating the products initially posited by it as objects, in the form of a need felt by the consumer. It thus produces the object of consumption, the manner of consumption and the motive of consumption (Grundrisse 92).

Furthermore, besides producing the material or object, the manner, and the motive for consumption, “production produces consumption … by creating the stimulus of consumption, the ability to consume, as a need” (Grundrisse 93). In other words, when Marx writes that production produces the subject for the object of consumption (Grundrisse 92), he means that production not only produces the product that is to be consumed, but it also produces the consumer that needs the product (Grundrisse 92 and 93). Production thus creates consumption by bringing itself to completion; and in this way production is distinguished from consumption.

Marx, however, stresses that while each of these moments ? production and consumption ? “creates the other in completing itself, and creates itself as the other,” still the moments articulated here belong to production in general. Production and consumption “appear as moments of a single act” (Grundrisse 94). In other words, production must be understood as “one process” to which all of the identities and the moments constituting them belong. Hence, production in general is the “predominant moment.”

With a single subject, production and consumption appear as moments of a single act. The important thing to emphasize here is only that … they [production and consumption] appear in any case as moments of one process, in which production is the real point of departure and hence also the predominant moment. Consumption as urgency, as need, is itself an intrinsic moment of productive activity. But the latter is the point of departure for realization and hence also its predominant moment: it is the act through which the whole process again runs its course. The individual produces an object and, by consuming it, returns to himself, but returns as a productive and self-reproducing individual. Consumption thus appears as a moment of production. (Grundrisse, 94)

“Distribution and Production”[29]

Marx begins his discussion of distribution with the following question: “Does distribution stand at the side of and outside production as an autonomous sphere?” Although he will answer this question in the negative, by arguing that production does indeed include distribution, there are a number of reasons to think that distribution does not belong to the sphere of production. From the standpoint of the individual, distribution seems to be prior to production because it establishes his or her place in the process of production. According to this point of view, Marx writes, “distribution appears as a social law” because it fixes the individual’s place in the social system, i.e., “the system of production” (Grundrisse 96). Since the individual’s place within this system is determined prior to his or her participation in the process of production, it would stand to reason that distribution does not belong to the sphere of production; rather, distribution would seem to precede production. “To the single individual,” Marx argues,

distribution appears as a social law which determines his [or her] position within the system of production within which he [or she] produces, and which therefore precedes production. The individual comes into the world possessing neither capital nor land. Social distribution assigns him [or her] at birth to wage labor. But this situation of being assigned is itself a consequence of the existence of capital and landed property as independent agents of production (Grundrisse 96).

The individual comes into this world without capital or land; he or she possesses only his or her own body which may be sold in the form of the individual’s labor power for wages. But Marx emphasizes that it is the mode of production that determines the individual’s place in the system of production. Hence, distribution is not an autonomous sphere existing outside of production; rather, distribution belongs to the sphere of production.

From the standpoint of whole societies, Marx mentions four historical examples that provide reasons to think that distribution precedes production, i.e., “that distribution is not structured and determined by production, but rather the opposite, production by distribution.” When one nation or people, for example, conquers another and divides the land among themselves, they force a certain mode of “distribution and form of property in land” on those who have been defeated; thus, production would seem to be determined by distribution. Again, if a conquering nation enslaves those it has defeated, and if, as a result, production were founded on slave labor, distribution would appear to be both prior to production and to determine the mode of production. Or, in the case of a revolution when a people revolts against the land owners or the landed gentry and redistributes the land by dividing their holdings into smaller tracts of land, distribution would appear to change the features of production. Similarly, in a caste system in which a legal system distributes, as a result of “a hereditary privilege,” property to some, land to others, and still others are restricted to the caste of laborers, distribution would seem to be prior to production, to determine production, and, hence, to stand outside of production as an entirely autonomous sphere.

Marx, however, rejects the notion that distribution belongs to an autonomous sphere; rather, he argues that “in all cases, the mode of production … is decisive” (Grundrisse 97). While the process of production involves appropriation, i.e., involves making something into property, “the producer’s relation to the product, once the latter is finished, is an external one”; in other words, the producer does not take possession of the product immediately (Grundrisse 94). In production, the producer does not intend the immediate appropriation of the products; the producer does not produce products for his or her own personal consumption. Rather, the producer can only take possession of the product insofar as the product is distributed to others. Distribution depends on the producer’s relation to other individuals. Hence, distribution, Marx argues, like consumption, belongs to the sphere of production.

Distribution steps between the producers and the products, hence between production and consumption, to determine in accordance with social laws what the producers share will be in the world of products (Grundrisse 94).

At the most immediate level distribution and production appear independently of one another. Distribution seems to be the mere distribution of products according to certain social laws which first appear as natural laws. However, “this distribution of products” is a moment in production realized as:

  1. “the distribution of the instruments of production, and …
  2. “the distribution of members of society among the different kinds of production” (Grundrisse 96).

For its part, production produces distribution, and different modes of production require different forms of distribution. “The structure [Gliederung] of distribution,” Marx writes,

is completely determined by the structure of production. Distribution is itself a product of production, not only in its object, in that only the results of production can be distributed, but also in its form, in that the specific kind of participation in production determines specific forms of distribution, i.e., the pattern of participation in distribution (Grundrisse 95).

In other words, while the structure of distribution appears as the naturally determined distribution of products, actually, the distribution of products is the result of this structure of distribution which is in turn the result of production as it changes the natural determinants to “historic determinants.” “At the very beginning,” Marx continues,

these may appear as spontaneous, natural. But by the process of production itself they are transformed from natural into historic determinants, and if they appear to one epoch as natural presuppositions of production, they were its historic product for another (Grundrisse 97).

Thus, distribution, belongs to the sphere of production and Marx calls it “production-determined distribution”; as production-determined distribution, distribution appears as one moment of production.

“Exchange and Production” [30]

Exchange appears as a moment mediating “production with its production-determined distribution on one side and consumption on the other …” (Grundrisse 99). Because of this mediation, exchange makes a threefold appearance, each level of which is either determined by or appears in the sphere of production:

  1. It is within production “that exchange of activities and abilities [division of labour] takes place” (Grundrisse 99]. This moment of exchange is the essential constitutive moment of production.
  2. Exchange as the “means” of bringing a product to its concrete reality, i.e., exchange preparing the product for consumption, is also determined by production. It is exchange that brings the product to consumption wherein the product is completed. In other words, production determines the way in which consumption receives its object by means of exchange (Grundrisse 99).
  3. The form of exchange, i.e., the way in which exchange is organized “between dealers and dealers …,” is “itself a producing activity” while at the same time being “entirely determined by production …,” i.e., the mode of production (Grundrisse 99). In other words, the organization of exchange which is determined by production determines the intensity and extensity of exchange. And, only in this last instance “where the product is exchanged directly for consumption” does exchange begin to appear separately from production (Grundrisse 99).

Thus, exchange, like distribution and consumption, appears not as an autonomous activity, but “as either directly comprised in production or determined by it.” Each of these concepts: production, distribution, exchange, and consumption, exists as moments within a complex whole where each mediates and is mediated by the others, but the determinate concept is that of production in general. Thus, distribution, exchange, and consumption always return us to production.

The Transition of Money as Exchange to Money as Commodity

Thus far, I have sketched out the concepts Marx presents in the “Introduction” to the Grundrisse (85-100). The question that must now be answered is: what are the conceptual moments of money as it moves from a mere medium of exchange to a commodity necessary for the productive process? Marx provides us with a clue to answer this question when he writes “circulation itself [is] merely a specific moment of exchange, or [it is] also exchange regarded in its totality” (Grundrisse, 98). One of the specific moments of circulation, however, is money that in turn exists in its concreteness in so far as it is seen in its determinate nature, i.e., as having certain specifiable determinations. Money can be understood to have the four following moments:

The properties of money as (1) measure of commodity exchange; (2) medium of exchange; (3) representative of commodities (hence object of contracts); (4) general commodity alongside the particular commodities, all simply follow from its character as exchange value separated from commodities themselves and objectified (Grundrisse 146).

Money as the “measure of commodity exchange.” If commodity A and commodity B are to be exchanged, then there must be an existent measure or standard to which both A and B may be related or compared in order to determine the feasibility of exchanging A for B. This process of quantification takes place in thought as “both commodities to be exchanged are transformed … into exchange values and are thus reciprocally compared” (Grundrisse 144).

Money as the “medium of exchange” (Grundrisse 146). Money takes on a character of its own independent of the products to be exchanged. In other words, in order to obtain commodity B, we no longer need to exchange commodity A for commodity B. All that need be done is to exchange a socially determined representation, i.e., exchange value, which, as it is attached to commodities A and B, appears as the price of these commodities, for commodity B. This socially determined representation, i.e., symbol (money as it appears as coin or paper) of the price of commodity B, may be obtained by exchanging commodity A for money. Thus, at this moment money mediates exchange because money may be exchanged for commodities, or commodities may be exchanged for money.

Money as the “representative of commodities.” Money comes to represent commodities as it attains a character of its own. When this happens it is no longer necessary to think in terms of exchanging one commodity for another, i.e., exchanging commodity A for commodity B. At this moment it is simply possible to purchase either commodity A or commodity B, or both commodities A and B for that matter, with a socially determined amount of money. Or looking at this purchasing process from another point of view, it is possible to sell commodities A and B for a certain amount of money. Hence, commodities are said to have an exchange value that appears as a price in terms of a specific quantity of money. At the same time, money has an exchange value that appears as a price in terms of commodities. In short, a commodity is said to have a price that is attached to the commodity in terms of money.

Money as a “general commodity along side particular commodities” (Grundrisse 146). Thus, as money takes on a character of its own, it becomes an object, i.e., a thing-in-itself. It becomes completely separated from specific commodities while taking on the characteristics of a commodity. It is in its commodity character that money is borrowed and lent, and generates interest. Hence, money has the capacity to produce money and money qua commodity takes on the character of capital.

By virtue of its property as the general commodity in relation to all others, as the embodiment of the exchange value of the other commodities, money at the same time becomes the realized and always realizable form of capital; the form of capital’s appearance which is always valid (Grundrisse 146).

Therefore, money in its four moments appears as a process in which the exchange value of a product qua commodity “obtains a material existence separate from the commodity” and in so doing becomes a commodity itself (Grundrisse 145); money is produced not for its use value, but for its exchange value.

At the same time, certain contradictions corresponding to this fourfold development arise.

Firstly: The simple fact that the commodity exists doubly, in one aspect as a specific product whose natural form of existence ideally contains (latently contains) its exchange value, and in the other aspect as manifest exchange value (money), in which all connection with the natural form of the product is stripped away again – this double, differentiated existence must develop into a difference, and the difference into antithesis and contraction. The same contradiction between the particular nature of the commodity as product and its general nature as exchange value, which created the necessity of positing it doubly, as this particular commodity on one side and as money on the other – this contradiction between the commodity’s particular natural qualities and its general social qualities contains from the beginning the possibility that these two separated forms in which the commodity exists are not convertible into one another (Grundrisse 147).

In other words, the commodity exists qua commodity and qua money. In that money has now attained a character of its own, it exists independently of the commodity. At the same time the commodity exists independently of money. As money comes to exist independently of the commodity, the commodity is no longer necessarily exchangeable for money because, as Marx writes, “the exchangeability … is abandoned to the mercy of external conditions … which may or may not be present.” Thus, exchangeability becomes “something different from and alien to the commodity, with which it first has to be brought into equation, to which it is therefore at the beginning unequal; while the equation itself becomes dependent on external conditions, hence a matter of chance” (Grundrisse 148).

Secondly: Just as the exchange value of the commodity leads a double existence, as the particular commodity and as money, so does the act of exchange split into two mutually independent acts: exchange of commodities for money, exchange of money for commodities: purchase and sale (Grundrisse 148).

There is no necessary correspondence between purchase and sale which often appear “temporally and spatially separate” and for this reason their “immediate identity ceases.”

Thirdly: With the separation of purchase and sale, with the splitting of exchange into two spatially and temporally independent acts there further emerges another new relation.

Just as exchange itself splits apart into two mutually independent cts, so does the overall movement of exchange itself become separate from the exchanges, the producers of commodities. Exchange for the sake of exchange separates off from exchange for the sake of commodities (Grundrisse 148).

Exchange for the sake of exchange, according to Marx, is commerce. The purpose of exchange is the object for which the exchange exists, but “the purpose of commerce is not consumption, directly, but the gaining of money, of exchange values” (Grundrisse, 149).

Fourthly: Just as exchange value, in the form of money, takes its place as the general commodity alongside all particular commodities, so does exchange value as money therefore at the same time take its place as a particular commodity (since it has a particular existence) alongside all other commodities (Grundrisse 150).

In other words, money, as it comes to exist independently of commodities, becomes a commodity itself. On the one hand, money is a commodity just like any other commodity. But on the other hand, it is different from other commodities: “it is not only the general exchange value, but at the same time a particular exchange value alongside other exchange values” (Grundrisse 151). Therefore, money exists in contradiction with itself. But “money does not create these antitheses and contradictions; it is, rather, the development of these contradictions and antitheses which creates the seemingly transcendental power of money” (Grundrisse 146).

In conclusion, money is a specific moment of circulation which in turn is “a specific moment of exchange, or … exchange regarded in its totality” (Grundrisse 98). From the point of view of production, we see that production no longer produces products for consumption, i.e., products that are to be complete in consumption, but rather, production produces exchange values. Consumption seems to slide out of the picture. Production comes to be determined by exchange values as money which first appeared as a means of exchange comes to be the end of exchange (Grundrisse 146 and 151).

[1]See, for example, Edmund L. Andrews, “Greenspan Concedes Error on Regulation,” New York Times, , October 23, 2008 (http://www.nytimes.com/2008/10/24/business/economy/24panel.html).

Almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he [Greenspan] told the House Committee on Oversight and Government Reform.

[2] See Brian Naylor’s October 24, 2008 interview with Alan Greenspan, “Greenspan Admits Free Market Ideology Flawed,” in which Greenspan said, “We are in the midst of a once-in-century credit tsunami. Central banks and governments are being required to take unprecedented measures.” (Transcript at http://www.npr.org/templates/story/story.php?storyId=96070766).

[3] Edmund L. Andrews, notes “despite his [Greenspan’s] chagrin over the mortgage mess, the former Fed chairman proposed only one specific regulation: that companies selling mortgage-backed securities be required to hold a significant number themselves.” At the same time in the same article, Greenspan expresses his continued belief in the market: “Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets … . Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.” “Greenspan Concedes Error on Regulation,” New York Times, October 23, 2008 (http://www.nytimes.com/2008/10/24/business/economy/24panel.html).  

[4] Mary Rawson. “Review of Unequal Freedoms: The Global Market as an Ethical System, by John McMurtry, Toronto: Garamond Press, (1998). Peace Magazine 15, 3, p. 31 (http://www.peacemagazine.org/archive/v15n3;31.htm).

[5] John McMurtry. “Myths of the Global Market.” New Internationalist, issue 301 (June 2007) (http://www.newint.org/columns/essays/2007/06/01/essay/).

[6] John McMurtry. “Myths of the Global Market.” New Internationalist, issue 301 (June 2007) (http://www.newint.org/columns/essays/2007/06/01/essay/). One cannot help thinking of the recent United State Supreme Court ruling that gave corporations the right to contribute unlimited funds to political campaigns; thus the pseudo-democracy has officially become a plutocracy.

[7] George Soros. “The Way Forward,” Financial Times. October 30, 2009. (http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=11135588&fromSearch=n).

[8] Walid el-Gabry. “Soros Says Crisis Signals End of a Free-Market Model (Update 2),” Bloomberg.com, (February 23, 2009). (http://www.bloomber.com/apps/news?pid=20670001&sid=aI1pruXkjr0s).

[9] George Soros. “The Way Forward,” Financial Times. October 30, 2009. (http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=11135588&fromSearch=n). “I regret to tell you that the recovery is liable to run out of steam and may even be followed by a ‘double-dip’ although I am not sure whether it will occur in 2010 or 2011.”

[10] George Soros. “The Way Forward,” Financial Times. October 30, 2009. (http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=11135588&fromSearch=n).

[11] Sean O’Grady. “The Money Man: Super-economist Joseph Stiglitz on How to Fix the Recession,” The Independent, (February 9, 2010) (Http://license.icopyright.net/user/viewFreeUse.act?fuid-NzA3MDM4NQ%3D%3D).

[12] John Lanchester, “Bankocracy,” London Review of Books, 31, 21 (November 5, 2009): 35-36. (http://www.lrb.co.uk/v31/n21/john-lanchester/bankocracy/print).

[13] John Lanchester, “Bankocracy,” London Review of Books, 31, 21 (November 5, 2009): 35-36. (http://www.lrb.co.uk/v31/n21/john-lanchester/bankocracy/print). Lanchester cites Merkel comments after her fall, 2009, meeting with the French president Nicolas Sarkozy.

[14] V. I. Lenin, Imperialism, the Highest Stage of Capitalism in: Selected Works, Moscow: Progress Publishers, 1963. (http://www.marxists.org/archive/lenin/works/1916/imp-hsc/).

[15]Karl Marx, 1973. Grundrisse: Foundations of the Critique of Political Economy, translated with a forward by Martin Nicolaus, New York: Vintage Books. For the particulars regarding the writing and publication of the Grundrisse, see Martin Nicolaus, “Forward,” 7-66.

[16]Martin Nicolaus, 1973. “Forward,” in: Karl Marx, Grundrisse, n. 1, p. 7. Nicolaus reports that a limited edition consisting of two volumes (one published in 1939, the other, in 1941) was published in the twentieth century.

[17]Marx, 1973. The General Relation of Production to Distribution, Exchange, Consumption. In Grundrisse, 88-100.

[18]Marx, 1973. The Method of Political Economy. In Grundrisse, 100?08.

[19]Marx, 1973. Grundrisse, 101.

[20]Marx, 1973. Grundrisse, 87. Compare Capital, I, pp. 177-78.

[21]Marx, 1973. Grundrisse, 87. In Capital, I, Marx calls these “the elementary factors of the labour process” (Capital, I, p. 178).

[22]Since production (i.e. bourgeois production) involves property, since property assumes a distinction between “mine” and “thine,” and since there is a need for a mechanism whereby “mine” can be made “thine,” according to Marx, bourgeois economists have assumed that the introduction of property demands certain specific legislative and juridical frameworks to protect private property. But “history,” Marx notes, “shows common property (e.g.[,] in India, among the Slavs, the early Celts, etc.) to be the more original form, a form which long continues to play a significant role in the shape of communal property” (Grundrisse, 88; italics added.) Furthermore, Marx argues, “every form of production creates its own legal relations, form of government, etc.” (Grundrisse, 88). “All the bourgeois economists are aware of,” he writes,

is that production can be carried on better under the modern police than[,] e.g.[,] on the principle of might makes right. They forget only that his principle is also a legal relation, and that the right of the stronger prevails in their “constitutional republics” as well, only in another form (Grundrisse, 88).

[23]Marx, 1973. Grundrisse, 90-94.

[24]Marx, 1973. Grundrisse, 93.

(1) Immediate identity: Production is consumption, consumption is production. Consumptive production. Productive consumption. The political economists call both productive consumption. But then make a further distinction. The first figures as reproduction, the second as productive consumption. All investigations into the first concern productive or unproductive labour; investigations into the second concern productive or non-productive consumption.

[25]Marx, 1973. Grundrisse, 93.

(2) [In the sense] that one appears as a means for the other, is mediated by the other: this is expressed as their mutual dependence; a movement which relates them to one another, makes them appear indispensable to one another, but still leaves them external to each other. Production creates the material, as external object, for consumption; consumption creates the need, as internal object, as aim, for production. Without production not consumption; without consumption no production. [This identity] figures in economics in many different forms.

[26]Marx, 1973. Grundrisse, 93.

(3) Not only is production immediately consumption and consumption immediately production, not only is production a means for consumption and consumption the aim of production, i.e. each supplies the other its object (production supplying the external object of consumption, consumption the conceived object of production); but also , each of them, apart from being immediately the other, and apart from mediating the other, in addition to this creates the other in completing itself, and creates itself as the other. Consumption accomplishes the act of production only in completing the product as product by dissolving it, by consuming its independently material form, by raising the inclination developed in the first act of production, through the need for repetition, to its finished form; it is thus not only the concluding act in which the product becomes product, but also production produces consumption by creating the specific manner of consumption; and, further, by creating the stimulus of consumption, the ability to consume, as a need. This last identity, as determined under (3), [is] frequently cited in economics in the relation of demand and supply, of objects and needs, of socially created and natural needs.

[27]Marx, 1973. Grundrisse, 93.

[28]Marx, 1973. Grundrisse, 93.

[29]Marx, 1973. Grundrisse, 94-98.

[30]Marx, 1973. Grundrisse, 98-100.