Sunday, February 15, 2015

Greece, Ukraine & NeoLiberalism

I suppose my worldview is somewhat Manichean, but in it, despite darkness, light always remains. As such I accept that the Original Sin of the American New Deal was the Jim Crow South of my childhood. Be that as it may, the export of the New Deal to the ruins of Europe at the end of World War II was incapable of hauling that historical dereliction with it. The Europe structured by The Marshall Plan was one of political Democratic Socialism overseeing a socially constrained Capitalism, the basic form of the New Deal superimposed on the devastated civilizations of Europe and Asia.

Roosevelt was unable to impose his liberalism thoroughly on even the American system and by extension, even less so in the devastated domains of American victory in the war, a challenge that fell to his less than visionary successor, Harry Truman. While Marshall ended up directing the reconstruction plan in Europe along the lines of the New Deal, MacArthur had a more royalist vision in Asia where he whitewashed the atrocities of Hirohito and reupholstered the Japanese Imperial throne. This darkness and light infected US foreign policy from the armistice until the 2000 election when the darkness gained full control of the foreign apparatus of state here.

This contest of darkness and light began in Greece and let us hope it will end in Ukraine. While the State Department dubbed Orwell and Hemingway as "premature anti fascists" for their Republican sympathies in the Spanish Civil War, George Polk pioneered "un-American activities" by supporting Republican efforts in Greece against US funded militarist authoritarians in the post war struggle for the political alignment of the Balkans. Polk was on the right side of civilization then and had his side been allowed to succeed the miss-rule of US puppet oligarchs succeeded by a CIA installed Military Junta may not have saddled the hard working people of Greece with the onerous debts with which they now struggle.

The Democracy that returned to Greece with the end of military rule in the 1970s was a nearly pure NeoLiberal one where the powers of violence embodied by the military and of money embodied in a deeply corrupt elite were both beyond electoral reach. Seen at the time as a necessary compromise that would allow Greece to advance to more normal European structures and status over time, it is now clear there was never any attempt at such an advance. In fact the form that government took at that moment has been the NeoLiberal ideal toward which increasingly the darkness of US policy has encouraged all its "allies" to evolve.

Between 1946 and 1980 the forces of darkness and light struggled for control of US foreign policy with darkness descending on Syria in 48, Iran in 53, Guatemala in 54, Indonesia in 58, Iraq in 60, Chile in 70 and Argentina in 1976. In all these instance, while the US rhetoric was about freedom, the actual policies that ensued were about political control for economic extraction with popular living standards suffering severely in all these nations while corrupt elites prospered. This was policy outside our direct dependencies where Marshall and MacArthur offered structures that integrated with the American system . These clandestine interventions external to our sphere of direct control offered a taste of what was to come as Neoliberalism came home to roost.

Wherever effectuated, the New Deal was enormously successful and popular, solidifying a new American middle class and creating them from scratch in Europe and our Asian dependencies between 1946 and 1980. To the extent that America has any positive associations abroad, it is the result of these policies in that period. The traditions from that period at home were strong enough to hold money power in check even through the turmoil of the Civil Rights era, but when the darkness at State drew foreign policy neophyte LBJ into Viet Nam while he was struggling to finally deliver on the "promissory note" of emancipation and the eradication of poverty, the post war structure was stretched beyond its resiliency.

In passing Civil Rights legislation Johnson shattered the New Deal political coalition permanently: Southern conservatives could only countenance economic justice for their bigoted white brethren and balked at economic inclusion for blacks, shifting the South within a half generation from bedrock Democrat to bedrock Republican and setting the Republican Party on the racist and economically exclusionary path it has been on since. When Nixon, ironically the last liberal American president, ended the convertibility of the dollar under the Bretton Woods system in 1971, dislocations began that would unravel the economics of the New Deal as well.

By the 70s, Americas business elites were chafing against the popular control of economic direction embodied in core Roosevelt era legislation. At the US Chamber of Commerce, a private association of business leaders, Lewis Powell penned his infamous memo that outlined a program that can only be described as a private assault on democratic participation in the economics and politics of the US
Federal and State governments. Through this private economic elite, the imperialist policies of MacArthur's Asian system were brought home to subjugate American citizens to an economic power similar to that used to control our Asian dependencies after the war. What set this system apart from Marshall's in Europe was that the Asian one left historical aristocracies and economic elites in tact in a system of centrally coordinated corporate Keiretsu in Japan and Chaebol in Korea. These Asian forms anticipate our destination as the outlines in the Powell Memo have been implemented to create an American corporate aristocracy.

Classical Liberalism had been an ever expanding set of institutionalized rights that had culminated with the UN Universal Declaration of Human Rights. These were rights people were universally entitled to. The essence of Liberal constitutional government was that checks and balances would be applied to government authorized concentrations of power that prevented those authorized concentrations from threatening these inalienable individual rights. The Neo in Neoliberalism comes from the application of these universal human rights to corporate entities, re-imagining government as the guarantor of the income streams that are the raison d'etre for corporations. This shift in perspective has fundamentally altered the meaning of US Constitutional history from a republican form that ennobled its people to an imperial one that glorifies conquest and extraction.

The MacArthur vision of political economy in Asia dovetailed nicely with this corporate vision as it had always been deeply skeptical of democratic governance. The more authoritarian and corporatist spirit embodied in his management of post war reconstruction in Japan and Korea came to inform American militarist intellectuals who would latter come to be known as Neoconservatives. But like the domestic original sin of Jim Crow, Roosevelt himself had committed its foreign policy equivalent in his deal with King Abdulaziz of what would become Saudi Arabia in supporting a theocratic totalitarian monarchy to ensure dependable access for the US military to whatever fuel may be needed. This embedded within the core New Deal both a military affiliation with authoritarianism and an unselfconscious inclination to grow the economy on the basis of cheap energy.

That great world wide middle class creating boom had been made affordable to elites historically jealous of their own privileges by the ease with which natural resource consumption added wealth without detracting from the entrenched positions of the already wealthy. A symbiosis thus developed between American elites and middle eastern despots who by 1971 had become accustomed to accumulating gold as reward for their dependability. When Nixon ended convertibility of the dollar to gold, OPEC was created to try to force the US back into the old terms. The US didn't yield and by opening up the natural gas market at home, once investments there began to produce, OPEC's embargo was overcome.

But the oil price shock had been seized by the Chamber of Commerce to re-define the terms of economic and political engagement by corporations.  Because the US postwar boom had depended on cheap oil, the OPEC embargo introduced a cascading inflation into a US economy already operating near capacity to support both the war effort and the legacy policies of the New Deal. Powell and his supporters took this moment of national crisis to engage their mouthpieces in a well funded and coordinated "public relations" (propaganda) campaign that succeeded in tying inflation in the popular mind to collective bargaining agreements and in particular "cost of living" wage adjustments claiming they locked the system into an inflationary cycle. War and oil were, of course, left out of this story and labor rights alone blamed for what was in fact an external shock.

To be clear, the cause of inflation was the oil embargo and the end of came from  improvements of the domestic natural gas market that created a competitive alternative to OPEC oil. The Fed action by Paul Volcker commonly credited with ending "stagflation" did in fact end labor rate indexing to inflation and with it the "stagnation" part of stagflation. Along with that went labor access to any benefit from its improved productivity to this day. This was the seminal systemic change that has fueled Neoliberal wealth concentration ever since: money from increased productivity that does not go to increasingly productive workers goes to increasingly rich capitalists. By this point Reagan and Thatcher were in office here and in London and the forces of darkness in US/Anglo foreign policy became entrenched at the top of domestic politics in both countries.

From that moment we have clearly become the global bully, picking on anyone and everyone as it suits our perceived political needs of the moment. I don't know of any popular, local good to come of any of our foreign actions since Korea beyond occasional natural disaster relief, and I know of a great deal of harm in Central America, Mexico, South America, Africa, the Mid-East and Western Asia. At the same time, "de-regulation" and "reform" took hold here incrementally freeing capital and burdening labor. Reducing citizens to "consumers" the new ideology ennobled greed and rapaciousness. The 80s and 90s were a non-stop assault on all the constraints on money power that had been central to the New Deal and remaking our system into a vast American Keiretsu where the authority of government is deployed to protect only the rights of its corporate citizens.

Buckley vs Valeo began the process of the enfranchisement of capital that was finally secured at the cost of any sane reading of the Constitution with the Citizens United ruling. But by then there had already been a silent coup when the dark forces of US foreign policy hijacked the 2000 election to install a consolidated NeoLiberal (economic)/ Neoconservative (political) government in the White House. What ensued was eight years of NeoCon supremacy shredding any constraints on executive action first abroad and then at home.

This was followed in the next administration by six years thus far in which the Neoliberals established their dominance when they were decisively bailed out by the combined Fed and Treasury in the first months of the present government. The use of fiat money by the combined Fed/Treasury to ensure that no major investor or banker incurred any real risk exposure or losses validated the most rampant and irresponsible speculation while simultaneously guaranteeing the beneficiaries of this financial Bacchanalia adequate cash flows to sustain their dominant position in paying for a form of electoral politics where qualification for office was achieved by the successful solicitation of bribes, euphemistically called "campaign donations".

The 2000 Florida Neoconservative coup installed unconstrained power in the White House. The 2008 financial coup installed a Neoliberal financial oligarchy above the raw power of the executive. By bailing out the Western banking system, Obama saw to it that the financial coffers of the oligarchy were finally secure from any uncertainty in the real economy, thus setting finance definitively above the militaristic Neocons who remained in fact constrained by what could actually be accomplished in the physical world. Finance, in the post Bretton Woods world, has become a pure political force: it can accomplish whatever can be bought, and for those things that can't, it can create the appearance through propaganda.

The institutional form at which we have arrived is virtually identical to the militarist oligarchy we installed at the end of the Greek Civil War sixty years ago. As corrupt, as capricious and as venal in power, the main difference is in scope: the US system now piggybacks on the previous Anglo one to dominate the political economies of four continents entirely with active and bloody ambitions in another two. But the scale and visibility of this system is beginning to create such massive and obvious contradictions that the ideology that binds it appears to be freezing into an  ice like fragility, contradictions now most visible in Greece and Ukraine.


Philip Bobbit's 2002 book "The Shield Of Achilles" is an interesting combination of great history and bizarre prognostication in the spirit of, though political inverse of, Marx "Das Kapital" and "Communist Manifesto". Bobbitt outlines a history of the relationship between war and law in Europe over the last half millennium. The central thesis is that the powerful struggle for power until such time as the struggle becomes more expensive than the reward for success. Of course, people being people, there's a strong tendency towards overshoot leading to a great deal of unnecessary damage. When, periodically the waste becomes so epically obvious that even its chief perpetrators can no longer deny it, they get together and codify mutual constraints they agree to let govern their behavior until such time as new sociopaths who've forgotten the basis of the prior agreement or feel for whatever reason they no longer need abide by it come to power.

The struggles and the waste force the sociopaths who generally come to dominate systems of organized violence to develop an understanding of the power of human systems, technologies and infrastructures, they would otherwise be uninterested in. The front line weapons are always of interest, but how and why they got there are essential details that must be forced into the consciousness of the powerful, the more psychotic, as a rule, the less interested. Once you've sustained armed conflict for long enough, however, you've been forced  by virtue of having sustained it to understand the long and complex logistical and even cultural chains that maintain the flows of material and people necessary to sustain effectiveness. This is not knowledge sociopaths or psychopaths are naturally inclined to. Power is all they really care about, but the smart ones learn along the way that attending to these systems (technologies and cultures) is the only way for them to sustain power once they have it.

So Bobbit takes us through the evolution of European governance and its history of defining crises: the transition of forms from "Princely State" to "Kingly State" with the Peace of Augsburg in 1555; the change from "Kingly State" to"Territorial State" resulting from the Peace of Westphalia, thirty years of untold slaughter to get to that one; "Territorial State" to "State Nation" with the Treaty of Utrecht; "State Nation" to "Nation State" at the Congress of Vienna of 1814/15. To this point his is great and useful history, at least from my perspective: it outlines and clarifies large historical processes around an understandable organization of forces in increasingly modern civilizations, accounting for all the major cultures and technologies in contention. Looking at the inclinations of history's victors and understanding the legal structures of constrained power they bequeathed us is very useful. It gives a why to the how and what of history's larger forms.

Apparently blind to the present psychopathology of power, Bobbitt becomes as ideological and daffy as Marx at his worst when he begins to discuss the power relations he is himself embedded in. He struggles mightily to elide the modern Welfare State, the result of World War I, the Great Depression and World War II into what he calls a "Market State" where "markets" are granted the same kind of agency Marx and Engles utopia granted "dialectics". And markets don't disappoint, being at least as suited to the task of explaining the future as dialectics: that is not at all. But this is where we arrive back at out main thread: this elision of markets and welfare is the defining characteristic of Neoliberalism.

Bobbitt wrote his book in 2002 at the pinnacle of America's "unipolar" moment after Fukuyama had declared the "End of History"with the triumph of the very notion then confusing Bobbitt: reified "free markets". The New Deal system, buy managing economics according to popular needs as expressed both in political votes and by purchases in the market place (that people had purchasing power to express demand and thus steer the macro economy was central to and the main loss from the New Deal), had created a set of deep infrastructures that saw to it that whoever worked hard and contributed to the system was rewarded in rough proportion to their contribution. This was a social/political management of a market system where essential functions that benefited from network effects, things like roads, utilities, basic research, education, health, clean air and water were managed, to their degree of network or necessity, or directly run by government according to the will of the electorate as expressed in elections and through market participation.

Markets were structured to ensure positive outcomes and distributed benefits by popular government. To the extent all this worked, it became largely invisible. By the time of the OPEC oil embargo the US Chamber of Commerce affiliated executives and individual funders were ready to take the "anti-Communist" rhetoric of free markets and re-purpose it against American Labor. By 1989 the "de-regulatory" "reformers" had broken labor, stigmatized concern for others as a sentimental weakness, even folly, and rescinded the Fairness Doctrine opening the communicative infrastructure of the erstwhile US democracy to the nonstop drum beat of anti-state, I would argue treasonous, propaganda. By the time Bobbitt wrote his book it was dogma amongst America's political elite that markets were the solution to the problem of government, in absolute denial of the realities of the New Deal's globally transformative success wherever it had been tried a mere generation before.

The Chamber of Commerce project resulted in dozens of well funded institutions that support hundreds if not thousands of "scholars" researching and writing an alternate history in which all of the US successes after 1932 were in spite of rather than because of the New Deal. A generation of young conservatives have now grown up in an alternate world of fact free history built around the propagandistic needs of the executives of powerful and rich corporations and other businesses. The idealization of greed and economic power embodied in this Neoliberalism fused naturally with the supposed "real-politic" of the foreign policy Neoconservatives who's supposed hard headed values idealized raw force and brute power to the same degree their Neoliberal brethren worshipped greed.

At about that moment when the Neocons and Neolibs fused in DC, our European dependencies embarked on their unified currency experiment and introduced the Euro. Its enabling legislation was written around the Neoliberal reified ideal of markets as the solution of the problem of government, cutting out all the electoral feedback mechanisms to economic activity. At about the same time, the Neocons engaged whichever of the former Soviet dependencies of central Europe they could in an eastward expanding NATO, in direct contravention to the promise Reagan had made Gorbachev when the Soviet Union unraveled. Neocons impose by force the "reforms" necessary for Neoliberals to integrate new territory into their system where the rich get richer and the poor poorer: if you know any exceptions, I'd love to hear them.

The Euro, by giving all of Europe interest rates suitable to the German economy created credit bubbles in all the smaller and less developed European economies: be clear on this, Southern Europe could not have borrowed from Northern Europe without willing lenders in the North. The Northern cries we hear of Southern abuse are disingenuous: Germany's pre-Euro Hartz reforms had imposed lower wages on the German workforce in exchange for job security. This imposed re-distribution within Germany guaranteed a current accounts surplus for Germany as her workers could no longer afford their own output. As Germany's export surplus grew, the holders of that surplus needed places to re-cycle it: this was the exact same problem OPEC developed after the end of dollar convertibility when OPEC princes began to ship surplus capital back to New York where it was lent out equally irresponsibly to Asian, South and Central American countries with the same abandon German and French banks loaned Euros to the South of Europe.

Just as it had not been the behavior of South and Central Americans that had changed with the PetroDollar crisis, it was not the behavior of Southern Europeans that changed during the Euro boom: it was the behavior of the Northern lenders that became newly irresponsible. Since then, the lack of democratic controls for economics in the Euro zone have been exploited by Northen bankers to force the South to honor the unplayable debts the Northern banks themselves made in violation of their own historical lending standards. So the Neocon use of blunt power abroad, un-legitimized by any electoral appeal, is now being used across borders within the EU to enforce the benighted vision of Neoliberal markets without government. This is the ideological system that explains the intransigence of northern bankers in the face of obvious humanitarian disaster in Greece: the limits of greed and power are laid bare where no moral resolution can be reached without first abandoning the utopia of markets, greed and power that form the essence of the Neoliberal world view. In a few short years, this deflationary insistence on debt service in shrinking economies has had the same affect as the 30 year war on labor in the US: to eliminate the populations ability to steer the development of the market by expressing demand for goods and services in it through the simple expedient of being denied incomes.

The NATO expansion into Eastern Europe has had a similar blindness to the real needs of real people on the ground. Latvia is held up as the paradigm of combined Neolib/Neocon policy where this small Baltic state has shrunk its way to success becoming both a NATO base and a de-populated shell of its former self where outsiders can afford a great life at the expense of what is left of the locals. The Troika plan for Latvia's recovery was to shrink to growth through austerity and alone amongst European countries, the policy has "worked". Latvia "succeeded" by exporting a third of its population. Now, while concerted power from the center of the Euro zone was able to impose this outcome on this tiny marginal state, what is implied in making this happen for the balance of the zone? Export of a third of the population? To where? But this appears to be the active policy in Ukraine.

Ukraine is deeply integrated into the Russian economic system, heir to the collapsed Soviet Empire. The reality remains that the people of Ukraine were a generation ago governed by Moscow and integrated into what was then one of the worlds largest economies. All the investment and development from that era remain on the ground in Ukraine along with the culture and people that once made it all work, all this is now being dismantled in the east by artillery fire. Destruction of infrastructure and displacement of population by civil war, funded jointly by us and I suspect by Russia, though our dark State Department is strangely laking in credible evidence of Russian involvement while our own is quite transparent, right down to our funding and supplying Nazis, it makes one wonder.

A US sponsored uprising in Ukraine in 2004 engaged the Ukrainian population in the hope of a New Deal style intervention, the legacy of the post war boom, but after the government change we more or less abandoned Ukraine to its fate as a dependency of Moscow. As Obama repeatedly reached out to Putin to manage our disasters in the middle east and actually listened to Putin when the Saudis wanted us to invade Syria last year, the Neocons at State stepped up their involvement in Ukraine to cut Obama off from Putin and regain control of the wars they and their friends profit from across the mid east. In all these Neocon efforts, resource command is the justification for wars contracted privately to companies they are affiliated with by the US. To end these wars would end the gravy train. The people on the ground are either tools or impediments toward the goal of war and resource extraction.

Meanwhile in the EU, on the economic front, populations are being reduced similarly to either tools of debt collection or impediments to it. As the US has drawn Europe into the fight we've picked in Ukraine, with suprising clarity we see how economic policy drifts into military policy as the Fed/Treasury and SWIFT payment systems have been weaponized and debt obligations are used to force an unwilling population into war on our behalf. The policy similarity to the humanitarian crisis in Greece is striking: dismantle infrastructure and displace people so that power and money can do as they please with real resources (other than people of course, they are seen in the Neolib world as only costs and in the Neocon world as bloody tools).


This is the end game of Neoliberalism. Either we will advance the project by exterminating populations and re-drawing maps to give money claims absolute value, even that to end human life, or we will end the psychotic project of Neoliberalism itself. Rome collapsed when it could no longer enforce the debts of its subjects, but hadn't yet developed the technology to take the world down with it. The centrality of money claims to the Neoliberal vision guarantees we will not stop the destruction of the global environment, the only habitat we have, until the Neoliberal elite are forced themselves to pay the money cost of the externalities they benefit from. The terms of the system are so obviously at odds with the propaganda used to justify it, how much longer will we allow the insanity to proceed? The straight forward candor with which Tsipras and Varoufakis proceed in Greece gives enormous emphasis to all the propaganda and lies told against them. That the Ukraine is as yet not perceived as the "Cuban Missile Crisis" of our time beggars the imagination: Russia wants war, look how close they put their country to all our bases!

Even through the lens of Bobbitt's vision the system and its values make no sense. The territorial Nation State has resource diversity that a vertically integrated corporation might exceed by contracting where that state must rely on treaty. But is a contract some how more inviolable than a treaty? By who's force? In addition a state can make psychological claims on citizens that corporations will never be able to make on employees. One can imagine a corporation offering enough benefits to sustain similar claims on its core employees, but what then happens when a market setback renders those benefits no longer affordable? In duress a state falls back on the the collective action for collective purpose of the citizenry, a market entity has no such fall back position, and if it were run so well that it did, with both employee loyalty and the institutional support to justify it, the business would be a state in all but name and in all likelihood, in search of resource access, would soon embody itself physically on a territory.

So we come full circle. Human organization precedes the market, in fact makes markets possible. Economies exist for the use of people, not the other way around. And civilization is the ground on which the benefits of economic activity can be effectuated and distributed. All the institutions and technologies with which we live are at our disposal, we are not at theirs. And sooner or latter a leader will again arise that realizes all of this and by enabling citizens to make their world better that leader will again begin making a stronger nation than any of those now extant who choose to see their people as extractive resources rather than the harbingers of a better future. Greek debts are unpayable and should be written down by the irresponsible creditors who could have told at the time they made the loans they were unpayable. Ukraine should be federated and demilitarized and the US corporations with interests there should be bought out by State so that we can leave that region to heal itself: it is closer to Russia than Cuba to us, we have no business there with weapons other than to threaten our own survival.

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