Monday Wake Up Call – August 13, 2018

(Wrongo will be taking the next few days off. He has blog fatigue, and also needs to work on some deferred maintenance here on the fields of Wrong. He’ll be back later this week, unless events require him to jump back in sooner.)

The Daily Escape:

Abandoned house, Wasco, OR – 2018 photo by Shaun Peterson.

We wake up today to Yanis Varoufakis, the former finance minister of Greece’s, review of “Crashed: How a Decade of Financial Crisis Changed the World” by Adam Tooze posted in The Guardian. Tooze is an economic historian at Columbia University in NYC.

This isn’t a review of Tooze’s book, which sounds fascinating. Rather, it’s a meditation on one of Varoufakis’s ideas in his review of the book. Varoufakis says: (emphasis by Wrongo)

Every so often, humanity manages genuinely to surprise itself. Events to which we had previously assigned zero probability push us into what the ancient Greeks referred to as aporia: intense bafflement urgently demanding a new model of the world we live in. The financial crash of 2008 was such a moment. Suddenly the world ceased to make sense in terms of what, a few weeks before, passed as conventional wisdom – even McDonald’s, for goodness sake, could not secure an overdraft from Bank of America!

Tooze focuses on the causes of the Great Recession in 2008, and the implications for our 10-year long economic recovery. He observes that neoliberalism’s mantra about markets had to be shelved to save the US economy: (emphasis by Wrongo)

Whereas since the 1970s the incessant mantra of the spokespeople of the financial industry had been free markets and light touch regulation, what they were now demanding was the mobilization of all of the resources of the state to save society’s financial infrastructure from a threat of systemic implosion, a threat they likened to a military emergency.

We have no idea where the current aporia will take us, particularly since this “moment” has already lasted 10 years, and the hard-won economic progress may be easily reversed. Varoufakis continues:

Moments of aporia produce collective efforts to respond to our bewilderment. In the late 18th century, the pains of the Industrial Revolution begat free-market economics. The crisis of 1848 brought us the Marxist tradition. The great depression produced both Keynes’s General Theory and Friedman’s monetarism.

We are clearly at a point of intense bewilderment. What direction is correct for our economy and our society? The concept of aporia may explain why no real solutions have emerged in the past 10 years.

Tooze thinks that the world economy today is at a similar point to where it was in 1914. That is, we’re headed to a global war based on the competition of the advanced economies for resources (this time, it’s markets, water and energy), while the Middle East is at war, competing to determine which variant of Islam will be transcendent.

Varoufakis thinks we are more likely to be where we were in 1930, just after the crash. Since 2008, like back then, income inequality has continued to grow, and we have a potential fascist movement in the wings. Varoufakis asks if today’s politicians have the vision, or the ability, to corral corporatist power on one side, and the emerging nationalist movement on the other.

We’re into the post-2008 world, one in which the owners of society, the largest corporations along with the international capitalists, portray austerity as our only answer. They stress the need for continued globalization and the upward transfer of wealth via tax cuts as the best chance to survive and prosper after the 2008 crash.

This is global capitalism at work: Continuing to extract all the wealth that it can in every economy with a compliant government.

People are getting near a breaking point. They want a better life, and they want to regain political control. The challenge for capitalists and their politicians is: Can they continue to distract the base, keeping them compliant with corporatism and the financialization of our capital markets?

Capitalism ought to fear nationalism, because a nationalist movement could easily rally the poor and the middle class against Wall Street and corporate America. But, for the moment, capitalism seems to be stirring the nationalist pot. To what end?

Whether a fight against Wall Street and Corporatism will emerge, whether it will evolve into a fascist-style rallying cry remains to be seen.

We’re too early in this iteration of aporia to know or to see where we are going clearly. We need an alternative to today’s global capitalism because the track we’re on could easily turn the world into a gigantic Easter Island-like landscape.

What alternative to today’s capitalism (if any) will develop? Will ordinary people have some say in the alternative?

Stay tuned.

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Is a New World Order Coming?

In the prologue to his 1987 book of essays, Hidden History: Exploring Our Secret Past, historian Daniel Boorstin wrote about “the Fertile Verge”, a place where something and something else, something unexplored, meet.

A verge is like a frontier region, a place where ecosystems, or ideas, mingle. Verges between land and sea, between civilization and wilderness, between state and national governments, between city and countryside – all are a part of the American experience. Boorstin said that the movement westward by colonists into the American continent was a verge between European civilization and the culture of the American Indians.

America is clearly now on the verge of something new, possibly a big change in the world order. The old rules are broken. New states may emerge out of conflict in the Africa and the Middle East. Our old allies see their future drifting away from ours. The old order is rapidly disintegrating. But is there a new order that will replace it? Will it happen only in America, or will it be a global change?

Consider the following about America:
• In August, the Wall Street Journal reported on an FBI database that contains a file on one in three adults, or 77.7 million Americans.
• Our schools aren’t succeeding,
• Our infrastructure is crumbling,
• American corporations are heading for the exits (to tax havens).
• 45 Million Americans live in poverty, and that number hasn’t changed since 2010.

We are taking on some of the trappings of a police state. And there is no reason to suppose that the FBI’s (and the NSA’s) increased sophistication in domestic spying, and data storage and retrieval will do anything but make that trend more efficient, and penalties more severe and long-lasting. That is not a prescription for maintaining a united Homeland.

Our coffers are shrinking, yet we march off to one risky war after another, with all of those billions going where, and for what? Our Republic now seems to want only compliant workers and consumers. All others need not apply.

Last bit of history; the Principate, (27 BC – 284 AD) was the first stage of the Roman Empire. The Roman Empire succeeded the Roman Republic. The Principate was characterized by a concerted effort by its Emperors to preserve the illusion of the continuance of the Roman Republic. And just like the Principate, the illusion of the American Republic is what now remains.

The order of things that underpinned our era is in crisis. Part of peoples’ concern is the sense that the old order isn’t holding, but we’re not quite yet able to see the terms of any new order, one that may be based on different states, different global powers, or on different principles.

So, what’s next for America? A nation founded explicitly on an idea of individual freedoms and representative governance, the US has always identified its success with the spread of liberty and democracy. Today, those very rights are threatened here at home.

The post-WWII bipolar world ended when the USSR collapsed under their own weight. That brought about a different world order, a uni-polar era, with the US as the sole superpower, possessing the only military strong enough to deter any other potential rival from engaging in aggressive war.

Even that order is ending. We are on the frontier of something completely new in global politics in addition to change in our domestic society. Consider what is happening around the globe:
• Our people see what’s happening in Ukraine; what’s happening in Syria, with what Assad has wrought on his own people; in Iraq, where Sunni, Shia and Kurd fail to compromise, even in the face of invasion; the war between Israel and Gaza; the challenge of ISIS.
• Libya is in civil war, Pakistan is close to one, and Afghanistan’s democracy may be on the verge of paralysis. Egypt again has a military-dominated government.
• Add to these troubles the relationship between the US and China, that bounces between pledges of cooperation and public recrimination.

In Africa and the Middle East, the 21st Century has collided with the 8th Century, and the 8th Century is armed with 21st Century weaponry, so it is winning on the ground. An entirely new paradigm for deciding our priorities is required.

What will that new paradigm be? The most important questions to ask are – what is in the best interest of our country?
• What do we seek to prevent, no matter how it happens, and if necessary, alone?
• What do we seek to achieve, even if not supported by a multilateral effort?
• What do we seek to achieve, or prevent, only if supported by an alliance?
• In what should we not engage, even if urged on by a “responsibility to protect”, or by a multilateral group or alliance?”

All of our intermediating of trouble in the world has weakened us. Continuing to do so will only hasten our eclipse as the indispensable power. Our role in the world depends on a strong economy and few structural/societal problems at home. Shouldn’t taking care of the Homeland be our primary concern?

We may feel that a new “Fertile Verge” is almost upon us, but no one knows yet what it will be, or if we will make it across to the other side.

Or, if crossing to the other side will be better for America.

 

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