The ruling class appears to have just barely flattened the Trumpism curve. A powerful second-wave Trumpism is inevitable.
We have to carefully distinguish
between two very different concepts, both based on the word “Trump”. First there is “Trumpism” which is an
ideology. The overarching idea behind
Trumpism is to make the GOP a working-class oriented party. The key policy aims of Trumpism are worker
scarcity and anti-imperialism. Worker
scarcity is achieved through immigration restriction and protectionist trade
policies. This is called macro-scarcity as it happens at the level of the nation-state. Labor unions attempt to create "micro-scarcity" at the level of the factory floor. Micro-scarcity is nearly impossible within a larger context of labor abundance.
So together in terms of policy, we have the
Trumpist Trinity, anti-immigration, trade restriction, and anti-imperialism.
This is the ideology that Trump ran on and rode to victory in 2016. This is the idea behind Trumpism.
The US has always featured two political
parties that serve ruling class interests;
Huey Long described it thusly, “They've got a set of Republican waiters
on one side and a set of Democratic waiters on the other side, but no matter
which set of waiters brings you the dish, the legislative grub is all prepared
in the same Wall Street kitchen."
Trumpism attempts to force one group of waiters to get their grub from
the working class’ kitchen. This is
obviously an ambitious goal. And a goal that threatens ruling class economic interests. This is one reason Trumpism is so ferociously bashed by ruling class media outlets.
Now comes a crucial distinction. In addition to the ideology of “Trumpism”
there is “Trump”, the man and his brand.
At best there is only a tenuous relationship between Trumpism and
Trump. To some extent this is natural as
ideas never remain pure for long when poured into the cauldron of reality. With that in mind, we can see that 2016
candidate Trump was relatively Trumpist but President Trump was less so. Nonetheless, salaries
for the bottom 25% of workers did have the highest rate in increase during his
term (through 2019). This represents the
first true redistribution of wealth downwards in the 21st century. But
in 2020, Trump put Trumpism on the backburner and instead ran mainly against the ruling class media but crucially downplayed subversive Trumpism in the process.
Now of course Trump is an oligarch and so belongs to the ruling class. But
within oligarchy, the only people who can challenge the existing order are
oligarchs. He committed massive class
treason in 2016 in order to serve his narcissistic need for recognition and
power. In no way should Trump be
idealized as altruistically caring about the working class. Trumpism was not much more than a means to an
end. Trump’s end is and always will be
Trump, not Trumpism per se. But none the
less Trump exploited and brought to life Trumpism and his motives for doing so
are irrelevant. And in the end the working class did benefit, particularly the Latino working class.
Trumpism is not a revolutionary ideology in
the correct sense of the term. It is an
incrementalist approach that seeks to better the material conditions of the working
class but within the current capitalist power structure. It posits a class struggle ideological
superstructure which is radical opposition to the globalist ruling classes
insistence on an identitarian (politics of race, sex, etc) perspective. The ruling class strategy in the US is to
decorate with masks of “diversity” the ugly visages of class dominance. Thus Obama’s and soon Kamala’s pro-ruling
class policies cannot be criticized for fear of being abused as a “racist”.
Trumpism’s non-revolutionary aspect is
similar to social democracy, as was championed by Bernie Sanders in 2016. In 2020 Bernie unfortunately fell to the dark side of identitarian politics, which
are necessarily the enemy of class politics and the most effective class
warfare sludge hammer in the ruling class’ tool box.
The key difference with social democracy is that Trumpism relies on labor markets to improve
the material conditions of the working class.
A tight labor market necessarily transfers wealth from the rich to the
poor in the form of decreased profits for the rich through increased salaries
for the poor. In fact far from there
being any contradiction between Trumpism and social democracy there is a mutual
dependence between them. The public
education, health, and support institutions of social democracy can only be
supported and revitalized by a prosperous working class. The key idea of
Trumpism is that the state asserts its borders to create labor scarcity. The great problem of Trumpism is that the
state is everywhere a tool of ruling class oppression. Borders are the battle lines of the struggle. Often called nationalism, Trumpism would be more precisely labelled as "borderism".
Trumpism stands in opposition to
globalization; whose goal is worker abundance which necessarily drives wages
down and increases oligarchic wealth. Workers of the world compete. US
led imperialism, especially in the Middle East is also a striking feature of
globalization. The new Biden coalition is a reactionary mix of Neoliberals and
NeoConsevatives. Their mission statement
is: Invade the World / Invite the World.
Trumpism stands in opposition to both Neoliberalism and Neoconsevatism. The place of a nations army in Trumpism is within a nations borders, not spread out over the globe in nearly 800 military bases located in 70 different nations.
Neoliberalism is Capitalism’s attempt to destroy the nation-state's ability to limit Capitalist profits through borders and regulation. Worker abundance is just one of
many Neoliberal goals. National borders represent barriers hindering capitalism’s fundmental mission of maximizing profit by producing commodifies with the cheapest
labor and selling them to the wealthiest consumers. Nation-states can also
impose regulations (environmental, worker, etc) which also limit capitalist
profit. Free trade allows corporations to relocate factories to nations with
the lowest salaries and the worst environmental and worker protections. For
those jobs that cannot be transferred, policies such as California's Prop 22 is the thin edge of the
neoliberal wedge that is constraining the nation-state from protecting workers.
NeoConservatism is the ideology behind on the one hand US military’s
global full spectrum dominance and more particularly a mechanism that sends
healthy young Americans to die for Israeli interests in the Middle East. Neocons were the architects of the Iraqi
invasion, but were shocked by candidate Trump's attempts at vilifying them. The ruling class media instituted a
reconciliation process where by evil neocon war pigs were transmuted into shiny knights
in armor through their denunciations of Trump.
St. John McCain is a prime example of this as is George W. Bush. Dick Cheney and Henry Kissinger are held in high regard by Joe Biden.
Ruling class elements within the GOP have traditionally attacked unions
in order to minimize worker micro-scarcity. What is inexplicable is when unions
attack Trumpist attempts to create macro-scarcity through the use of national borders.
A united Union/Trumpist front is required against ruling class interests.
Struggling for worker scarcity does not mean one “hates” the workers the ruling
class is importing in order to create worker abundance. This is to accept the
ruling elite’s identitarian frame, which boils down to: class struggle is
racist: that the ruling class is
benevolent and kind and for purely altruistically loves to import loads of poor, docile workers, while evil native workers hate them because they are taking their jobs. The ruling class media preaches: Oligarchs + cheap labor immigrants = good. while Native workers militating for their class
interests = bad. The key goal for Trumpism is to flip these equations.
Trump the ruler was presented with the
greatest gift a border-loving Trumpist politician could ever ask for:
Covid-19. But instead of exploiting this
crisis like Viktor Orbán did in Hungary,
Trump stabbed Trumpism in the back by turning himself into a useless
libertarian during the crisis by refusing for example to push a law that
requires home manufacturing of all critical supplies and in never closing the
borders properly. He acted like a narcissistic clown in the early days of the
crisis and deserves to lose just for that reason.
The ruling class response to Trumpism is always identitarian politics: noble ruling class oligarchs and their spokespeople screaming that the dirty
peasants are racist. What the US ruling
class must always do is project their racism onto the peasants, who white or
black, both suffer economically from racial oppression. Mao Tse-Tung gave this astute analysis of US
the final analysis, national struggle is a matter of class struggle. Among
the whites in the United States, it is only the reactionary ruling circles who
oppress the Negro people. They can in no way represent the workers,
farmers, revolutionary intellectuals and other enlightened persons who comprise
the overwhelming majority of the white people. At present, it is the
handful of imperialists headed by the United States, and their supporters, the
reactionaries in different countries, who are oppressing, committing aggression
against and menacing the overwhelming majority of the nations and peoples of
the world. We are in the majority and they are in the minority.
So US racism is fully owned and perpetuated
by the ruling class: wealthy oligarchs (including Trump), the media, Wall
Street, CIA, FBI, the military industrial complex, multi-national corporations,
Silicone Valley Tech, Hollywood, etc.
Where there is power there is racism, where there is powerlessness there
may be bigotry but not racism. The above
lineup of ruling class racists, except for Trump, is the Biden coalition. The multi-racial and multi-religious ruling class goal is to place an “enlightened person” mask over naked and
rapacious ruling class greed and oppression.
Under Biden, globalization will once again increase
the pace and amplitude of the immiseration of the working class. As a result, resistance to
the dominant economic paradigm of Neoliberalism will only grow on both the progressive left and
the popular right. Previously elections
in the US were between center left and center right factions fighting for the
right to serve the ruling class. Looking
at 2020 from a bird’s eye perspective, roughly speaking the Biden coalition consists of most progressives, the center left, and many elements of the center right
(Neocon elements close to the Bush family). The
Trump coalition is portions of the center right and the popular right. The ruling class was going to be fine
whatever the result, but a Biden presidency constrained by a GOP Senate is
ideal in some ways to the ruling class.
A key strategic objective of the ruling
class is to keep the far left and right at each other’s throats. The polarizing nature of Trump helped the media achieve this rigid
politically binary orthodoxy. In contrast, in the future, anti-ruling
class progressives and popularists have to find a way to combine their forces
and energy in opposition to the ruling class and stop engaging in the pointless stalemate
of playing “socialists” vs; “fascists”, a battle whose only possible winner is
the ruling class.
The problem moving forwards, from the ruling class point of
view, is the unbearable whiteness of Joe Biden.
In their desperation to unseat Trump, there is now no diversity mask for the ruling class to hide behind as anger mounts over ever-increasing
ruling class perfidy. What’s fascinating
to study is the impact BLM, urban riots, and defunding the police narratives
had on the election. One reading is that
these phenomena turned a potential Biden landslide into a near stalemate.
Florida voted for Trump and a $15 minimum wage law. California voted
for Biden along with the neo-feudal Prop 22 which strips protection from
workers so that Tech Baron profits can soar higher.
I grew up in a California that was an
example of social justice and economic prosperity for the world. The ruling class of at that time was wise and
generous: they, for example, created the California public university system. Alexandre Kojève is a Stalinist intellectual
who helped plan the European Union. A
famous quote of his is that "Henry Ford is the one great authentic Marxist
of the twentieth century". In this
he subversively is saying that the great capitalist industrialist did far more
for the working classes than any Marxist intellectuals ever did. I would adapt this to say Edmund Brown, the
moderate Republican most responsible for the success of California is the
second great authentic Marxist. And just
to be clear, I mean this as a compliment. But this was during the Cold War when the ruling class feared the Communists and so created relatively economically fair and prosperous society. Those days are far behind us.
So we must face facts. California today is a disaster and is exactly
what America needs to avoid becoming. California
has the highest poverty rate in all of America once adjusted for cost of
living. It is close to becoming a third
world country. The rich have it good. But there is a massive brown and white
proletariat that is a massive breeding ground for Trumpism. California today, smug as it is, is exactly
what America does not want to become. Even California as late as1980 would be a much better model to aspire towards. Or Utah, which amazingly enough has one of
the smallest differences between rich and poor in the US.
One of the most interesting outcomes of the 2020
election is the specter of Latinos embracing Trumpism. In the borderlands of Texas, Starr County is 96% Latino and it swung
towards Trump by an absolutely stunning 55 points. These kind of
demographic sea changes do not just happen. Trump actually carried Zapata
County, which he lost by 33 points in 2016. And remember this sea change happened with TRUMP
running! This sea change will become a tsunami when a Trumpist candidate runs
on popular Trumpist policies while not crippled with Trump's negatives with Latinos.
about this is that Latinos embracing Trumpism turns the immigration question on
its head. Are liberal Democrats really going to be excited about opening
the borders and granting citizenship to crypto-Trumpist Latinos? And by
the same token perhaps future Trumpist politicians will openly embrace Latinos as a
demographic, when combined with rural/working class whites, is a coalition
they can ride to the White House? Latinos embracing Trumpism potentially shatters the
Democrats "Coalition of Color" which attempts to unify wealthy urban cosmopolitan
elites with minorities in a united front against rural and working class
whites. In 2024 this lineup could become urban elites and blacks against
the latino and white rural and working class masses.
There are three reasons
for this stunning Latino sea change: the worker scarcity economics of Trumpism,
the cultural machoism of Trumpism, and anti-black feeling among Latinos.
This Latino/black rift is well-known in Los Angeles and many black commentators
mention it. It's not going away any time soon and future Trumpist
politicians will exploit it to the hilt.
The Dreamers or Amnesty
question points out a glaring contradiction in the Liberal position on
immigration. On the one hand they say we need immigrants to do the
work Americans will just not do. But on the other hand lets emancipate these
semi-slaves so that they can become Americans. Which means they will then refuse to do the
work Americans will just not do. So we are back to square one and have to
let in masses of more illegal immigrants to do the work the recently made
Americans will now just not do. All this within a context of increased
automation which means we need fewer low skilled workers, and during the Covid
crisis which is causing mass unemployment. This is a great time for
Trumpists to be out of power and to let Biden deal with these extremely
unpopular conundrums. Trumpists are in a win-win situation.
Granting citizenship to Latinos means potentially a greater pool of Trumpist
voters and it will also exasperate the current economic malaise in favor of Trumpist
popularism in 2024.
It’s vital to see the
current immigration situation through the lens of slavery. There are
parallels between the current apologists for illegal immigration and those who
defended 19th century slavery as economically inevitable. Immigration
restrictionists can be seen in the same light as those who struggled to end the
slave trade. In 1808, the US banned the importation of slaves. This
created a scarcity of slaves. As a result, black slave's values as
commodities shot up and their material conditions improved, albeit within the
context of slavery. Not because slave owners cared about them as humans,
their treatment improved because they now had intrinsic value created by the
scarcity created by banning the importation of slaves. In contrast, poor white
sharecroppers had zero value to the Southern ruling elite and in fact were a
form of competition to the slave system. A white sharecropper was happily
allowed to die of starvation since he had no value. A black slave would have at least received subsistence
support. In the end slavery was damaging to both black and white workers
because it lowered the social floor of labor in general.
By restricting the "immigrant
trade" it necessarily improves the material conditions of the most recent
immigrants. This is one of the reasons Trumpism is popular in Latino
communities. Only when the immigration trade is stopped, can the current
illegals be "emancipated". Just think of how pointless it would
have been to emancipate black slaves while the slave trade was still
flowing. The freed slaves would soon be replaced by new slaves shipped in
over the border. This is exactly what will happen if amnesty is given to
illegals with the borders still wide open.
Just imagine if the
concept of racism existed in 1808. The ruling class of that day would
have called slavery restrictionists "racist" for attempting to block
the importation of blacks into America! The ruling class would have
declared how terrible life is in Africa was and even though they were coming in
as slaves, they would be better off in the US.
The motives of slave trade restrictionists, those who wanted to build a metaphorical
seawall to block the slave trade, would have been declared to be racist.
One of the most
corrosive social impacts of slavery or semi-slavery is that the labor slaves
perform becomes stigmatized and full citizens refuse to participate in
it. When I was growing up in California, the only job Americans would not
perform is that of hot tar roofing. Even as a kid I noticed that only
fresh over the border Mexicans would do this work. I had paper routes as
a kid but when I was 16 I was replaced by a poor Mexican guy who delivered papers
out of a station wagon. Back then teenagers did gardening work or
babysitting. It was common for teenagers to spend some of their summer
vacation picking crops in fields for pocket money. I knew something was
wrong when adults started doing teenager work. Now everyone in America
wants to be a lawyer or a doctor but not pick food. This is a dangerous trend that will not end
well. Immigrants scrape by doing the difficult teenager work.
Now just to be clear,
Trump had no intention of truly stopping the immigrant trade, he only wanted to slow it down a bit. This is why
he concentrated on the bombastic wall instead of the very simple device of
E-Verify, a system that would make it nearly impossible to employ
illegals. Trump used Trumpism to gain power but never had any intention
of fully implementing Trumpism. In a sense, his initial attack on
Mexicans can be seen as cleverly creating an identitarian firebreak so that the popularism of Trumpist
policies would not spread widely enough to become dangerous to the ruling
class. If he had not undermined his own Trumpist policies, Trump would have won a second term. On the other hand, if had strongly implemented Trumpist policies, his social class, the ruling
class, would have lost a huge battle in the omnipresent class struggle.
In the end Trump chose his class interests over his own personal political
interests and this is why he lost, albeit barely.
The only way for recent
Latino immigrants to reach a level of equality with the rest of America is
through actual existing Trumpsim -- through the creation of worker scarcity that will mean,
because of worker shortages, the recent immigrant moves up to doing a proper
adult job while teenagers get off their screens and go out an mow some
lawns! And now the only way to progress down the road towards real Trumpism is to
get rid of Trump!
California is a now a de facto one-party
state but I can see that conditions are ripe for the rise of a popularist yet
macho, Latino based, Trumpist style political faction to oppose the cosmopolitan
urban Democratic hegemony. Back in the
60’s, Cesar Chavez was endeavoring to increase the QUALITY of Hispanic life in
the US by increasing the salaries of farm workers through a strategy of worker
scarcity. Ruling class institutions,
threatened by the potential of having portions of their wealth transferred to
poor peasants, created an organization called “La Raza” as an alternative to
Chavez. La Raza wanted QUANTITY, they
wanted more and more Latinos to build up their base of political power. And all the better if these Latinos stayed
poor: not only do their ruling class paymasters stay happy, this would also keep the Latino masses
dependent on their identitarian political leaders.
So one of the key outcomes of the 2020
election is that in ever larger numbers, Latinos are rejecting Quantity of
Latinos and opting for Quality of life for Latinos.
And so in order to further Trumpism, Trump
must go. In a sense the Biden presidency
will be a reactionary movement in that will attempt restore the pre-Trumpism
ancien regime. The fallout from this will only further
cement the soundness of Trumpism as an ideology. But Trump as a leader is a much more mixed
bag. New Trumpists will arise, for
example Tucker Carlson or podcaster Joe Rogan. They must reach out to progressives with appropriate health care proposals. A patriot such as Tulsi Gabbard would play a crucial role in bringing the two sides together. 2024 will be a great year for Trumpism because this time Trump will not
be leading it.
A Green Folkhem
“It is the hallmark of any deep truth
that its negation is also a deep truth.”—Neils Bohr
around the middle of the 20th century, can safely be declared a socialist
paradise. Its generous welfare state offered universal health care, paid
parental leave, pensions, preschool care, progressive taxes, and a system of high
quality elderly care. But these accomplishments only tell half the story. The
small nation of Sweden also developed an impressive array
of internationally recognized companies. ABB, Alfa-Laval, Atlas-Copco, Bofors,
Bona, Ericsson, Electrolux, H&M, Husquvarna, IKEA, Saab, Sandvik, SAS, Securitas,
Skandia, SKF, Tetra Pak and Volvo showcased Sweden as a capitalist paradise.
These achievements materialized in no small
part realized by virtue of the Swedish societal concept of Folkhem (People’s
by Socialist Prime Minister Per Albin Hansson, Folkhem emerged in the aftermath
of the Great Depression in Sweden. It served as a conceptual guiding principle
for political and economic decisions in Sweden from the 1930’s until well into
the 1970’s, when increasing worker militarism started destabilized elements of
Folkhem was built upon the bedrock of the 1938’s
Saltsjöbaden Agreement3, a non-aggression pact between workers and management.
An agreement between Swedish unions and management organizations, the Socialist
government helped bring the two sides together by threatening anti-management
legislation against a bourgeoisie already living in fear of a rising Marxist
tide. Instead of waging a fragmentary class war leading to a one-sided
dictatorship of the proletariat, the Swedish socialists conceived society as a
whole and built a balanced system. The One (state) holding in interdependent
tension the Few (bourgeoisie) and the Many (working classes) for the benefit of
the All (Sweden).
Dogma—Unity in Complementary Opposites
“There is unity in the world, but it
is a unity formed by the combination of opposites.”
is yet another confirmation of the wisdom of Sun Tzu’s strategic ideas, which
are based on the Chinese philosophy of Yin-Yang. Sun Tzu taught that seemingly
opposite forces were more profitably conceived of as naturally complimentary components
of the same system. This concept is demonstrated in the etymological origins of
“Yin” (dark side of a mountain) and “Yang” (sunny side of a mountain). Some
other examples are fire and water, creation and destruction, nature and nurture,
supply and demand, predator and prey. The key to a successful strategy is manipulating
these complementary forces in ways that achieve Sun Tzu’s overarching goal
“victory without conflict.” 5 Folkhem provided a societal framework that
suspended opposing forces in complementary tension and interdependence. Both
bourgeoisie/proletariat and capitalism/socialism were paired in a dynamic
equilibrium that brought out the productive best of each while simultaneously
suppressing the other’s more malignant tendencies.
Rejecting other candidates who were promising huge social
program build-ups in the US, Democratic primary voters recently chose the
fiscally conservative candidate. This choice was motivated in part by cost
fears these social programs provoked. Not long after, facing a tough reelection
battle, and in response to a gathering, pandemic-fueled economic crisis, President
Trump conjured at least $3 trillion of helicopter money out of thin air. It was
as if the putative God-Emperor declared "Let there be money" And
there was money. Trump saw the money, and it was good. Democratic
party elders responded with grave warnings about hyperinflation and wheelbarrow
money. Some Democratic voters were dumbfounded by Trump’s display of fiscal
magic. How is it possible Trump effortlessly pulling trillions out of his
Treasury hat? The memory was still fresh of Democratic party sages shooing their
voters away from universal health, tuition-free public universities, and the
Green New Deal, due to the allegedly exorbitant fiscal price tags associated.
Analogous to water’s cycle of evaporation and
precipitation, carbon dioxide is released into the earth’s atmosphere and is
eventually reabsorbed back into the earth’s once plentiful carbon sinks. Much
of this carbon is released due to human economic activities. Human history was
one of a gentle rise in both population and levels of economic growth and the
earth, flush with soil, forests and oceans, gladly reaccepted its prodigal carbon
back into these natural reservoirs. The Industrial Revolution combined with
discovery of fossil fuels radically changed this growth pattern. Surging ever
skyward, as if manned missiles were on an economic mission to occupy infinity. Many
decades ago, the earth’s capacity for carbon reabsorption was surpassed, the
excess carbon accumulating ever denser under the indefatigable dome of the
earth’s atmosphere. A finite earth’s inadequacies were exposing it an unworthy
base of operations from which to vanquish infinity. Pandemic lockdowns have
exiled on main street, the consumers who produce the bombs and bullets for the economic
war on infinity. The economic growth pattern trajectory has turned sharply
earthbound. Now in all likelihood for the first time in a lifetime for many, more
carbon is reabsorbing back into the earth than is being emitted. The pandemic
having provoked, only for the moment, a very slight decline in overall
atmospheric carbon levels.
The Fed’s balance sheet balloons as our carbon emissions
crater. Today, the ongoing pandemic is focusing attention on two
seemingly contradictory schools of thought. Fiscal expansion, full employment,
and increased social programs are among the policy goals of Modern Monetary
Theory6, a macroeconomic
approach that advocates increased government spending. Décroissance (Degrowth)7
is, in contrast, an environmental movement
which champions gradually decreasing economic growth, eventually triggering
drops in carbon emissions below the earth’s capacity for reabsorption. Given the current reality of political
power, the ascendant Few can use MMT to enrich themselves, while deploying décroissance to emasculate the Many with austerity.
two complementary working theories within the Folkhem social framework reverses
this deleterious dynamic. MMT financing, directed towards ameliorating social inequality,
would provide the underpinning required to execute décroissance’s
goal of bringing our
consumption down to sustainable levels. Thus embedded, the two working theories
are placed in a role of mutually tempering the other’s malignant tendencies
while simultaneously supporting their many benign elements. The result is a
robust conceptual theory for solving the climate crisis, a Green Folkhem.
Meanwhile Wall Street bankers luxate in liquidity of
dubious origin while the meeker classes struggle, snaking their gas guzzlers in
mile long food queues. A globe sans frontiers is sliced and diced into
decreasingly small regions in an effort to compartmentalize a smoldering virus’s
relentless search for fresh tinder. Bread is baked, victory gardens planted, long
disused sewing supplies are transformed into masks, protective acts of bricolage.
Consumers, long accustomed to buying what their grandparents made by hand are
seeking elders for DIY counsel.
Foundational Myths--Birth of Civilization and Social
“Seven Samurai” is a simple and universal cinematographic representation of the
birth of civilization. The drama starts with a rough band of roaming bandits cruelly
planning a harvest time raid on small and defenseless village. Some
villagers overhear the bandits plans. The villagers have a choice. They could
ignore the threat hoping the bandits go elsewhere. Or choose to use the months before
harvesttime to prepare for the worst. A few lucky survivors of a winter of
starvation would face a seedless spring. Preemptive action is taken, and a band
of Samurai are tasked with the defense of the village. The loss is immediate
for the villagers as the hungry Samurai must be fed, and a shock to the village
standard of living is felt. Is the threat real some villagers ask as they see
the hungry Samurai gobble up bowls of rice? Yes, the village’s foresight was just
enough to defend their way of life when the roaming bandits do arrive for their
harvest. A perpetual conflict between productive and parasitic social classes
is at the heart of this film.
Samurai successfully protect the village from
the roaming bandit raid. Thus, civilization is born.
Kurosawa's film depicts the village symbolically
transitioning from living in what political philosopher Thomas
Hobbes called a State of Nature--where life is famously solitary, poor, nasty, brutish,
and short--into a Civil Society by engaging in a social contract with the
Samurai. It's clear that the roaming bandits represent a
parasitical class. The Samurai are functionally now fixed bandits, are
also a parasitical class. When given a choice between parasite types,
humans prefer a fixed bandit (government) which is intimately tied to and
dependent on the host society (productive classes), being limited in their
parasitic activities for fear of killing their host. Roaming bandits face no
such constraints and will often plunder to the point of destroying the village.
The film closes with a rueful Samurai
foreseeing eternal producer class ascendancy, “once again the farmers win”.
Alluvial planes civilization
was born when elites mastered alluvial flood plains by
creating systems of irrigation through canals and sluice gates. A managerial
class of priests, administrators, and merchants directed precious water to a peasant
class. From the fields, by means of labor, through the grace of human
intelligence and apparent mastery of nature, a surplus emerged. Once sent back
to the managers, a virtuous cycle of mutual class dependence was created.
Eden was not to last as surpluses are
eventually the bane of agrarian paradises. Concentrated abundance attracts
microparasites: viruses and blights. It also lures human macroparasites. Either
the centralizing draw of not-distant-enough Empires, or the scattered repulsion
of raiding Nomads. Humans plants and animals develop and mutate immune system resistance
to microparasites. Macro-parasites are eventually absorbed into a society as
two parasitical classes, plutocracy and lumpenproletariat, perpetually feeding
off their two productive class hosts, the bourgeoisie and working classes. A
well-ordered society develops immune system reactions to keep these classes in
check. But currently in the US the opposite is happening, an emasculated
working class reveres the plutocrats, while an ascendant bourgeoisie indulges
an ever-expanding lumpenproletariat. The two parasitic classes divert precious
resources to Empire, consumption, and an ever-expanding police state. In
reaction, social safety nets contract.
Georges Bataille La Partie Maudit –
study of consumption of surpluses, not of production
Excess energy is the effervescence of life.
Human sacrifice, construction of a church, or the gift of a jewel
are no less interesting than the production of wheat.
Freedom of thought, both MMT and decroissance limit their holistic theories
as “left wing” movements.
Solutions to political problems deriving from traditional reasoning.
“It is not necessity but its contrary, “luxury”
that presents living matter and mankind with their fundamental problems.”
Productive vs nonproductive expenditure -- neither
is a pure category.
Keynes bottle metaphor (gold) and Marx chapter 17 surplus value –
used in crusades or cathedral building – these surpluses can go to social
Fear and the anxious search for a
solution vs freedom of mind exuberance in the search for solutions, free from
the anxiety. Productive vs luxury – the search
for solution is luxury, superfluity, and must necessarily be so.
Circumscribe two opposing political
Often "literally" literally means
Class struggle and solidarity
A theory of class structure and struggle
emerges from this foundation myth. Marx's binary model of a bourgeoisie
oppressing a proletariat is too simple and leads to misunderstanding. A
better model would contain four classes, two parasitical, plutocrats and
lumpenproletariat, and two productive, the bourgeoisie and the working class. And
from this alignment emerges the preferred class struggle: makers against
plutocratic class emerges and is able amass huge fortunes from its links to
government power. They recycle that material wealth back into political power
in order to defend their wealth and expand opportunities for rent extraction.
The other parasitical class sits at the bottom of
society. Roaming bandits transform themselves into Marx's
Lumpenproletariat. A low-level criminal class that feeds on the weak and
vulnerable. Think of thieves, pickpockets, grifters, etc. all the way up
to Mafias, drug cartels, street gangs, etc. Lumpenproletariat may pose less of
a direct threat to society than the looting plutocrats do. The true danger is a
society's immune system overreaction to a strong Lumpenproletariat
infection. This immune system is manifested in the penitentiary industrial
complex, a system of courts, police, jails, and insurance companies. While at
least providing employment, this system comes at the opportunity cost of more
productive activities. Worse it offers the plutocrats rich rent-seeking
opportunities. Viscous circles of parasitic activity start on both the top and
bottom layers of society against the productive middle.
productive classes are the farmers from Kurosawa’s
masterpiece. The bourgeoisie are the land-owning farmers and the working class,
the landless laborers. Today the bourgeoisie is today made up of educated
professionals, for example medical doctors. The working class is composed of
individuals with lower education attainment and who typically engage in
physical work, for example a plumber.
A sane theory
of class struggle would unite the two productive classes against the two
parasitical classes. But this takes an explicit agreement, a sort of class
non-aggression pact, between the bourgeoisie and the working classes because
their class interests are not always the same. For example, a
plumber would like to purchase the doctor's services for as cheaply as
possible and so he may propose a single payer health care system to help keep
the price of medical care down. From her point of view, the doctor wishes to
obtain the plumber's services for as cheaply as possible and so she may
encourage an abundance of plumbers all competing against each other, keeping
their rates low. A plumber would obviously prefer a scarcity of plumbers
so that the supply-and-demand curve works to assure him of a higher price for
his labor while the doctor prefers a private health system that allows her to
keep her income high.
But is such
an agreement possible between the bourgeoisie and the working classes? It's
clear the plutocrats would prefer the two productive classes be at each other's
throats instead of united and deployed against him. One way the plutocrats
keep the two productive classes fighting is to launch emotional culture
wars between the productive classes. But history shows such an agreement
between classes is possible.
Folkhemmet -- Aspiring to post-WW2 Sweden
its generous welfare state featuring universal health care, paid parental
leave, universal preschool care, and its system of pensions and elderly
care, post-war Sweden is often thought of as a socialist paradise. The reality
is that it was also a capitalist's paradise. Somehow the tiny nation of
Sweden produced a plethora of internationally recognized companies, such
as Ericsson, Bona, ABB, Volvo, Saab, Elecrolux, Atlas-Copco, Sandvik, Tetra
Pak, Alfa-Laval, SKF, IKEA, Bofors, Skandia, Husquvarna, Securitas, SAS, and H&M.
Sweden even managed to produce its own fighter jet; a feat usually reserved
for larger nations.
Folkhemmet—the people's home—was the social concept
that directed Swedish success. A national home where the
bourgeoisie and working classes lived in relative harmony, almost as a
married couple. With a small population, its exceptionally productive economy
was constantly hungry for labor, Sweden often faced worker scarcity, a position
of power for the working classes. The welfare state functioned as a domestic
labor liberator, freeing women from the care of children or elderly. Women were
both encouraged to join the work force in large numbers and to have more babies
to ensure a growing supply of future labor. The working classes union’s agreed not
to take advantage of their strong negotiating position. This was
formalized in the Saltsjöbaden
Agreement of 1938, which can only be described as a non-aggression pact
between the working classes and the bourgeoisie. Peace allowed the two
productive classes to turn their combined political guns on both the plutocratic
and lumpenproletariat classes.
There was no
culture war in Sweden during this Golden Age of productive class
peace. The bourgeoisie in Sweden took their cues from European high
culture whilst the working classes preferred American popular culture. In
other societies where the bourgeoisie is ascendant, status-anxious working
classes tend to blindly ape bourgeois political opinions and culture, often at
the expense of their own economic interests. This phenomenon is expressed
within center-left political parties which formerly represented the working
classes but now serve bourgeois economic interests.
and Sweden’s membership in the EU broke the productive class truce—the
bourgeoisie has been ascendant for at least the past 25 years. Present-day
Denmark is the closest current example of Golden Age post WW2 Sweden.
same time America developed a sort of class peace. Fordism was based on the idea that workers
would recycle their salaries back to the bourgeoisie by purchasing the
commodities they produced. In return the wealthier classes would be able to engage
in conspicuous consumption. This created
demand for new products when the working class attempted to ape their betters
by consuming simplified versions of luxury items. Admittedly cycle worked well
in the good time. But then the Great
Depression struck. FDR also tried a pale
imitation of a Folkhem with his New Deal.
It contained some useful social programs to appease working class anger
and to keep them from eying Marxism. But
it did not create class peace and its half measures are apparent today as the
US lags Europe on the social front.
Modern Monetary Theory (MMT)
A useful analogy for understanding monetary policy’s
relationship to an economy is of a hot air balloon hovering in the sky. The goal
is to keep the balloon afloat within a reasonable range of altitude
(inflation). Failure occurs when the balloon gets dangerously close to the
ground (deflation) or when it sails off into the stratosphere (hyperinflation).
The goal is to position the balloon at the right altitude to catch those soft
warm southerly winds that blow the balloon northwards -- towards a higher GDP. These
winds tend to be stronger at higher altitudes, but the balloon becomes unstable
the higher it flies. The economic winds can suddenly shift.
many sorts of ballast that can keep the balloon from zooming up into the ether
of hyperinflation: low productivity, a gold standard/strong currency, frequent
bond market issues, and balanced budgets (taxes matching spending) or even
budget surpluses (taxes higher than spending). The problem is that too much
ballast will keep the economy earth bound, stagnated, and tending towards
unit is what counteracts the hot air balloon’s ballast, giving buoyancy to an
economy. These include high productive capability, deficit government spending,
and a weak currency. The goal being to soar high enough to reach those winds of
growth but not so high as to reach the upper altitudes which represent the
inflation zone. If the balloon soars too high it will reach hyper-inflation,
which is a zone of no return and the balloon (monetary system) must be
abandoned. This is what happened in the Weimar Republic in Germany during the
post WW1 era.
shift without warning and out of nowhere a wintery northerly wind can suddenly blow
the balloon south into recession and occasionally even depression. In this case
policy makers attempt to stimulate the balloon higher by turning the burners up
(deficit spending) hoping the winds at higher altitudes are the warm southerly
economics features an ingrained vertigo and prefers the economy to hoover much
closer to the ground. MMT has no fear of heights and advocates for policies
that will raise the balloon to altitudes where economic growth can be maximized.
Deeply indebted intellectually to Maynard Keynes, MMT is
a theory of macroeconomics that advocates increased government spending. It is
dismissive of the entire concept of a budget deficit and pushes for full employment.
They insist a monetarily sovereign issuer of currency, governments that control
the printing presses of their currency, faces no necessary link between tax
receipts and government spending and cannot be forced to default on loans. MMT
holds that issuing bonds is not a necessity. The only limit to government
spending is inflation. Some of the leading advocates for MMT include Stephanie
Kelton, Randall Wray, Bill Mitchell, and Warren Mosler.
recent Democratic primary contests, several Democrats announced generous social
programs. Non-candidate Alexandria Ocasio-Cortez (AOC) had the most ambitious,
a Green New Deal (GND) that contained a laundry list of social programs and
environmental targets associated with sustainable energy. It contained no
limits on economic growth, however. Andrew Yang proposed a Universal Basic
Income, proposing to send a $1,000 monthly check to all adult Americans every
month. Bernie Sanders presented programs for universal health care and
affordable public universities. Democratic primary voters preferred the
fiscally conservative candidate Joe Biden.
Over the past
forty years of yin-yang between Republican and Democratic Administrations, a
clear pattern emerges. The Republicans run on a platform of fiscal conservativism
but end up spending money like drunken sailors. Reagan ballooned the deficit on
a huge military buildup and Bush II launched a savage war of imperialism. Labelled
the tax and spend party, Democrats run on the idea they will create social
programs. But once in office they end up cleaning up the previous Republican’s
fiscal mess by cutting spending and increasing taxes. Social programs if they
do appear, are weak and compromised, like Obama Care. A universal health care
system with a public option would have been the preferred option.
systematic under-performance by successive Democratic Administrations is one of
two reasons America finds itself in such a compromised social state during the
reason given for these fiscally conservative actions is that the “Bond Market”
forces us to move towards balanced budgets. But is this true? Why does the Bond
Market only limit Democratic spending? It seems to go into hibernation once a
Republican swears the oath of office.
market (lowercase) is where nations offer their debt, the form of bonds, for
purchase by potential bond holders. The bonds may be short term (1-4 years) or
long term 20-30 years). The interest rate for short term bonds would normally
be lower (but not always) than for long term bonds since in theory there is
more risk with longer term bonds. Bond traders price bonds by looking at
variables described by the hot air balloon analogy. The more risk for
inflation, the higher the interest rate the bond market will charge. It’s similar
to an individual seeking a home loan from a bank. The financial state of this person
will be examined. Higher interest rates mean debt service costs increase and could
result in less money being available for social or military spending. The fear
of skyrocketing interest rates has traditionally been used against Democratic
Administrations to keep them on a fiscally conservative path and away from new
bond market can be reified into the Bond Market, a conceptual tool of
plutocratic discipline over Democratic Administrations. MMT as a school of
thought lacks respect for the Bond Market. This offers a way fiscal way forward
to finally build these social programs.
After rolling out her Green New Deal proposal to great
media fanfare, AOC immediately faced the usual, "How are you going to pay
for it?" This kill-shot had already claimed universal health care and
any preschool child care proposals, not to mention free public universities
during this election cycle. Instead of rolling over and dying as Democrats
usually do, AOC's response invoked the heterodox economic theory of MMT: “I think the first thing that we need to do is kind of
break the mistaken idea that taxes pay for 100% of government expenditure.”
AOC cited one
of the central ideas of MMT: that taxes are not 100% required for government
spending. AOC’s statement is double-edged though and helps expose Donald
Trump’s latent MMT tendencies. If taxes are not required for government
spending -- and they are not – then Trump’s tax cuts for the wealthy, while
economically inefficient and morally deplorable, are not really going to lead
the US to economic Armageddon. The truth is, paying for the Green New Deal
is really just as simple as paying for America's forever wars. Congress will
authorize the necessary spending, and Treasury will spend. AOC has specifically
endorsed MMT, saying it needs to be, "a
larger part of our conversation."
Taxes do play
a central role in MMT theory. While not being 100% necessary for funding
government spending, a sovereign issuer of currency must force her citizen’s to
pay taxes exclusively in the local currency. This creates demand among the
citizens to take jobs paid in this currency. With the sovereign issuer having a
monopoly on issuing this currency, the demand for its currency translates into
power for the government, and the ability to spend money. This power imbeds
value into its currency, at least within its national borders. According to
MMT, the amount of taxes collected is not required to match the amount of
government spending and so the constraint of deficits is a false constraint.
aspect, that MMT’ers are reluctant to admit, is that the power of their theory
depends greatly on the power of the currency under discussion. As the global
reserve currency with no currency rivals on the horizon, the US Dollar is in
such a dominant position that MMT theory works very well when describing the
greenback. One of the keys tenets of MMT is that a sovereign issuer of currency
cannot be forced into default on debts incurred in that currency. Closet-case
MMT scholar Donald Trump, in his very unscholarly diction, restated this 2016,
starting with an exceedingly important qualifier:
is the United States government. First of all, you never have to default
because you print the money. I hate to tell you. So, there’s never a default.
This is technically
correct even without Trump’s qualifier. But weaker currencies must either
accept the valuation of international currency markets. which may not be very flattering
or trade commodities for hard currencies in order to purchase imports. So,
while MMT may very accurately describe the all-powerful US Dollar and the
possibilities US policy makers have. MMT is much less useful in describing a
weaker currency such as the Argentinian Peso. which must be converted to US
dollars for Argentina to import services and commodities or to get foreign
loans. And so, the Bond Market has much more power over these countries. Argentina
or Turkey cannot print its way into prosperity. The Bond Market rules these
countries with an iron fist. In the US, printing and prosperity do have a
relationship. But there are always limits; the primary one being inflation.
The reason MMT
works well for strong currencies can be seen in the hot air balloon analogy. A
strong currency acts as ballast, it tends to drive the system downwards towards
deflation. A strong currency has little need for those other forms of ballast,
balanced budgets or selling bonds. As the global reserve currency, the US
dollar can be considered a “hyper-currency”. Global demand for the dollar,
according to the Triffin Dilemma, requires deficit spending. The global power
and reach of the dollar mean the US hot air balloon has very little chance to
getting anywhere near inflation.
France, Euro, and British Pound can be considered “super-currencies”. They have
considerable room to ignore the Bond Market but not as much as the US has. On
the other hand weaker currencies act to give buoyancy to an economy. These economies
require ballast to compensate. Balanced budgets and/or submission to the Bond
Market is required for weaker currencies to keep their exchange rates stable
with the hyper-currency.
It must be
again emphasized that ever since Reagan, Republican Administrations, with their
policies of tax cuts and war spending, have been deploying MMT-like economic
policies. At the same time--in a blatant case of projection—have been accusing
the Democrats of being the big spenders. This trend continues today with
the difference being that Trump’s pandemic splurge is too ostentatious to
According to MMT the US has no obligation to issue bonds
to finance the so called “deficit.” It’s not necessarily a bad idea to issue
bonds, there are many good reasons to do so. But it is a political choice, not
an economic necessity. In other words, submitting to the dictates of the Bond
Market is a choice. Given the status of the dollar, the Bond Market has no
power over US policy makers. MMT advocates see the concept of a deficit is an
accounting fiction used by plutocrats to damp down government spending. There
are limits to government spending, namely inflation. The true limits are not
those imagined by the deficit hawks. While it is nice to see the relationship
between money spent by the government and money taken in—the all-encompassing
importance given to the US “deficit” is more about politics and less about
economic reality. For example, under MMT, neither social programs nor middle-class
tax cuts would necessarily need to be "paid for" by tax increases
Employment and Reserve Labor Pools
advocates increasing aggregate demand (the total
amount of demand for all finished goods and services produced in an
economy) to the point that full employment results. This is
standard Keynesian theory which is why sometimes MMT is referred as
Neo-Keynesian. The problem with Keynesian theory is that deficit spending
during the bad times is supposed to be balanced to some extent with surpluses
during the boom but this second part of the deal is almost always reneged on.
Americans have found a novel way around this. They deficit spend during
Republican administrations no matter where they find themselves in the economic
cycle. Then the hapless Democrats sacrifice their own spending agendas and
concentrate on balancing the budget during their time in office and fail to
deliver any new social programs.
One key flaw
in the MMT belief that increasing America’s aggregate demand will lead to full
employment is globalization. The US is a leaky bucket for employment. Pour aggregate
demand into it and much leaks out and creates employment in other countries due
to offshoring, particularly in China. Only a certain percentage of US
aggregate demand leads to actual Americans getting jobs at American wages.
Capitalism is relentless in its efforts to keep that number as low as possible.
MMT’ers will admit this is true but will respond by shifting the goal posts. They claim its beneficial if the US is able to
spread out aggregate demand to the rest of the world. They do have a point up
to a limit. For example, in the ‘60s, during the peak of the Cold War, the US
strategically exported aggregate demand to non-communist areas of Asia—primarily
Japan, Hong Kong, Taiwan, and South Korea—in the form of highly favorable trade
arrangements. This led to the creation of strongly committed anti-communist
Asian Tigers showcasing the splendors and supposed universality of western
capitalism. But this was a calibrated and limited gift of aggregate demand that
served geopolitical goals. It balanced the malignant wage impact on US worker
salaries with the more benign importation of cheaper consumer goods. Post-Cold
War globalization has toppled this equilibrium with a flood of cheap imports
combined with the destruction US worker wage growth.
One way that
inflation can arise is if aggregate demand rises faster than the productive
capability of an economy. But with the much of the productive capacity of
the globe ready and willing to serve US aggregate demand, there is next to no
possibility that rising US aggregate demand could lead to inflation. But
any increase in aggregate demand does exacerbate the current climate crisis.
the US does not have full employment is not because the plutocratic class are
unaware of the magic of MMT. The US does not
have full employment because that would mean the wealthy are losing the class
war. Unlike the Swedish model, there is no alliance in the US between the
productive classes. Class struggle in the US features all classes constantly
at each other's throats. You may see some temporary alliances, but for the
most part the Plutocrats are the dominant class and are able to impose their
will on the others. But with no peace treaty, the bourgeoisie are
skeptical of full employment as well—remember, they want their plumber's
services as cheap as possible while keeping the cost of their own services
employment, which really means worker scarcity, should indeed be the overarching
strategic goal of any political movement that labels itself left. And so MMT on
the right track economically and politically in promoting full employment. As
we saw in the Swedish example, worker scarcity leads inevitably to worker
power, which leads to higher worker salaries, which means lower profits for the
wealthier classes. To a limit this means a more just society with a favorable
distribution of wealth and plenty of resources for social programs. In short,
worker scarcity creates a virtuous circle for the workers but a potentially vicious
circle for the wealthy.
with worker scarcity is that it could lead to "inflation." This
leads to a deeper question as to what is the optimal level of inflation for a
society? Plutocrats will want it low, 1-2%. Workers do best with it at
around 6-7%. This was the level of inflation in Golden Age Sweden. The
bourgeoisie prefer it at 3-4%. This important question is almost never
discussed anymore. The definition of "inflation" has by default
been set at the level the plutocratic class want. Often inflation is used
as an excuse to tamp down worker salaries. A more just principle for
limiting inflation would be to relate salaries to rises in
productivity. In the US, productivity has risen for years, but salaries have
remained flat. As an upper limit most agree inflation over 10% is
prefer an abundance of labor. Workers competing against each other for the
lowest wages. A reserve labor force is summoned. On constant standby, they
are ready to be deployed at the first signs of worker scarcity. In the US
during the 19th century, the “huddled masses” in Europe were America’s
reserve labor force. As American born workers were displaced by the
cheaper newly arrived huddled masses, those displaced natives were mobilized to
expand the frontier out west. Indigenous land metastasized into an ever-growing
imperial tumor. As a new century arrived, immigration was slowed, the frontier
had at last reached its temporary boundary of the Pacific Ocean. America was
mutating from an agrarian society into an industrial power and its appetite for
labor only grew. The reserve labor force of southern blacks was hastened on a
Great Migration to curb northern wages. As immigration almost stopped in the
1920’s, worker scarcity loomed, but the Great Depression arrived to create a
massive domestic reserve labor pool, the Okies and other Dust Bowl migrants. By
the time WW2 broke out, FDR had gotten most of the white men back to work. A
reserve labor force of women transformed into Rosie the Riveters, as waves of blacks
migrated westward. After the war, women were sent back to the kitchen and
blacks were consigned to urban ghettos. In the ‘60s, as the labor market
tightened and as the specter of worker scarcity loomed, women were again
deployed as a permanent cheap labor force. This exhausted sources of domestic
reserve labor and so in a combined Cold War effort to universalize the American
Way to all races, Third World huddled masses became America’s new reserve labor
force and Hispanics largely replaced blacks as agricultural and domestic labor.
Fast forward and today, as a result of the recent pandemic lockdowns, the US is
gathering potentially the mother of all reserve labor pools.
The way many
MMT thinkers accommodate the need for a permanent reserve labor force is to
explicitly create one through a job guarantee (JG) program. This would be
a reserve labor armyl whose soldiers receive a monthly salary. Employers
would always have the right to deploy from this low wage brigade, whose
salaries would be tethered to the minimum wage. While admittedly the JG
idea is a realistic nod towards the class warfare interests of the wealthy,
this remains a very controversial proposal and is not per se fundamental to MMT
thought. MMT's JG is different from Andrew Yang's Universal Basic Income, which
would apply to all Americans and is not necessarily an attempt to create a
reserve labor pool. The JG is designed as a tool to tamp down the inflation.
about this constraint of inflation? If the Bond Market’s authority is not
respected, will people need wheelbarrows to carry their money down to the
corner store to buy a six-pack, just like during the Weimar Republic? How
similar were those historic conditions in Germany to the current problems
facing the US? What follows is an explanation, in some detail, of how
Weimar’s hyper-inflation occurred.
Money -- Hyperinflation during the Weimar Republic 1914-1923
roots of the Weimar inflation lay in German WW1 financing: war was a
speculative endeavor back then. As bitterly as Germans complained about these
reparations, had they won the war they would have imposed similarly harsh
reparations on Britain and France. At the outbreak of war, the German did not foresee
its length or unhappy outcome. They were looking forward to a reparation bounty
at the expense of the Entente powers.
Empire emerged from the primordial nation-state soup of multiple principalities
which merged with Prussia in 1873. Their currency was the Goldmark until the
outbreak of WW1 in 1914. The Goldmark, as its name implies, was linked to a
gold standard. Gold gives a currency strength and so if we return to the hot
air balloon analogy, the Goldmark could be considered a super-currency and
easily able to resist inflation. At the outbreak of the war, to facilitate war
financing, the German Empire functionally abandoned the gold standard and
switched to a currency called the Papiermark. This was a comparatively weak
currency in the age of the gold standard and so gave buoyancy to the monetary
system. This was desired by German policy makers to facilitate the rapid growth
of their armaments industries to take on the industrial powerhouses England and
In those days
the tools available for financing war were taxes, inflation, domestic
borrowing, and foreign borrowing. Germany was a young federal nation in 1914
and the weak central government did not have to power to impose an income tax.
The current process of European integration strongly resembles the processes
that created Germany. Think of the weak EU today trying to finance a fiscal
response to a pandemic with no ability to tax. The Germans chose to primarily finance
their war effort through domestic bond buying—patriotic Germans were sure their
side was going to win and there was a nice payday just down the road. German
leaders were well aware that their losses would be limited by inflation since
these bonds were in Papiermarks, a currency they could easily print in case of
war the Germans issued a local currency. Interestingly both the MMT and Décroissance
movement champion these small, local currencies. Germany tried to maintain the
fiction that the Papiermark was tied to gold for foreign consumption. The
German Central Bank counted this local currency as gold and allowed them to
print even more Papiermarks. This was clearly inflationary,as the Papiermark
weakened by these printing episodes, it was blasting hot buoyant air into the
balloon and lifting the system higher into the air. When the US prints it has
next to no impact on ballast effect of its hyper-currency although the
resulting fiscal expansion would lead to US buoyancy as well. The problem for
the Germany Empire is that ballast was the enemy of war production and so they
jettisoned much of it.
nothing fundamentally wrong with the ad hoc way the Germans financed their war--France
and Britain did similar things--but not quite to the extent the Germans did. While
inflation was always going to rise during a war, catastrophic hyperinflation in
Germany was not yet inevitable. Germans lost the war and the Entente Powers
imposed a huge reparations bill. This fell on center-left Weimar Republic, which
took power after the failed communist November Revolution of 1918-19. Not for
the first time in history would a center-left government be deployed to clean
up a fiscal mess. naturally, the reparations specified that the debt was to be
paid back in Goldmarks, their former super-currency that was linked to gold. The
German people had their war bonds paid back in soon to be worthless
Papiermarks. The profits of war normally go to the rich, the costs of war are
always socialized to the masses.
The reparation bill meant the Germans now had a debt in a
foreign currency (gold). Determined to deny this reality, Germany stubbornly crashed
through all boundaries and increased the printing of Papiermarks. Chimerically
printing gold, for a short while they managed to trade these condemned notes to
foreigners for hard currency convertible to Goldmarks. Exuberant monetary
buoyancy with no limiting ballast skyrocketed into Weimar into hyperinflation. Germany
could pay no more. The allies occupied the Rhineland, the industrial heartland
of Germany, but this attempt to grab real assets ultimately failed.
hyperinflation peaked in summer 1923 with the largest denomination being a 100
trillion mark bill. The Rentenmark was introduces in late 1923 with twelves
zeros being cut from prices and the German Central Bank managed to keep its
value stable. In 1924 it was replaced by the Reichsmark which continued as
Germany’s currency through World War 2. Adopted during Allied occupation, the Deutschmark
was Germany’s currency from 1948 until 2002, replaced by the Euro.
There are no
parallels between Weimar and the situation the US finds themselves in today.
The gold standard was jettisoned by Nixon in 1971 after several European
nations went on a gold bank run against the US dollar – just another example of
Republicans rejecting in the real world the hard money, economic thrifty
economic orthodoxy they love to cover themselves with in the rhetorical world. Gold
was functionally replaced by the dollar. During a pandemic, the US is desperate
for buoyancy, just as the German Empire was. But the hyper-currency status of
the dollar acts as a power ballast keeping the US hot air balloon under control
even under the most profligate printing sessions in monetary history.
the point of view of the earth, humans are damaging parasites—not unlike how an
outbreak of lice spreads over a human head. The head’s capacity to tolerate
lice cannot be increased, there is only so much life blood to suck, while the
population and appetites of the lice resist boundaries. But not all lice are
created equal and in the earth’s case around 20% of the lice are much plumper
and more gluttonous than the other 80%, who are quite lean. These plump few,
mostly located in the wealthy industrialized countries, suck much more of the
globe’s life blood than the lean lice do. On the national scale of each louse
nation, a similar relative ratio exists between plump and lean lice. Are these
parasitic lice aware that, like the farmers in Seven Samurai, in the end the
earth will win?
According to its advocates, Infinite growth on a planet
with finite capacities augers the inevitability of décroissance. The choice
humankind has is between a serene well-managed voluntary décroissance or a
panicked, chaotic and haphazard one. An analogy can be made to military
withdrawal. A tactical withdrawal occurs when an army realizes they have
advanced too far into enemy territory, that their current situation is
untenable, they recognize they surpassed the limits of their capabilities and
take their own initiative to organize an orderly retreat back to a defensible
(sustainable) position. There is no panic, they maintain contact with the enemy
but gradually move back towards safety. When an army refuses to act on the
repeated warning signs of dangerous overextension, a rout ensues. Generals refusing
to face reality and will promise miraculous silver bullets or even heavenly
interventions to save the situation. The rout begins when these miracle fails
to materialize, or God has other priorities, and the enemy forces the generals’
hand. Suddenly the retreating soldiers are falling over themselves rushing chaotically
back to an ever-elusive safe zone where the more foresighted armies are already
lounging in comfort. Large portions of a routed army may be annihilated during
a disorganized retreat.
How did we
get to this untenable system of infinite growth? Traditionally societies lived
in a sustainable harmony with their environment. Cicero, in Cato Maior
De Senectute, wonders why elderly farmers work so hard on tasks they
surely know they will never profit from. He quotes Cato, “He plants the trees
to serve another age”. Cicero provides the following reason.
And if you ask a farmer, however old, for whom he is
planting, he will unhesitatingly reply, "For the immortal gods, who have
willed not only that I should receive these blessings from my ancestors,
but also that I should hand them on to posterity.
Growth was not a priority in traditional society. Generational
sustainability requires a caretaker attitude towards the earth’s riches. There
was no desire to hand more to their progeny than the received from their
ancestors. Stability remained the rule until the Industrial Revolution greatly increased
man’s ability to manufacture goods on a large scale. But the lack of portable
energy thwarted progress. The exploitation of fossil fuels began in the mid-19th
century and cheap and mobile energy broke the final barrier to rapid economic
growth. An American Dream evolved that mythologized an ideology of limitless
growth, social mobility, and consumerism. But two restraints are increasingly disturbing
the dreamers’ still blissful sleep.
created as collateral damage from relentless economic growth represents the
first restraint. The urgent threat is carbon dioxide accumulating under the domed
boundary created by the earth’s atmosphere. In the 150,00O years before the
Industrial Revolution, atmospheric CO² levels remained roughly the same at 270
parts per million (ppm). In 1860, given buoyancy by industrial progress, these
levels started to gently rise. As giant armies clashed on the steppes on
Europe, the mid-20th century saw this increase sharpened. During the
Cuban Missile Crisis it was 313ppm. While the Iranian Revolution ignited below,
above the level reached 335ppm. During Operation Iraqi freedom it was 375 ppm,
today in 2020 it is 416. The earth’s capacity to reabsorb CO² is limited to
oceans, soils, and forests. Economic growth is leading to the global
destruction of forests, a primary sink for wayward carbon dioxide to return to
earth to. Before the industrial revolution, the earth had 5.9 billion hectares
(ha) of forest. Today it is down to 4 billion ha with 7 million ha lost every
year. So as carbon emissions grow ever higher, the earth’s capacity to reabsorb
this wayward carbon decreases every year.
There is a
rigorous correlation between the amount of carbon dioxide in the atmosphere and
rising temperatures. Concentrated amounts of carbon dioxide lead to a
greenhouse effect, trapping solar energy within the atmosphere by hindering its
freedom to escape back towards the great void of space. As temperatures rise,
the polar ice caps melt, raising sea levels and threatening to divert critical
ocean currents. The Gulf Stream pushes warm southernly air currents over
Europe, if this were to change large areas of Europe would have a Siberian
climate. Rising temperatures, while aiding farmers in some traditionally cooler
climates, overall diminish agricultural output on a global scale. There is a
cumulative effect, melting icecaps reflect less solar energy back to the
atmosphere. The loss of agricultural lands to drought and desiccation induces
deforestation. The earth’s lowered carbon absorption capacity leads to higher
temperatures. Forest fires become more prevalent further limiting the earths capacity
for carbon absorption. And yet the earth’s population and economic growth
continue to climb higher, stubbornly emulating the increasing levels of carbon
dioxide in the earth’s atmosphere instead of taking a cue from the diminishing
There is much
uncertainty as to what this amount is, and when it will be exhausted. Projections
on future prices by the barrel are notoriously unreliable. Fossil fuels are the
bedrock from which economic growth soars upwards. Since the Industrial
Revolution, humans have consumed between 100-135 billion metric tons of oil, and
in doing so releasing carbon dioxide into the atmosphere. Estimates vary as to
how much oil remains in the earth. A consensus is growing of roughly a 50 and
75 year supply depending on growth assumptions and types of oil reserves
considered. Globally, 80% of energy consumed is fossil
fuel based, 10% biomass, 5% nuclear, and 5% renewable (solar, wind, hydro,
geothermal). Global economic growth is anchored to an
eroding foundation of energy supply.
The US is the largest consumer of oil,
followed by Europe and China. In offshoring industry, the US and Europe have transferred
some of their oil consumption to China. The energy reauired to produce and transport
commodities consumed in the West are now place in China’s ledger. If
consumption drops in the US and Europe, oil consumption should drop in China unless
China stimulates their domestic consumption to mitigate the loss of foreign
Renewable fuels include biomass, hydroelectric,
wind, solar, and geothermal. Biomass requires fossil fuels for its production. Large
hydroelectric projects are powerful and efficient providers of energy but can
cause environmental damage and the displacement of local populations. Wind is a
promising energy source but usually only functions 25% of the time. Solar
energy, at least conceptually, comes the closest to an infinite source of
energy, at least from the perspective of the relatively tiny earth. But at
present solar energy must pass through our atmosphere which is increasingly
being filled with carbon dioxide and will potentially hinder efficiencies. Manufacturing
solar panels involves the use of caustic chemicals and creates greenhouse
gasses. Geothermal is also a promising energy source. The amount of thermal
energy stored in the earth, from the human point of view, again approaches an
infinite energy source. Up until now its exploitation is largely limited to
areas near tectonic plate boundaries such as in Iceland. Cracking through the
earth’s mantle could have explosive downsides but these are primarily
New Deal (GND) contains many worthy proposals to support the development of
renewable sources of energy, along with a useful expansion of social programs.
But in its acquiescence to continued economic growth, the GND falls short of a
viable solution in a similar manner that the original New Deal fell short of
Folkhemmet, or to Obama Care falling short of Medicare-for-All. Renewable
energy sources may indeed in the future turn out to be the silver bullet
required to save the concept of perpetual economic growth. Funding should be
generously allocated for continued research. This is a primary goal of the
Green New Deal and it is certainly worth the effort. But what if technological
breakthroughs do not materialize. If no solutions are found, the decision to
maintain perpetual growth will turn out to be mankind’s Army Detachment
obscure reference that only military history buffs would understand. Army
Detachment Steiner became part of popular culture in the past few years though
the viral videos featuring Hitler in his bunker. These parodies depicted the
moment the Führer realized that Army Detachment Steiner was totally
insufficient to stop the Soviet invasion and that suicide is now his only
Detachment Steiner consisted of a small ragtag group of soldier assigned to SS-Obergruppenführer Felix
Steiner and given the mission to save Germany during
the Battle of Berlin by stopping the implacable Red Army lava flow that erupted
from the cauldron of Stalingrad. Hitler inflated Steiner’s very limited
military capacity by labelling battalion into an army detachment. This is not
dissimilar to the magical thinking required to imagine renewable energy sources
will one day have the capacity to fuel implacable economic growth. In the end
Steiner refused to attack the advancing Soviets. The moment of Hitler’s fateful
meeting with reality is at the center of these parody videos. But by this point is was already years too
late to execute an orderly withdrawal.
Complete annihilation was the only outcome possible.
We are not at
the Battle of Berlin stage of the climate crisis. A stubborn insistence on
perpetual growth based on miraculous renewable fuel silver bullets is the best
way to get ourselves there.
would be rendered as Degrowth in English, but this sounds clunky and ugly.
There are active semantic debates within the décroissance movement about rhetorical
strategies and labels. For example Noam Chomsky disapproves of the “degrowth” appellation
because of its negative connotations. Aesthetically “degrowth” is a clashing of
a Latin prefix on an Anglo-Saxon root. The French word croissance is
derived from the Latin crescere, which signifies a coming to life. So
décroissance provides the ballast contained in the prefix “de” to the
blossoming of life. In France they often try to turn the rhetorical tables by
labeling infinite growth as “surcroissance”. Here the prefix “sur” imparts
buoyancy. The fundamental argument of the décroissance movement is that given
the current climate crisis, ecological ballast is required to gravitate back
into harmony with our terrestrial host. MMT on the other hand argues that
economic buoyancy will boost us towards a just society. If this economic buoyancy can be directed
towards a secure safety net, towards productive class peace, and away from
consumption, then the conditions are set for a socially serene décroissance.
is rooted intellectually in the ideas of sociologist Emile Durkheim,
anthropologist Karl Polanyi, and psychoanalyst Erich Fromm. It has been
profoundly influenced by several social polemists from the 60’s including
sociologist Jacques Ellul, whose best known work, Propaganda, studies the
interaction between information and propaganda. Ivan Illich wrote De-School, a
polemic against the harmful impacts mass education on children. Militant critic
of the society of consumption, Michel Clouscard is the author of the Neofascism
and Ideology of Desire. Another source was the anti-development movement
in France in the late 60’s and early 70’s that saw the Western impetus to
economically “develop” the Third World as simply a continuation of colonialism
in a different name.
advocate of décroissance in France is economist Serge Latouche. Phiosopher
Alain de Benoist has also written a book advocating décroissance. The tired binary
left/right political spectrum is falling out of favor in France but Latouche
could be considered a left populist while de Benoist, a populist from the right.
This matches MMT’s wide populist appeal, with AOC supporting it from the left,
and Donald Trump implicitly but Marine Le Pen explicitly supporting it from the
right. Décroissance has recently caught some traction in the US, clearly
influencing the recent Michael Moore movie, “Planet of the Humans.” The décroissance
movement often turns its rhetorical guns on the “sustainable development”
movement. Claiming that its true goal is to “sustain” multinational profit
margins, advocates of décroissance argue there is nothing sustainable about
perpetual economic growth. They cynically see the “sustainability” movement as
part of a corporate greenwashing public relations campaign.
a virtuous circle of a serene décroissance, Serge Latouche resorts to a
slightly cringy eight R’s formula: Reevaluate, Reconceptualize, Restructure,
Redistribute, Relocate, Reduce, Reuse, Recycle. By Relocate, he is referring to
a process of regionalization, a preference for the local. As in think globally,
act locally. A fundamental strategic goal of décroissance is having citizens strive
for political innovation and economic autonomy at the local level. Latouche
exhorts communities to launch projects that are rooted in the spirit of place. He
suggests taking local control over food distribution, establishing local micro-currencies,
in a wider attempt at local autonomy. Eager to opt out as much as possible from
the larger society by changing values at the local level, he acknowledges there
agrarian utopias always run up against is the threat posed by roaming bandits,
as demonstrated in Seven Samurai. There is a dialectic relationship between the
power of the state (One) and the political maneuvering room possible on the
local level (Other). In theory, the more powerful the One is, the more secure
and prosperous the resulting environment will be, and the more freedom the
Other can be accorded. But having a powerful and competent One is a rare event.
Since it doesn’t often exist, humans have often found it necessary to invent
One: an all knowing, all powerful, benevolent One.
Ideas are not enough—an appropriate ecosystem is where
they will flourish. But the size and political structure of the US is
increasingly creating a sterile political soil sowed with salt, where progress
and new ideas are easily thwarted by either side. This current US internal
power structure and globally dominant position is like that in China at the end
of its Medieval period. A powerful empire at that time, China was
just becoming aware of stirrings in the far away land of Europe. A couple
centuries later, large swaths of the Celestial Empire were
under Europeans control. How could this have happened?
with Montesquieu, many commentators have pointed out that Europe’s great
strength, its rich and fertile soil for innovation, was its political
fragmentation: its everchanging labyrinth of frontiers and nodes of power. This
becomes clear if we compare China and Europe after the year 1400. China had at
this point already developed the printing press, gunpowder and long-distance
shipping while Europe was more or less still in the Dark Ages. But because
China was a single political unit dominated by an oppressive, despotic, and
heavily burdensome elite it never took advantage of these inventions since they
were threats to status quo power. Divided Europe, on the other hand, was living
in a Darwinian primordial-state stew where disperse elites were competing. It
was only because of this decentralization that new ideas, the same that were a
threat to the Chinese elite, were seen as seeds of opportunity that could
blossom into tools of power in the struggle for European domination. This
laboratory-of-power provided a rich ecosystem for new innovations that, when
they turn out to be successful, would be adopted by all the others in an effort
to keep up. This is how Europe evolved the technical and ideological power
that enabled it to dominate the rest of the world in the 19th
century. In contrast, the centralized Chinese Empire imploded into the 20th
century only to finally collapse upon itself in no small part due to
humiliation brought on by Europeans. Starting in the second half of the 20th,
under the auspices the Communist Party, a novel ideological version of “One”,
China has restarted the process of imperial centralization and the
concentration of power. China’s tiny remaining residual areas of fragmentation
are creating increasing tension but also give hope as places where better
societal seeds can take root.
in mid-20th century Europe, with the rise of mechanized total war,
Europe’s endemic power struggles crossed the threshold of allowing constructive
innovation into assuring collective destructive annihilation. In the wake
of this catastrophe, a weak form of the One, the EU, was created as a way to
diminish this destructive competition and divert it towards more healthy competitive
avenues towards progress. But today Europe is staining under the
contradictions of centralization towards a weak center and the current pandemic
is forcing a rapid return to regionalization.
the current pandemic, we are also seeing stirrings of regionalization in the
US, as like-minded groups of states band together to pursue policy. In
California there have even been calls for independence. With its huge
population and powerful economy there is no doubt California is a viable
nation-state. The problem will be the Currency Question. In
Scotland's recent bid for independence, they simply ignored the crucial
question of whether they would keep the Pound (but with no ability to printing
it), adopt the Euro (as we will see again, no printing), or create their own
currency which they would be able to print and therefore be fiscally
the power of the US dollar, and the spending opportunities the Treasury
Department gives, the best strategy would be to push for as much devolution of
power from the Federal level towards the states while stopping short of full
independence and thus losing the dollar.
history is a pendulum swinging between imperialistic centralizing forces that
result in larger and more powerful universalist political entities. Inevitably
these imperial entities compress and concentrate so much mass that similar to
the Big Bang, they destabilize and explode the centrifugal particularist forces
of nationalism and regionalization. Particularism in its turn reaches an outer
boundary. As the decrease in size and power, political units become vulnerable
to raiding by roaming bandits or incorporation into stronger neighboring fixed
bandits. One of the newly fragmented regions can start acting as a new core,
drawing neighbors into its gravitational field by the power of an innovative
organizational principle. This yoyo-like process of retraction and expansion gives
hope that a world ever deeply addicted to consumption could soon metamorphosize
into an ecologically aware society living serenely within the earth’s limits. The
other process would be a deep ideological conversion by the One, currently
mired in addiction to consumption. Something along the lines of Constantine’s
conversion to Christianity.
have historically twice been the trigger of major imperial retrenchments. Launched
by the strategic brilliance of Genghis Khan, the Mongol Empire connected China
to Europe during the 13th and 14th centuries and
represented the first case of Eurasian globalization. Mongol military might—Pax
Mongolica--ensured trade routes such as the Silk Way stayed open and safe. These
very same routes became the passage ways of disease and pestilence that had
previously been sequestered and isolated deep in the eastern Eurasian steppe. The
resulting Black Death devasted Europe with a dose of spontaneous décroissance,
both demographically and economically. The resulting labor shortages did
wonders for peasant salaries and standard of living during the following
1870 to 1918 British naval supremacy powered another Globalization episode
which featured massive migrations of European populations and pollical power towards
a non-European periphery. But this centralizing tendency from multiple nodes of
power inevitably crossed each other and clashes ensured. WW1 was a veritable
battle of the empires—British, French, German, Austro-Hungarian, Russian, and
Ottoman. Vulnerable human tinder, weakened by wartime deprivations, allowed the
Spanish Flu to scorch much of the globe. Pax Britannica was ending. Woodrow
Wilson’s 14-Points spelt particularist doom to these exhausted empires by
unleashing the centrifugal powers of self-determination and nationalism. And not
just the many new European nations spawned by the breakup of the Austro-Hunganian
and Ottoman empires at the end of WW1. This centrifugal anti-imperialist wave
also included Indian independence, the ensuing global anti-colonial movement,
culminating finally with the victory of Nelson Mandela’s African National
Conference. And in launching this wave, the US became a powerful node of global
power. Will the current pandemic impel a similar fate for Pax Americana
and its global empire of consumption and infinite economic growth? Today, the décroissance movement seeks to
harness these centrifugal forces to propel the world in the direction of
localism. But where will the new node of power arise?
The Bond Market and the Euro
The Eurozone provides a real time petri dish
to better understand the intersection of monetary policy and regionalization--to
study the interplay between centralizing and centrifugal tendencies. During this
pandemic, the echoes of Weimar are impeding Europe from addressing the
resulting economic fallout. The balance between centralization and
regionalization has suddenly been lost in favor of the smaller political
entities. The old continent is teetering precariously towards fragmentation,
caused by the weakness of its center.
a contextual grounding, following the Second World War, the various European
nations moved towards the Folkhem model in creating socially democratic
institutions such as universal health care, affordable pre-schools and
universities, and pension systems for the elderly. The European social efforts
easily surpassed those created by the US’ New Deal. But they never reached
Swedish levels because peace between the two productive classes was never an
explicit part of these European efforts.
the end of WW2, the German Question was posed. How to keep Germany from ever
doing this again? The Morganthau Plan was one response, it sought to impose a
drastic form of punitive décroissance by deindustrializing Germany. According
to Goebbels the plan was to turn Germany into a giant potato patch. This
inspired many German soldiers to fight on until the bitter end. By 1948, the
better angels of noblesse oblige had won the day, and as the nascent
global One, the US instituted the Marshall Plan. The reindustrialization of
Europe had begun, with MMT-style fiscal stimulus provided by the now global
reserve currency, the US dollar. An elderly old continent Europe that had once
ruled the world, now lay dead in the ashes of the two world wars. A new Europe
was reborn, but only to some extent in the image of their American cousins, one
of two new global hegemons.
new social programs and Marshall plan were both responses to the rise of Soviet
power, the other node of global power. The wealthy classes of both the US and
Europe discerned this looming threat on the horizon and took positive actions
to deal with it.
until the Second World War the pound sterling had been the global reserve
currency. Late in WW2, a conference took place at Bretton Woods, New Hampshire.
On the agenda was the architecture of post war monetary system. Two visions of
the new world order were debated. America at the time was in a similar position
globally as China finds itself today. The US was the world’s great exporter and
the as a result, world’s great creditor nation. The US goal was to cement the
concept of free trade and at the same time limit their trading partner’s
ability to manipulate their currencies. A strong currency is an exporting
nation’s greatest burden. Manufacturing as efficiently as possible, driving
worker wages as low as possible, but always vulnerable to importing nations’ limits
imposed by protective currency depreciations, or worse tariffs. The US main
strategic goal at Bretton Woods was to put an end to these restrictive polices
and to ensure the free movement of trade. The very same restrictive policies deployed
when the US was a burgeoning industrial power in the 19th century. US
industry had grown strong behind a protective phalanx of protectionist
visions of a new world order were presented at Bretton Woods. The US position
was a universalist position which would cement the unilateral power of the One.
Maynard Keynes presented a more particularist plan, favoring a multilateral
approach in favor of the Few. No one at the conference ever presented any plans
that sought to protect the interests of the Many.
lieu of dollar hegemony, Keynes proposed the Bancor, a supranational
currency used for international exchange as a unit of account but not as an
actual currency. The Bancor value would
be tied to a basket of currencies and gold. He also proposed an institution to
help manage international trade imbalances. Looking back, most economist see
the wisdom in Keynes’ proposals. However, the US won the day, an International
Monetary Fund, based in Washington DC was established to manage the new global
monetary order. The Soviet Union refused to acquiesce to dollar hegemony and a
Cold War had begun.
to their postwar industrial strength and sound monetary policies, it only took
Germany a few decades to rise to the position of regional financial hegemon in
Europe. In those days, each European country featured their own currency. Attempts
were constantly being made to stabilize exchange rates between nations. Some
currencies were powerful super-currencies, such as the Deutschmark and French
Franc. Others were weaker, for example the Greek Drachma and the Italian Lira. Weakness
could come as a result of less stringent monetary policies or weak
manufacturing bases. Countries like Greece and Italy could protect their
domestic industries through increased fiscal spending and/or by devaluing their
currencies. European nations sold their debt on the bond market. The interest
rates charged varied greatly. Nations with super-currencies got low rates while
those with weaker currencies were charged higher rates, which limited their
ability to spend fiscally. Thus the discipline of the Bond Market was felt by
the weaker currencies.
the Greek Drachma depreciated, products manufactured in Germany became more
expensive. Bad for German industry, better for Greek industry. As reviously
mentioned, currency devaluations could serve as a very imperfect form of protectionism.
Manufacturing powerhouse Germany did not appreciate this, so gradually, over
the years as its manufacturing base flourished, it adopted the natural ideology
of the industrial powerful: free trade.
faced the same problem that the US did after WW2, and that China faces today. Global
manufacturing powerhouses naturally adopt a free trade ideology. With China,
“free trade” is a one-way street. Chinese industry is still developing. On the
domestic front, similar to 19th century American, China imposed
trade boundaries by pursuing protectionist measures against imports. But on the
external front, China pursues 20th century American ideas of free
trade, trying to convince other nations to open their nations to steady flow of
low priced Chinese products. But cheap labor + strong currency = economic ruin
for China’s current model. Therefore, China locks its currency at an
artificially low value.
power and efficiency of German industry meant there was no need to pursue explicit
protectionist measures to keep discerning, quality-conscience German consumers
from purchasing cheaper Greek products. But Germany did recognize that the growing
strength of their currency was becoming a serious problem.
tried a similar exchange rate strategy to that the US deployed in Bretton
Woods. The European Exchange Rate Mechanism (ERM) was established. It was sold
as a way for the more monetarily profligate nations to get a stern dose of
sober German monetary discipline by basically tying themselves to the sage
whims of the German Central Bank. The reason to do so from the German point of
view was to keep these less fiscally disciplined countries from devaluing their
currencies and thus blocking the flow of superior German goods. But when
Germany, always paranoid about inflation, hiked their interest rates in the
wake of German reunification, all hell broke loose and eventually parasitic
plutocratic speculators like George Soros gravely damaged the ERM on Black
Wednesday, and in doing so extracted a fortune from Europe.
need to keep German goods flowing unimpeded by potential currency manipulations
did not go away and so eventually the Euro was devised. The beauty of the Euro
from the German point of view is that by joining their strong currency to
weaker currencies such as the Drachma or Lira, the overall strength of the new
Euro would less powerful than the D-mark. This would help them in exporting to
the rest of the world in addition to locking in European exchange rates once
and for all.
Germany benefited from the bouyancy created by the amalgamation of their strong
D-mark with the currencies of economically weaker nations, it refused to give
these nations any sort of control over the printing presses of this new
currency. Yes, perhaps Germany could allow a form of Potemkin control—create a
fictional European Central Bank, for example—but real monetary power must
always stay in German hands. Eurozone nations became the equivalent of US
states, they were required to relegate their printing presses to museums as the
price of entrance into the Eurozone. The only way they could spend money was
through taxes, or by borrowing on the bond market. Politically, given certain
historical unpleasantries, Germany did not want to serve the public role of
monetary disciplinarian in Europe. By forcing European nations to raise money
on the real bond markets, Germany hoped the dreaded Bond Market would act to
temper the more proliferate monetary tendencies of some European nations.
Euro system explicitly increased the risk of default: as Trump and MMT
advocates state, a monetarily sovereign nation cannot be forced to default on
debts issued in their own currency because they can print this currency. But
take away the printing presses and now European nations could indeed default.
But the ever-wise Bond Market saw through this ruse. The Bond Market assumed
that Germany, due to certain historical unpleasantries, would be forced to step
in to bail out a European nation on the brink of default and so the Bond Market
encouraged the real bond market to price their interest rates accordingly.
Nations like Greece, who the Bond Market had previously treated as if they were
Greeks, charging them high interest rates (over 10% at times) for loans,
suddenly found themselves, in a blink of the eye, with nice low German interest
rates (less than 2%). This was basically free money to the Greeks—and they
didn’t even have to print it! Productivity in the Greek economy had not improved.
With their newfound wealth it was quite the opposite. Suddenly the profligate
Greeks and other economically weaker European nations were able to live a plump
German lifestyle. Germany did not mind too much; German manufactured goods were
increasingly flowing into the suddenly plump Greece and to other previously
marginal European nations.
German–Greek dynamic closely mirrors Chimerica, the integration of the Chinese
and American economies. Americans performs conspicuous gluttony while diligent
worker bee China supply them with a never-ending supply of goods to consume. All
the while the planet suffers. Carbon is launched into the sky from the dirty
factories in China, where environmental protections are frowned upon. Fossil
fuels burning day and night to manufacture commodities and in transporting them
to their final end consumer on the other side of an exasperated globe.
difference is that America anyone else’s central banker to achieve something
close to free money; Americans are proud possessors of the global reserve
currency’s printing presses which fuel their plump American lifestyles. But to
China even this was not enough. In the early 2000’s, China started recycling
large amounts of money into the US real estate markets, helping trigger a
speculative bubble that for a short time had Americans living even plumper as
they took out second mortgages on their now hugely inflated home equity. All
this extra disposable income was now available to buy even more Chinese
products. Carbon dioxide accumulating ever denser under what is supposed to be
a protective atmospheric dome.
there were a few wise Germans who realized these Eurozone dynamics were
unsustainable, but their voices would have been silenced by the manufacturers
getting rich and the European integration enthusiasts preaching a thousand-year
EU Reich of perpetual peace and free trade. But in the end the Bond Market failed
its duty to discipline the Greeks and German Chancellor Angela Merkel was
forced to step in. Interestingly, in an echo of the Democrat’s role in the US,
a far-left Greek Government was brought in to impose Bond Market austerity on a
monetarily rambunctious Greek population after years of a center-right
government presiding a beggar’s banquet. Austerity is a malignant form of décroissance.
Austerity is applied in a rough ratio of 80% to the working classes with only
20% to the bourgeoisie. This type of décroissance must be explicitly avoided in
attempting to ameliorate the infinite economic growth paradigm. The climate
crisis cannot be solved on the backs of the working classes as EU leaders are
attempting to do with the debt crisis in Greece.
is historic precedent for this paradoxical reversal of roles—for the supposed
tax-and-spend Democrats being the ones to impose economic sobriety while the
supposedly austere Republicans start throwing money around as soon as they get
their hands onto power. Otto von Bismarck always held that parties should take
the helm to carry out policies which they opposed:
If reactionary measures are to be carried, the Liberal
party takes the rudder, from the correct assumption that it will not overstep
the necessary limits; if liberal measures are to be carried, the Conservative
party takes office in its turn from the same consideration.
This is the “only Nixon could go to China”
idea, which recently, somewhat optimistically if not outright delusionary, this
has become “Only Trump could do Universal Health.”
the Greek debt crisis, other weaker European economies started to groan under
the weight of a suddenly reinvigorated Bond Market. The real bond market
started increasing the interest rates charged on Italian bonds. Instead of
paying under 2%, suddenly Italy was only able to sell its bonds for over 6% with
no stop in sight for this vertiginous trajectory. The Bond Market suddenly
stopped being an imaginary plutocratic constraint and instead was seriously
threatening to destabilize the entire Italian banking system. During the Greek
crisis, the Italian government refused to accept any similar austerity linked
bailouts. Italian leaders understood well that if their banking system
collapsed, so would Germany’s.
crisis ensued. According to MMT advocates, the solution was to de facto print
money by having the ECB buy an unlimited quantity of Italian bonds. And after
some hesitation, no doubt of German origin, this is exactly what the ECB did. MMT
also pushed for mutualizing European debt through the issuing of Eurobonds.
Germany blocked this measure. The Euro is a supercurrency and the only thing
stopping beneficial printing of Euros was German paranoia over Weimar.
then there was the pandemic.
Money -- Pandemic Monetary Policy
monetary policy is pure MMT: in countries with hyper or super-currencies, central
banks rent heavy duty helicopters and start raining money upon the startled
heads of their citizens! This is an extreme form of fiscal stimulus; conceived
to ward off depressions. More modest
forms of stimulus are applied during recessions. The helicopter money concept
started as a tongue-in-cheek parable by Milton Friedman but over the years is
an often discussed proposal in theoretical discussions and is now becoming a
reality in the pandemic stricken US. This being America, those heavy-duty
helicopters are showering liquidity upon sticky-fingered bankers on Wall
Street, but a few lesser helicopters are sprinkling cash on lockdown Americans,
exiled in their homes on main street.
with weak currencies such as Turkey, helicopter money is not an option due to
its potential negative impact on fragile international exchange rates.
So instead of showering his citizens with Lira, President Erdoğan has opened a bank account and is imploring
the Turkish people to send him money!
look on this American monetary spectacle with skepticism. The EU has not had a
great pandemic given the centrifugal forces towards borders, barriers and
regionalization. Germany sees this chaos as an opportunity to reassert
control over the ECB. Germany is aware there will be Europeans calling for ECB
helicopters. The specter of Weimar still looms large in the minds of Germans.
So, a constitutional court in Germany has committed a case of lèse-majesté by
ordering a European court to review a two year old decision that rubber stamped
the ECB’s bond buying policies. Germany implicitly threatened to not participate
in future ECB bond purchases. This is the equivalent of the US threatening to
not participate in NATO activities.
Cynics saw this as Germany creating a strong bargaining position over
the question of helicopter money in Europe.
In late May, EU
president Ursula von der Leyen announced a 750 million Euro pandemic recovery
fund that would be borrowed by the EU Commission from bond markets, backed mutually
by the 27 member nations of the EU. This is historic in being the first time
the members of the EU have mutualized in any fashion their debts. Some were
calling this a Hamilton moment, recalling in 1790 when Alexander Hamilton
convinced the US congress to create a federal debt, transforming what had been
a confederacy of states into a unified federal state. What is interesting are
the various options given as to how these debts will be repaid. Either the
member states will have their contributions increased, or the EU will reduce
their payments back. Far more likely is
that the EU will be given the authority to collect taxes to pay these bonds
back starting in 2028. The EU current impotence to raise taxes recalls that of
the weak federal German state at the start of WW1.
This was a
good compromise for Germany as it relieves pressure for more drastic ECB
measures and it potentially allows them more control as they will no doubt want
to add conditions to the member states who receive these funds. The method of
financing this relatively modest fund is conservative, a vanilla loan from the
bond market. This satisfies the more fiscally frugal members of the bloc. The
idea of mutualizing EU debt pleases the partisans of further EU union. And
crucially for Germany, ECB helicopters stayed glued to the ground.
point of view of décroissance, this tepid European fiscal response to the
economic fallout of the pandemic does have positive aspects. Given Europe’s
social protections, the economic pain caused by the pandemic could be less than
that felt in the US. Europe, with its anemic growth rates, in a large part due
to the transfer of its industry to China, has been flirting with décroissance for
the past two decades. The problem is the fallout from the pandemic and the weak
growth rates push the burden unfairly on the working classes. The bourgeoisie
as a class have benefited from globalization and are far more likely to be able
to telework than a bricklayer during the pandemic.
Ten thousand years ago, emerging from under his forest’s
tenebrific canopy, newly civilized man, lying on his back to rest from the labor
of his freshly ploughed fields, was at last face to face with his new rival;
the startling immensity of the open sky. Tempests, droughts, and worst of all,
lightning replaced the beasts and shadows of his former life amongst the trees.
With the nature of his relationship to this pale blue antagonist hanging in the
balance, man made a fateful choice. Whether directly or through appointed
deities, with all the audacity he could muster, our ancestor declared himself
sovereign over the forces of nature.
terrifying the annual ritual of the winter solstice must have been to our
distant forbearers. Ever shortening days, the seemingly imminent victory of
darkness -- the more mathematically inclined of them may have even calculated
to the day the eventual total disappearance of the sun and mankind’s descent
into perpetual night. The tales of their heroic efforts to stave off disaster
are lost to us forever.
In taking on
the climate change challenge one sees what is most noble in man. Standing
before a realm, he declares sovereignty; faced with a threat, he takes the initiative.
Laugh as we may at our progeny for their strange rituals which succeeded in
warding off the disappearance of the sun so many centuries ago. It is man’s will
to rise to the challenges posed by nature, it is the beast’s fate to not.
The condition sine qua non in the US for comprehensively
addressing climate change is a peace treaty between the two productive classes,
which will take concrete form in a social pact. In the US this can be financed
in part from transfers from the bourgeoisie towards the working classes but
also by extracting overvaluation of the hegemonic dollar through the
application of MMT. Call it a Green Folkhem. Think of this dollar overvalue as
a sort of oil reservoir and MMT policies as oil wells which bore down to this
pool of wealth and pump it back to the surface for exploitation by the
productive classes. A veritable dollar hegemony dividend. What is vital to
understand is that the overvaluation accumulated due to dollar hegemony is NOT
a renewable resource and once it is all pumped to the surface, the US dollar
will lose its reserve currency privileges. It will decline from being a hyper-currency
to a super-currency. This precious fiscal resource should not be wasted on mindless
consumption but must be directed towards building the Green Folkhem. To be sure
the Dollar will still be a powerful currency, the rules of MMT would still
apply, only less so than they do with a global reserve currency.
Some of key social
features of a Green Folkhem would be a secure universal health care system. Andrew
Yang’s Universal Basic Income would also be a vital component. This assures
people of a hard floor to their standard of living as well as promoting
internal migration in the US away from expensive nodes of urban affluence and
towards less expensive rural-based towns in the US. Other important programs
would be affordable access to higher education and job training programs.
goal of this Green Folkhem is a socially protected vessel ready to enter a
sustained period of controlled décroissance. A target of –3% annual GDP
contraction would be set. As a society grows wealthy, its birth rates naturally
decline to below replacement, creating population décroissance. It is vital
that this natural process be allowed to occur and not be vetoed by immigration
policies. Americans have an average Ecological Footprint of 8.3 and Guatemalans
1.8. Décroissance would encourage migration from the plump countries towards
class alliance built in stone by the Green Folkhem empowers a war of attrition
against the parasitical classes. The plutocratic hordes of wealth can now be
clearly seen for what they are, stashes of precious standard of living, created
by the productive classes, but hijacked and held hostage in plutocratic vaults.
These fortunes must be liberated in the name of décroissance. On the margins of
society, the criminality and social friction caused by the Lumpenproletariat is
also diverting precious resources away from productive class standard of living
and must be minimized.
reindustrialization of the US must be protectionist—of the climate. Constructed
in an incremental fashion, it would take a certain time. Chimerica was likewise
not built in a day. Green tariffs, gently climbing each year would give the
impetus. Encouraging a race to the top, these tariffs would be calibrated to reward
producer nations with stronger environmental policies. Currently globalization
encourages an environmental race to the bottom by boasting multinational profits
for those located in producer nations with the worst environmental policies. With
the advent of automation, the urge to arbitrage on labor differences between
the first and third world diminishes. One variable of control in a regime of décroissance
would be to adjust workweek hours. Necessarily commodity prices will rise and
in response consumption will fall. This is the purpose of décroissance. Capitalism
functioned swimmingly in Sweden’s restrictive Folkhem, there is no reason to
think, given stern government guidance and financial support in limited cases,
that capitalism will do any worse in a Green Folkhem. Just as children thrive
once boundaries are set, so does Capitalism.
policy in a Green Folkhem would need to drastically evolve. There is something deeply
repugnant about a society that gorges itself with food but mostly refuses to
have anything to do with growing it. One mitigating factor is admittedly the
incongruity between dreams of healthful bucolic paradise and the pesticide ridden
poisonous reality of chemically strewn fields. Local organic agriculture must
replace hazardous Big Food in a Green Folkhem.
In the late
60’s, Alice Waters visited France with dreams of small local farmers producing
the high quality food France is famous for. She was disappointed to find out
that while these do exist in isolated corners, France’s agriculture is just as
industrialized as the US’ was. She returned to the Bay Area and using the
gourmet aggregate demand created by her famous restaurant, she launched the Gourmet
Industrial Complex, an ironic name for the chain of high quality, small
producers who supplied her restaurant with edible matériel of excellent
quality. The producers were often of
working class origins, the consumers were exclusively bourgeois. But the local
food scene has been expanding across the United States, joined by
micro-breweries in examples of small scale, high quality production. Americans
in albeit limited numbers are willing to participate in this type of
greenhouses provide high quality produce all year round. Tomatoes in a
Brussels’ market in February can be very close to the quality of those imported
from Italy in August. There are limits though and it will be some time before
Flanders is producing high quality olive oil, coffee beans, or bananas and so
in a Green Folkhem there will always be agricultural trade between nations in
different climatic regions.
pandemic has once again proven the ancient maxim that cheap labor will block technological
progress. US meatpacking plants rely on abundant cheap and docile labor. The owners of these plants have no interest
in investing in technology to make these plants, cleaner, safer, and more
efficient. Conditions are pushed right
to the limit of being unsafe under normal conditions. During a pandemic these plants collapsed as
workers perished and the virus flourished.
Contrast meatpacking in Denmark, where labor is well paid. Their plants are highly automated. Workers have a clean and safe environment to
do their jobs in. There was no
disruption in the meatpacking industry in Denmark during the pandemic.
It is vitally
important that the citizens of a Green Folkhem have an ever-blossoming
relationship with agriculture. A year of agricultural service could help
resolve labor shortages that appear in the current situation. Home gardens and
schools growing their own lunch crops with labor provided by students are some
of the many ways to achieve this.
Folkhem experiencing décroissance will have little need to build new buildings,
which despite green building rhetoric, even in the best cases, cause
considerable environmental damage. Architects would instead concentrate on
renovating existing building stock. A decreasing population means the cost of
housing should generally decline. The current phenomenon is of urban nodes
acting as magnets, densely concentrating wealth and housing demand through
their near monopoly on the most sought-after jobs. This will be alleviated by
the UBI and its tendency to disperse people, liberated from having a fixed
place of employment, towards areas with lower standards of living.
its anemic growth rates, and only slightly tattered welfare states, is not all
that far from being a functional Green Folkhem. This fact helps substantiate
the feasibility of the concept. Most recent growth in Europe can be tied to
population increases due to immigration and correspondingly most social
problems are linked to the same source. The parasitic power of Europe’s
plutocratic and lumpenprolatariat classes is weaker than in the US. There
remain two main tasks for Europe to move towards a Green Folkhem. First is a
truce in the admittedly low-grade producer class war. The bourgeoisie must make
a financial gesture to ensure the climate crisis is not resolved on the backs
of the working class. Second, Europe must relocate manufacturing back to the
old continent. Chineurope is less integrated than Chimerica is. The process of
once again intertwining production and consumption in Europe should be less
complicated than in the US. Europe’s indigenous population has for a number of
decades reproduced at below replacement levels. If this natural population
reduction of plump lice is allowed to occur, global décroissance remains viable
even with the predicted demographic expansion of lean lice in other areas of
facing a grave international crisis as a result of the pandemic. The global
economic system they have ridden to a point where they could imagine world
domination in the future is now collapsing before their eyes. The benefit of
globalization to US elites was its ability to drive down wages—it gave them
access to an exquisite global reserve labor pool. But the coronavirus and its
associated lockdowns is pushing the US into deep wage deflation. With a soon to
be 50 million unemployed Americans, Wall Street elites no longer need Chinese
wage slaves to increase their profit margins. But worse for the Chinese, the
lockdowns are inducing demand destruction: the US consumer will very soon not
be able to perform her duty as the world’s glutton of last resort, leaving supertankers
full of shiny Chinese trinkets rotting on docks in China.
With the US
facing an extreme bout of pandemic induced décroissance—great for the climate terrible
for China’s global ambitions—the only card the Chinese have left to play is to
pump up consumption in their domestic economy, resisting décroissance with
croissance à outrance? Lean lice about to get a bit plumper? This process, if
combined with increased social programs, a Sino Folkhem, will be a healthy
development. China must also collocate consumption to their production and
consumption. The huge foreign currency reserves China has built up as a result
of globalization can be reinvested domestically in social programs and in
support of increased domestic consumption. China will necessarily go through décroissance
as a result of industry moving back to the US and Europe and so this can be compensated
for, but not fully, by increased domestic consumption.
On the global and ideological levels, there must also be
a major ideological shift in mindset:
The flow of the two last millennium’s history is that of
a slow rise of uniformity, which starts with Monotheism. The affirmation of one
God necessitates in effect the unity of the human family, no longer just as a
biological species, but from the spiritual point of view. To say there is only
one God, is to at the same the same time say that humans form but one sole
family and to disqualify all the other gods. This amounts to establishing a
system of truth where otherness becomes a source of falsehood and error. “One
was the characteristic of first Judeo-Christian and then Modern culture”, wrote
Michael Maffesoli. One excludes the Other, which threatens its exclusivity. The
Other can therefore be in good conscience eliminated. In the course of Western
history, the obsession with One never ceased to function as the guiding
principle. Driver of intolerance, exclusion, separation, and then atomization,
it has fueled all inquisitions, and justified all attempts to eliminate
Alain de Benoist – L’idéologie de genre
The current viral strain of One jumped ideological
species in Ford’s auto factories. It lay semi-dormant during the Great
Depression and Second World War. As American power rose in the aftermath of
WW2, it slowly spread to the “free” world with the help of the then altruistic
and far-sighted Marshall Plan and the Asian Tigers policies. At that point no
one imagined that dangers of the contagion of hyper-consumption. The Fall of
the Berlin Wall released One from its Cold War quarantine and it was free to infect
most of the globe. The End of History was prematurely declared.
at its handmaiden Imperialism, are the delivery mechanisms fueling the current
culture of hyper-consumption. The entire globe is encouraged to converge
towards the One, this being the American Dream of infinite consumption. Décroissance
necessarily entails a gradual dismantling of globalization, the admittedly
highly efficient regime of cheap production which maximizes both consumption
and the destruction of the earth. Part and parcel of this will be décroissance
in the US’ Imperial capacity. Reducing military spending is a vital component
of décroissance. As global long-distance trade declines, the imperial burden of
patrolling the high seas loses pertinence and in turn lessens global tensions. The
schizophrenic policy of Invade the World/Invite the World, where US armies
invade or regime change foreign lands and then within the midst of the ensuing
chaos, generously offer to share the American Dream with a few survivors, must
objection to the Green Folkhem is that in parts it is just a clever “Green”
restatement of Trumpism. There is truth in this statement. But taking this idea
further, the Green Folkhem is much more accurately described as a restatement
of 2015 Sanderism. Bernie was strongly anti-free trade and anit-cheap labor
immigration. But contrary to Trump, Sanders consistently pushed for huge
increases in social programs. Such an audacious plan will only be implemented
with widespread approval so the fact that Trump supporters can see benefits
within the Green Folkhem is a feature and not a bug.
starts with the plump lice but the lean lice must adapt to climate realities as
well. French economist Serge Latouche has written passionately about the third
world’s need to reject the Western concept of “development” and to instead look
inward towards their own cultural and economic traditions. He writes:
The global economy, with the help of global institutions
emanating from Bretton Woods, has evicted millions and millions of people from
the countryside. It has destroyed their ancestral way of life, erased their
means of subsistence, and crammed them into third world slums and suburban
ghettos. These are the “castaways of development”. These left behinds are condemned
by the dominant paradigm to disappear, they have no choice than to organize
themselves around an-other logic. They must innovate, and many of them
will invent an-other system, an-other way of life.
Latouche, Survivre au développement
Latouche goes on the label this embracing of the other,
a Vernacular Society. This rally cry to the Third world holds much wisdom for
the First as well. Humans must move being merch-hungry marionettes in the
pursuit of One: the infinite expansion of production and consumption. Embracing
the other is the first step towards finding a mode of living in harmony
with the natural limits of our terrestrial host.
Grand Inquisitor – Politics of a Green Folkhem
liberal democracy the political vessel best able to deliver a Green
Folkhem? Many liberal democracies have
not cloaked themselves in glory during the ongoing pandemic. Authoritarian systems like those in China
eventual rose to the challenge but only after they attempted to use their state
power to crush the virus by denying its existence.
problem is locking in the benevolent part.
The Grand Inquisitor.
of choice – political coercion
will – interested choice
need for freedom – man's need for shackles
heretics on the stake
world of ideas – herding men towards a goal
bread – spiritual bread
with an ecofriendly reader identifying with the idealism of Christ and seeing
the Inquisitor as Trump. Slowly transition
so that by the end it is a Eco Inquisitor tempted to burn deplorable eco-heretics
on the stake.
with the gentle kiss from Idealism of the lips of earthly realism.
always wins, a gentle kiss on the lips of power.
is the farmers, realism is the Samurai.
his final lectures at the Collège de France, “The Courage of Truth”
(1983–1984), Michel Foucault explored in detail the ancient philosophical
tradition of the Cynics, emphasizing one of their key principles of life. The
Cynics urged their followers to change society’s values, to change society’
Cynics preached a philosophy of other-worldliness, a precursor to
Christianity. They spoke to the decline of Athenian power in the wake of
the Macedonian Alexander's conquest and absorption of Athens into his growing
Empire. Athenian glory days were over and for the next 2,300 years, Greece
would be a trophy province for a series of empires: Roman, Byzantine, Ottoman,
and eventually the EU. In its glory days, Greek philosophers were more
concerned about how to build the best city-state than how to build an empire. A
culture in decline reacts in frustration to any system it views as rendering
the politically wise impotent. Cut off from access to the power to change
the collective, they turned inward, attempting to achieve internal salvation,
virtue, and most importantly, self-knowledge. The goal of this introspection
was to allow one to know oneself.
Cynics were proletarian philosophers. To the workers, the poor, and the
uneducated crowds, they preached their
doctrine of self-sufficiency and rejection of nomos (current
societal values). They pushed their audiences to strive to live in harmony
with nature and to reject wealth, power, fame, and possessions; to live instead
a simple life focused on challenging conventional values and living a pure life
of noble austerity. They were the
forerunners of the décroissance movement.
Foucault was dying of AIDS when he gave his last series of lectures. It is no
accident that he chose the Cynics’ philosophy of decline as a way to exhort his
students to live lives striving to change the values of their society. In
a highly metaphoric way, MMT also shares the Cynics’ concern to change the
currency of society. According to one (of many different) traditions, Diogenes of Sinope, the son of a money changer, was
ordered by an oracle to parakharattein to nomisma (deface the
current coin). He took a chisel and defaced enough coin that
archaeological finds include many defaced coins from that period. For
his act of changing the value of the currency of coin in Sinope, Diogenes was
charged with counterfeiting and exiled to an Athens in decline.
injunction to change the value of the currency does contain some ambiguity. A
more literal and perhaps conservative approach to changing currency values would
be to carefully survey the money supply and then “deface” or “stamp out” false
foreign, barbarian coin in order to maintain the “true” value of the currency.
This approach can be seen as an ancient precursor to today’s Bond Market. But surely this was not Foucault’s point.
injunction to change a society’s currency can very easily be conceptually
expanded to a Nietzschean-type “revaluation of all values” by fundamentally
changing society’s values. If we adapt to current climate realities, for
example, the value of our coin will change, as well. Like the Cynics, MMT demands
that we cast aside current economic values. It opens a theoretical way to give
society the material means—the wherewithal—for radical change, for a Green
Folkhem. But this will be a one-off, as any truly radical revaluation of
American values will ultimately mean the demise of the US dollar as the global
reserve currency. But there is justice here, as US dollar hegemony leads to
over-consumption in the US and over-production in much of the rest of the
world. While there is no rival currency in sight, there is the dark horse of
the Bancor. MMT opens the possibility to radical revaluation of society
but only at the acceptable cost of bringing the US dollar down to the level of a
still powerful supercurrency.
Kevin Batcho is a
Brussels-based writer on economic and political issues.
A study of the dialectic between limits and infinity. To become healthy, a disordered society must change. Reordering its societal labyrinth, hedges must be displaced, and new paths paved. An amorphous state of nature takes form in bounded Civilization and begets an array of social classes. Correctly ordering these classes leads an exemplary Golden Age welfare state in Sweden. Modern Monetary Theory, which eschews traditional economic limits, provides the material means for a bountiful coupling of the working class and bourgeoisie. Décroissance proposes strict environmental boundaries to ensure this class bliss can be sustained. Expanding empires reach their apogee while roaming bandits impose a nadir on rebounding localities. The One and the Other struggle in an eternal recurrence. As paradigms shift, the One must adapt or be replaced by a rising Other. But how is it possible to impose humane limits to an environmental crisis caused by an all too human population’s disrespect for boundaries? The wise application of ballast and buoyancy is one solution. “The fundamental argument of the décroissance movement is that given the current climate crisis, ecological ballast is required to gravitate back into harmony with our terrestrial host. MMT on the other hand argues that economic buoyancy will boost us towards a just society. If this economic buoyancy can be directed towards a secure safety net, towards productive class peace, and away from consumption, then the conditions are set for a socially serene décroissance. A Green Folkhem is born.