A guest Post from Patrice Ayme.
(Well I say ‘guest’ in the sense that Patrice has very kindly allowed me to publish a post he recently published on his own Blog. It’s very much appreciated. I should add that the minor changes that I have made, in my editorial role, are gently to improve the clarity of this fine piece of work, not in any way to amend meaning. Ed.)
THE PRIVATIZATION OF MONEY CREATION IS THE ENGINE OF PLUTOCRACY.
To understand the present financial and economic crisis, we need the clarity of deep philosophy.
The situation is actually simple, in its grossest outline. To create public money, the money everybody uses (be it cash, electronic transfers, swaps, whatever) we use a private system, with proprietary money creating devices inside (say subprime, or derivatives). Civilization has never worked this way before, as the state previously was careful to stay the one and only money creator.
Now society, worldwide, uses a privately-managed public-money ‘system’ creating what is known as a fractional reserve system. [Wikipedia explanation of fractional reserve system, Ed]
That puts huge power in the hands of underground private individuals we don’t even know the names of. Those cloaked powers in turn corrupt the visible political socio-economy, from below. The whole metastasis is not even described, because intellectuals would have to do so, but most are paid by institutions subservient to the present global corruption.
We saw a similar situation in the Roman empire, when the intellectual class was at its richest, but its critical ability had been corrupted.
The modern banking system is a Faustian bargain (as in a deal with the Devil) with the bankers; in exchange for the immense powers the private bankers were given with money creation, they were supposed to loan it back to society for its development.
This worked reasonably well in the Nineteenth Century. But in the Twentieth Century, bankers observed they could support fascism regimes, and get away with it (only Dr. Schacht, one of the “Lords of Finance”, sat in Nuremberg tribunal, and he was exonerated). Now bankers think they can engineer a depression, and get even richer from it: just keep the profits, and make taxpayers pay for the losses.
By Patrice Ayme
Note 1: Paul Krugman observes, with many others, that the crisis of the West needs “intellectual clarity” to be resolved, and, meanwhile we are “overmatched“. I made preceding comment in answer to Krugman’s cogent remarks. (The New York Times had the kindness to publish what I wrote within two minutes! )
Note 2: HOW THE FINANCIAL CRISIS IS TURNING CIVILIZATIONAL:
China just established another train speed record for “unmodified’ train sets (481 km/h). OK, some will claim China stole a lot of Japanese and European technology. And some French engineers have sneered that the very high speed system in China is not as high performing as it looks (France has much higher average speeds, the highest in the world). However, this is not the point. The point is that China is trying very hard to progress and improve. Meanwhile some of the colossal technological edge of the West is eroding away quickly. The result will be world war, or global plutocratic peace (as plutocracy furthers its deal with China).
How does China improve so much and so fast? Because Chinese banks, the largest in the world, operate according to the fiduciary duty, the Faustian bargain, that the fractional reserve system ought to impose, and used to impose in the West.
Top Chinese bankers know all too well that if they cheated, they may end up with a bullet in their skull. China is led by scientists and engineers who turned to politics, but know that they cannot make mistakes in their calculations. Mao made many mistakes, and dozens of millions died.
The history of China, in the 26 centuries before that, was spoiled by a well meaning, but meek philosophy, which left too small a place to deliver progress of the material, and intellectual kinds.
Civilization is not about “leaving it at that”, the way Confucius mostly had it. Civilization is also about the dream, and implementing it. Indeed, civilization cannot stand still, anymore than a biker can stand still, because resources run out always (as Rome and the Mayas found out). Thus moving on is the price of sustainability. Progress is the price of sustainability.
Note 3: It may seem a curious thing that Karl Marx did not make a strident version of the preceding critique (instead he modestly accused tangentially bankers of “monopoly” powers).
But this Marxist discretion proves the point I alluded to above, namely that bankers were better behaved in the 19C. So Marx talked about other things.
Ironically, early American presidents had perfectly well seen the danger bankers posed, and worried more about them than Marx himself! And let no one call Andrew Jackson a communist: that would be serious mistake…
In the 21st Century, by capturing the states (USA, EU), and various institutions above them (IMF, World Bank, BIS), the bankers have established a monopoly of power early American presidents rightly feared (and Jackson, wounded at 13 by an English sword, later a proud carrier of several bullets, and a general in the field, feared very little). The wise know what to fear. The mentally simple just smile, thinking only about themselves, as they can’t think much further than that.
From the Ed.
Dear Readers, I really hope that you read Patrice’s post in full and in a quiet place where you could reflect on the meaning and underlying implications of what Patrice is saying. Those in the UK may have been able to watch a typically fabulous BBC Television series, Ancient Worlds. It’s still available on BBC iPlayer.
What comes out from the message of mankind over the centuries is that wonderful French expression plus ça change, plus c’est la même chose – the more that changes, the more it stays the same thing. But where we are as we approach the New Year of 2011 A.D. is possibly at a cross-roads – and I intend to write a little more on this idea over the coming days.