Tuesday, 31 December 2013


Conspiracy theories have been popular largely because the human mind responds to the irrational and the intoxicating inexplicable or enigmatic. This is largely because the rational and empirically-based explanation is not nearly as stimulating to the brain that craves excitement to fill the emotional void. It has always fascinated me that people cling to conspiracy theories, even long after empirical evidence is presented to prove them incontrovertibly false. In some cases, however, empirical evidence validates conspiracy theories, thereby providing further ammunition to those that find such theories appealing, especially in cases involving  social, political and economic elites that are involved in scandals, corruption, and "conspiracies". When the World Bank estimates that at least 10 percent or $7.3 trillion of the world's GDP estimated at $73 trillion is black market or subterranean economic activity, how can the average person not accept conspiracy theories and lapse into fatalism?

Why do conspiracy theories have mass appeal regardless of cultural differences? Is this unique of our epoch of widespread cynicism among the masses, or has it always been the case since ancient times? And why do such theories have greater level of acceptability in traditional societies where religion dominates than in secular ones? A conspiracy theory about the assassination of John F. Kennedy, for example, has as much appeal in Catholic Argentina as it does in orthodox Russia, or Hindu/Buddhist India. A conspiratorial work of fiction about a secret society of powerful individuals would have as much appeal among Japanese readers as among Spaniards or Egyptians. The same holds true for a conspiratorial non-fiction work about the US Central Intelligence Agency carrying out assassination plots, the National Security Agency spying on millions of people within and outside the US, or International Monetary Fund deliberately sinking debtor economies in order to transfer wealth from the periphery to the metropolis and create conditions of massive capital concentration.

Naomi Klein's book about the IMF is an example of populist hollowness that appeals to the masses already suspicious of large organization that impact the lives of millions. Those who have studied the role of the IMF using archival materials realize that this extraordinarily thin account that Klein presents is intentionally designed to appeal to the reader's emotions and sense of cynicism about powerful institutions. While scholarly works about the role of the IMF do in fact reveal that the agency works to sustain and strengthen finance capitalism at the expense of the middle class and laborers, Klein's work has as much relevance to reality as Martians building the pyramids in ancient Egypt. 

However, the book sells precisely because it is not scholarly, takes the reader through a fictional ride of intrigue like a James Bond film, and at the same time, it indoctrinates without providing any redeeming value to the reader interested in understanding the IMF's true mechanisms and relationship to governments and finance capital. That the book is more fiction than non-fiction appeals to people not just in the US but around the world as much as Harry Potter because it reads like Harry Potter, and it has about as much value in terms of entertainment, that is to say, stimulating and satisfying the irrational the mind.

Are people attracted to conspiracy theories because the dominant irrational in the mind craves to be fed; is it because we live in the age of cynicism when institutions from religious and education to political and business thrive by deceiving or at the very least manipulating the public; is it because there is a sense of loss of personal control of the environment and the individual yields to conspiracy to explain the deeper complexities of simple reality; is it that humans have a fundamental mistrust of each other and of themselves and would rather believe the worst; does belief in conspiracy theories makes us feel more intelligent and affords us the illusion that we have control of the situation; or it is because we love heroes and villains and conspiracies feed on such protagonists? No matter how we deconstruct the mass appeal of conspiracy theories, they do fill an emotional gap and entertain the mind like no empirical evidence can.

Many people are favorably inclined to conspiracy because they are conditioned to be cynical by life itself that beats them on the head on a daily basis. Conspiracy theories are not the exclusive domain of any political ideology or political organization or regime. Besides infamous dictators like Hitler and Stalin that have manipulated public opinion by advancing conspiracy theories, leaders of democracies like George W. Bush have done the same to advance policies linked with domestic security and foreign affairs.

How can people not be conspiratorial in their thinking when their politicians, priests, and social leaders either lie or hide the truth and are guilty of hypocrisy. Priests ask their flock to be virtuous, while they are hardly up to the task; politicians demand honesty in citizens, while their acts are hardly exemplary; community leaders using their positions for private gain at the expense of the community. The amazing thing is not that there are so many cynical people, but why isn't everyone in this world that we live in?

The more corrupt and perfidious secular and religious leaders, the greater mass appeal conspiracy theories will have. Everyone must have seen an adult parent instructing the child not to smoke while the parent is holding a cigarette in hand; or not to do drugs while popping sleeping and tranquilizer pills. However, conspiracy theory belief goes beyond such hypocrisy to the core of a sense of fatalism about life itself and the belief that free will has severe limitations. People are so overwhelmed by institutions that determine their lives that they feel powerless. This sense of powerlessness helps to weaken the masses and strengthens the elites. Therefore, conspiracy theories about the elites inadvertently help elite interests as they make the masses feel paralyzed in their fatalism.

In early April 2011, when I wrote the brief piece on conspiracy theories, it was because individuals with graduate degrees were telling me that there is a global conspiracy by the IMF and European Central Bank to lower living standards, and that the method adopted was no different than the CIA used in counterinsurgency operations. To no avail, I tried to argue that CIA operations have their own logic, and IMF austerity measures, now adopted by the European Central Bank, have a different logic that they follow and that analyzing counterinsurgency operations must be a separate enterprise from analyzing monetary and fiscal policy. Even more irrational, some of the same people in Greece that embrace Klein's IMF book also believe that airplanes are constantly spraying cities with chemicals to keep them docile and not resist the IMF austerity measures! When I joked about this with a former banker, his response was that there is validity to the "chemical spraying theory", otherwise, how can we explain the public's lack of resistance to misery?  

Given that I failed to convince even the most rational people, I often ask why they yield to conspiracy theories instead of seeking rational explanations. In correcting my wrong impression, they made it clear that in embracing so-called conspiracy theories, they were indeed more intelligent than the naive person that tried to find a rational-empirical explanations. In probing deeper, it became obvious that belief in conspiracy entailed a degree of intelligence that the 'other' lacked, a degree of cynicism that was baptized 'intelligence'. This too is an integral part of our modern mass culture, given birth by the widespread cynicism in the political and economic arena, among the elites ranging from political and economic to religious and academic. Why do conspiracy theories persist?

Clearly, I am at all expecting the average person beaten down by unjust institutions to accept the synthesis of rationalism and empiricism that I. Kant developed in his philosophy, or his views on causality and free will. However, I am astonished that more than 200 years have passed since Kant warned about human beings clinging to ignorance and superstition, largely because they are intellectually lazy. Here we are in the early 21st century when there are plans for interplanetary colonization and people insist on conspiracy theories that force them into a state of fatalism. Modern science and technology has not had much impact on the mind when it comes to feeding the emotional aspect of the brain what it craves, except that once in a while conspiracy theories do validate those who advocate them, and there are many of those examples.

In examining the "Iran-Mexico plot" of 2011, it is now very clear that there was a rush to judgment by the mass media and US and pro-US governments, before there was a full investigation in the case. Not just the US government, but all of the Western World and its mass media lined up behind US official explanations about an Iranian role where there was none. Today, there is some evidence that an exiled group may have been behind the plot, but that is lost in history and all one remembers is that Iran carried out an "evil act". This is merely one of many conspiracy theories where the only thing remaining is the conspiracy theory while facts, especially in this case that they are damaging to US credibility, are ignored. The lesson here then is not that the individual is intellectually lazy and prone to superstition craving emotional fulfillment through conspiracy theories, but that governments and private  institutions such as religion and the mass media shape the conspiracy minded public to be receptive and remain fatalistic for this fosters docile behavior and acceptance of the status quo.

Sunday, 29 December 2013


Does widespread cynicism throughout the world in the early 21st century about political, judicial, business, religious, educational, social and cultural institutions widen the gap between the individual and the community, thereby contributing to deteriorating societal conditions and erosion of "humane" individuals in an immoral society? Scandals seem as routine as daily life, at least they are so treated to keep the existing superstructures going. Everything involving corporate executives, banks, as well as politicians that people once deemed powerful - everyone from Egypt's Mubarak and Turkey's Erdogan to Italy's Berlusconi and countless other corrupt individuals that have tasted political power - all of it is part of a decadent superstructure that people simply believe is beyond their control.

Reflecting the interests of the financial, political, and socio-cultural elites in every society, superstructures mold the individual who must conform to the immoral system out of necessity for survival and thus be a part of substructures. While critical of the corrupt and decadent superstructures, the individual follows similar patterns of behavior in everything from substructure involvement to personal conduct in relationships ranging from personal to business and public transactions. The hypocritical aspect of the individual is a reflection of the hypocrisy in the elite-dominated superstructures held together by the pyramid of decadence.

To many citizens, politicians are unrelentingly deceitful and manipulative because they get away with distortion of reality owing to PR and populist skills, combined with a well-orchestrated media machine behind them. Similarly, individuals in their own microcosm, especially individuals who wield power in the private sector, adopt patterns of behavior intended to achieve success through manipulation and deception, regardless of the impact on individuals and social welfare. Shallowness and superficiality prevalent among guardians of superstructures permeates throughout society and it is the dominant mode of communication between individuals mistrustful and fearful of the other who in turn never goes beyond appearances, beyond fear, beyond the apparent self-interest of survival.

Some young people are of the opinion that pursuing the conformist route of decadence as carved out by existing superstructures yields rewards. Otherwise, they may suffer the multifarious consequences of socio-political alienation by following a path of idealism intended to create a more humane society. The existing amoral at best and immoral more realistically superstructures reinforce atomism and suppress collective consciousness and communal dynamics. Should citizens simply remain docile and permit the continuing superstructures and substructures to perpetuate societal misery and social injustice, or should citizens become active as it is their duty to improve society? Has the value system of bourgeois society, combined with the age of the web made people so atomistic and alienated from the collective community that human beings are incapable of collective action? If so, can there possibly be hope for improving social justice in unjust societies?

Friday, 27 December 2013


During the decade of "irrational exuberance," as former FED chief Allan Greenspan baptized it, investment firms employed market analysts with the specific goal of talking stocks and bonds up or down, so that a few large clients could buy or sell and make a quick profit in the process. These "stock and bond plugs" by supposedly "objective" analysts constituted free speech. Those who naively accepted their advice well, "buyer beware." Hedge Funds, partly responsible for the crisis of 2009-2010, also employed such "credible analysts" who were "market canaries."

Business dailies, journals, TV shows, Blogs, and newsletters became an integral part of the big "investment scam" where "objective analysis" flowed freely to manipulate markets. Once the internet bubble burst and the scam of "objective stock and bond analysts" was exposed, banks and investment firms had to change their strategy to continue amassing quick profits by manipulating the securities and commodities markets around the world, and in the process to defraud the multitudes who have investments in stock and bonds, many through their retirement portfolios.

Government regulators were well aware of what the banks and investment firms were doing, everything from fixing rates to illegal activities that included money laundering. Against the background of a "hands-off" climate and a neo-liberal ideology, and given the reality of large campaign contributions by banks and investment firms, government did very little to restore credibility, with the exception of egregious cases where modest fines were imposed and class action law suits that yielded a tiny fraction to defrauded investors. Because most market observers and participants became well aware of the scam that banks and investment firms perpetrated, a more credible method was needed in order to defraud more efficiently. This is where the "objective academic" freelancing as "consultant" comes in. Prominent economists, including Nobel Prize winners, took advantage of the lucrative opportunities to serve as "consultants" for banks and investment firms, as they had before the recent crisis.

The public generally assumes the economist as an academic is "objective" motivated by theoretical models, empirical data, and wisdom combined with a conscience rooted in serving public welfare. However, the crisis of 2008-2010 made it apparent that such individuals were on the payroll to deliver their employer's "gospel truth" with the sole purpose of swaying the market in everything from crude oil and currency values to bonds and stocks. This new "investment scam" is continuing. Hesitant to mention specific companies, media outlets and individuals involved, I will only point out that in the past several months a number of Hedge Funds, business TV and web programs, newspapers and magazines have employed "investment scam" artists parading in legitimate "economists" suits to continue manipulating currency markets, stocks, commodities and especially bonds.

The most recent example of how academics and the corporate media are in the service of scam-artists involves Euro-bonds and the euro. On the eve of the Davos economic conference in 2011, a very popular New York-based business TV network, a popular London financial newspaper, and a world-renowned economist simultaneously announced that Spain, Greece, Portugal, and possibly Ireland if its austerity programs fails are the Euro-Zone's weak links on the verge of bankruptcy. It is true that all EU countries are experiencing very serious deficits that should drive down the currency and the bonds higher.

The EU's strongest economy Germany is suffering a staggering budgetary deficit of 6% of GDP (86 billion euros), while Greece, one of the smallest EU members, is heading the deficit countries with budgetary deficit at 12.7% of GDP. The IMF has announced that in fact most countries suffer from inordinately high budgetary and balance of payments deficits. The deficits are a result of the recent crisis that required immense public funds to save finance capitalism. Naturally, this means higher bond yields, and lower value of the currency for EU. Here is where the "investment scams" enter into the picture, disseminating disinformation to make even greater profits by forcing the Euro-bond yields higher and the euro's value lower.

As the fourth-largest EU economy, Spain under a Socialist regime became a target of the disinformation regarding the degree to which specific EU country austerity measures would work to lower government deficits and restore market confidence. Spain with the highest unemployment in the EU has no room for the type of austerity measures that Ireland adopted, so it is an easy target. At the Davos conference of 2011, business journalists asked European heads of state if more rigid austerity measures are required to restore "investor confidence." To illustrate the absurd limits of finance capital's demands for social sacrifice, former Greek Prime Minister Papandreou sardonically replied that his government could impose euthanasia on 700,000 retirees to solve the deficit much faster. In 2011, this was a joke perhaps in poor taster. At the end of 2013, it is not far from the truth, given that the elderly have to choose between basic food needs, heating their homes and medications.

The EU central Bank and number of top EU officials, including heads of state and finance ministers had to undo alarmist "investment scam" propaganda by reassuring the public that EU monetary unity and market solidarity remains unshaken. The same officials confronted the media and economists that were spreading "investment scams," and the latter had to retract and claim they simply did not have "sufficient information" with which to analyze bond and currency trends. In some cases, "investment scam" artists blatantly lied about empirical events that were groundless, while in others they were simply feeding hyperbolic analysis on existing data and reaching absurd conclusions, such as "the end of the EU and the common currency."

In both cases, the purpose was to drive up bond yields and the euro down, which coincidentally serves the interests of EU exporters along with bond investors, in some cases one and the same entity. At the outbreak of the current crisis, the EU proposed tighter government regulation of banks, investment firms, and especially off-shore companies that shield large investors. Obama did not go along with the EU proposal until after the Kennedy Senate seat in Massachusetts went to the Republicans and the Supreme Court ruled to restore corporate campaign contributions under the guise of free speech.

Exploitation of the public by a handful of fraudulent investors determined to continue manipulating markets so they can amass greater wealth is indeed a Constitutional right under free speech protection. I have no doubt that when the Founding Fathers debated the merits of free speech they had in mind "investment scams." The question after the early 21st century's first major global economic recession is whether the role of the state in protecting public welfare is comparable to protecting national sovereignty from enemies foreign and domestic. Although free speech is not free if it excludes certain groups, currently it does exclude those engaged in "hate speech," libel, or speech intended to terrorize citizens (e.g. fire in the theatre, there is a bomb on this train, etc.).

Should governments curtail free speech to prevent the "investment scams," should they treat them in the same manner as libel suits, should they treat "scams" in the same manner as "hate speech," should they impose heavy fines for disinformation that is after all commonly used in the political arena? If "hate speech" is contrary to a democratic society because it promotes conflict and social disharmony, do "investment scams" cause far more damage to public welfare? Governments will do very little if anything for the very simple reason that the "investment scam" artists are an integral part of the capitalist system and they help in the relentless process of capital accumulation on a global scale.

Specifically, the pressure on the Euro-bond and the euro in recent weeks has actually forced EU governments to squeeze more concessions from labor and the middle class--raising retirement age, lowering social benefits, lowering wages, more flexible labor market with less job security, higher indirect taxes, and greater incentives for corporate investment. The "investor scams" that manipulate markets every single day prove that Adam Smith's "Invisible Hand" is visibly corrupt, and left to its own devices it will prolong the pain of billions of people around the world who work for a living.

Friday, 20 December 2013

PREJUDICE: North-South Division

The domain of human prejudice falls mostly in the domain of the social sciences, although the hard sciences also have an important say in this area. Clearly, the human proclivity of prejudice rooted in egoism and elitism, both innate and learned behavior must be analyzed to understand the human mind that discriminates. However, there is also the institutional and legal prejudice that feeds the innate in the human condition.  If a society has laws rooted in racial, ethnic, religious, gender, sexual orientation differences of minorities the entire society tends to conform, including individuals who would otherwise be opposed to such tendencies.

Prejudice is hierarchical, starting from the family, to the neighborhood, to the tribe, to the ethnic group and nation and to groups of nations. Racial-ethnocentric divisions have existed for centuries, although the modern form has its roots in the European era of the Commercial Revolution that launched an outward expansion adventure from Europe to the rest of the world. Prejudice, therefore, is subject to historical and cultural factors in a specific sociopolitical context that is both institutionalized and imbedded into the social consciousness.

Ancient Romans entertaining prejudice has nothing to do with 21st century Italians and their own circumstances that lead them to thought and behavioral patterns of prejudice, any more than prejudice by the North-West Europeans conquering much of the Southern Hemisphere. The question is whether in the 21st century the northern hemisphere, especially in North America and Europe is carrying on the legacy of colonialism when it comes to prejudice and discrimination based on race, ethnicity, and religion. Considering that the victims of colonialism were people of the southern Hemisphere, and the colonizers from the northern, is there lingering prejudice rooted in a north-south divide? If this is the case, is such prejudice rooted in racial, ethnic, religious and cultural differences, or is it sheer opportunism and economic exploitation that uses race, ethnicity, religion and culture as a pretext to retain prejudiced attitudes?

The term "prejudice" refers to prejudging race, ethnicity, religion, class, gender, sexual orientation, disability, or lifestyle mode before knowing the facts of the case. Although prejudice is as old as civilization, it was not until the 19th century that a more systematic (or scientific, if one prefers the term) approach to the subject started. This is partly because there were biologists and doctors who adopted Social Darwinism and argued that whites are superior to non-whites not just in appearance but biologically as well. Discrimination by the majority at the expense of the minority population was purely political, economic and social, but justified by some of its apologists in the framework of pseudo-science, including Social Darwinism and other extreme theories of hatred that were institutionalized and an integral part of the law and society.

Within the broader term of "prejudice" is the phenomenon called Nativism, which existed in the US during the 19th century, but also in Eastern Europe during the interwar era when pro-Fascist movements and regimes became known as "Native Fascism". At the core of the Eastern European Balkan phenomenon was ultra nationalism under authoritarian regimes with Fascist-style policies. “Nativist” politics and prejudice of immigration are very old in both US and Europe, as are the arguments against immigration. The irony of all this is that the American colonists were invaders and destroyers of native cultures, as were the European Barbarians who migrated from Central Asia to colonize the continent.

As liberal democracies evolved to permit greater tolerance for women, as well as religious, ethnic, and racial minorities that constituted the majority of the population, although the institutional structure treated them as minorities, the legal system allowed for recourse of victims of prejudice. However, prejudice and discrimination are deeply rooted in a society, ingrained into the culture in such far reaching manner that there is a huge gap between what is legal and what is actual. The best evidence of this is the US that remained an apartheid society in practice, especially in the South, for an entire century, from the Civil War until the Civil Rights movement. Not that Europe was above ethnic racial and religious prejudice, considering that in the 19th and 20th century Europe had regimes - from Tsarist Russia to Nazi Germany - aiming at targeting minorities, in some cases totally eliminating them; and all along the majority population going along with such blatant persecution.

But that is far too distant, far too historical and unemotional to have any relevance in the present.
 If indeed the countries of origin would be developed on “self-sufficiency” models instead of globalization rooted in draining their resources and keeping them perpetually underdeveloped, then I would agree with the argument some have advanced against “temporary immigrants.” The fact that there is “permanent and temporary foreign labor” is proof that the countries of origin are not developed in large measure because they exist under exploitative models of integration. This is not to excuse the utterly corrupt public and private sectors of the “countries of origin” (invariably underdeveloped in Africa, Asia, and Latin America), but they do not operate separately and distinctly from the world capitalist economy.

Regarding the impact of private remittances, I agree about their positive value to the country of origin, and thank God remittances are something although they come with the hard work, deplorable living conditions, and exploitative wages of legal and illegal immigrants in the advanced capitalist countries. Be that as it may, are remittances a structural solution to fix the chronic problem? Nor do I believe that trickle-down economics, as the great John Kenneth Galbraith noted during the Reagan-Thatcher decade, works to do much for the lower classes of either poor or rich nations.

I think it is an insult to the millions of Mexicans in the US who have helped build the US economy in the past 200 years to dismiss them as gardeners and swimming pool cleaners for the rich, and to limit their vast and multifarious contributions to the US economy and social fabric. I believe kind well-intentioned people–whether politicians and intellectuals, or the corner drug store pharmacist in Cleveland or Paris, feel less secure when they see or hear about waves of immigrants threatening the status quo. I am not sure why people find it extraordinary that the poor–in this case poor immigrants–commit crimes, given that poverty is the real crime that capitalism precipitates.

And I am seriously concerned when people single out Muslims, Africans, Latin Americans, Asians, or any other group to prove their point about the evils of immigration, and then they ask for empirical evidence to prove that higher percentage of crime is caused by natives instead of immigrants. All of this implies there is something in the DNA of the immigrant that causes him to commit crimes, and that the environment is free of any responsibility. As an emotionally charged issue, especially in this decade after 9/11 and the US-western-led wars against Muslims, immigration on the surface is an easy target for all calamities people believe befall their country, not realizing that as “established natives” they are descendants of immigrants.

That ethnic, racial and religious prejudice is on the rise owing to the global economic crisis of 2008-present entails that a strong trend of ultra right wing groups has been gaining strength across Europe. This is evident by organizations that use the pretext of Muslim terrorism threat to justify anti-Islam hate speech and acts against Muslims whether they are recent immigrant, legal or illegal, as well as residents of Europe. Muslims as well as gypsies have become the scapegoats for all the ills of capitalist society falling apart because its financial structure has experienced enormous strains from within largely because of scandalous practices.

In January 2012, I wrote an article arguing that prejudice is caused by low intelligence. "Scholarly studies have shown that there is a correlation between prejudice of any type from race and ethnicity to gender and religious caused by ignorance, isolation - the absence of cultural diffusion - the environment, and low IQ. One recent study- Gordon Hudson lead psychologist -  emphasizes low intelligence, social conservatism and prejudice. In an era of the war on terror aimed against Islam, the topic of prejudice ought to concern the entire world, but the question is whether a scientist ought to place more emphasis on neuro-biological factors than psychological and environmental, or whether to adopt a holistic approach."

One could argue that a great deal of human behavior can be explained by low intelligence, including why people act against their own best interests.That is true enough, but when the victims of prejudice are primarily from the poor Southern Hemisphere, namely Africans, Asians and Latin Americans, while the perpetrators of prejudice are concentrated in the rich Northern Hemisphere, then the North-South divide is not just cultural, but economic that determines the cultural divide and accounts for the persistence of prejudice. The grossly unequal wealth distribution is at the root of of the North-South divide and prejudice that accompanies it.

Economic hegemony allows for cultural hegemony and permits the mind of those living in the Northern Hemisphere, even those impoverished to feel good about themselves that they are part of a "superior"area in comparison with the inferior Southern Hemisphere. Therefore, prejudice and discrimination are as economically determined as culture and account for the persistence of this divide in the last four centuries. The only saving grace for those in the Southern Hemisphere or with roots there is if their individual class status transcends their racial, ethnic, religious status. White Christians and Jews respect a Muslim from Indonesia who is millionaire and treat that individual with deference because of the wealth factor. At the same time, however, a factory worker in Bangladesh has less worth than the commodity she produces. Despite the emergence of economic strength in Asia and Brazil in the course of the 21st century, it is highly unlikely that the North-South prejudice divide will end. On the contrary, it will intensify as Europeans and North Americans will become even more prejudiced against immigrants from the Southern Hemisphere.

Wednesday, 18 December 2013


In all economic contracting cycles throughout finance capitalism’s history, labor (blue collar skilled to unskilled, agricultural day laborers to small farmers, and white collar, clerical to professionals and mid-management) ultimately pays the price for dislocation. The middle class, as the media and governments define it today to include a very broad range from upper working class to highly paid professionals, experiences downward pressure toward ‘proletarization’ status instead of upward mobility as it envisions its destiny. Very clear in the 1930s, this phenomenon is taking place today amid the current crisis not only because people are losing jobs, homes, retirement savings, etc., but because the future looks bleak for them and their children. 

Besides part-time and contract work, blue-collar and white-collar workers are asked to accept pay cuts, reduced benefits, reduced work schedules, flexible working conditions, all of which will be accompanied by the expectation of retiring at a later age. Where are the blue collar, white collar, and the recent ‘proletariatized’ middle class headed and will they emerge stronger than they did during the Great Depression, helped immensely by the war, or will the middle class society lapse into chronic decline? There is a fundamental question of whether the ‘middle class’ was on sound footing, or artificially created by a deficit-spending system now in crisis. On paper, the combination of low labor values in the Third World that allowed for higher incomes in the advanced countries and the postwar credit economy accounted for the quantitative and qualitative growth of the middle class in core countries. 

A large percentage of the population in the West, Japan, Taiwan, South Korea experienced upward mobility in the past 40 years, but a large percentage of the middle class mobility was because of the credit economy. The ‘wealth effect’ was a mirage because the middle class lived on credit and hoped values in everything from their incomes to homes and securities would continue to rise. The current crisis has exposed the bourgeois facade of endless progress and revealed that a large percentage of the middle class was really working for the banks – all along, the "proletariatization" of the middle class was taking place serving both an economic and political purpose. 

The US Congressional Budget Office estimates that in the next three years there will be a $2.9 trillion gap between productive capacity and actual output; in short, more than 300% the amount that congress approved as part of Obama’s stimulus package. Such a gap will mean that the state must decide if the top 10% of income earners bare the brunt of the cost, or if the middle class and workers will have to endure lower living standards. Because capital accumulation on a world scale can take place by the more thorough exploitation of labor, the state will support financial elites’ efforts to squeeze out the maximum from middle class and workers short of precipitating social upheaval and political instability. 

Arbiter of social relations through control of the fiscal system, the state will largely determine how weak the working class and middle class will be for society to function without paying the price of radicalization and violence. Hovering around 20% in the US and rising as it is throughout the world, chronic poverty will remain a permanent legacy of the current recession. ‘Third World-type’ conditions already exist within the advanced capitalist countries – families in the American Deep South and northern inner cities subsist on a couple hundred dollars per month and rely on food stamps to feed themselves. Conditions for the bottom 20% of the population are not that much better in the EU where the prospects for recovery are not as bright as in US, and even less so for Japan. 

If finance capitalism is to survive with the inevitable wealth concentration within the top 10%, there must necessarily be downward income pressure on the middle class and workers. Generating greater surplus than the market can absorb will keep the capitalist economy in a limited-growth mode for at least a decade, unless the state absorbs the surplus and spends it for social development instead of defense. Because the effective demand is limited by the earning power of workers and middle class in the post-credit crisis of the early 21st century, and the sharply reduced personal wealth (drop in real estate values, private pensions, and stock portfolios) the illusory middle class ‘wealth effect’ will remain low and accumulated surplus capital high thus keeping the world economy under limited growth prospects for a long time. 

Of course, China with a strong state structure and dynamic economy is the exception and of course, we must science and technology innovation take into account, as well as the degree to which the state will intervene to limit capital accumulation by the financial elites. But given existing conditions in the advanced capitalist countries, what impact will they have on the social order? Because there are multiple institutional means that condition people toward conformity, most people exercise self-restraint toward the status quo as they are convinced that there may be rewards in such behavior and punishment for social dissidence. There is also the cultural difference in every society - for example, in western countries historically the individual assumes responsibility for success or failure and thus internalizes what is in essence an outward or objective phenomenon like job loss. 

The internalization process entails that the individual feels guilty and may act against himself or loved ones, instead of criticizing or striking out at the system. Naturally, the mass media, schools, religion, business, and the state inculcate such thinking into the minds of the individual who blames himself as a failure, not realizing that the financial and political elites that control institutions have failed. Accountant John Smith in Denver lost his life’s savings in the stock market, he cannot find work, his wife divorced him, and it is all his fault because he has failed to receive the requisite training to conform to the ‘new market conditions’. People permit their lives to be conditioned and ruled, and sometimes often ruined by man-made systems that the entitlement-minded financial and political elites have forged to retain their privileged status. 

The individual has been conditioned to equate man-made systems with natural disasters like earthquakes or floods. Part of this thinking is a testament to the resounding success of a ubiquitous ‘birth-to-death’ PR campaigns that have convinced people to accept capitalism as ‘natural’, a premise that both Adam Smith and Thomas Malthus shared. Once people accept that premise, and they aspire to upward mobility possible only within the system, they never even consider working class consciousness for to do so is to demean their own self-image the credit economy makes possible and to lack ambition for individual (bourgeois) success. 

How many ads are there online, in newspapers, etc., about ‘assistant manager’ in everything from office clerical positions to fast food jobs, when in reality those are low-paying jobs veiled by a bourgeois ‘status title’ people appreciate more than income? After all, the ‘real worth’ of the individual was ‘creditworthiness’ bundled as part of net worth, thereby giving the illusion to a large percentage of people that they were part of capitalism’s success. Class-consciousness is the enemy of the financial and political elites that constantly inculcate the idea that ‘all of us must work together and sacrifice’ for the greater good, when in fact the ‘greater good’ is largely the domain of the elites. 

As "proletarization" of the middle class become more apparent, the current global crisis will evolve into a middle class crisis of alienation, stratification, and erratic class/status identity. Additionally, there will be the increasingly prohibitive costs of higher education, especially graduate school that will be out of reach for a larger percentage of people in the next decade and possibly the next half century. At the same time, there will be fewer positions available for the college-educated population that will have to be highly mobile not only within its own country but internationally and must accept jobs unrelated to their college degree – a phenomenon that has been growing in the past decade. 

Though society will become increasingly polarized and likely to remain so because of capital accumulation in a credit-tight environment, the cyber-eco-bourgeoisie will co-opt and thus de-radicalize a segment of the recently created ‘proletariatized’ middle class and working class aspiring to upward mobility and lifestyle. More realistic and self-aware than the ‘credit bourgeoisie’ of the past half century, the "cyber-eco-bourgeoisi"e of the 21st century will also be useful to the political and financial elites in promoting corporatism whether that is in the US, Japan, or EU.

Tuesday, 17 December 2013


Classical Liberal (Lockean) political theory maintains that individual consent ought to determine politics and policies. “Wherever, therefore, any number of men so unite into one society as to quit every one his executive power of the law of Nature, and to resign it to the public, there and there only is a political or civil society.” John Locke, Second Treatise on Civil Government. However, the reality is that T. Hobbes’ Leviathan that Locke rejected lives inside competing interest groups among the elites (including the 17th century when Locke represented mercantile interests) that have played a catalytic role in shaping policy in modern pluralistic societies governed by varieties of Liberal-type constitutions. 

Although policy-formation is the presumed domain of competing interest groups whether politically organized like the Whig faction in Locke’s time, or modern-day corporate lobbies, consent-theory is more easily justified and implemented during times of national emergencies or crises than during ‘normal times’. Having built a national consensus during the Great Depression for economic reasons, the US continued to expand the consensus to include the entire Western Hemisphere under bilateral and multilateral agreements. These culminated in redefining the Pan-American system during the war, and then globalized during the Cold War when besides NATO, OAS and SEATO, IFIs were also established to complete the triumph of Pax Americana

The dynamics of the Cold War necessarily resulted in domestic national consensus not only in pluralistic societies like the US at the helm of the world-capitalist system, but also in Communist nations and in the non-aligned bloc. Therefore, the Cold War as the point of origin for policy-formation and consent-theory entailed that the state forged consensus among competing interest groups under a neo-corporatist model that would presumably serve not only the political and financial elites, but the military establishment, intelligentsia, farmers, and labor unions whose cooperation was crucial for policy-formation against ‘common external enemy’. Nor is this to be confused with the military-industrial complex that was only one byproduct of conformist policy-formation. After the Communist bloc collapsed and China became thoroughly integrated into the world capitalist system, the institutionalized co-optation of the disparate interest groups needed to remain intact. This is not because there was a ‘common external enemy’ - of course one had to be created as catalyst to interest-group co-optation - but because consent-theory assumptions were obviated by the changing structure of the political economies around the world and the neo-liberal globalization trend. 

The interdependent world economic structure as the basis of consent-theory and as a reality cannot change systemically as Russia, China, Brazil, India, and even some EU leaders wish. However, economic nationalism – from the political left and to the ideological right – and varieties of Socialism will challenge and try to replace classical Liberalism and the American-centered world system as the ideological foundation on which political economy and international security rest. This means new international division of labor, redefinition of the terms of trade and investment that do not disadvantage the Third World and new ‘North-South’ hemisphere relationship that allows for a more equitable redistribution of wealth – all of it used as leverage by those wishing to further dilute Pax Americana. Depending on its severity, the current economic dislocation will force political and financial elites along with the intelligentsia to re-examine the ‘consent-theory’ paradigm with the US as the leader. They must seek alternatives that would ensure policy-formation does not drift toward the lower classes or to the Third World whose conformity and co-optation must be guaranteed to prevent any change either in the social order or the international order. 

The unfolding civil disobedience combined with labor and middle class protests throughout the world will continue to challenge consent-theory that the political and financial elites are interested in preserving. Assuming that the forthcoming G-20 meeting (April 2009) will result in consensus and assuming the Chinese prediction about national recovery by June 2009 is correct, it may be possible that by early-to-mid-2010 the US will be coming out of recession as the FED is now predicting. The EU will realize real growth much later than previously expected (the latest IMF report is very pessimistic about Europe) and gradually Japan and the rest of the world will follow the EU. Such scenario depends largely on what policies the G-20 will adopt to better-regulate the crippled economy for the duration. 

The middle class and workers will lag far behind in the recovery process as will the Third World – regrettably, there are no AIG-type bonuses for the middle class and workers whose consent must be manipulated back toward support of the elites. In short, the lower the social strata the slower the recovery; similarly the less the country is developed the slower and more painfully it will emerge from this crisis. The crisis will exacerbate societal polarization that manifests itself in increased social protests, xenophobia, ethnocentrism, racism, chauvinism, etc. Whether it is to the extreme right or left, going to the roots of society in times of crisis will be a normal response on the part of the masses; that is where a large segment of the population feels a sense of belonging and safety, not in institutions that failed them. The current crisis will intensify the ‘revolutionary’ impulse to alter the social and political structure as well as a minority counter-revolutionary impulse to retain the social structure by an authoritarian movement, regime, or authoritarian policies adopted by otherwise liberal-bourgeois regimes. 

The dialectic between the two impulses will entail the biggest challenge to the political elites in pluralistic societies since the Great Depression. If as Jean-Jacques Rousseau has argued the repressive conditions imposed by a minority over the majority necessitate force morally and socially justified, then we can expect in the upcoming months and years more voices of leftist dissent and reactionary outcries to maintain the status quo by force. The current crisis has diluted if not obviated policy-formation and consent-theory, as we knew it under Pax Americana throughout the Cold War and in the post-Cold era of the global anti-terrorism campaign on which foreign policy of many states are based; with all its intended and incidental domestic policy-formation consequences. To counter the inevitable challenge that pluralistic societies will be facing, the political and financial elites will have to deliver on the promise that after the crisis there will continue to be ‘ever-rising living standards’ within the existing stratified social and international order. 

Such promises of what Kenneth Boulding, Beyond Economics (1968) called ‘cowboy economics’ rooted in arrogance of financial power buttressed and protected by the political elites will not be sufficient to convince people who lost homes and businesses, jobs and careers, savings and retirement nest eggs, and their lifestyle turned upside down. Given that the political and financial elites have always manufactured consent, consent-theory is their domain to define and implement to preserve and advance their privileged position. Crises, however, bring out in otherwise docile-conformist citizens tendencies that range from reactionary to revolutionary, from cynicism to ‘apocalyptic nihilism’, which is what most people act on and understand by the term (as opposed to anarchist or existential). Besides resorting to more austere laws to ‘contain’ dissidence as it arises with greater socioeconomic problems, the state along with the media, think tanks, and anyone with access and influence to public opinion will have to argue that any alternative to systemic transformation of the social and political order nationally and internationally will entail the demise of civilization as we know it.

Monday, 16 December 2013


PART I: Historical Antecedents

Is the world less anti-American under the Obama administration and will it become more so as the American financial and political elites hoped when they facilitated the election of the first African-American president? Of course, we will not know the definitive answer for another three years or so. However, there are signs that the symbolic significance of Obama combined with symbolic and moderately substantive-policy changes, which have been necessitated by the multifaceted realities of the mini-depression, have convinced people from around the world and from across the ideological spectrum that America may readjust its Pax Americana conduct, just as it did during the Great Depression. 

Anti-Americanism has been a reality for America’s southern neighbors since the Spanish-American War and for reasons that range from ideological and geopolitical, to economic and racial. Some would argue that the genesis of anti-Americanism dates back to the Polk administration that took the first step to put the Monroe Doctrine and Manifest Destiny into practice. However, it was really after the Korean War and the start of the non-aligned movement that US foreign policy and the role of the US in the world came into question as outwardly ‘democratic’ (invariably defined by the electoral system) at home but essentially imperial abroad. 

During and immediately after WWII, much of the world had residual goodwill and a positive image of the US. However, from the end of the Korean War until the controversial 1968 election taking place during the Vietnam War, the US lost a great deal of its popularity, not only with its nemesis the Communists around the world but with most countries, and this despite the polarizing Cold War and secret deals foreign governments cut with Washington. Contrary to the liberal view and one often cited for anti-Americanism, most if not all countries were and still are far less exercised about the nature U.S. institutions per se and far more concerned about ‘American Exceptionalism’ and ‘US Transformation Policy’ that has negatively impacted the lives of the majority of people around the world since 1945. 

Total power that ranges from military and economic to political and cultural, with the intent of shaping the world after its own image is the source of anti-Americanism that has evolved in the sixty years. US meddling on behalf of anti-democratic regimes in overt and covert operations throughout the world for more than half a century are a major source of anti-Americanism that transcends all ideological, ethnic, cultural, religious and political boundaries. Support for Marcos in the Philippines, Suharto in Indonesia, Salazar in Portugal, Franco in Spain, the colonels in Greece, apartheid in South Africa, quasi-apartheid Israel against the Palestinians, and military dictatorships in Latin America, all in the name of ‘freedom & democracy’ amid the Cold War, constitute sufficient proof to the entire world that the US was a global empire and a threat to the sovereignty of smaller countries reduced to client states. International Financial Institutions (IFIs) like the IMF and World Bank were also in the service of Washington and Wall Street to keep client states in line. 

French anti-Americanism, in essence the attempt of Charles De Gaulle to affirm nationalism and preserve French identity by accusing the Americans of Exceptionalism was an affirmation of France (eventually and essentially Europe) coming of age and able to stand on its own feet without having “Cold War-Mother America” influencing everything from defense and foreign policies to commercial relations and cultural trends. But even before De Gaulle awakening Europeans to the reality of lessening dependence on the US and asserting their own direct influence in the Third World, Latin America from the overthrow of Guatemala’s president Jacobo Arbenz in 1954 to the CIA involvement in Allende’s overthrow in 1973 marked a period of anti-Yankee sentiment that was a reflection of Latin Americans resenting US interference in everything from trade unions and development projects to influencing national elections. 

After the Nicaraguan and Iranian revolutions of 1979 and especially after September 2001 various US agencies became interested in identifying the sources of anti-Americanism. Departments of State, Defense, and various intelligence agencies wanted to pinpoint specific areas where they could improve America’s image in the world to combat terrorism, but also for commercial/financial and political considerations. Consulting companies and individual scholars provided a great deal of material to the government, most of it useful from academic perspective. However, hardly any of that material has been very practical in reversing anti-Americanism in the world, not just among Muslims but all people regardless of faith. The reason is the underlying assumption that there is something fundamentally wrong with the ‘anti-Americans’ just as there was with the former Communists who must be converted to the true faith through a PR campaign that points the road to PAX AMERICANA.
 PART II: Anti-Americanism under Obama
Hollywood and the American entertainment industry have helped mold the view of American society, values, and perceptions within and outside the US. Therein may rest some of the sources of cultural and political anti-Americanism when civilizations clash as in the case of Islam and the West. Besides the web that allow a percentage of people to determine for themselves what goes on in the US, the masses are invariably influenced by popular culture as the corporate-owned media depicts it throughout the world. Of course, it is not US per se, but inhumane US values and policies that are the core target of critics from all ideological perspectives. These may involve everything from US positions on climate change to privatization of public services that make products and services less affordable for the poor. In some cases, centrists - believers in the electoral process and some variation of liberalism - are the most important anti-Americans, because they are invariably in power and conduct policy. 

Although nationalists of all ideological/political persuasions have been and remain the arch-critics of Pax Americana, it is important to note that the most militant anti-Americanism emanates not from the left but from the right as in the case of Muslims as well as many Europeans and Latin Americans. Nevertheless, hyperbolic anti-American rhetoric and some symbolic acts in politics and media is a cultural trait demonstrating despair with local/national conditions. For example, when the US is behind the World Bank’s privatization of water resources and links immense development loans, local/national social, political, media protests assume the phase of anti-Americanism. Therefore, anti-American rhetoric and demonstrations are part of how local and national activists react even if the US as a target may be indirectly involved. At the same time, political parties and governments in many countries use anti-Americanism to distract from their own incompetence, systems swimming in corruption, or simply to win elections. 

Governments and political opposition also use anti-Americanism to criticize a neighboring government that may have received more US aid, or greater diplomatic backing from Washington. In short, anti-Americanism has various domestic political dimensions and it is a reflection of regional issues not always directly related to anti-Americanism as form of protest against Washington per se. As significantly, we must distinguish between anti-American inflammatory rhetoric, and the reality of the social elites and broader middle classes in the world emulating the American lifestyle that is a more important export than any single product or service. Of course, it will take many years, more than a single administration, and above all substantive policy changes – from imperious to real co-existence – on the part of the US to reverse global anti-Americanism that reached its zenith under Bush-Cheney. 

The well-publicized reports that the Bush-Cheney team had ordered the CIA to get results from Muslim prisoners by systematically torturing them did not help improve America’s image at a time US officials appeared puzzled about ‘outsiders hating our freedom’. Interestingly, at the time that the US was violating the basic human rights of prisoners and violating the Geneva Convention, it expected all others to abide by it – yet another case of “American Exceptionalism” that ran counter to the very expensive PR campaign to assuage the root causes of anti-Americanism in the world. Nor does it help that the rhetoric and strategy seems to be pointing toward co-existence and multilateralism, but the goal remains global hegemony. Is fear of the ‘democratic America’ (Washington’s projected self-image) the overriding concern of people around the world as the Bush-Cheney ideologues claimed? Or is it the arrogance and abuse of US government and corporate power that results in the misery of billions of people whether it is in protracted low-level Middle East wars, or in impoverished Africa and Latin America where the World Bank is using loans to superimpose privatization and deprive people of basic products and services at affordable cost? 

The world is clearly less afraid now that Obama is in the White House. There is an assumption that the Bush-Cheney resounding failures in the Middle East culminating in the 2008-09 US-based financial crisis will force Washington to engage in multilateralism whether on the issue of world trade, financial restructuring, finding solutions to nuclear proliferation, the Palestinian-Israel conflict, etc. That the Obama administration has refrained from manufacturing scenarios to create crises as did the previous regime, and that it has opted for a managerial instead of a hard-line ideological approach with regard to Russia, Iran, Cuba, Israel, and to a small degree even North Korea is indicative that it could move toward more substantive changes as a means of keeping its global leadership position. 

Just as FDR the Obama administration during its first term in office has proved that anti-Americanism can be mitigated with palatable rhetoric and high visibility acts even of some import. However, the trend changed toward the end of the first Obama administration owing to the following developments. 1. US interference in Arab Spring uprisings from 2011 until 2013; 2. US drone warfare - declared a war crime by human rights organizations - in Pakistan, Afghanistan and Africa; 3. the increasingly clear picture that the Obama administration was just as adamant about preserving Pax Americana as all previous presidencies; 4. blatant US intervention in Egypt and Libya resulting in a de facto civil war and a society as divided as Iraq and Afghanistan;

Public opinion polls indicate that anti-Americanism around the world is about at the same level today as it was under George W. Bush, one of the most hated US Presidents outside of the US. And while it is true that anti-Americanism is highest in Muslim countries, it has actually risen sharply across the world, including Southern Europe, though not in northwest Europe. There is still a global perception that the US is an aggressive imperialist power that deprives other nations of their national sovereignty whether in diplomacy, military domain or economic affairs. Of course, it is true that the expectation levels for Obama, even by Fidel Castro and the late Venezuelan president Hugo Chavez, were very high to ameliorate relations with the rest of the world by abandoning the aggressive foreign policies of his predecessor. 

Given that tactics changed, with substance only when absolutely necessary because there was no other choice - as the case of Syria proved - people quickly adjusted their perceptions of America under Obama as another PR president following the exact same goals as previous administrations. So what is the answer to lowering the level of anti-Americanism around the world? PR experiments have obvious limitations. Only substantive policies will determine if Pax Americana is currently under adjustment and if the world will become less anti-American and the degree to which the US will enjoy global preeminence or gradual decline. Will the US alter its goals and tactics so that there will be less anti-Americanism around the globe? Not unless it is absolutely necessary and it has no choice.