Invisible Government Series V: Masters of Strategy

Screen Shot 2016-01-23 at 2.38.28 PMMoti Nissani, PhD
No Planet – No People

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Combined flag of Anglosphere nations.

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Invisible Government Series Table of Contents

Part IV of: Why does the Invisible Government Continue to Grow in Strength?

The Controllers of the Invisible Government are evil geniuses and not – as many aver – sophomoric dabblers

We must admit to ourselves that there are truly evil geniuses out there, and in most cases these characters have taken control of the power structure. Mike Krieger

The Controllers

Juan O'Gorman

Juan O’Gorman, Enemies of the Mexican People

This article takes if for granted that the five major countries of the Anglosphere—Australia, Canada, New Zealand, the UK, and the US—are governed behind the scenes by a small group of people.

This group in turn shapes historical events, accounts for the near-uniformity of these five countries’ political developments, and enjoys partial or full control of most countries of the world. As far as we can guess, this group is comprised of a few banking families and their allies in the information, corporate, military, intelligence, and “religious” worlds. This group goes by such names as the deep state, invisible government, bankers, oligarchy, Bilderbergers, and Directors. In this posting, following Aldous Huxley, I shall refer to the members of this group as the Controllers.

What is it that the Controllers are after? Why aren’t they content with what they already have? The best guess is that they are just as sick as the fictional Eddorians:

While not essentially bloodthirsty—that is, not loving bloodshed for its own sweet sake—they were no more averse to blood-letting than they were in favor of it. Any amount of killing which would or which might advance an Eddorian toward his goal was commendable; useless slaughter was frowned upon, not because it was slaughter, but because it was useless—and hence inefficient. And, instead of the multiplicity of goals sought by the various entities of any race of Civilization, each and every Eddorian had only one. The same one: power. Power! P-O-W-E-R!! (Doc Smith, Interplanetary, 1948)

David Rockefeller

David Rockefeller

The Mush-for-Brains Misconception

Most independent analysts take a dim view of the Controllers’ intelligence. Mao Zedong, for instance, referred to the USA as a paper tiger.

In a recent speech—one of his most outspoken yet—President Putin said:

“I am under the impression that our counterparts [read: America’s Controllers] have mush [porridge] for brains. They really have no idea what is going on in Syria and what they are trying to achieve.”

In other words, the people controlling the USA are poor strategists: They are stupid, do not understand what’s going on, and don’t have clear goals.

In his wonderful China Rising, Jeff Brown writes:

“Baba Beijing and the Chinese think in terms of decades and centuries. Americans can’t think past the 24-hour propaganda spin and quarterly stock reports.”

Likewise, A. Raevsky (“Saker”) believes that the Western leadership is clueless, lacking political vision and professionalism. The American empire is weak and delusional. Echoing Khruschev’s famous reply to Mao, “yes, a paper tiger, but with nuclear teeth,” Raevsky feels that the Russians are only worried about the West because it “does not take a great deal of intelligence to trigger a nuclear war.”

Dmitri Orlov et al. likewise talk about “a string of foreign policy and military disasters such as Iraq, Afghanistan, Libya, Syria, Yemen and the Ukraine.”

A few more examples of this fundamental misperception appear below, in the Middle East section.


Origins of the Mush-for-Brains Misconception

Alexander Zinoviev’s Self-Portrait

Alexander Zinoviev’s Self-Portrait: Thinking is Painful.

We shall shortly see that the Controllers have, over the past three centuries or so, made enormous strides: they have accumulated power and riches at a steady pace. This is nothing new. Taylor Caldwell, a novelist, saw this worrisome and astounding progress already in 1972:

“[The men of the Invisible Government] would continue to grow in strength, until they had the whole silly world, the whole credulous world, the whole ingenuous world, in their hands. Anyone who would challenge them, attempt to expose them, show them unconcealed and naked, would be murdered, laughed at, called mad, ignored, or denounced as a fantasy-weaver.”

Why would so many knowledgeable people ignore such a striking and obvious historical record? Let me offer two overlapping speculations.

One possibility involves a failure to appreciate the difference between wisdom and cleverness. The Controllers are indeed utterly clueless about the true meaning of our brief journey on earth. Anton Chekhov said:

“In reality, everything is beautiful in this world when one reflects: everything except what we think or do ourselves when we forget our human dignity and the higher aims of our existence.”

The Controllers are manifestly oblivious to these higher aims. Subscribers to the mush-for-brains view confuse this profound lack of wisdom with stupidity.

This confusion is aided in turn by the seeming contradiction between the Controllers’ avowed and real goals. If you take them at their word, they are indeed idiots. If, on the other hand, you judge the success of their actions by their hidden agenda, they are evil geniuses.


Why is this Mush-for-Brains Controversy Important?

Sun Tzu famously said, “If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.” To retain their independence, Russians, Chinese, and revolutionaries the world over must indeed know their enemy. And they certainly must know whether they are confronting imbeciles or Machiavellians.


The Historical Record

The key to the proper assessment of the Controllers is their achievements. Are they steadily nearing the goal they set for themselves (enslaving humanity)? Who is gaining ground, the Controllers or the rest of us?

The historical record, as Caldwell so clearly saw, is unequivocally in favor of the evil geniuses view. One could fill an entire Kindle with examples, but here a few scattered fragments should be enough to drive the point home.


The Domination of Europe

The vicious brilliance of the Controllers at times defies belief. Thanks to bribes, assassinations, the recent variation of the Gladio conspiracy, extensive wiretapping and blackmail of who’s who in Europe, economic warfare (e.g., the FIFA “scandal,” the VW “scandal”), and control of the banks, corporations, media, and intelligence services of Western and central Europe, this continent is now a submissive colony of the USA. In the words of one historian, “the level of abjection passes belief.”

Likewise, the level of strategic planning needed to bring this abjection about, to force once-independent countries like Germany and France to betray the interests of their people in the service of the Controllers’ agenda, also defies belief.


Latin America

As we speak, the Controllers are brilliantly undermining the progressive governments of Latin America, once more turning this entire area into their back yard. Thus, “a new gang of vassal regimes has taken-over Latin America. The new rulers are strictly recruited as the protégés of US financial and banking institutions. Hence the financial press refers to them as the ‘new managers’ – of Wall Street.”

The most brilliant move involves Argentina and Brazil, countries who maintained friendly relations with Russia and China and pursued, now and then, independent policies that served the interests of their own people. In Brazil, especially,

“A phony political power grab by Congressional opportunists ousted elected President Dilma Rousseff. She was replaced by a Washington approved serial swindler and notorious bribe taker, Michel Temer.

“The new economic managers were predictably controlled by Wall Street, World Bank and IMF bankers. They rushed measures to slash wages, pensions and other social expenditures, to lower business taxes and privatize the most lucrative public enterprises in transport, infrastructure, landholdings , oil and scores of other activities.

“Even as the prostitute press lauded Brazil’s new managers’, prosecutors and judges arrested three newly appointed cabinet ministers for fraud and money laundering. ‘President’ Temer is next in line for prosecution for his role in the mega Petrobras oil contracts scandal for bribes and payola.

“The economic agenda by the new managers are not designed to attract new productive investments. Most inflows are short-term speculative ventures. Markets, especially, in commodities, show no upward growth, much to the chagrin of the free market technocrats. Industry and commerce are depressed as a result of the decline in consumer credit, employment and public spending induced by ‘the managers’ austerity policies.

“Even as the US and Europe embrace free market austerity, it evokes a continent wide revolt. Nevertheless Latin America’s wave of vassal regimes, remain deeply embedded in decimating the welfare state and pillaging public treasuries led by a narrow elite of bankers and serial swindlers.”

The remaining bastions of semi-independence—Venezuela, Ecuador, Bolivia, Nicaragua, and Cuba—are obviously being targeted now by the “witless” Controllers—while the Russians and Chinese are standing by, doing next to nothing.

China in particular, offers a puzzling example of shortsightedness. China is sitting on trillions of digital dollars that it is surely going to lose. Yet, it doesn’t occur to Xi and his colleagues to counter American aggression by creating their own version of the CIA, NGOs, and regime change outfits. It doesn’t even occur to them to give Venezuela an outright gift of at least $50,000,000,000, to help it ride the current American-engineered maneuvers and especially the masterstroke of manipulating the price of petrol downwards. China faces a far greater peril now than the Controllers-imposed opium addiction, and yet it nickel-and-dimes its few remaining potential allies.


The Middle East

From its inception, America’s modeled itself after the vicious Roman Empire, not the far more civilized Democratic Athens or the Iroquois Confederation. Like the Americans, the Romans endlessly bragged about bringing peace to the world. The reality was diametrically opposite, as one eloquent victim explained: “To ravage, to slaughter, to usurp under false titles, they call empire; and where they make a desert, they call it peace.”

In the Middle East, one independent, secular, country after another has come under American control. The countries whose leaders sought an independent path suffered genocide, neo-colonialism, devastating wars, sectarian and ethnic conflicts where hardly any existed before, millions of refugees, fragmentation, environmental contamination, and as a consequence, higher cancer, mutation, and birth malformation rates.

Most independent analysts feel that America (the Controllers’ chief enforcer of military and economic conquests) is failing in the Middle East. These analysts seem to believe American politicians and presstitutes when they say that their main goal is to bring peace and democracy to Iraq, Syria, Libya, or Yemen (the Americans of course prefer to keep silent about the vicious dictatorships of their Wahhabi friends). These analysts, as we have seen, believe the politicians when they say that their hearts go out to the long-suffering Arabs, that they really care about the ongoing genocides of Christians and everyone else.

In a typical naïve outburst, for instance, a Georgetown University professor asks: “Why did the United States fail in its war on Iraq?”Eric Margolis calls the Iraq War “the worst disaster for the United States since Vietnam.” Paul Craig Roberts sees America’s policies in the Middle East as a failure.

These astute commentators see the American-created desert, the devastation, the hate that America incurred in the Middle East and elsewhere, and they conclude that these policies have been a failure. But the consistent pattern of “failures” suggests that these “failures” are not an unintended consequence caused by the pursuit of other, loftier, goals. Rather, the “failures,” future conflicts, and chaos themselves are the goal.

Sharmine Narwani describes the real goals of the Controllers:

“A 2006 State Department cable that bemoans Syrian President Bashar al-Assad’s strengthened position in Syria outlines actionable plans to sow discord within the state, with the goal of disrupting Syrian ties with Iran. The theme? ‘Exploiting’ all ‘vulnerabilities’ [and suggesting, among other things, playing] ‘on Sunni fears of Iranian influence.

“In 2013, influential former US Secretary of State Henry Kissinger openly advocated redrawn borders along sectarian, ethnic, tribal or national lines that will shrink the political/military reach of key Arab states and enable the west to reassert its rapidly-diminishing control over the region.”

As usual, Israeli strategists are more outspoken than their American counterparts. By 1982, they had already spelled out its goal of redrawing

“the Mideast into small warring cantons that would never again be able to threaten the Jewish state’s regional primacy. Lebanon’s total dissolution into five provinces serves as a precedent for the entire Arab world including Egypt, Syria, Iraq, and the Arabian Peninsula and is already following that track. The dissolution of Syria and Iraq later on into ethnically or religiously unique areas such as in Lebanon, is Israel’s primary target on the Eastern front in the long run, while the dissolution of the military power of those states serves as the primary short term target. Syria will fall apart, in accordance with its ethnic and religious structure, into several states such as in present day Lebanon, so that there will be a Shi’ite Alawi state along its coast, a Sunni state in the Aleppo area, another Sunni state in Damascus hostile to its northern neighbor, and the Druzes who will set up a state, maybe even in our Golan, and certainly in the Hauran and in northern Jordan.”

Thirty years later, that nightmare describes the world. Narawani warns:

“Arabs and Muslims need to start becoming keenly aware of this ‘small state’ third option, else they will fall into the dangerous trap of being distracted by detail while larger games carve up their nations and plunge them into perpetual conflict.”

Similarly, Russia, China, and humanitarians everywhere must become keenly aware that the Controllers are international grandmasters. Given the comparative naiveté of the people who oppose them, they almost always win.


Former Members of the Warsaw Pact 

The “featherheaded” Controllers now manage, impoverish, and run roughshod over many former countries that had been part of the Russian alliance. Who would have thought, just 30 years ago, that the Americans would one day find a peaceful way of placing nuclear delivery vehicles in countries like Romania and Poland? Who would have predicted that they would ever again place German soldiers 100 miles from St. Petersburg?


Other Nations

The Controllers manage most of the world’s countries. Their armies conquered Japan, Germany, and Italy—and never left. They stole parts of Mexico and Colombia, and turned most of Latin America into subservient, violence-ridden, colonies. Again and again, they assassinated patriotic leaders and replaced them with quislings willing to enrich themselves by serving their foreign masters. No people is safe from their regime change operations (including the American people), and no country—even traditional safe haven Switzerland—is safe from their financial blackmail.


The Controllers’ Brilliant War on their Own People

Sadly, owing in part to the 1990s manufactured collapse of the USSR, America’s Controllers have acquired vastly more power and riches, while gradually relegating the American Constitution to a meaningless piece of paper (see Part I of this series). They, assassinated or brutally tortured their real and imaginary opponents, stole so much from so many to the point that America’s 20 wealthiest people now own more wealth than the bottom half of the American population combined, neglected America’s infrastructure, elevated self-serving mendacity to an art form, conducted a phony war on drugs, used these very drugs and an utterly broken justice system to turn the USA into an incarceration nation in which jailers enjoy a de facto license to kill, destroyed American industry, and converted a once-rich country to the “most bankrupt nation in history.”

Take as just one example the so-called bailout of Western banks. In reality, that was the biggest transfers of money (and hence power) in history—from the vast majority of the peoples of these countries to the Controllers.

The criminals who planned the 2008 crisis, the criminals who are deliberately undermining the world’s economies, were paid handsomely for their misdeeds. 

The money the bankers got, had Western governments chose to nationalize these banks instead of giving them the people’s money, could have worked miracles in improving the economic situation of the world’s people.

I must confess that I wouldn’t have thought it possible that anyone could perform such astounding hat tricks as “bailouts” and not have to contend with a revolution the following day. The Controllers had a deeper understanding of the power of propaganda and human nature.


The 1990s Neo-Colonization of Russia and Its Aftermath: Four Trojan Horses

Throughout the 1980s, I studied the Russian-American standoff. And yet I failed to predict Russian naiveté, decency, inferiority complex, and the enormous damage inflicted on the Russian psyche by Stalin. I still find it hard to believe that the “dumb” Controllers were able, in the 1990s, to achieve the de facto occupation of Russia, sinking that once-powerful country into chaos, poverty, criminality, corruption, assassinations, organized crime activities, and social discord. Washington and its quislings were running—and deliberately ruining—the country.

Gratefully, the Americans eventually left—but only after leaving four Trojan horses behind.


Trojan Horse #1: Western-Style “Democracy”

Instead of establishing real democracy, the controllers re-created Russia in their “democratic” image. Even at the best of times, such “democracies” do not represent the interests of ordinary people. Sooner or later, they are doomed to be taken over by psychopaths.


Trojan Horse #2: Oligarchs and the Russian Economy


Another brilliant move on the part of the Controllers was the patronage and creation—from thin air—of the scourge of the Russian oligarchs. These “shysters basically stole Russia’s most valuable companies in the 90s, minting a small handful of mega-billionaires, while the rest of the country ate”—and is still eating—dirt. Very little has so far been done “to strip said shysters of their ill-gotten gains, and redistribute shares to the people.” As a result, unlike the much-maligned Soviet Union, Russia is plagued by vast income inequalities, poverty for the majority, inequality before the law, and unaffordable housing.

These oligarchs, “are still in full control of the Russian financial and banking sector, of all the key economic ministries and government positions, they control the Russian Central Bank and they are, by far, the single biggest threat to the rule of Putin and . . . to the Russian people and Russia as a whole.” Moreover, these oligarchs “connive to make Russia join the West as a junior partner.

Besides controlling the economy, the oligarchs corrupt everything they touch and provide a demoralizing proof that in Russia—as in the West—crime pays.


Trojan Horse #3: Russia’s Central Bank and Constitution

It is impossible to exaggerate the gravity of the following question to the wealth and liberty of a nation: Is its central bank private or public?

Here are two quotes (many more are available here), both underscoring the import of this question.

“The issue which has swept down the centuries, and which will have to be fought sooner or later, is the people versus the banks.”—John Acton (1834-1902)

The second quote provided a dire warning to the American people from the very start. William Pitt, British Chancellor of the Exchequer, said of the inauguration of the first privately-owned central bank of the United States under Alexander Hamilton:

“Let the American people go into their debt-funding schemes and banking systems, and from that hour their boasted independence will be a mere phantom.”

This is exactly what the Controllers accomplished, taking control of Russia’s Central bank. From that point to the present day, Russia’s boasted independence has been a mere phantom.

Central Bank of Russia

Controllers bearing gifts: The Central Bank of Russia



The most meticulous documentation of this paradoxical reality known to me comes from historian Nikolay Starikov’s Rouble Nationalization (you can read a book review here or freely download the entire English translation of the book here):

“The structure of today’s world is a financial one par excellence. Today’s chains consist not of iron and shackles, but of figures, currencies and debts. That’s why the road to freedom for Russia, as strange as it may seem, lies in the financial sphere. Today we are being held back from the progress at our most painful point—our rouble… Our rouble, the Russian currency unit, is—to put it delicately—in a way, not quite ours. And this situ­ation is the most serious obstacle to our country’s development. . . .

“Let us start with the simplest question—who issues roubles? This is easy—the Central Bank of Russia, also known as the Bank of Russia, has the monopoly on issuing the Russian national currency.

“‘Article 6. The Bank of Russia is authorized to file suits in courts in ac­cordance with the legislation of the Russian Federation. The Bank of Russia is entitled to appeal to international courts, courts of foreign countries and courts of arbitration for protection of its rights. . . .

“The Russian economy does not have as much money as required for its proper operation but equal to the amount of dollars in the reserves of the Central Bank. The amount of roubles that can be issued depends of the amount of dollars Russia received for its oil and gas. That means that the whole Russian economy is artificially put in direct correlation with the export of natural resources. This is why a drop in oil prices causes a collapse of everything and everywhere. . . .

“An idea of a bank independent from the state was brought into the Soviet Union as a Trojan horse—through ‘advisors’, through those who had practical trainings at Columbia University, those who were recruited or simply betrayed their country . . .

“Among other things, it contains such amusing details as article 7: ‘Drafts of federal law and regulatory documents of the federal bodies of executive power concerning duties of the Bank of Russia and its performance shall be submitted to the Bank of Russia for approval.’ If you want to dismiss bankers through making amendments to the legislation—kindly submit the draft of the bill to them in advance. Otherwise, they might as well sue you for your legal mayhem in a court of Delaware . . .

“The second security level is the Constitution, as the ‘reformers’ shoved some words on the Central Bank and its status even into the Constitution. Article 75 (points 1 and 2) says that ‘the currency of the Russian Federation is the rouble’, and ‘issuing of money shall only be done by the Central Bank of the Russian Federation’, that ‘it performs independently from any other governing bodies.’ If you want to be surprised—have a look at Soviet Constitutions. Read the Constitution of the USA. You will find no mention of a bank that issues money independently anywhere, because such articles should not be a part of the main law of the country. What body issues the currency is a technical question, it is not fundamental for the country and its people. For the people it is not very significant, but it is a key issue for enslaving the country. That is why it was hastily dragged into the Constitution. And now this technical detail is there next to the fundamental rights of Russian citizens.

Western control by proxy of Russian banking, finance, and the economy as a whole, has yet another sinister aspect. Prof. Michael Hudson and others underscore the fact that the USA has consistent, massive, balance of payment deficits with such countries as Russia, China, and Japan. Financialized and deindustrialized America buys real goods abroad and pays by running its printing press. Consequently, such countries accumulate the digital equivalents of billions or trillions of dollars.

They then use a good part of this money to buy U.S. treasury bonds. The net result of this convoluted, scarcely credible, process is straightforward: By financing the U.S. military and economy, these countries empower their own oppressors.

That is then one other legacy of the Controllers: They created a situation whereby Russia, while fighting for its very survival, finances its own military encirclement and the ongoing attacks on its economy and currency. Thanks to the powerful fifth column and alien constitution the Controllers bequeathed, Russia is “economically enslaved to the United States.”

Can witless people plan and execute such a coup?


Trojan Horse #4: Information

Inside Russia too, the Controllers left behind another curious legacy: Hostile foreigners and their agents indirectly own some mainstream Russian media. And state-owned, independent, and private media are still afraid to tell the people of Russia and the world ugly truths about the West, still trying to curry favor with Washington and its Controllers, still often take the Controllers and their vassals at Langley and Washington at their word.


Parting Words

The Controllers have been trying to subjugate Russia, its vast resources, and educated and creative people, for centuries. They tried direct or proxy wars, and so far failed. They tried nuclear brinkmanship, and they failed. They tried sleight of hand in the 1990s—and almost succeeded. They are resorting to blood-curdling brinkmanship now, and it remains to be seen whether this will lead to the conquest of Russia, its annihilation, or the destruction of humanity.

war is peace

They are now resorting to military intimidation and economic warfare. They came close several times to turning Russia and China into vassal states, and they are now pursuing that goal, full steam.

They hope that one day soon they will have reached at long last their vision of the future: “a boot stamping on a human face—forever.

The Controllers are engaged in a cross-generational undertaking. They are closest now to achieving their dream than any other empire in history has ever been. They could be the brightest bunch of psychopaths that ever lorded over humanity. If Russia, China, and revolutionaries everywhere wish to prevail, they must never underestimate their opponents. As well, they must level the intellectual playing field.

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Moti Nissani
Moti Nissani is an organic farmer (in Argentina), a former university professor (in the USA), a jack of many trades, and the compiler of  “ A Revolutionary’s Toolkit.”.


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Does Bilderberg Really Run The World? One Chart To Help You Decide

Tyler Durden


Site of the 2016 meeting of the Bilderberg Group – Interalpen-Hotel Tyrol und Hohe Munde

The truism states “A picture is worth a thousand word.” Well that is certainly true in this case. – rw

With the Bilderberg 2016 meeting now humming along at the Taschenbergpalais hotel in Dresden, deep behind closed doors and protected by heavily-armed guards, many have wondered: just how hyperbolic are allegations that the Bilderbergs run the world.

To help readers decide, here is a chart laying out the linkages and various connections – financial, political, statutory and otherwise – between the handful of people who comprise the Bilderberg core and the rest of the world.

They Rule picture of the interconnections of various corporations and people to the Bilderberg Group

They Rule picture of the interconnections of various corporations and people to the Bilderberg Group. CLICK HERE to see fully enlarged graphic.


Source: Zero Hedge


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Podemos and the Limits of the Neoliberal Order

horiz grey lineBy Jorge Amar and Scott Ferguson


EditorsNote_WhiteIn looking at the rise of the Podemos in Spain one has to also look at the rise of Syriza in Greece, and ask the question of the authenticity of these supposedly "left," populist, political parties. With the Syriza party, it seems that they were essentially a hoax, a strain of "non-left left", for as soon as they took power , they capitulated to the banksters without a whimper. The "hope of the people" was dashed upon the rocks before the ship left the dock, thereby leaving a very bad taste in the people's minds about the integrity of so-called left parties, for, despite initial fiery rhetoric,  it showed even less backbone than the others.

Now we have a similar rise of a left, populist party in Spain and Italy, and as Amar and Ferguson state, they will need to "compromise" out of the gate, or they will immediately fail. In this context, besides questioning the analytical framework behind such statements, their seemingly tacit endorsement of reformist incrementalism and the economic approaches exclusively favored by mainstream (capitalist) theorists, why are they so sure that remaining true to their promises will immediately condemn such parties to defeat? The operative question —we are told—is "what will they compromise," and "how far will they go?" But underneath these questions we have to wonder if the instigation and popularity of these supposedly "left" parties is simply a ploy to discredit the entire concept of socialism, and thereby force a reaction from the people to go with a "right" or corporatist agenda. That certainly seems to be the pattern - particularly if we expand our frame to say Latin America. While we can hope that this is not the case, and that Podemos, despite its unpromising track record and bourgeois leadership, will somehow stand up for the good of the people, it also seems highly possible we are watching little more than political theater. Podemos and its ilk are essentially not true revolutionary socialist parties, but social democrats—at best, hence their willingness to play ball with the capitalists. That, indeed, is an old story with social democracy, which for generations has been happy to wield power to "manage" (or front) for capitalist regimes, albeit with varying welfarist faces.  Welfarism is naturally better than savage free marketism, but the world is now at  ahistorical stage when capitalism cannot be prolonged via mere socialist patches. It must be dealt a death blow and retired from the stage of history, or else all of humanity and the planet will be finished. This task these parties are loath to commit to or even envision. That's why in either case—Syriza and Podemos—it is the "left" brand that suffers a bad blow to its credibility and promise. RW/PG

No private character, however pure, no personal popularity, however great, can protect from the avenging wrath of an indignant people the man who will either declare that he is in favor of fastening the gold standard upon this people, or who is willing to surrender the right of self-government and place legislative control in the hands of foreign potentates and powers.

William Jennings Bryan, “Cross of Gold,” 1896

In the wake of Syriza’s utterly disappointing challenge to the EU Troika’s punishing austerity politics in the Eurozone, leftists around the globe are now turning their eyes, and hopes, to Podemos in Spain. Podemos grew out of the 15-M, or Los Indignados, anti-austerity protests back in 2011. The organization took myriad local government seats after forming an official political party in 2014. And as of the national parliamentary elections held in December 2015, Podemos has emerged as a viable third-party counterforce to Spain’s historically two-party neoliberal government. During the recent elections, the ruling, conservative People’s Party (PP) lost sixty-four seats, while the opposing Spanish Socialist Workers’ Party (PSOE) hemorrhaged twenty seats. Podemos, by contrast, earned sixty-nine seats, coming in just 300,000 votes behind PSOE and securing roughly 20% of the votes within the Spanish parliament. And in fourth place was Ciudadanos, the smaller, center-right “Party of the Citizenry.” Ciudadanos won a sizeable forty seats in parliament, but this was far less than early polling predicted.

[dropcap]C[/dropcap]ommentators have dubbed Podemos’ and Ciudadanos’ upset of Spain’s two-party system a political earthquake, while the international left is characterizing the battle ahead as source of great hope and an opportunity to bring real change to Europe. Here, however, we dampen the leftist enthusiasm surrounding the Spanish election, and regarding Podemos in particular, putting pressure on what we argue to be the party’s under-theorized and rather conservative program for economic change. Specifically, we offer a critique of Podemos’ commitment to so-called “sound finance,” as well as the tax-and-spend liberalism upon which its proposed solution to Eurozone austerity is supposed to hinge. But we also suggest a more promising way forward: that Podemos join forces with the fifth-ranking Unidad Popular party. Unidad Popular’s primary economist has turned to the heterodox school of political economy known as Modern Monetary Theory (MMT), coming to see what Podemos takes to be economic truths regarding the Eurozone as neoliberal myths that should be overtly politicized and rejected as such. By collaborating with Unidad Popular, we conclude, Podemos stands to not only pose a serious threat to Eurozone austerity, but also supplant the neoliberal order with an alternative and more just political-economic regime.

Political Crossroads

[dropcap]T[/dropcap]he general elections results that some people are characterizing as the end of the Spain’s hegemonic ’78 Regime are not quite as promising as such pronouncements let on. Podemos still lacks the necessary votes to command real power in the government, and the neoliberal bipartisanism comprised of the false choice between PP conservatives and PSOE socialists will continue to rule Spanish politics for some time. What Podemos’ electoral gains do represent is a crucial political challenge. Now it is time for Podemos to decide whether to openly collaborate with others, thereby creating a relatively stable government that can reverse austerity, or to refuse cooperation, likely forcing a new election cycle.

Though constrained in its own right, this is essentially Podemos’ decision to make. The dominant PP has no chance to win a working parliamentary majority without the endorsement of the PSOE. With an electoral base that is, demographically speaking, doomed, PP received more than 7,215,000 votes in the election, but lost more than 3,500,0000 votes from 2011. PSOE, meanwhile, saw its worst outcome since 1977: 5,530,779 votes, losing more than 1,500,000 since 2011. This leaves Podemos to negotiate between three future scenarios. None are certain. And each comes with its own rewards and pitfalls.

In the first scenario, the PP could form a government through more or less open cooperation with the PSOE and Ciudadanos. This arrangement would look something like the political makeup of the current German government. However, open collaboration may prove dangerous for the PSOE. As some regional leaders of that party are explicitly warning (if not threatening), the PSOE’s Pedro Sanchez should not rush too quickly to show support for the PP, since such an action may incite a mass defection of voters from the PSOE towards Podemos. Podemos’ recent gains have gone far to unmoor the decades-old truism that the PSOE is the Spanish left’s only feasible tool for combating PP conservatives, and the PSOE are now visibly worried.

Under a second scenario, the PSOE can attempt to constitute a new government by aligning itself with the third party, Podemos, and the fifth party, Unidad Popular. But this is also unlikely, considering the fact that Podemos rose to power by rejecting Spain’s bipartisan regime and calling for a new constitutional process. Podemos won its power from voters who resist the PP and PSOE duopoly, seeing both parties as more or less equally guilty of alienating the citizenry and exploiting the revolving doors between government, industry, and finance. Podemos disparages this class as the casta (caste) and vows to overturn it. To renege on this promise could prove politically deadly. One way to for Podemos to skirt this problem would be to demand the PSOE accept certain far-left measures, such as the referendum about Catalonia’s (and other regions’) “right to decide.” Podemos’ allies in these regions are unwavering on this issue, and persuading the PSOE to sign on to such a measure would go far to secure Podemos’ political base. Unfortunately, however, the PSOE has historically refused this policy and in all likelihood will not adopt it.

Finally, in a third scenario no coalitions are built between the reigning parties and we see a repetition of the same general elections in few months. This scenario is most likely, given the obstacles suggested above. In this case, the bipartisan regime will continue its decline and Podemos will use the PSOE’s rejection of its own faux leftism to erode more of the PSOE’s electoral base. Such a process may result in Podemos overtaking the PSOE and eventually taking command of parliament. But there are clearly many moving parts at work here, rendering the future of the Spanish left at once promising and uncertain.

Podemos’ Economic Program

[dropcap]S[/dropcap]uch are the political crossroads that Podemos and the Spanish left in general will face in the months ahead. But there is still another and, we would claim, more important matter to consider, and one that fundamentally shifts the ground beneath this unfolding story. This is the issue of political economy and specifically, the economic program Podemos aims to install, if and when it manages to take hold of parliament.

Surprisingly, Podemos’ economic platform has received inadequate critical attention by the leftist commentariat. This is especially true of English-language media. Much has been written about Podemos in the US, UK, and elsewhere. But such writing tends to focus on Podemos’ leader, Pablo Iglesias, and devote most of its energy to weighing the relevance of Podemos’ status as a popular political movement in relation to similar efforts around the globe. As a consequence, English speakers are offered little concrete discussion about the specific economic policies Podemos is proposing. Iglesias himself has published articles in English-language publications such as New Left Review, Jacobin, and The Guardian. These pieces explore political struggles, communication strategies, and grassroots organizing. Yet Iglesias devotes very few words to outlining Podemos’ economic program in such texts, leaving most English-language readers in the dark.

In truth, Podemos’ economic program has evolved quite a bit since the party’s initial formation. But this economic program seems to become more and more conservative as time progresses. At first, for instance, Podemos proposed a Basic Income Guarantee and debt relief for citizens, in addition to making more general promises about ending austerity. Yet month by month, Podemos has dropped both the Basic Income Guarantee and the debt relief program, as well as myriad other proposals. To be sure, the party remains committed to its central promise, which is to repair and expand Spain’s welfare state. But Podemos has conspicuously pared down its economic platform in compliance with the reigning economic orthodoxy in an effort to secure political legitimacy both within Spain and abroad.

The Trouble with Podemos

[dropcap]A[/dropcap]lthough Podemos’s grassroots-driven rise to power should be seen as meaningful and genuinely exciting, the party’s economic strategy is simply inadequate to win the political struggle it aims to conduct against the neoliberal order. The real problem with Podemos’ political economy lies less in the specific proposals the party is offering, but rather in the unreflected neoliberal assumptions that underlie the party’s shifting economic platform. First among these assumptions is Podemos’ apparently blind commitment to the doctrine of sound finance: the mythic principle that a healthy national economy requires government to balance its budget, whether in the short run or over the course of the business cycle. As Modern Monetary Theory (MMT) has shown, this principle is not only inimical to economic productivity, but also debilitating for equality and justice. Meanwhile, this principle rests upon another noxious maxim Podemos holds dear: the false notion that states are revenue constrained and that a government must tax before it can spend toward the public good.

The only scenarios under which a sovereign government might be constrained in this way, contend MMT economists, is when international gold standards or currency-peg agreements force states to accept debt obligations in a currency over which they assert little control. Such arrangements not only limit public spending to the tax revenues the state is capable of collecting, but also force governments to bend to the dictates of international creditors. Put another way, metal standards and currency pegs transform sovereign nations into de facto colonies of other political bodies.

This is why MMT economists such as Bill Mitchell have long spoken out against the bankrupt neoliberal logics that undergird the Maastricht Treaty. Signed in February 1992 by the members of the European Community in Maastricht, Netherlands, this treaty robbed European member states of their fiscal sovereignty and established the Eurozone as a monetary union without the strong fiscal union that would be required to support it. This has resulted in an abstract and especially cruel version of an old-time gold standard, which paradoxically forgoes any basis in gold bullion. Against the warnings of a dissenting minority, the Eurozone’s quasi-gold standard has crippled European nations by restricting public spending to a finite pool of value and in turn forcing governments into brutal debt agreements.

The dominant narrative sees the resulting sovereign debt crises as the crux of the Eurozone disaster, thought to be the consequence of profligate governments being unable to live within their means. However, these crises are mere symptoms of the Eurozone’s faulty structure. The true cause of this disaster is the Eurozone’s shackling of government spending to a false finitude and treating this subjugation as a natural state of affairs. Though written in somewhat technical language, Mitchell’s account of the Eurozone’s structural failings is instructive:

It is a basic characteristic of any monetary system that government can only create risk free liabilities if they are denominated in its own currency. … [However], the current design of the Eurozone determines that the Member State governments are not sovereign in the sense that they are forced to use a foreign currency and must issue debt to private bond markets in that foreign currency to fund any fiscal deficits. … The member state governments thus can run out of money and become insolvent if the bond markets decline to purchase their debt. … Their fiscal positions must then take the full brunt of any economic downturn because there is no federal counter stabilization function. Among other things, this means the elected governments cannot guarantee the solvency of the banks that operate within their borders.i

Governments require the political capacity to create money, or “risk-free liabilities,” on demand, Mitchell explains. Such powers are needed to maintain the solvency of banks, as well as to use fiscal policy to counter recessions and depressions. The Eurozone, however, strips member states of this spending capacity and requires them to borrow on international bond markets. The result transforms sovereign governments into cash-strapped debtors, makes economic recovery for individual nation-states impossible, and dooms the entire Eurozone system to failure.

Fellow MMTers L. Randall Wray and Dimitri B. Papadimitriou describe the historical consequences of the Eurozone’s lethal design as follows:

From the very start, the European Monetary Union (EMU) was set up to fail. The host of problems we are now witnessing, from the solvency crises on the periphery to the bank runs in Spain, Greece, and Italy, were built into the very structure of the EMU and its banking system. Policymakers have admittedly responded to these various emergencies with an uninspiring mix of delaying tactics and self-destructive policy blunders, but the most fundamental mistake of all occurred well before the buildup to the current crisis. What we are witnessing are the results of a design flaw. When individual nations like Greece or Italy joined the EMU, they essentially adopted a foreign currency—the euro—but retained responsibility for their nation’s fiscal policy. This attempted separation of fiscal policy from a sovereign currency is the fatal defect that is tearing the Eurozone apart.ii

As Wray and Papadimitriou have it, the Eurozone crisis is not the direct outcome of pro-business policymaking and anti-social austerity programs, as vile as these measures are. It is, rather, an effect of the calamitous finitude baked into the EMU project. The Troika can say, “Pay up!” and “Tighten your belts!” until they are blue in the face. But European governments will be structurally incapable of settling such debts as long as their monetary sovereignty remains fettered. To make matters worse, Germany’s tendency to hold money surpluses as the Eurozone’s net exporter further exacerbates the debtor positions of other member states. If the money supply is finite in the Eurozone and the German economy hoards its export profits, this means that there is simply not enough money to go around and that import-dependent economies such as Greece, Spain, and Italy will continue to suffer deficits no matter how successfully they manage to tax their distressed populations.

Europe’s phantom gold standard has not only immiserated populations, but also quashed Syriza’s resistance to the ongoing devastation in Greece. This is not merely because the Troika rejected what Greek finance minister Yanis Varoufakis consistently referred to as Syriza’s “modest proposal.” It is because, unlike during previous eras when metal standards were both popularly contested and philosophically denounced, neoliberal ideology has come to wholly naturalize the Eurozone’s shrouded cross of gold. This has made real transformation unimaginable, as Varoufakis and his team sadly discovered in July 2015.

For this reason, Podemos will have to directly thematize and politicize the Eurozone’s taken-for-granted finitude if it wishes to make meaningful and lasting transformations. First and foremost, this means reclaiming the state’s monetary sovereignty and boundless fiscal capacities. But it shall also require a major propaganda campaign, aimed at persuading ordinary people that the state is limited only by real resources and productive infrastructures and simply cannot run out of an abstract unit of account. It must be made clear that only by seizing government’s power to spend as needed can Podemos hope to end austerity and create the conditions for full employment and widespread prosperity. However, for all its leftist rhetoric and broad grassroots support, Podemos remains ill-equipped to end austerity since it does not dare imagine liberating Spain’s public purse from the Troika’s asphyxiating grip.

Podemos’ economic program is thoroughly consistent with the gold standard metaphysics of sound finance. Party leaders imagine they can simultaneously adopt this ideology and succeed in accomplishing what Syriza could not: acting against austerity while playing along with Eurozone budgetary rules. Upon these faulty premises, Podemos then treats what is in reality a very conservative tax-and-spend liberalism as the crux of its economic strategy. A Podemos-led government would seek to reverse social spending cuts by increasing some taxes, creating a slate of new taxes, and reinforcing the mandate of the AEAT (the Spanish equivalent of the IRS) of fighting tax evasion. Believing that public programs should be funded by this revenue, Podemos thus plans to tether the recovery and expansion of the Spanish welfare state to the futile task of fighting tax avoidance within a zone that permits free trade and capital movement. In such a zone, every private person and corporation can shuffle money easily between countries without notice. Barring a common tax authority and total multinational cooperation, even the most vigilant efforts to collect taxes are bound to fail.

Podemos’ chief economist, Nacho Alvárez Peralta, is quite explicit about the party’s devotion to sound finance and tax-and-spend economics. Alvarez expressly supports government budget-balancing. He breaks with the European Central Bank only on the timeline he asserts is required to achieve the criteria outlined by the Eurozone’s Stability and Growth Pact (SGP). Alvarez is also the architect behind Podemos’ tax-based strategy to fix the welfare state, which he presumes to be the only way out of the current mess.

Podemos thinks it can somehow accomplish what Syriza did not. However, it must learn the true lesson of the Greek fiasco: As long as a nation-state remains inside the Eurozone and subject to its SGP budget requirements, there shall be no alternative to austerity or the neoliberal order. And with the EU Commission’s latest demand that the next Spanish government cut another 9 billion euros to meet stringent deficit targets, the stakes of learning this lesson could not be higher.

Another Future

[dropcap]W[/dropcap]ith MMT’s critique of political economy in focus, a more promising way forward presents itself for the Spanish left, one that refuses the neoliberal premises that have come to frame Eurozone politics. As we suggested at the outset, this will require Podemos to join forces with Unidad Popular, an avowedly socialist and feminist party of the left now headed by economist and MMT advocate Alberto Garzón. As opposed to Podemos’ Iglesias and Alvarez, both Garzón and Unidad Popular’s chief economist, Eduardo Garzón (Alberto’s brother), hold a view of political economy that is very close to MMT’s understanding of monetary sovereignty, fiscal spending, and taxation. Garzón is well aware that Eurozone rules have perniciously, and needlessly, choked off the Spanish government’s spending powers, severely contracting what MMTers such as Stephanie Kelton refer to as the “fiscal space” that is necessary to sustain and enlarge a national economy.

In addition to restoring and developing the Spanish welfare state, Unidad Popular’s key economic proposal takes its cue from MMT’s idea for a federal Job Guarantee program. Garzón’s proposal is a modestly scaled version of MMT’s Job Guarantee. It is designed to provide community-focused, living-wage employment to Spain’s chronically under- and unemployed, which would not only provide immediate relief to destitute Spaniards, but also reverse the nation’s deflationary economy. Going beyond Keynesian pump priming, this Job Guarantee is meant to be a permanent public institution that expands countercyclically in lockstep with market downturns. If permitted to become a truly universal program, Spain’s Job Guarantee would serve a powerful new mediator of social production and value. In addition to setting just minimum standards for wages, working hours, and benefits, the Job Guarantee would carve out a larger space for public works that are free from market imperatives, place the program’s means of production in workers’ hands, socialize and compensate much unremunerated care work, and give everyday people a say in the shaping of their world.

What is more, Unidad Popular’s Job Guarantee scheme makes no mention of needing to meet the arbitrary budget goals of the SGP in order to fund such a program. This is because Unidad Popular roundly rejects the neoliberal premises of such goals. Indeed, if challenged by the Troika, the party is wholly prepared to set the crucial question before the body politic: Should we continue to obey the Troika’s crippling mandate in order to remain within the Eurozone? Or, shall we refuse the Troika’s dictates and risk ejection from the Eurozone? This is the question Syriza could not, or would not, ask. Yet what the Syriza tragedy has proven is that this is the key question upon which the fate of Europe shall depend.

Before the recent Spanish election, Podemos and Unidad Popular were in conversations to form a coalition. At the last minute, however, Podemos’ leaders broke off these talks for what we considered to be tactical reasons. Our hope is that there will be another chance to forge a coalition when the new elections are convoked. Of course, nothing will ensure the success of the Spanish left. All we have is our solidarity and commitment to struggle. But to fight against the neoliberal order while uncritically adopting neoliberal assumptions is to forfeit the contest from the start. Unless Podemos or any other leftist party is prepared to proffer a substantive alternative to the rules of the neoliberal game, we will no doubt suffer a disaster that is far greater than the one we are currently witnessing in Greece.

Such is the promise of MMT for the contemporary left: While MMT’s understanding of money as a limitless public instrument can free us from debt and austerity, its community-focused Job Guarantee provides means to build a new political economy, which transfigures social and ecological relations from the bottom up. Yet this is what other critical-theoretical appeals to MMT do not seem to comprehend. Reticent to appropriate and reshape the state apparatus, critics such as Nigel Dodd and David Graeber have called upon MMT’s understanding of money as a public balance sheet to challenge the inevitability of neoliberal power. In our estimation, however, MMT is more than a weapon for negating neoliberal domination. It is also a powerful tool for cultivating a positive and enduring alternative to the neoliberal catastrophe—first in Spain, then beyond.


About the authors
Jorge Amar is a Spanish economist, president of the APEEP (Asociación por el Pleno Empleo y la Estabilidad de Precios, or Full Employment and Price Stability Association), and a doctoral candidate in Applied Economics at the Universidad Valencia. Recently, Amar served as economic advisor for Spain’s Unidad Popular party within the Grupo de elaboración política (Policy Elaboration Group), a provisional task force coordinated by economist Eduardo Garzón. Scott Ferguson holds a Ph.D. in Rhetoric and Film Studies from the University of California, Berkeley and is currently an assistant professor of Humanities & Cultural Studies at the University of South Florida. He is also a Research Scholar at the Binzagr Institute for Sustainable Prosperity. His essays have appeared in CounterPunch, Screen, Arcade, the Critical Inquiry blog, Naked Capitalism, Qui Parle, and Liminalities.


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Source: boundary2 online


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Panama Papers show that capitalism is working perfectly

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=By= Ben Hillier

Jakarta fresh water

The waterways, and poverty in Jakarta, Indonesia. World Bank. Farhana Asnap.

[dropcap]O[/dropcap]ne law firm, working for over 40 years with more than 14,000 banks, lawyers and incorporating authorities, set up more than 200,000 off-shore shell corporations to enable mass tax avoidance by rich people and large corporations around the world. Some of the details now have been widely-reported – and there is probably much more to come from the 2.6 terabyte file leak from Mossack Fonseca.

This is just the tip of the iceberg.

According to University of California economist Gabriel Zucman’s research, about US$330 billion is lost each year to tax avoidance and evasion. Writing at theintercept.com, journalist Jon Schwarz noted that Zucman “conservatively calculates that, as of 2014, at least $7.6 trillion of the world’s financial wealth – or about 8 percent of the world’s total financial wealth of $95.5 trillion – was ‘missing’”.

It didn’t go for a walk on a sunny morning and run away from home. It was kidnapped by some of the most ruthless corporate minds in the world. States have the power to pull these rogues into line, yet many continue to enable profit-shifting and actively weaken the powers of tax agencies and regulators in the name of “reducing bureaucracy and red tape”. Take the federal government’s gutting of the Australian Tax Office, or the recently instituted “deferred prosecution agreements” in the US, which allow companies to buy their way out of criminal charges.

When national elections are increasingly fought on the question of whether or not social services can be maintained, it is a basic right that we have knowledge of corporate crimes and access to the real figures of potential government revenue – not skewed data that confirm the narrative of politicians who say that we can’t afford decent health care, welfare and public infrastructure.

Consider, for example, that US$7.6 trillion figure. That is about 10 trillion Australia dollars. If it were “found” and taxed at 40 percent there would be government revenues enough to build more than 1,900 state of the art hospitals like the large new Royal Adelaide – about 10 hospitals for each country on the planet.

Yet while corporate fraud is gargantuan in its scale, it is not the expression of a system that “isn’t working”, as Time magazine’s Rana Foroohar noted in early April. In fact, the tax rorts are only a small part of the proceeds of a colossal theft from the world’s workers, which is the foundation of the system. This larger theft is often overlooked because capitalism’s structure obscures how value is created and distributed through the economy.


Three basic aspects of this structure are, first, that firms carry out their productive activities independently of one another. Their books – the record of inventories, bills, inputs etc. – are confidential, to hide as much of their operations as possible. That’s the nature of private property.

Second, while they act independently, private businesses nevertheless interact to provide goods and services (commodities) for each other and for other consumers. During this process, local, national and regional economies, and a global economy, are formed.

Third, the interaction of these firms occurs via the market, which allocates labour and goods to different branches of production. The result is an economy in which the connections between people are formed only indirectly via the exchange of things (the products of labour).

The economic value of things, expressed in their price, is a result of the labour expended in their production: the average time it takes the average worker using the standard technology in any given industry to produce some particular commodity. It is also a result of the value transferred from raw materials and machinery, which are the products of previous rounds of production.

The way value is formed is complex; no-one knows in advance what the value of anything will be. We can say what something is selling for today, and business managers make estimations about what it might sell for tomorrow. But only after the commodities have been produced and put on the market for sale can their value be gauged. Why? Because only through the exchange of things are the various activities of businesses throughout the economy systematically compared; averages can be formed only through such comparison. And only after it has been performed can we find out whether or not the labour was actually useful.

Because prices are formed only on the market, it appears as though it is the natural properties of the commodities themselves, or simply the psychological wants of consumers, rather than labour, that determine a thing’s value.


One of the key ideological defences of capitalism is that, when individuals pursue our own economic self-interest, the greatest welfare will accrue to society as a whole. As Adam Smith famously wrote in The wealth of nations:

“Give me that which I want, and you shall have this which you want, is the meaning of every [bargain]; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

It’s a nice theory, naturalising the operations of the market, transforming economic reflexes into a moral imperative and confirming, for anyone wanting confirmation, that being a greed-filled self-absorbed turd is good for everyone around you. Smith’s words retain some currency because everyone must interact on market to satisfy our needs. In that sphere we seemingly are on equal footing – we buy, we sell, and we allegedly enjoy the same protections, whether we are rich or poor, a person or a corporation.

This reality, and the theory built on it, obscures a fourth feature of capitalism – that it is a class society in which a minority of people own or control the vast majority of the productive apparatus that is required to produce the things that we all need – the telecommunications infrastructure, the agricultural land, the machinery, the office blocks, the factories, the mines and so on.

Entering the market, workers have only one commodity to sell: their capacity to labour, their “labour power”. That commodity can’t be hidden away in the British Virgin Islands, or treated like a financial instrument and loaned out in return for a cut of the profits produced elsewhere. Workers need food, water and shelter every day to replenish their capacity to work. So, far from being on equal footing, they are at the mercy of property owners, who will hire only those from whom they expect to make an economic gain – the extraction by bosses of “surplus value”.

This surplus value extraction is, on one hand, easy to grasp. When a firm’s products are sold, the revenues come back to the business to pay for the costs of production. But every firm requires that the sales revenues will be greater than the money originally outlaid. This extra value goes to the executives, the shareholders, to pay taxes and interest on loans, and part of it is retained for reinvestment.

Where do these profits, this surplus value, come from? From the workers. Labour power is a unique commodity, which in the production process not only passes the value embodied in it on to other commodities, but also creates additional value. This is the source of the great theft.

In other class societies, the transfer of the products of labour from the labouring classes to the ruling class is fairly transparent. A peasant family, for example, could calculate clearly how much they were being exploited: they might work five hours each day producing things for themselves on their own plot of land. They might then work another three or four hours on the lord’s land producing food for him. They could see what was theirs and what was his. If the lord had 20 peasant families on his estate, you could easily do the math regarding how much the lord took overall. In a capitalist economy, as the late Marxist scholar Ellen Meiksins Wood put it in Empire of capital,

“The class relation between capital and labour is rather more difficult to decipher. Here, there is no direct transfer of surplus value. The workers pay no rent, no tax or tribute, to their employers. There is no obvious way of distinguishing between what workers keep for themselves and what they forfeit to capital. In fact, far from extracting rent from workers, the employer pays them, in the form of a wage, and that payment appears to cover all the work the worker performs.”

Exploitation is still occurring – someone might get paid for eight hours’ work, but the value created in that eight hours surpasses the value of the wage. That’s capitalism’s great “secret”. The exploitation is hidden beneath the fiction of “a fair day’s pay for a fair day’s work”, and further obscured by the fact that, because value formation is itself so opaque, it is impossible to say exactly how much value above its wages the global working class is losing to the capitalist class.

All this is totally legal. In fact, the legal system is designed to facilitate it – even to the point that we have the legal term “fiduciary duty”, which basically says that corporate board members and executives have a legal requirement to maximise the returns to their shareholders. That is, they are guilty of a crime if they don’t facilitate the greatest degree of exploitation deemed reasonable.

Some among the political establishment rail against the tax rorting and unfair or corrupt businesses practices. But they all defend the wage-enslavement of the majority of the world’s population. This process doesn’t happen in a shell company on Grand Cayman. It is the hum-drum of workplaces in every town and city, in every county and state, in every country. Even if we can’t precisely calculate it, we know that it is occurring. And this theft, in monetary terms, dwarfs what is being exposed in the tax avoidance of the ruling class.

Competition and corruption

The firms carrying out the exploitation are locked in a competition that forces on each a never-ending quest to increase productivity (reduce the amount of labour expended in the production of commodities). New technologies, efficiency gains and the closure of older businesses all affect the average time it takes to create something. The businesses that produce things using less than the average amount of labour time have a competitive advantage.

The intense economic competition over time results in the greater centralisation of wealth in fewer hands and its concentration in larger corporations, which exert greater powers. In the case of the US, the Economist noted in March:

“Our analysis of census data suggests that two-thirds of the economy’s 900-odd industries have become more concentrated since 1997. A tenth of the economy is at the mercy of a handful of firms … A US$10 trillion wave of mergers since 2008 has raised levels of concentration further. American firms involved in such deals have promised to cut costs by $150 billion or more, which would add a tenth to overall profits.”

The race to sell as much as possible also necessarily leads to extra-economic competition. This involves conspiracy, the rewriting of laws (labour, environmental, tax and competition laws for example), bribery, espionage and violence. It is important to understand that such practices are intimately bound up with capitalist production. They are not intrusions into an otherwise unadulterated economic process. Nor are they some new development, as New York University historian Greg Grandin, in an article published in the US liberal magazine Nation, implied when he wrote, “financial crimes and political conspiracies aren’t discrete events but the essence of neoliberalism”.

There is no doubt that the neoliberal era has provided legal enablers for illicit financial flows. Yet Grandin’s comment is deceptive. Today’s frauds are shocking in their scale, but they are a direct extension of the anarchic private competition at the heart of the capitalist system, not simply a by-product of the great financial deregulations and restructurings of the 1980s and 1990s. As an example, the Russian revolutionary Nikolai Bukharin noted a century ago of the struggle among US trusts in the 19th century:

“Criminal gangs were hired to destroy railroad tracks, to damage and blow up oil pipes; incendiarism and murder were practised; governmental authorities, including entire judicial bodies, were bribed on a large scale; spies were maintained in the camp of competitors etc., etc. – there is a plethora of material in this respect in the history of the giant American combines.”

What the Panama Papers reveal is not a broken system, but one running as it was intended to and as it always has – concentrating ever greater sums of wealth in the hands of a tiny few, with the connivance of their political and legal servants.


All this is why socialists don’t just argue for higher corporate taxes and financial transparency (although we certainly do), but for a completely different economy. We have a world of abundance in which poverty and inequality are the conditions for economic growth because capitalism is run according to the maxim: “From each worker according to their labour, to each capitalist according to their investment”.

We need an economy that eliminates the private ownership of the productive apparatus of society. An economy that eliminates the anarchy of the production processes. An economy that is governed by the planned production of goods, rather than by the interactions of things in a market. An economy that is not guided by competition and the search for profits. An economy that eliminates exploitation.

We need a socialist economy run according to Karl Marx’s maxim: “From each according to their ability, to each according to their need”. If you think that sounds like a good idea, then it’s time to join the socialists and work towards that goal.


Ben Hillier is an Editor for Socialist Alternative, a revolutionary socialist organisation that is the publisher of Australia’s leading radical left newspaper Red Flag.

Source: RedFlag


Note to Commenters
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subMedia’s Exposé: “Stashing the Booty” (Video)

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=By= subMedia


[dropcap]T[/dropcap]his is an excellent piece of work as regards the wealth that is stashed around the planet and related matters. Big kudos to subMedia for this masterpiece. I dare you to click play ’cause I can almost guaranteed you are going to be captivated and maybe apalled.

Stashing the Booty from subMedia.tv on Vimeo.


Note to Commenters Due to severe hacking attacks in the recent past that brought our site down for up to 11 days with considerable loss of circulation, we exercise extreme caution in the comments we publish, as the comment box has been one of the main arteries to inject malicious code. Because of that comments may not appear immediately, but rest assured that if you are a legitimate commenter your opinion will be published within 24 hours. If your comment fails to appear, and you wish to reach us directly, send us a mail at: editor@greanvillepost.com

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