01 July, 2012

Austerity: The Rape of the Poor

Class war?

 The Dissolution of Fictitious Value

Are you wondering what is going on among the leaders of the Euro Zone of the European Union? Do you, along with British Prime Minister Cameron and his Tory colleagues, put the whole thing down to their stubborn refusal to act! Or do you decide that all such efforts to rationalise our World (including the lauded United Nations) are doomed to failure from the outset. Yet what is really happening is certainly none of these things! It is the final Dissolution of the Fictitious Value on which Capitalism rests. It is the regularly occurring and inevitable Crisis of Capitalism!

Unified Europe under threat

This isn’t just about Greece, or even the sorely threatened Euro Zone. It is about the failure of the capitalists final throw – to generate yet another fictitious bubble, this time out of the “Own Your Own Home Myth” for the very poorest layers in capitalist society. It not only didn’t work, it was the final straw that broke the camel’s back. Its failure put ALL value in question. And the answer that came back was that such “growing” value rested ONLY on an agreed and regularly inflated figure, so that in the end all apparent gains were shown to be an illusion. Value poured away in one avalanche after another and in the last few days it has become clear that the mightiest banks were fiddling the interest rates to give the appearance of their getting out of their own self-made mire.

Now, this is not, as some might think, just what we have been waiting for, so, that finally we will be rid of this cancerous growth upon society. For, the perpetrators do have alternatives. They have done it before, and they will do it again. They contract back into their own national bases and oppose all others. And in such circumstances the ultimate “solution” is always the same. It is war!

And all supra-national organisations, such as the old League of Nations and the present UN, are shown to be toothless and useless in any global responsibilities. They can never act against powers in ultimate crisis. They can’t even cope with tiny Syria! Why, for example, is Russia still the enemy? It has returned to the capitalist fold. Indeed, if you listen to the current crop of Tory backbenchers in the UK parliament, it is clear that all foreigners are a threat. “We must struggle for the best opportunities to win what advantages we can”, is their ever-clearer standpoint.

Now, you may with justice dismiss such a “final decline” analysis, by referring to the regular past crises and their apparent, just as regular, “resolutions”. And all that is accurate, but to reveal the nature of such past recessions and Slumps, and to compare the nature of the current crisis with all of those, you must attend to the Theory of Emergences (slowly developed concerning Stability & Change in all systems of whatever kind), wherein crises ultimately will occur to any Stability, and when they do almost nothing can stem an impending calamity. Indeed, in such circumstances something painfully calamitous is unavoidable.

There is, of course, a crucial period in which ever-developing swings downward are countered by often repressive and restorative built-in reactions opposing them. In a society approaching a Revolution, this always takes the form of ever more violent police and even military actions, which can, and often do, become Civil Wars (as in Syria currently). And these counter actions can win – if only for a time.

The suppression of the 1905 revolution in Russia was just such a “success” for the powers that be. Indeed, repression of nascent change of whatever kind is the natural, built-in reaction of any system in crisis, not as in a revolution, by intention, of course, but as part of its very stability-imposing nature.

For, to achieve stability in the first place against many contending alternatives, any successful protosystem had to include what I call “policemen processes” – destructive processes that could actually become part of such a proto-system to oppose all dissociators of, and competitors to, that system. There can never be any stability without such elements! Stability is not merely a new arrangement that is better than a prior one (a happy medium?), but one which can extensively and effectively suppress opposing processes whether dissolutory or as competing proto-systems. These winning elements exist in ever more strength until the mix of multiple conducive processes and defensive/aggressive policemen processes is unstoppable, and totally dominating. That is how new stabilities are always established.

So, in a crisis, the restorative weapons, for both defence and attack, are always available, and in a dissolutory swoop naturally grow in strength: they join the ever-present independent dissolutory processes (usually collectively termed The Second Law of Thermodynamics) in the melee, and, in so doing, ultimately remove everything that both the Second Law forces and themselves act upon. The situation appears to be careering down to total Chaos!

Now, in natural systems, such crises are unstoppable, but in revolutions that is NOT the case! For such involves thinking human beings, and the defenders will always find many and various policemen processes to stem the cataclysm. The fulfilment of a revolution is many times more difficult than a natural Emergence. Now, this reminder of The Theory of Emergences has been necessary because of the economic crisis of Capitalism made inevitable by the latest defensive measure, another of the kind that has succeeded in the past in hauling the system back from complete collapse. And that is the ever-new ways of “creating” fictitious value in all things! As always, the dominance of some towering component, in this case the United States of America, could maintain the fiction by threat of, and even actual use of, war (and even the threat of the nuclear demise of humanity). But, as always, these methods are not sufficient alone to maintain a system, which has used up literally all its potentials. In spite of the demise of the Stalinist Empire (with its appearance of the “dreaded” Socialism), things have not got better overall, but actually much worse.

So, what was the EU about, and why did it have to move towards monetary union? And, of course, why was it bound to fail? It seemed so obvious as a solution. Develop a counter to American dominance by a unified Europe to challenge its hegemony and compete on equal terms. It had succeeded in America via the union of a continent-wide set of separate states, but it was, like Australia, an expansion into a “relative void” by a more advanced and equipped people, who mercilessly removed the meagre sprinkling of indigenous hunter/gatherers. And all these “states” were very young and with odd and much weaker dominances. The task then was much easier. In Europe, in the 20th century, very old and well-established nation states, with strong internal dominances, and even diminishing global empires, were a much more difficult problem. The unification was first achieved in the fairly narrow area of Iron and Steel production, and only much later as a Common Market, but without political union. Each country maintained its own political set up and governance, and, of course, their dominances established in each due to its own history and institutions. They could NOT be unified! Indeed, nascent attempts like the so-called European Parliament were necessarily toothless and certainly did NOT govern. All nationally dominant parties continued to act as before, and hence in a crisis would do what they had always done only more so!

The current crisis in the Euro Zone is not due to the inadequacies of the European leaders, but to undiminished National Interests and their embodiment in national ruling elites. The Nation State is the natural Modus operandus of an established capitalist dominance. Within the overarching, though decidedly partial system that is the European Union (and within it the Euro Zone) the naturally dominant country is Germany, and the weaker states have tried to milk the wealth of that super state to finance their own growth using the usual capitalist mechanism of long term and fictitious credit. As long as everyone, and especially the rich investors in this enterprise were confident of large returns, the system seemed entirely stable. And without internal-national changes of any significant kind, states like Ireland, Portugal, Greece, Cyprus and even Spain borrowed at a vast rate to “build a bigger economy” things would work out. But, where were all the enormous sums to come from to finance these remarkable developments?

The final US trick to fund all of this was in the seemingly never-ending increase in value of houses. They would lend to truly vast numbers of the very poorest in the US, with the plan of getting at least some repayments, and then on the inevitable defaults they would take re-possession at, as usual, an inflated value of the property. Continual cycling of this sort would retain ownership of properties with increasing value, while getting non-returnable repayments on every cycle. The poor could supply the resources needed, if the exercise was done on a sufficiently large scale. And that was attempted! But, the plan failed everywhere, because the repossessions, were NOT of properties of increasing value, but of wrecks, as the dispossessed took their revenge, and values swooped very quickly down. The plan failed in a very big way. Now, it didn’t only stretch to this particular sector, for the bottom fell out of the property market in general, and there was no way back!

Sub prime loans went wrong in the US

In such a scenario, it has always been the same, someone has to pay, and if it is not to be everybody, then the fight begins – not only between rich and poor, but also between countries as the natural states of Capitalism. For the canny perpetrators of this gigantic scam didn’t carry it through. They instead sold-it-on worldwide as Triple A rated investments, and banks all over the world bought into it as a very profitable scheme. Indeed, many of the original perpetrators had “got out” of the scheme early with a profit, and it was the duped buyers of such “value” that were taken to the cleaners.

This was the origin of the now infamous 2008 crash. Does anyone even remember it now? The crisis hit the European Banks, who had bought in for a quick and easy profit, and instead had vast debts, which they couldn’t pay for as these assets were worthless. National political leaderships tried to stop a total collapse by using vast borrowings to cover the bankrupt banks, and in the UK several major banks were either partially or even majorly nationalised to transfer the losses to the nation. Now, you can’t invent value, so no matter what any country did, the crisis never went away, and individual countries made their own arrangements to try to redirect the damage elsewhere, to other countries. And the crisis just rumbled on and got worse. Now four years later it threatens not just the Euro Zone, or even the European Union, but worldwide Capitalism itself.

Now, the question is posed, “How can you get a cooperation of the different national bourgeoisie to aid the ones so weak as to find it impossible to cope?” To answer that question I can only repeat my favourite story of 2008, when Iceland’s financial sector bit the dust. The very same day the British businessman Green was filmed in Reykjavik “looking for businesses to buy for a song”. And even now in 2012 in the midst of the crisis, the rich buy at the bottom of a diurnal swing – convincing the uninitiated that an upswing is in the offing, only to almost immediately sell to take a profit, and thus causing the market to plunge again. Can you expect such sharks (or their advocates - politicians) to bother about those being fleeced to fill their own pockets? Of course not!

Let us be crystal clear. In what is usually a periodic slump, those who can make the rest pay, and actually buy while living off their accrued fat until a turn-around occurs. Do you want proof? Why is the remuneration of the rich accelerating, while the systems crumble (including publicly owned services)? Paying them bonuses for their “failure” is necessary, so that they at least will survive in the manner to which they have become accustomed. So, with their belief in Capitalism, they expect to cruise the South Seas in their yachts, until the turn round gets going again and they can return with pockets full of money, to once again milk their sacred cow. The question is, “Can they do this for ever? Or is their system running out of lies?” For, if this is the case, the disenfranchised will need to tool up for the coming revolution. The Arab Spring is only the precursor! 

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