About OUFI

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London, United Kingdom
Welcome to my Blog. This Blog provides a platform for free expressions on issues of importance that appeal to the independent mind. Matters of political, moral and social concern, that may agree with or contravenes our free and well-intentioned thinking, have free reign on this blog. Friends and colleagues can express and respect different opinions on current or historical issues that at times may run counter to established worldview. “I do not agree with what you have to say, but I'll defend to the death your right to say it.” - Voltaire

Sunday, 23 September 2018

War at the Vatican

Pope Francis is the best thing that has ever happened at the Vatican.  He is also just about the most hated figure by some of the inner circles, the Curia, to walk through its corridors.  After centuries of corruption at the very top here comes a reformist who is trying to dislodge old and worn out traditions to meet the social demands of the twenty-first century.  By some Cardinals he is likened to Caligula emperor of Rome who was made famous by his cruelty, sadism, extravagance, and sexual perversion.  Since the inner circle cannot dislodge him, some priests go so far as waiting for Pope Francis to die.  His only mistake is attempting to reform and liberalise the church of Rome from the cobwebs of millennia and more.  Outside Rome and especially by non-Catholics and Atheists he is the most popular keeper of the Keys of Heaven.

Since Cardinal Jorge Bergoglio became Pope in 2003, he has created many enemies the conservatives who disagree and fear that his spirited approach will divide the church. At the outset, he made it clear to do away with the pomp surrounding the pontificate, supported migrants, his attacks on global capitalism and, most of all, his moves to re-examine the church’s teachings about sex.  The last point, as detailed by a document 256 pages long, written by him, 'Amoris Laetitia', (The Joy of Love), has scandalised the college of Cardinals some of whom now think he is flirting with heresy- the willful rejection of an established doctrine of the church, a sin punishable by excommunication.   He takes a distinctive liberal look at divorce, gay marriage, abortion and sex education.  According to an Archbishop from Kazakhstan though, such views allows “the smoke of Satan” to enter the church.

The issue that has been the subject of most contention is the question of divorce.   Pope Francis is trying to encourage priests to give communion to divorced, remarried and cohabiting couples.  Such an act stands in complete contrasts to over a thousand years of Catholic doctrine.  Many Cardinals are trying to persuade him to abandon the idea before it becomes official policy.  His refusal to abandon such notions as seen by many of his cardinals likely to divide the church, so the idea of accusing the Pope of Heresy has moved up a gear, the battle has taken an aggressive turn.  The problem, however, is shrouded by a complication that a pope can do no wrong.

For the infallibility of the vicar of Christ to remain as such Pope Francis must not be allowed to go on with his ideas, it would otherwise suggest that all popes before him were wrong.      In practice and away from official policy, communion to divorced couples is a matter of routine.  If the rules were literally applied, no one whose marriage had failed could ever have sex again, but more of that later. A further complication at this crossroads is, the priest who is, unknowingly, giving communion, to divorced couples who have remarried, would de facto be sinning.  But, reversing traditions raises a further problem; here Catholicism rests on eternal truth, without, conservatives would argue then what is the point.  The Keys to heaven, therefore, would seem at a loss, to unlock this conundrum, to proclaim what is sin and what is permitted remains for St Peters Church pressing need to decide. For now, this has plunged the Church of Rome in a crisis, and with that, a schism is forming between conservatives and liberals.  As with the introduction of reform in the Second Vatican Council in the 1960’s resulted in splinter groups is also happening today causing many hardliners to break away adamantly refusing to recognise how people behave nowadays.

 Pope Francis does realise for Catholicism to survive it must come to terms with the way people live these days, that to continue standing against the sexual revolution is no longer an option.  To hold an absolutist position against contraceptives and to realise that one lifelong marriage for many is both untenable, priests no longer should be pretending otherwise.  It is time to recognise that to obey official doctrine is unachievable in practice, and a decision needs to be made for some guidance and semblance to normal among the oppositions to prevail.  Whichever side is allowed to win would likely result in a divided church, so a reconciliation between theory and practice is a must to avert a probable fracture.  Since many followers of the faith are divorced or unmarried parents, they need to believe in what they worship but to know they are sinning when receiving communion, for example, the number of churchgoers will further dwindle.  To reconcile these opposites, however, may not be to all the Cardinals advantage since many of them believe the difference between the church and its congregation gives meaning to the faith and church continuity. They argue for the church must always set the agenda to its followers and not the other way round.  According to the Congregation for the Doctrine of the Faith, or CDF, the role of the church is to teach the world, and not to learn from it.  To expect followers of Catholicism to obey without question may be possible for the former but proving increasingly difficult for the latter, for such a status quo to preside, will not help future generations of Catholics, and the church pews will empty faster.

The idea is that introverts such as the conservatives want more than the sterile religion on offer by Protestantism for instance.  Its liberality no longer offers the intellectual stimulant by conforming to the society around it.  In contrast, the extroverts such as Pope Francis wants to move away from the traditionalist patriarchal rigidity but more to a common sense approach.  The problem with introvert approach must surely be that no religion can survive if it goes against the will of its worshippers.    Similar concerns were taking place at the second Vatican council in 1962 when trying to reconcile the Catholic church with the modern world -  replacing the introverted priest facing God at the altar with the extroverted figure facing his congregation.  Then, dropping Latin as the official mass liturgy was the time when nuns discarded their habits and priests discovered women and threw away the shackles of introverted orthodoxy. But somehow, even though an overwhelming majority of Cardinals voted for the use of Contraceptives Pope Paul VI overruled them in 1968. He could not admit that his predecessors had been wrong, and the Protestants right. This intransigence marked a new chapter in resistance to change which is staring us in the face today.

For the introverts, they now have another argument up their sleeve, that is;  “what comes from the Enemy cannot and must not be assimilated. You can not join Christ and Belial! What Nazi-Fascism and Communism were in the 20th century, Western homosexual and abortion Ideologies and Islamic Fanaticism are today.” Chief among Francis opponents is Cardinal Raymond Burke, United States’ most influential Catholic in Rome, who is also using his position within the walls of the Vatican to re-legitimise extremist forces that want to bring down Western liberal democracy the church had fought against since the eighteenth century.  In Steve Bannon style, the Vatican is facing a political war between the modernising Pope Francis and a conservative wing that wants to reassert white Christian dominance.  “capitulating to Islam would be the death of Christianity...the Islam that wants to conquer the world, the black flags that point to Rome".  Burk's words stand in contrast to Pope Francis washing and kissing the feet of Muslim migrants.

Cardinal Burke does not exactly come in with proper moral credentials.  Aside from his racist remarks and Breitbart like extreme right-wing views supporting a holy war firmly believing we are at the beginning stages of a global war against Islamic fascism … a very brutal and bloody conflict … that will completely eradicate everything that we’ve been bequeathed over the last 2,000, 2,500 years … if the people in this room, the people in the church, do not … fight for our beliefs against this new barbarity that’s starting.” He also has a hatred of women, an advocate of wars in the Middle East and a firm supporter of white supremacy.  All of that Pope Francis hates.

Pope Francis also believes there is “a stream of corruption” in the Curia which has been the bane in his pontificate since he was elected.  Historically, of course, corruption at the Vatican has been a cultural institution starting with  Donation of Constantine, Latin Donatio Constantini and Constitutum Constantini, the best-known and most important forgery of the Middle Ages, the document purporting to record the Roman emperor Constantine the Great’s bestowal of vast territory and spiritual and temporal power on Pope Sylvester I (reigned 314–335) and his successors, https://www.britannica.com/topic/Donation-of-Constantine .  After the death of Charlemagne, the first Holy Roman Emperor, the Church of Rome became a Sovereign State, boundlessly rapacious, distributing land for ecclesiastical profit and feudal Tithes.  The greatest schism was between 1378 - 1417 when there was not one Pope, not two but three Popes, three obediences and three sets of cardinals competing over the Keys to Salvation.  Over the years that followed the Reformation, Renaissance Popes indulged in hedonism, sex, mistresses, illegitimate children and parts of the Lateran Palace became a place for orgies. The so-called Apostolic Church was eventually succumbed to its present status and location after receiving 750 million Liras (old money) in 1929 Lateran Treaty, effectively ending Catholicism as State Religion in Italy and creating the Vatican as an independent State.  Today, Money laundering is still rampant despite a warning from the US Treasury and the process of making saints in the words of Italian journalist Gianluigi Nuzzi estimated the going rate for canonisation at €500,000 per halo.

As for Homosexuality, Pope Francis famously said: "Who am I to Judge", which puts the objective moral 'truth' in perspective. His way of showing religious tolerance and mutual respect in the hope it will eventually encourage peaceful coexistence, as morality demands.  Christianity, a revealed religion, is an open religion, was built on tolerance since the days of Paul of Tarsus, ruling over objections by James half-brother of Jesus, famously said "you don't have to become Jewish to become Christian", referring to circumcision.  With time the faith became a polyglot Christianity flexible enough to absorb a diversity of practice that gave it vitality. "Judging All Men, Judged by None" is not for Pope Francis.

On the question of divorce, the Catholic fact is that marriage is for life is absolute and indissoluble so long as both parties baptised.  The reality in lived faith is also that Catholics divorce and remarry at about the same rate as none Catholics.  The vast majority of them see nothing wrong with that comfortably attend mass and take communion.  Actually, it is not so much divorce that the Roman Catholic Church objects to as it is remarriage after divorce.  The church certainly does not approve of divorce.  A divorced Catholic can still be an active member of the church, can still receive the sacraments.  The only provision is that the divorced Catholic does not remarry while the first spouse is still alive.  If a divorced couple happens to be cohabiting and their first spouse dies then either can rush to marry in a church and leave the adulterous life behind.

Here is the irony, however, is that rich people can hire lawyers who can prove the marriage was wrong in the first place or somehow prove the marriage not been consummated, to have it annulled.  Steve Bannon, a Catholic, ex-White House Chief Strategist, has managed to divorce all three of his wives.  Newt Gingrich, a former speaker of United States House of Representatives, broke up with his first wife while treated for cancer, and while married to his second wife had an eight-year affair with Callista Bisek, a devout Catholic, before marrying her in church. She is the new US ambassador to the Vatican.  I suspect Cardinal Burke while policing the faith,  had a hand in these arrangments right under his good nose, but I fear accompanied by a moral shortcoming.  The number of annulments granted by diocesean tribunals to divorced Catholics rose from 368 in 1968 to around 40,000 in recent years. The idea of no sex in a second, third or fourth marriage is ridiculous, but that is how Catholic doctrine stands. Yes, consummation is a big word here.  It seems to me that a promise to Love does not so much recognise matrimonial Covenant in the Catholic Church, or Cherish and Obey but by the Sexual Act.  If the sexual intercourse is coerced or unconsented, it can all get very complicated.  Cruelty, infidelity, abuse or just a failed marriage are all subordinate to the sexual act, are not a reason for annulment.

Room in this essay has not allowed a place for Abortion, human rights, outlook on lesbian, gay, bisexual, and transgender (LGBT), child-abusing priests while also not acknowledging the fact that a large proportion of the priesthood is gay.  Reflecting on the leading causes of War at the Vatican, the main battleground is on divorce, so this contribution ends with it.  Matrimony for the first thousand years of Christianity not considered a sacrament, but doing so, around 1435, Christianity sought to restructure Christian society through godly law such as the blessing of crops was at one time; for a fee of course.  Marriage along with Baptism was another form of humanising spiritual association a barometer of the spread of Christian piety.  The church also sought to curb some of the traditional contractual and sexual rituals associated with marriage and eventually to define a marriage ceremony in a church as a sacrament and gifts of rings as prophylactic magic.

In conclusion, Pope Francis extends a helping hand to divorced and remarried people, extending mercy and forgiveness rather than seeing them as sinful people.  At a time of going through great emotional stress, the church needs to provide them with a sort of refuge to piece their lives together again.  Against that view and still determined, stand the introverts conservatives who are today outnumbered by the extraverts.  Francis says “... I would also point out that the Eucharist ‘is not a prize for the perfect, but a powerful medicine and nourishment for the weak’.”  He goes on to add “By thinking that everything is black and white, we sometimes close off the way of grace and growth.”  For Cardinal Burke, such a passage was an anathema. Sacked first from his position on the Vatican court along with another handful of Cardinals questioned Amoris Laetitia whether it contravened previous teachings and threatened to go public accusing the Pope with Heresy.  Although he currently leads a minority of objecting Cardinals, nonetheless it is growing looking increasingly ominous.  Among Pope Francis supporters, there is doubt whether convinced how the Church of Rome is lead or it is a show of piety and humility to God's representative on Earth. I fear it is the latter and cannot help, but if history is anything to go by, I see Pope Francis walking on thin ice.  The College of Cardinals is famously traditionalist if not introverts and change at the speed Pope Francis is advocating, they will likely get out of breath. There are ominous doubts ahead all shrouded in secrecy but resistance to change growing more potent among the Cardinals. Pope Francis argument however compelling in its effort to drag Catholic doctrine into the modern world, currently supported by only two-thirds of the College on whom the future of the Catholic church now hangs, in the meantime, the Keys of Salvation, are in safe hands.


Wednesday, 5 September 2018

The French Revolution

A historical account of the French Revolution 1789, presented here in a series of six parts.  Explains the philosophy behind it and the immediate reasons that finally made the breakthrough for the people of France in the late eighteenth century to take the law into their own hands. It resulted in massive social and political upheavals dispensing with Monarchy opening the gates for civil war, terror and bloodshed to the way making a Republic.


Part One: Liberty, Equality, Fraternity.


Part Two: Chateau de Versailles


Part Three: The Tennis Court   

Part Four: Storming of the Bastille


Part Five: Death of Monarchy


Part Six: Reign of Terror


Sunday, 19 August 2018

Clash of Opinions

 The YIN and YANG, a Chinese symbol,  like Adam and Eve, together they are a perfect whole.  The logo is rooted in distinctions and an encounter between good and evil, along with other dichotomous moral judgments.  The power of its influence is natural causation for civilisation born out of man's opposing differences. 

The oldest and the most intelligent argument cluster around the controversy over the existence of God.  The greatest thinkers the world had ever known, across the centuries, religious and atheist alike have stood on opposite ends claiming their polarising beliefs.   Intellectual and Philosophical arguments for the existence of God, vary from Thomas Aquinas’s Second Way existence and order of causes (Domino effect)  to Anselm's 'Greater than which cannot be conceived', (Ontological argument), Paley’s design teleological argument (Watch), Behe’s intelligent argument (The Eye), and many more that went into arguing for the existence of God. In the course of those centuries, the flow of different opinions by such intellectual giants over that period has handed us a tapestry of knowledge.  What follows will attempt to take a brief look at how we form our opinions to project on others.  A glimpse at what makes us enshrine these ideas into our psyche energises us in our discussions, arguments and the way we exchange our differences that makes us tick. 

Photo by Pierre Metivier

Here are some explanations for arguments, claims, evidence, and reason.  An argument is produced when someone makes a claim and gives reasons for that claim; a sequence of steps may take us to the conclusion of the argument from the stated reasons or premises of the argument. The flow of the argument would arrive at the conclusion logically follows from the validity of the claims at the start of the argument.  Here we have engaged in logic; the logic is the science of valid reasoning.  In Philosophy an argument is not a conflict but a discussion for a claim in a series of statements giving reasons to believe that claim to be supported by evidence. That is all very well as far as theories go, it is very different in practice where a clash of opinions is never far away from a discussion. 

Source: Cartoonstock.com

Discussions, a sharing of ideas, should be like playing tennis responding to the each other’s statements.  Unfortunately most occasions, in many arguments there is hardly a ‘feedback’; when the output becomes part of the next input because we hardly ever listen but mostly we like to hear ourselves speak so we play with a different ball most of the time.   Sometimes, instead of a learning curve a treat to gain knowledge from an exchange of opinions, more often it boils down to who is right and who is wrong, forgetting what the claim was in the first place.  Score a point becomes all-important.    In the heat of the argument, we could be saying the same thing using different words, we neither realise what is said because we are not listening. Confusion between winning an argument or to being right. Suddenly from a gentle conversation, without warning, once a claim is made it sparks a difference urging a counterclaim so we enter into a minefield. An innocent statement or unfortunate choice of words expressing an opinion can also provoke a misunderstanding easily ensuing an argument. 

Which brings us to our addiction to the Smartphone.  The Social Media has become the principle communication platform but rarely can explore beyond superficial knowledge.  “Well, that is my opinion” sums up what most people come away from it.  With that smart gadget at hand bombarding headlines at us 24/7, we are news savvy or more precise, headline savvy.  There are so many of these tidbits of information flying about there are bound to be something that sticks.  Knowingly or unknowingly these so-called titbits are of course other peoples’ opinions some of which based on facts while others manufactured to suit a particular bias.  However, whatever spin or colours they dress up, one idea is bound to stick that we find attractive and strike us as right we can feel comfortable enough to go with and to share.  What we are sharing, of course, says nothing about what we think since we are yet another agent for WhatsApp - a messenger.  Nevertheless, whatever we share is our 'understanding' of the subject at hand and armed with that morsel of knowledge forms our deep down belief.  That off the shelf argument picked from the 'smart' phone stockroom; unsubstantiated and fabricated, for many, it remains their unshakable belief.       

If the subject is about race, then our attraction depends on our cultural background or how near to our social compass.  If the issue is about acceptance or tolerance towards gender orientation, its traction depends on our religious belief as well as cultural accommodation that tune our liberal or conservative antenna towards it or away from it respectively.  Even when the words used are the same, the cross-cultural meaning in language could be quite different. Communication without cultural understanding can add fuel to the confusion and would bar the clarity with which either reason or rationality can exert the required influence on a conversation. Contradicting the same point may even jeopardise the relationship we try to establish.

In many of such cases nowadays there is no such thing as making up one’s mind because such matters involve thought but in this case, thinking gets in the way and cumbersome when our instincts will do.  What is surprising at this stage is the rigidity people hold on to a view so acquired that when pressed on its validity they show aversion to the point they will deem it rude.  To question their claim is interpreted as an attack on them therefore out of order and malicious. When confronted with specific, concrete examples or data that contradicts their claims there is hardly a change of opinion instead, a rebuttal “that is my opinion, anyway.” Sadly, in the worst scenarios when disagreeing with a claim, people take it as an affront to their dignity which they shield by personal challenges provoking ad-hominem they resort to offensive language.  

A good example where confusion sets in, on the question of tolerance.  What is tolerance? A reasonable explanation is to help keep diversity a wellspring of strength to have respect for people whose abilities, beliefs, culture, race, sexual orientation, or other characteristics are different from our own. A religious fanatic would immediately object to this definition that includes “sexual orientation”; that such a declaration of tolerance can not include tolerance for everyone.  Suddenly we have a problem, we are coming up with intolerance of something against the state of tolerance. A good reminder here is that many of their kind are intolerant of sin and consider homophobia as sin but remain happy tolerating racism and other forms of bigotry that many would consider sin.  The argument, therefore, revolves around what we call sin: so when deeming homosexuals as sinners but racists are not sinners the answer must lay not so much with intolerance therefore but with respect for the other people’s orientation and opinion. 

Source: Cartoonstock.com

Which brings us nicely to the questions to what is moral and to what is natural since there is a tendency to accept a natural state of events.  Accepting unfair discrimination or earthquakes – or even the common cold – by saying that such things have always been around and are ‘perfectly natural’, we should be unimpressed.  Just because suffering and injustice are natural and widespread, it does not follow that it is wrong to oppose them. Accepting as natural is a wish for drawing the argument to a conclusion on the account just because something is widespread is accepted. Such an argument carries no reasoning but anchored by self-interest rather than critical understanding.  To argue that meat-eating is natural and the conclusion that meat-eating is therefore not morally wrong is invalid; just because something is natural it does not automatically make it right.  In such cases, it is interesting to find the linkage between what makes something natural therefore accepted and right versus unnatural and wrong.  Some may confuse the difference between lending support to the idea of 'natural' with that which they approve.  While many others find a link in only that which does not involve changes brought about by a person’s will.

Daniel Kahneman and Amos Tversky in the 1980s, summarised in Kahneman’s bestselling Thinking, Fast and Slow (2011). There, Kahneman divides the mind into two allegorical systems, the intuitive ‘System 1’, which often gives wrong answers, and the reflective reasoning of ‘System 2’. ‘The attentive System 2 is who we think we are,’ he writes; but it is the intuitive, biased, ‘irrational’ System 1 that is in charge most of the time.  The psychologist Jonathan Haidt calls the idea that reason is ‘our most noble attribute’ a mere ‘delusion.’ The worship of reason, he adds, ‘is an example of faith in something that does not exist.’ Your brain, runs the now-prevailing wisdom, is mainly a tangled, damp and contingently cobbled-together knot of cognitive biases and fear.

Then there is the Relativist theory of what is right for you may be wrong for me and vice versa.  People might even contemplate by claiming that there is no non-relative right or wrong in the assessment of any reasoning, no non-relative truth or falsity.  Say, for instance, coming against polemical issues that involve ethics of Cannibalism or the argument for The Death Penalty as examples. But, what is right for you could be wrong for me; such a relativist claim itself is true or false – or is it just right for the relativist?  I leave this hanging for you to think about.

Source: Cartoonstock.com

In conclusion, I hope you agree we all have inbuilt biases, we continually argue by these hard-wired biases, that tune us towards a tendency to seek out or notice information that supports our pre-existing ideas, rather than to look for unbiased information that would otherwise draw us nearer to the truth. But judging from current trends to reason by evidence is losing its power.   One point worth mentioning is one man's bias is another man's truth where nowadays there are 'alternate facts' in place of truth, and in current lexicon, the truth is only in the eye of the beholder. 

'Agree to disagree' may be an empty phrase but is nearest we have to Yin and Yang. 

Sunday, 5 August 2018

Capitalism, Globalisation, Nationalism. Part 3 Nationalism


“I’m not a white nationalist, I’m a nationalist. I’m an economic nationalist…The globalists gutted the American working class and created a middle class in Asia. The issue now is about Americans looking to not get f—ed over. If we deliver.” • Steve Bannon, Quoted in the Hollywood Reporter, 11/18/2016

Looking at the below chart, like him or hate him I think he has a point.  

Chart that speaks volumes

To put a little flesh on Mr Bannon's argument, I look at how China manipulated Capitalism and made it work within its core economic system.  In 1999, around 29 million people could have been considered middle class according to Pew Research benchmarks based on levels of disposable income. By 2013, that number had ballooned to 421 million people or over one-quarter of its population.  Markets there for luxury goods, technology and food products have risen precipitously, and the travel sector has grown along with them.  If we take tourism for example: "Over the past two decades, Chinese tourism has risen by a factor of 25, climbing from 5.3 million in 1997 to 130 million in 2017. That year, Chinese tourists poured $258 billion into the global economy. This puts their spending at double that of U.S. tourists and three times that of German ones. China is now the top origin point for tourists visiting Thailand, Japan, South Korea, Vietnam, Russia, the Maldives, Indonesia, North Korea, the United Kingdom and South Africa."

While in the United States...  

In 1915 the top 1% had 18% of all earned national income.
In 1930 the top 1% had 10% of all earned national income.
In 2007 the top 1% had 24% of all earned national income.

In 1977 the top 0.1% controlled 9% of all national wealth
   In 2007 the top 0.1% controlled 22% of all national wealth.

In 2011, the top 1% one per cent of US households controlled 40% of the nation's entire wealth.

Since 1980 the richest 0.1% of the world's population have increased their combined wealth by as much as the poorest 50% - or 3.8 billion people.  In 2017 the top 1% of people own 27% of the world's wealth

These figures worth thinking about that level of disparity defies all theories of justice, naturally in need of some urgent attention.  We need to question whether we are nearing the end of Capitalism or whether liberal democracy is imploding spelling the end of centrist politics.  But before we can bid goodbye to Globalisation and neoliberalism, I think it is good to try to get a grip on this subject to look at the before and after situation up to this point and see what it has come to mean.  In the seventies before the neoliberal period, we had a stable government, inflation finally under control, labour's share of the national income was acceptable, compromises between Capital and Democracy finally reached, low inequality with interest rates that encourages both savings and investments alike.  Whereas now we have almost zero interest rates, no incentives for savers, wage share and workers power both are at an all-time low, weak unions, high inequality, robust globalised finance market and weak governments under the banner of free trade.  All in all, The One Dollar T-shirt coming into Europe has proved to be very expensive and damaging.  For many, it feels that governments are straddling an unfair system of an income distribution through a complicated labyrinth.   An economy is working for everyone it ain't instead for the majority causing grievances, insecurity, resentment and fear.  Those on the wrong end of the inequality ladder are hurting.  A backlash to such injustices gives way to Populism which is what we have today. 


As fear spreads it spawns Nationalism and the rhetoric by outliers increases by playing on that fear often preaching xenophobia.  They are easy to recognise. Populists and Nationalists have a habit of wrapping their respective flags around them, and present-day examples are not in short supply.  Top of the tree sits Donald Trump, Brexit campaigners, UKIP, National Front leader Marie Le Pain in France, Vladimir Putin, Russian President, Recep Erdogan, President of Turkey to name a few.  We also have Right-wing Nationalist who are currently defying EU immigration rules, in Poland, Czech Republic, Hungary, Austria are also to some degree undermining democracy and the internationalist liberal order.  Populists also come from the Left wing of political spectra such as parties like the League and The Five Star movement in Italy.  Mainstream parties are weakening, and the election of centrist parties in Germany and France only serves as a mask against a wave of strong anti-immigration nativist feelings and populist sentiments growing in both countries.  Left-wingers blame Capitalists and globalisation while right-wingers blame immigrants and globalisation.  They win big on 'Anti ticket'; anti-immigrants, anti-establishment, anti-elitists, anti-Euro (UKIP) and of course anti-globalisation, playing on scepticism and fear is a vote winner.

There are reasons why populists play on emotions and prejudices. Demagoguery comes in different rhetoric but all colours are very useful in building up a following even to a cult status where yet a lie becomes truth.  Globalisation has weakened Democracy and National Sovereignty, and in the face of that, people become inward-looking, want to take back control of their destiny and laws.  There is a national identity to protect so people reach out for ideological walls.  People also seek political accountability from those representatives they vote for to somehow resolve the dilemma of high inequality and high capital mobility amid the persistent relative downward shift in wages.  Globalisation has made the labour market far too flexible without compensation destroying its ability to command a share of any surplus; a wage stagnates effect.  People en masse are angry and resentful. Many feel helpless, alienated and frustrated.  Combined they form the ingredients of nationalism and identity politics, and that is what we see thriving.  In Germany, the common denominator is resentment and protest. Only 34% of people who voted for AfD (Alternative for Germany) did so with conviction. Twice as many voted that way because of their “disappointment” with the established parties. This pattern applies Elsewhere in Europe, You can label it: “We feel betrayed and abandoned.”

The political backlash also stems from resentment against tax loopholes of the kind that help tax evasions by individuals and globalised corporations.  Their existence has been known all along but its extensive use recently coming to life by the exposure of the 'Panama Papers.'  For ideas here are at least ten accounting tricks for avoiding payment of tax.  Most of these for individual use whereas what large conglomerates get up to is mind-boggling.  The corporate tax rate in the United States is 35 per cent, but only a few pay this rate.  Others syphon or ‘park’ most of the profits in tax haven outside the US.  If you are a boss of a conglomerate here are some mesmerising ideas for you. All these alarming ways for not paying their due taxes is ethically wrong causes injustice for all and untold damage to public finances and the economy, all that of course means less money to go round.  Aside from attempts at controlling money laundering, circulation of profits has free reign to roam around the world.  The free choice also extends to park their profits in a haven away from government reach.  A case in point is Amazon.  It has revealed that its UK corporation tax bill almost halved to £4.5m last year, days after the US company posted a record profit of $2.5bn (£1.9bn) in its most recent quarter.

There is a current trend for political alignment is shifting to readjust the balance between the tiny elite and those disadvantaged and dispossessed masses in Europe and the United States.  In efforts to close the yawning gap, there is a desperate need to bring back the compromises between Democracy and Capitalism (see part 1).  Socialism is knocking at Europe's door even in the US Democratic Socialism is making some headway.  It is coming dressed up along cultural lines as well as economic, for both to amplify popular resentments and divisions.  Seeing communities turning inwards, unilateralists, hollowing out support for Globalisation.  To fend off these currents compromises will need to iron out these grievances along these issues to proceed in tandem to ensure democracy does not turn to authoritarianism.  There is a chance; however, that unhinged cultural, ideological issues will dominate in the short run giving way for the populists to do their work that will override materialist values.  These will replace economic matters from their central role temporarily but would do so permanently if governments maintain the current free fall in their financial systems.  In the meantime we see right-wing demagoguery gaining ground by diversions from economic ills, preferring to attack same-sex marriage, abortion, immigration, Islam and generally popularise conservative ideas to run Anti to all of them. 

Such practical use of tactics to attack these soft targets will not last, liberalism and individual freedom will not go into reverse but having set a course of globalisation, a new system needs to run alongside to police it.  There also lies a likely danger ahead; the populists highly unlikely be able to deliver on their promises.  Although, there is a remote chance they do on one or two minor issues but nothing like what they promise. One of the weaknesses of the Anti crowd'' is they have no idea what to replace them with.  Waiting on the wings there are uncompromising hurdles they need to tackle: new Technology, robotics, the Internet they are indiscriminate and wait for no profession irrespective of skill. It is important they realise, change is inevitable but need not be ungovernable, and a pullback from integration from a rule-based universal order need not be the answer.  

Populists cannot bring back old and lost jobs, and President Trump’s idea of “We’re going to negotiate like crazy,” is mere rhetoric.  Despite his promise to drain the swamp Trump hasn’t drained the Swamp. He never intended to drain the swamp. Neither would the Brexit leadership who repeatedly echo Boris Johnson’s claim that Britain sends £350 million a week to the EU, as money lost to the NHS will be seen for what it is: bogus and devious. In such inevitability, it will be a dangerous road ahead, will see hostilities towards democracy and the undermining the rule of law.  Already early ominous signs point to the number of people in England and Wales filing for insolvency hit more than six-year high in the second quarter of this year does not bode well for the future. People are looking for job protection and a political kickback, but with the political class despised as they are, it remains to be seen as the story unfolds what happens next; it may not be pretty.   However, if the latest poll is anything to go by, most people are seeing the light with Brexit looming, a hard edition could be economic suicide.   

As we have seen Globalism is a follow up of neoliberalism, but it has come to mean a broken system of economic governance such as has been discussed in Part 1.  Nationalist Populism, a derivative of Globalism, has been a wakeup call for democracy and the liberal elite.  To look at where it is coming from gives us a beginning how to tackle it.  It is not enough to criticise their supporters for being illiterate, racist or unintellectual but to look at the reasons for voting the way they do.  There are dangers within the conduits of the economic and political system such as those discussed in part one and two. 

Finally, ending these series where they started, we have seen the recession hit the economies in 2008. Still, the crisis is not over, clearly, with persistently troubled Capitalism, for many, not the few, dare I say, we are not out of the woods yet. For ten years we have bumped along with extraordinary measures, massive quantitive easing (QE), interest rates at virtually nothing, neoliberalist ideas, free trade, concentrating on inflation rather than full employment.  Taking over Freddie Mac and Fannie Mae in the US and The Northern Rock in the UK almost nationalising the mortgage market yet the depression persists. Pushing interest up and reversing the system as explained in part one could be frightening to contemplate especially for those on a low income will pile up the pressure on an already creaking system.  

As it stands, therefore, the present Capitalist order of boom and bust is incompatible with progress. Rather than an economic entropy a dire need for a balance in world capitalism.  New economic ideas to restructure and to regenerate the system with modern imagination.  Intelligent policies with which people find common cause not to disengage must now come to centre stage. Time to call time to the bonanza of the super-rich elite reversing their gravitational pull and put in place a corrective mechanism overseas and regulates social justice with economic growth disciplined to fair income distribution.  Progressive thinking enshrining both economic and social trajectories to meet 21st-century economic challenges spanning national borders; a drive towards utopia maybe but aiming high never hurt anybody. 

"The actual and prospective performance of the capitalist system is such as to negative the idea of its breaking down under the weight of economic failure, but that its very success undermines the social institutions which protect it, and "inevitably" creates conditions in which it will not be able to live and which strongly point to socialism as the heir apparent"

---- Joseph A. Schumpeter
'Capitalism, Socialism and Democracy' 

Compiling these series I had access to many sources and sincerely hope to have done justice to their contributions.  I, therefore, like to thank the following:

Professor Ronal Inglehart of the University of Michigan
Professor Mark Blyth of Brown University
Professor Michael Cox of London School of Economics
Professor Julia Black  of London School of Economics
Professor David Harvey of London School of Economics
Professor Simon Deakin of Cambridge University
Last but not least Nomi Prins, former Wall Street insider. 

Sunday, 29 July 2018

Capitalism, Globalisation, Nationalism. Part 2 Globalisation

Part 2 - Globalisation

The intention of globalisation is for a tendency to encourage free movement of goods, people and services around the world and to harmonise price and quality of commodities.  At the same time to open borders and promote investments, cultural diversity and spread information technology for global linkages of people.  It was for the developing world to catch up and to raise their people’s standard of living, There is no doubt it has made China the economic powerhouse it is today, also enriching other developing countries mainly African countries and India made huge gains.  Unfortunately, it has not worked out that way for the people of Europe and North America.  Many in the west increasingly see Globalisation as an instrument more for the rich to get richer and the poor if not poorer to remain at a standstill.  I shall argue here that globalisation has become a dominant force in encouraging inequality and low wages where the rich have pulled away leaving others with stagnating income.  Also, but with lesser emphasis on the influx of refugees and immigrants distinct cultural differences that changed both local ethnic and physical landscape and given rise to concerns about the loss of native identity, culture, and civilisation.

Widening income disparities springs danger and may not only raise welfare concerns but expressions in increase social anger; crime and radicalisation are often the manifestations. A rising inequality may also hurt the social structure and raises ideological worries as we will see in the coming third and final instalment; Economic Nationalism.  Also judging by the recent spate of terrorism the mix has aroused fears from within, and people have called for restrictions of immigrants from certain parts of the world an eventual and direct backlash.

A look at inequality and its relationship to globalisation.  Part one of these series pointed out that inequality is an inherent feature of Capitalism it progresses, in theory at least, in a U shaped curve in a boom and bust cycle.  As society moves from Agriculture based to Industry based communities, inequality increases.  As it develops into a more advanced State, the standard of living rises and the distribution of income becomes more equal provided it stays under state control.  Globalisation has put a stop to that theory; disparities in the twenty-first century abound in many areas and across the world with evidence that the gap is widening more rapidly.  Part of the blame for these changes is because the markets have changed.  World markets have become global in the field of transportation, trade liberalisation, financialisation, and structure and fusion of information technology, the flow of commodities, investments and labour.  Governments have put globalisation on auto-pilot or at best power to regulate capitalism has shifted away from government control making it difficult if not impossible to govern under free tariffs agreements. Hence wealth and income become incompatible with democracy so long as taxation remains at their current low levels with loopholes abounds.  In this regard, many countries see severe strains placed on their democracies. 

Subsumed into a shifting pattern of inequality are Technology and financial globalisation both working through processes that raises the demand for skilled workers.  According to the IMF (International Monetary Fund) analysis, increasing trade and economic globalisation has had separately identifiable and opposite effects on income distribution. Whereas trade liberalisation and export growth are found to be associated with lower income inequality, increased financial openness associated with higher inequality. Technological change which itself stems from integration has had even higher income inequality.  Even then, access to higher education revolves in a pattern.  This trend, a drive towards both expert systems and robotic technology while replacing people, and seeing that market forces are at the door, lends to a situation that leaves a handful of individuals as an extremely well-paid minority. A sliver of society made up of financiers, entrepreneurs and Ceos at the very top to direct the economy. 

There is a profound sense that Economic and political power now placed in the hands of Oligarchy; economies are influenced and rigged by the elites for the elites, and those in position to gain call this transitioning market modernity.  When Wall Street is bullish, it creates sufficient ripples around the globe, sending the London Stock Exchange and the city of London, as well as NYSE and other financial districts a wave of a frenzy of profit making.  Sure enough, there are significant economic gains but most of it going primarily to the very top of income distribution pyramid while the providers’; the producers of commodities, real income stagnates.  The NYSE at a capitalisation of over Twenty-two Trillion Dollars would have a say in the running of the country.. Besides manipulating the financial system to their advantage a stage is reached where wealth dominates since wealth is growing faster than economic output. The belief that wealth would filter to the bottom remains a myth.  Indeed the wealthy are using and abusing such privilege to increase their wealth and political power.  Short of cronyism, lobbying budgets are on the increase so are the paybacks.  Such incestuous rotation of economic activities ensures a concentration of wealth to remain within a restricted circle.  So, sure enough, the government responds: compelling it not to adopt policies that reflect common economic interests of their constituents.  Inequality has become a political issue for the average family, and young graduates alike would feel economically alienated.  Such a system of inner circles are dividing society and pulling away from what has hitherto been common issues between citizens but are now sectioning along loyalties favouring interest groups.  Jimmy Kimmel, an American Television host, put it in colourful language: he charged that Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan and other lawmakers "won’t do anything about this (Gun Control) because the NRA has their balls in a money clip."

Digging deeper into the specifics, the chart below explains the divides well.  It is important, however, to get the terms right: “Income is defined as household disposable income in a particular year. It consists of earnings, self-employment and capital income and public cash transfers; income taxes and social security contributions paid by households are deducted. The income of the household is attributed to each of its members, [ …] Income inequality among individuals is measured here by five indicators. The Gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality.”  

During the last decade, the real income of professionals and non-professionals alike has stagnated, but the income of those at the top has multiplied.  FTSE CEOs earn 386 times more than workers on national living wage and rising.  Clearly, despite the British government promise or in America’s case to “clearing the Swamp” is not working for everyone.  In Britain, the Brexit effect of pushing the Pound down and increase in costs of imports plus the current squeeze on income and pressures of austerity have not fared well on the inequality stakes.  “As UC Berkeley economics professor Gabriel Zucman argued[…] the top one per cent — and the top 0.1 per cent and the top 0.001 per cent — have truly pulled away from the upper-middle class even while most college graduates’ fortunes remain broadly similar to those of the median American."

A well-known team of inequality researchers – Thomas Piketty, Emmanuel Saez and Gabriel Zucman – has been getting some attention recently for a chart they produced, (above).  It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality.

Mixed with this toxic combination of rising inequality, real wage declines, and a sense of unfairness that the financial elite has created most people in Europe and the United States are angry and turning to populist demagogues who they hope will deliver back their jobs and raise their standard of living to perhaps more of an equal playing field.  Factory jobs, Office jobs, and those long ago considered safe positions are today vulnerable with no guaranteed pay for a decent standard of living. A stable career path is a thing of the past instead we are seeing the growth of internships and short-term contracts as well as exporting of jobs.  Outsourcing by way of call centres set up in India and elsewhere by Banks and British Telecom are primary examples.  For others, it means they must now compete in an international job market, and here the Internet plays a significant role.  The rate of unemployment in the US and UK are down but so is job quality and job security while pay is stagnating and that downward spiral increases the more companies globalise. 

At this rate, the cheap Jeans is not so cheap after all, and the one dollar T-shirt is by far more expensive it would seem nor the global business opportunities not so golden. The oscillating if not convulsive nature of capitalism with the adverse effect of globalisation added, has stimulated second thoughts and doubts on its advantages by those advocating it in the first place.   At its start, it rose with invigorating fanfare, but now its demise is on the horizon as seen by an effective backlash any time soon in the shape of Nationalism. The caretakers at Davos " while cradling champagne and canapes this January the sparkling wine returned, but by all reports, the mood was one of anxiety, defensiveness and self-reproach."    

Globalisation for the developing countries has had two main features.  One is the US, and Europe exported Capital in the shape of knowledge and hardware while by importing clothing and shoes -  Cheap Labour, they have implicitly exported wealth. It also causes wage competition by putting downward pressure on wages in Europe and the US.  The orthodoxy of economics for trade to comparatively benefit the participating nations' average income has not worked.  Even for those Middle-class professions not in competition, insulated from foreign trade, see rising competition from within that would also put pressure on salary rates.  Neither has the fusion of technology led to higher investments enough to benefit those in the West. Such adverse and stagnating situation for most people has caused enough concern for individual studies regarding links between trade, wages and inequality and found the cumulative adverse effect that this had, even for those sticklers who have until now believed globalisation was beneficial, to come round to eschew mainstream politics in favour of Populists outsiders and identity politics.  

According to Dani Rodrik, Turkish Economist, Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University. In his 'The Globalization Paradox', "... we cannot simultaneously pursue democracy, national determination, and economic globalisation. If we want to push globalisation further, we have to give up either the nation-state or democratic politics. If we want to maintain and deepen democracy, we have to choose between the nation-state and international economic integration. And if we want to keep the nation-state and self-determination, we have to choose between deepening democracy and deepening globalisation. Our troubles have their roots in our reluctance to face up to these ineluctable choices." Starting with the United States, an increasing number of countries are opting out for National Determination influenced by Populists leaders riding on a wave of grievance as will be seen in the third and final part in these series.  

Compiling these series I had access to many sources my sincere hope I have done justice to their contributions.  I, therefore, like to thank the following;

'Foreign Affairs'
'The Economist'
Professor Ronal Inglehart of the University of Michigan
Professor Mark Blyth of Brown University
Professor Michael Cox of London School of Economics
Professor Julia Black  of London School of Economics
Professor David Harvey of London School of Economics
Professor Simon Deakin of Cambridge University

Last but not least Nomi Prins, former Wall Street insider. 

Sunday, 22 July 2018

Capitalism, Globalisation, Nationalism. Part 1 Capitalism

Part 1 of 3 - Capitalism

What is Capital? Capital is value in motion.  Capital in circulation is sequential continually undergoing changes. One minute it is paper, then it is liquid, then it is a number, then it is a commodity, it is a unit of production, goes back into money then back into commodity again.  As it moves it goes into different states and in various transformations. At all times its value is at the point of demand and desire. For capital to go through a realisation or conversion process, it needs buyer and seller transaction that converts it into value.  In other words, not all money is capital.  Free goods such as searching Google or Wikipedia have cultural value that also revalue as it circulates.  Commodity production and realisation are two different things.  Therefore Capitalism is not an ideology but a system; money going through conduits of realisation in a Capitalist world Capital works within a framework held together by price mechanism and the profit motive.

Writing about Capitalism, it is inevitable that I start with Karl Marx.  Though many of his thoughts associated with communism were wrong, he was right to stress that "Capitalism is unstable."  The boom and bust cycle would eventually destroy it.  By nature of this operating system, it goes in cycles of around 50 years.  It's first high point was in the 1815 start of the Industrial Revolution and the machine age in Britain. Development in this area brought success in high economic growth not only in Britain but also reflected on other countries in Europe.  Economic growth, however, was sectarian, constituted of a class structure as well as coming at a cost; responsible for atrocious urban living conditions.  High industrial growth saw a downward spiral during the revolutions in Europe of 1848.  Then on came the Golden era starting in 1870's but was only golden for some the masses saw increasing impoverishment and economic oppression that took the Great War in 1914 to infuse some egalitarianism.   Mass production exemplified by Ford Model T was to follow it, up to 1929, the great crash and the depression that developed in the 1930's then again unreined capitalism dominated in parts of the world but not in others and that divide contributed to the crushing blow of Worl War II that saw the massive capital destruction.  Since the end of that war, a new cycle driven by new technologies, consumerism and new techniques in the organisation of production.  This time, however, new restraints on its excesses such as The Beveridge Report in Britain undergirding a welfare programme kept Capitalism under control. The system was also held together by other financial regulatory restrictions by both government and institutional frameworks.   

It is important to realise the well-known fact that from early inception there has always been an inherent tension between Democracy and Capitalism but today they are also in conflict, and both are in retreat.  Their marriage is facing a crisis; polarising societies and inviting populist agendas by those depicting themselves as mavericks or outsiders who have the wherewithal to sustain long periods of electioneering but more of that later.   A definition of both terms from Mark Blyth of Brown University will help to gain a clearer understanding on the differences between Capitalism and Democratic Politics: "capitalism allocates resources through markets, whereas democracy allocates power through votes."  At this stage, it is essential to consider that contrary to what some believe Capitalism is not a self-adjusting system but needs politics to control it.   In other words, how these two are allowed to interact together determines our world. 

Let's pause for a moment to look at the origins of Capitalism.  A short history of Capitalism must start once more like most things in Mesopotamia when agriculture was settling in its roots.  A division of labour there occurred where those who grew crops to provide for the elite warriors that defended the populations. Writing and reading came next where messages sent across long distances and when gaps were opening up between sections of societies; between town dweller merchants and rural illiterate peasant communities and through that door came inequality.   Along came the Silk road that stretched between China into Arabia bringing Spices and Silk to Europe and for millennia trade flourished countries in continents exchanged culture, language and religions across free borders. Countries jostled, borrowed and competed with each other. Not until the seventeenth century triangular trade period put capitalism on the map in Europe.  Buying slaves in Africa in exchange for beads, then, selling the human cargo in exchange for Sugar and Cotton in the Americas to ship back to England.  The Enlightenment invited Political Democracy and Banks, Insurances, Stock Exchange and entrepreneurial culture, took off.  In combination, they created wealth that helped finance Imperialism and colonialism leading on to the coming machine age and the Industrial Revolution propelling Britain to the world banker.

By now, inequality became the order, throughout that history, Capitalism was an exploitative system subjecting workers to long hours, inhuman conditions and low wages and inundated with cultural prejudices.   Late nineteenth century saw institutional measures redressing imbalances efforts made to narrow the gap forming a clean environment and better working conditions.  Actions towards more literacy, better working conditions and free franchise for political participation that gave strength to European economic supremacy.  Early twentieth century saw unions with rights to organise and to bargain collectively and in the US restraints placed on ‘Robber Barons’; who were presenting an unacceptable face of Capitalism.  After that, for many years, growth and higher per capita income came on an equal basis, though society was still divided along class structures. Relative economic security prevailed evidenced by good compromises between capitalism and democracy in the production of goods and services- an age of productive form of finance.

Late in 1950 and throughout the 1960’s in post-war economic order, the dread of unemployment receded, growth and prosperity were on the rise in both Europe and the US. However, marked inequality of income, and even more striking inequality of wealth, a typical characteristic of capitalism, was the dominant form of economic organisation in western European countries.  Though an inherent feature, it was tolerated so long as it remained restrained within reasonable parameters.  Some including me would argue such a gap was an accepted standard feature providing inspiration, drive and empowering entrepreneurial adventure.  Nevertheless, up to the 1970’s the Western world experienced a post-war boom in the shape of an economic miracle.

The sudden ‘economic earthquake’ of the oil shock in 1973, however, inflicted serious harm to Europe’s economy. Dennis Healey, Britain’s Chancellor of the Exchequer at the time, was quoted “inflation, unemployment, bankruptcies, falling capital investment and a worsening trade deficit as its visible effects.”  This cast into doubt the post-war economic modernity that confidently embodied technological advance, commercial growth consumerism and individualism. Arresting this danger became a priority, to carry on with the post-war system was not a plausible option. 

The economic cycle yet again turning, the boom and bust nightmare returns, it was time for new ideas and a new course for Capitalism to be put in place to meet new challenges. 

Faced with such a national economy that seemed to be staggering from crisis to crisis some economist concurred the interventionist state was impeding economic growth.  For the ‘neo-liberals’ services such as insurance, housing, pensions, health and education – could be provided more efficiently in the private sector.  Time was ripe to return to a free market economy even though many considered the schemes politically myopic and economically anachronistic.  Margaret Thatcher, the then British Prime Minister stood for ‘new’ Victorian values: reduced taxes, the free market, free enterprise, privatisation of industries and services, patriotism, and ‘the individual’ – neoliberalism.

In a natural sort of way Capitalism, in an unplanned economy, breeds on itself and marches onwards from one point to the next dynamic in form, individualistic, continually reforming setting new ideas as it prods along.  On this path of an evolutionary process, the world started to move from a productive economy to a finance economy. A new discipline concentrating on the stability of prices, measures to impose industrial order and to rebel against a system that promoted full employment. New rules also included reducing taxes especially on high earners that had hitherto funded state spending.  To do so in a recessionary period of the 1980’s meant falling government income, higher deficit turning the economy into debt financing; from tax-based state to debt-based state in a new neoliberal era.

Modern finance in a continuum of Capitalism gave entry to ‘financialisation’ many would deem unproductive form where Hedge funds capitalists cannibalise good firms.  For example in the pharmaceutical industry the firm producing essential medicine selling a pill at £10.00 each the company is bought by investors only to see the same product selling on the market at £500 a tablet.  Nothing there to stop them and the cost of medical insurance in the US is a case in point.
Money finance was now master of the economy.   It worked for a while at least, and the financial industry national and transnational capitalists grew unchecked.  Both were now overriding the preferences of private and developing countries, vetoing policies with which they disagree, and here Greece comes to mind.   Such a transformation in other areas of the economy seemed to bring economic stability.  Mortgage and credit card made loans easier for their private citizens and prosperity was felt by most.  It was all an illusion and once more the bubble burst and the cycle stalled in 2008.  It was not bad news for all, in fact, the middle and lower classes suffered only the rich top one per cent captured the newly created wealth.

This new economic drive of neoliberalism of minimal state interference in the economy was most active in Britain and the United States. Such measures were considered malevolent only ideally suited for the rich.  The rest of European countries were hesitant in applying such rigorous form from fear of social polarisation opting out instead for harmony and conciliation.  Many people consider neoliberalism makes the wealthy free to abuse their economic power by dominating the rest of society.  That belief gained credence during the financial crisis of 2008 when governments had to bail out the banks which meant government debt exploded.

Following the housing market crash and the corresponding banking crisis of 2008, The collapse of Lehman Brothers created economic turmoil.  The Federal Reserve, the United States central bank, started printing money to buy government bonds (government debt ‘asset holding’) to stimulate the economy in the face of subsequent economic recession.  Over the years since it has increased funding from one trillion to four trillion dollars to what initially started as emergency bailout money for the banks. The Fed would later call this Quantitative Easing (QE).  It is an alternative system to lowering interest rates to jump-start a flagging economy. At zero interest rates, they couldn’t go down any further.  Over this period the idea was exported to European central bank, Japan central bank, Bank of England and so forth.  In the process over the last ten years, they have created twenty-one trillion dollars of ‘printed’ money buying bonds and stocks around the world that will somehow create economic stability.  Between then and now at almost zero interest bank rate there has not been any growth but neither has there been a recession throughout the world. An artificial inflated financial system but the Fed knew if it were removed the financial market would collapse. To save them from future collapse, it seems the banks have colluded among themselves creating a bubble they cannot abandon. This is a world of bonds and stocks that Wall Street manipulates that can influence not only money supply but also dominates the financial systems of every country (except China) around the world.

Another side of financialisation is currency manipulation.  August 15th 1971 Richard Nixon, President of the United States, took the Dollar off the Gold Standard.  At the threat of War, he forced Saudi Arabia and all other Arab Oil producing Gulf states to trade oil for Dollars. An action that also released the Banks from a disciplined market that was previously regulated by the price of gold, banks were now free to speculate ‘playing the currency market’.  It was the George Soros moment;  by converting Sterling to Deutsch Marks, he made One Billion Dollars in two days of trading.  If you can make that much in 48 hours why go into production and the headache of employing thousands.

Looking at things more broadly, today Financialisation is 24/7 around the globe open all hours.  Clearly, we have a scenario where Capital is now dominating Democracy.  Banks and Economy are an ensemble, and for a government, it meant by saving the former is saving the latter.

Money flows around the world information technology, and service industry follows.  People from all walks of life, religion or race become more integrated than ever before demand for specialisation has expanded gradually bringing communities together.  Globalisation is multi-dimensional, increasingly characterised by the mobility and cross borders of people, capital, and ideas and accelerated by the rapid development of communications and information technology. Free boundaries also meant a change to social structure, multiculturalism, the growth of multinational companies.  On the reverse side, it has put pressure on wages and widened the inequality gap.  The fear would be on an even grander scale, just as authoritarianism and totalitarianism were an existential threat to democracy in the west so might globalisation.  Short of transforming the architecture of the economic system Democracy must prevail, as we shall see in part 2 'Globalisation', next week.

Compiling these series I had access to many sources and sincerely hope I have done justice to their contributions.  I, therefore, like to thank the following;

'Foreign Affairs'
'The Economist'
Professor Ronal Inglehart of the University of Michigan
Professor Mark Blyth of Brown University
Professor Michael Cox of London School of Economics
Professor Julia Black  of London School of Economics
Professor David Harvey of London School of Economics
Professor Simon Deakin of Cambridge University
Last but not least Nomi Prins, former Wall Street insider.