JR'S Free Thought Pages
            No Gods  ~ No Masters   


We live in a State controlled Corporatist Kleptocracy

…and it’s why we’re on a fast track to serfdom.

Two eloquent articles by Thomas Patrick Wilkinson that I have provided below explain our present predicament as well as anything I’ve read in recent months. Noam Chomsky would be hard pressed to improve on their explanatory power, historical precision and clarity. Wilkinson uses the recent Greek “financial crisis” as the focal point of the first essay. You will never find anything remotely resembling this sort of enlightened incisive analysis in our sycophantic right wing corporate newspapers that are little more than platforms for calcified conservatism and the status quo of financial pillage and attacks on the middle and lower classes.

As an encore to the taxpayer bailouts of predatory financial institutions and banks we will be treated to a massive scaling back of social spending in order to “stabilize” economies by a balanced budget. This is to be achieved by impoverishing labor, slashing wages, reducing social spending and rolling back the clock to the good old class war as it flourished before the Progressive Era. The Ayn Rand dystopia of Ponzi capitalism and a “free market” for financial vultures at the expense of working people must be sustained at all costs.

Beyond merely shrinking the economy, the neoconservative aim is to change the shape of the trajectory along which Western civilization has been moving for the past two centuries. It is nothing less than to roll back Social Security, health care and pensions for labor, health care, education and other public spending, to dismantle the social welfare state, the Progressive Era of genuine democracy and ultimately even the very concept of classical liberalism. In other words, demographics and the working classes are being set up as scapegoats for massive rollbacks and austerity programs throughout the world.

In Greece for example, the government has been unwilling to tax the wealthy and the Big Corporations. So labor must make up the fiscal gap, by permitting its socialist government to cut back pensions, health care, education and other social spending – all to bail out the financial sector from an exponential growth that is impossible to realize in practice.

As economist Michael Hudson stated in a recent essay, “the logic seems to be the familiar old class war, rolling back the clock to the hard-line tax philosophy of a bygone era – rolling back Social Security and health care, public pensions, rolling back public spending on education and other basic needs, and above all, increasing unemployment to drive down wage levels. This was made explicit by Latvia’s central bank – which EU central bankers hold up as a “model” of economic shrinkage for other countries to follow… A half-century of failed IMF austerity plans imposed on hapless Third World debtors should have dispelled forever the idea that the way to prosperity is via austerity. The ground has been paved for this attitude by a generation of purging the academic curriculum of knowledge that there ever was an alternative economic philosophy to that sponsored by the rentier Counter-Enlightenment. Classical value and price theory reflected John Locke’s labor theory of property: A person’s wealth should be what he or she creates with their own labor and enterprise, not by insider dealing or special privilege.”

The Return of the Ancien Régime

Greeks, Germans and Bankers



The German press is saturated with reports intended to verify the myth of the slovenly, lazy and corrupt Southern European countries which virtuous and hard-working northern European countries mistakenly admitted to the European Union. The role of the most felonious corporation on the planet today is trivialized since the harmless fraud investigations in the US against the “mother of all racketeers“ (along with JP Morgan) are never reported in connection with their advisory and trading “services“ in Greece or throughout Europe. Yet there are numerous strands to the fabric of confusion being woven in the Greek dilemma. The criminals are at large and their business continues.

Let us recall some significant facts without which the Greek condition cannot be properly understood. When the Second World War ended, Britain and the US intervened with overt and covert military “aid“ to suppress the anti-fascist resistance in Greece, largely but by no means exclusively composed of Greek communists. This became known as the Truman Doctrine, analogous to the Monroe Doctrine. What it meant in effect was that the US claimed the right to supplant civilian democratic institutions with military dictatorships in Europe to protect its corporate interests however defined.

There is a tendency to forget that Germany was occupied and subject to military government until the end of the 20th century, albeit indirectly through the client Bonn regime. The Soviet Union and not the US defeated Hitler. Mussolini’s regime more or less capitulated in favour of restoration of an anti-communist government supported by the Mafia and US secret services (probably not so surprising now that we know Mussolini was bankrolled by British intelligence services prior to seizing power). However, Franco and Salazar were firmly supported by and supportive of US/ UK corporate interests. The democratisation of Greece after the war would have been a serious blow to US interests: not to mention that control of Greece and Cyprus were essential for control of the eastern Mediterranean. (Just as important as the control over Suez, Malacca, Hormuz, and a number of shipping routes worldwide.)

As in all other countries where US-supported dictatorships were used to suppress democracy and protect corporate interests corruption was endemic. How could it be otherwise? The military lives from weapons and the booty of war. These are elements of crime per se. Moreover there is not a single US-supported dictatorship that did not plunder the national treasury either directly or in cooperation with the US banks (private and government-owned).

When Greeks finally had enough of this plunder and abuse by a nominally civilian government, with US connivance the military seized power directly again. Greece’s economy was never democratised. Rather it slid into the usual hands, either American corporations or those beholden to them. It is despite this infiltration of the Greek economy by foreign capital that once civilians were allowed to hold government office again concessions in the form of social security, labor agreements, and education were made. It was the strength of popular movements, genuine social democrats, communists, and liberal middle classes that led to the introduction of these claims on the State.

But as with Bismarck’s introduction of social insurance at the end of the 19th century, the beneficiaries—namely working people—had to pay for these benefits in the form of wage and salary deductions. Bismarck wanted to bind people in Germany on the state, which was securely in control of a king-emperor and aristocracy. In the US, these „benefits“ are private because officially the US is a democracy and US policy is to bind people to corporate patronage and peonage not to democratic institutions. So when the US enforced its control over Greece, first through the Truman Doctrine and then through covert NATO support of the “Colonels”, it was determined to control the state and thus the country’s resources. The democratisation and subsequent integration into the EU suddenly made all these social security benefits a right, like in other post-war social democracies, instead of a privilege. As a right recognised by the state and anchored in legislation, one could no longer pull the plug so to speak—after spending so much time creating a military-oligarchy control over the state and applying social security to reinforce that control.

Whether Goldman Sachs was “needed“ to perform “Enron-like“ tasks on the Greek national accounts in order to pass the fiscal monetary test for the Euro may be subject to debate. The Euro regime was established to favor this kind of accounting because it was based on surrendering democratic control over theeconomy and fiscal policy. Every member of the Euro had private investment bankers manipulating the national accounts to meet the formal requirements for Euro membership. The control of the Euro, like the activities of the Bank of International Settlements, lies with the private commercial conspiracies (in terms of the US RICO Act) mistakenly named “banks“. No country could have met these requirements democratically since they were antithetical to any democratic process. The preparation of national accounts according to criteria such as national indebtedness is in and of itself deceptive.

National governments issue debt for two reasons: a) to manage domestic currency supply and expenditure or b) to transfer earned wealth (from labor) to rentiers (in this case mainly banks) by creating and enforcing liens through taxation. In the latter case, the national government, controlled by bankers and their owners, becomes a derivative instrument used for controlling the underlying cashflows of a domestic economy. Of course the first reason for creating debt, e.g. issuing currency, is entirely legitimate. The government provides and manages a tool for facilitating exchange and transactions which are subject to limits of scope, geography and so forth. However, the second reason is essentially criminal.

Throughout Europe and in fact throughout the world, tax collection is intensified to guarantee payments on bonds underwritten by banks as devices for sucking the earned income out of the economy. These bonds are actually tantamount to the Privy Purse; they are direct feudal payments to an oligarchy of absolute rulers by divine right. They take precedence over all other obligations foreign or domestic. These bonds are usually tax-exempt to induce rentiers to buy them because of the “risk” they entail.

In fact the “risk” is an artificial classification agreed by the rentiers agents to fix the rate of extractive cashflow. One could compare it to the US “oil depletion allowance” which rewards the petroleum extractor for accelerating the rate of profit by reducing the tax in proportion to the exhaustion of the concession (for which the oil company rarely pays anything). In fact they cannot be taxed since this would frustrate their ultimate purpose—to bleed economies dry. The “sovereign credit rating” is a secretly negotiated deal between the parasites sucking off national income and the agents of government as to the rate of profit from taxation permissible before the banks and their principals attack the national economy through adverse currency trading, boycotts etc.

Governments that refuse to submit to the ratings cartel are blacklisted: that means neither they nor any normal business or persons in the country will be allowed access to credit or such access will only be at intolerable cost. When cash flows do not suffice—as with the depletion of an oil well—profits can only continue with the surrender of all the physical assets in the economy. First the public sector assets are sold or mortgaged then the small and medium-sized businesses are forced into insolvency when they can no longer meet their tax obligations or private debts. In Germany there is an unofficial policy (accidentally admitted by some people in the tax offices) of denying taxpayers deferrals in order to force them to seek bank financing (on near usurious terms). Banks in turn have been selling their loans to hedge funds—unregulated by banking law—which in turn foreclose on those loans in order to seize the land and other assets. Greece’s national debt is in reality a complex food chain whereby labor and land are mortgaged to banks and transnational corporations and workers are cheated out of wages, pensions, and homes. There is no way to repay such debt. A person infested with tapeworm cannot eliminate the parasite by eating.


When the private banks which control the central banks, directly in the case of the Bank of England, Federal Reserve, Bank for International Settlements, World Bank, etc. or indirectly like the Bundesbank and to some extent the Banque du France, defined the rules for the Euro and created the European Central Bank as a Fed-clone, based on anti-inflationary targets and limits on public sector borrowing and debt, they were establishing totally rigid, anti-democratic criteria for fiscal and economic policy in all the member states. Banks and “the market“ are elevated to god-like status where their demands are not only unilateral and non-reciprocal but they are immunized against any democratic claims. They acquire in every sense of the word “extraterritoriality“. Quite literally this means legal entities originally conceived only by act of legislature are by what must be seen as virtual divine right—beyond the scope of the very legislature that gave them their charters and licenses to do business.

The logical and obvious consequence of the present state of affairs is nothing less than the absolutism of the Bourbon monarchy overthrown in 1789.

However, this obvious conclusion about the state of the European Union, in the face of the Greek crisis, belies the complexity of the problem that faces us. In 1789, the French people saw one king and his functionaries in the Church and nobility—they had one territorial focus for their opposition. Today we lack this clarity. Not because the matter is not clear but because we have such difficulty seeing ourselves and our role in this. We can see the banners from the iconic mountain peak of democratic mythology, violated by the rapine viciousness of transnational corporations behind the banners of US power. But we cannot see the trail that leads us together to seize that mount again and banish those who have soiled it with their greed and sociopathic violence.

The temptation to focus on the debts and to find fault with what the Greeks bore as they joined the EU and the single currency is a great deception. The fact that Germany and the US could sell millions of dollars/ euros in weaponry to the Greek military while demanding the cancellation of every social obligation to its people is just one more proof of how we are deceived. Europe is saturated with corporations aided by scavengers like George Soros and crypto-banks like Goldman Sachs whose only reason for existence is to steal as much as possible and to return us to the penury, peonage and slavery that led the French to revolt and shorten the bodies of the parasites claiming to rule them.

T. P. Wilkinson writes and teaches politics and literature in Heinrich Heine's birthplace, Düsseldorf. He is also the author of Church Clothes, Land, Mission and the End of Apartheid in South Africa (Maisonneuve Press, 2003). Currently he is working on a book called: 1959: Unbecoming American. He can be reached at beda.v@maisonneuvepress.de.

The State as Protection Racket

Chapters in the History of Daylight Robbery


I always ask myself when someone says or writes "loss", where did the money go? Even when a ship is lost at sea there is generally wreckage. Of course the ocean is bigger than the economy and it is possible that a ship's remains disappear beyond recovery. The price of abandoning the very modest social gains of the New Deal in the US and social democracy in Europe with the ascendancy of Margaret Thatcher and Ronald Reagan has been enormous, not only for US and European working people but, for the rest of the world. In fact the meter is still running with no indication of when it will stop.

In this crisis everyone still talks about trillions in losses. If these losses are real then that means the value has been forfeited in favour of someone else. E.g. after the Great War France and Britain were essentially bankrupt: they owed nearly everything to US banks. Without economic manipulation, war and terror, India would probably have occupied the same status vis a vis Great Britain in 1945 that Brazil gained vis a vis Portugal after the Napoleonic Wars. The claims against the productive capacity and assets of Old Europe were held by identifiable third parties, representing, then as now, a tiny band of bankers. Of course those claims were so great that no normal income streams from taxation could satisfy them. Control of Britain was effectively ceded to the US, while India was wracked by civil war rather than collecting the wartime debt Britain owed to her.

The other meaning of loss is the inability to sustain a certain valuation of an asset or income stream. The nature of the initial valuation is then the problem. The continuous attempts in the IFRS (international accounting standards) to skirt around the issue of essentially fraudulent valuation illustrates that even the private sector's notion of "value", whether book value or fair value is the product of casuistry.

In other words, the "losses" hidden on the books of the USG banks, “Fannie” and “Freddie”, are either notional or they reflect claims that were satisfied in favour of third parties beyond the capacity of those institutions to generate income. Again we know who those third parties are. The "losses" are essentially sacrificed sovereignty. Federal institutions pledge to private persons (corporations and foreign exchange pirates) the State's capacity to pay, derived from the ability to tax the working population, beyond any realistic possibility to extract that income. Well that is not entirely true: Just as the railroads and banks obtained control over most of the continental US by defrauding the US government in the 19th century, the surviving banks have defrauded most of the American population of its home equity today. The endless wars, funded by plundering the public treasury and the wealth of other countries, are part of that income extraction, too. Now the US government is little more than a mercenary enterprise, the most heavily armed collection agency on behalf of third party creditors on the planet.

Of course there is plausible denial for any of the beneficiaries of this plunder since populations weaned on soap operas and "crime drama" are incapable of examining, let alone comprehending the most obvious operations of US corporations and their agents-- who almost never appear as criminals on television. The "crime drama" narrative dominates almost every bandwidth on the critical spectrum and as a much younger Michael Moore demonstrated in Bowling for Columbine, corporate crime does not make acceptable television. The most elemental sociological truths, plain to anyone who has ever belonged to a club or worked in middle management of a company, namely that "democratic" and "meritocratic" decisions are regularly subverted by scheming among the ambitious at the expense of the docile-- become discredited when the insight is applied to the polity as a whole. People who do not think twice about making a phone call to a "friend" to influence a decision in their social club or place of employment, become incredulous at the suggestion that the chairman of a major investment bank would dictate policy to the head of state whose election he had financed. 

In short the debate about the current global economic "crisis" is obscenely counterintuitive and illogical to the point of incoherence. Who is willing to “follow the money"? This dictum, popularised in the Woodward and Bernstein fairy tale of Nixon's demise-- All the President's Men-- appears utterly forgotten, despite recurring astronomic fraud perpetrated by US corporations since the so-called "S&L scandal"-- crimes for which no more than a handful of people were indicted, let alone tried or sentenced. Only one corporation was deprived of its right to do business, Arthur Andersen, and this was patently done to spare all the politicians from the reigning US president, most of the US Congress, and untold state and local officials who had been bribed or otherwise influenced by Enron. 

If the stories reported by Pete Brewton in 1992, the documented history of the OSS' "China insurer" AIG, and the implications of the 2002 Powers Report on the Enron collapse are taken seriously, then Houston lies on a financial fault line more devastating than the San Andreas. That fault line runs from Texas through Virginia to the bedrock of Manhattan. The economic earthquakes that have persisted since 1980 are both literally and figuratively the result of deployment of the US atomic arsenal and the policies that gave rise to it. The US dollar's continued, if fluctuating, strength as a reserve currency is based on drugs, weapons, and oil-- all traded in US dollars. However, this material reality is also based on an ideological or dogmatic constitution. The seismic activity induced by US corporations created gaping holes in the global economy-- holes which could only be breached by the financial instruments developed in the weapons laboratories of Wall Street based on the same conceptual models as the neutron bomb and today's nano-munitions developed at Lawrence Livermore. Indeed, the theory has been almost universally accepted that people are always to blame for the problems of government and Business is the sole and universal solution to all problems. Hence tax monies will only be spent on weapons, war, and subsidies for corporations—the things Business needs.

A considerable obstacle to any change in the US, short of its destruction, is the fact that as Michael Hudson and former assistant Treasury secretary under Reagan, Paul Craig Roberts, insinuated recently, the US government has absolutely lost whatever legitimate function it may ever have had as an instrument of popular will. In other words, the efforts of working people, whether immigrant or ex-slave to remake the plutocratic regime of the 19th century into a State responsive to their needs were frustrated by the massive assaults on labour, combined with the ideological warfare of the "Progressive" movement. The latter, funded heavily by the newly created super-philanthropies, including those of Rockefeller, Sage, Peabody, and Carnegie, predated CIA-style front organizations and infiltration. They helped turn popular sovereignty movements into the kind of technocratic organisations which prevail today-- dependent on corporate donations and led by the graduates of cadre schools like the Ivy League colleges, Oxford and the LSE. With few exceptions the only remnants of the "popular will" in the US are those that drive lynch mobs, reincarnated in "talk radio" today.

The main work of the USG and the corporations for which it stands has been to undermine any notion that the State is rightfully an expression of the popular will for the realisation of popular welfare. The State has been reduced to a protection racket. By the time Ronald Reagan, imitating Margaret Thatcher, pledged to “get government off the back of the people”, the only “people” who counted were corporations and those in thrall to them.

It is easy to forget that the US was actually founded on the basis of a kind of white (in that sense "enlightened"), oligarchic absolutism-- the British parliamentary dictatorship minus hereditary monarch. Its moral vision predated the Thirty Years War and, until John Kennedy was elected president, its hypocrisy was that of Cromwellian fanatics. In revolutionary France and countries that were inspired by France, as opposed to the American independence war, struggle continued on the premises that the State is not the King (in whatever incarnation) but created by the citizens (not the possessive individual) for the maintenance of the common weal-- including the nutrition, health, housing, education of its people. The opposition to destruction of the public sector or public services and the debate that continues in Greece, France, Italy, and to a lesser extent Germany, defies comprehension in North America and Great Britain because of some unfortunate residues of that revolutionary vision of the State have been violently opposed by Britain and the US ever since 1789-- except when the resulting instability provided business opportunities. (Thatcher did not restore the spirit of Churchill to power—but that of Wellington.)

Moreover as Coolidge once said, "the business of America is business". If a policy or action of government cannot be expressed in terms of someone's maximum private profit then it is indefensible in the US. The conditions of the Maastricht Treaty establishing the euro and the ECB are an attempt to impose those same ideological and political constraints on the European Union enforced by adoption of the Federal Reserve Act in the US. The Federal Reserve is essentially a technology for naturalising usury and endowing it with supernatural legitimacy. But just as it has been argued in some quarters that the US Federal Reserve triggered the Great Depression-- for the benefit of the tiny bank of banking trusts-- the European Central Bank, urged by the right-wing government in Berlin, is being pressured to follow the same rapine policies as the FED is pursuing today.

The "Crisis" is not really about the "debt" or the heinous losses. It is a crisis of sovereignty. The failure of popular sovereignty means that a microscopic bacterial colony of the immeasurably rich can make war on the rest of the world, destroying the common weal and commerce at home and everything else abroad. Germany's citizens have been bludgeoned since 1945 by Anglo-American propaganda and the occupation forces to persuade them that they-- not the great banking and industrial cartels on both sides of the Atlantic-- were responsible for Adolph Hitler's rise to power. When in 1968, student leaders like Rudi Dutschke tried to remind Germans that their democracy was destroyed before Hitler's putsch and that they had the right and opportunity to demand a democratic Germany after the war, those young people were harassed and even killed. (Dutschke was shot in the head by an unemployed labourer. That “lone” killer later died in prison with a plastic bag over his head.) Attempts to create a truly popular democratic government in Germany have been frustrated by foreign intervention since the French Revolution. Nevertheless people in Germany still believe that the State is there to provide services to the people-- and not to fight wars to further foreign trade as suggested by Horst Köhler before he recently resigned as German federal president.

There is no doubt in Germany that former Chancellor Schroeder’s refusal to follow the US into Iraq—whatever motivated it—enjoyed the widest support, even among those who tend to believe anything the US government says. The resignation of former IMF director and Federal President Köhler expresses the sensitivity of the situation today. On one occasion he referred to the great banking interests as “monsters” and then broke the silence on the German war efforts in Central Asia by explicitly articulating what had been Chancellor Merkel’s, silent but deadly policy of supporting US counter-terror in Afghanistan. Köhler was not opposed to the future escalation of German belligerence, but by his calling a spade a spade on national radio, the right-wing government in Bonn almost had to defend its unconstitutional deployment of German soldiers in public. Already in April Angela Merkel was forced to sacrifice an army general and a cabinet minister when it became known that German combat aircraft were also bombing civilians like their US counterparts—and trying to keep the fact a secret.

In the midst of the financial crisis, that is the plunder and pillage of the accumulated reserves of Europe's working population after those of the US are exhausted, it is impossible to ignore the restoration of Asian political and economic prominence. This process started in the 1960s when Britain and the US launched their wars to secure footholds and control of the vast resources of Indonesia and Indochina. Although only partly successful, the destruction of national independence movements throughout South Asia created the conditions for de-industrialising Europe and North America. Mistakenly much of the North American and European Left judged the losses in Korea and Vietnam as defeats for US power. Such judgements have been based on assessments of the official war aims and not on any analysis of the underlying corporate and financial policy objectives. The long-term results of those wars included creation of the massive debt system that is at the root of financial collapse for the majority of US Americans. Of course China remains the great unconquerable threat to continuation of US hegemony. The balance of power in Asia may be very delicate indeed.

Continental Europe remained somewhat insulated from those seismic forces until 1989. The “velvet” invasion of Eastern Europe and the former Soviet Union led by US capital, aided as usual by the combined secret services and economic "consultants" of Shock Therapy, began the destruction of the economic base for European social democracy and "real socialism". The debt machine created to exploit Eastern Europe was applied in Germany first-- destroying the GDR and financing that destruction with EU-generated debt, culminating in the euro. Introduction of the euro effectively destroyed half of the purchasing power of working people in the Euro Zone overnight, creating the conditions for consumer borrowing which had prevailed in the US since the late 60s and eroding wages and benefits drastically.

The final loss of control over archaic legislative instruments (whether in the US or Europe) is not only assured by the system of bribery which makes those in office indentured servants of corporations. Full investigation of the Enron scandal would have proven once and for all that there is almost no one in the US Congress not owned by some corporation. Similar conditions have come to prevail in European legislatures where for decades US academic and policy exchange programmes have trained the political class to work first and foremost for Business.

The loss is also assured by the now entrenched belief that the only legitimate human goal is individual personal profit. As Hudson has suggested, this is the "theology of the Chicago School". Since Margaret Thatcher was appointed to convert Britain to that dogma, nearly the entire political, academic and "civil" culture has been saturated with people who cannot think in any other terms-- even when they assert that they are still social democrats or democratic socialists. The latter insist that “social policy” is merely a palliative to prevent the poor and destitute from becoming unsightly spectres in urban entertainment centres. They all have become positivists-- reifying the prevailing economic relations and worshipping quantitative methods-- subordinating human agency to pseudo-science and thinly disguised opportunism. The only kindness this ethical standpoint can express is "charity". Charity however has nothing to do with the common weal or the State as an embodiment of the popular will. In fact it is just as parasitic as the belief from which it springs. If those whom John Pilger called "the new rulers of the world" consent to relieve us-- that is to allow us anything resembling our dignity and subsistence wages-- then it will scarcely exceed the infamous "dimes" with which John D. Rockefeller cloaked his cynicism in piety and charity. Nowhere is the cynicism more profound than in the expression “giving back”. Of course the pennies “given back” are microscopic compared with the billions “taken” in the first place. But those shiny pennies and dimes are enough to keep embedded intellectuals loyal to Bill Gates or George Soros. For a few dollars more they will even protect the likes of Blankfein or Buffett.

"Charity" is the gratification a person finds when scratching a mosquito bite. One feels better while scratching-- although this provides no relief. The cause of the itch is the substance injected by the mosquito while sucking the blood from its victim. Of course some mosquitoes offer only token charity and the itch disappears. But there are mosquitoes that carry other parasites-- the effects of their charity can last for ever, or at least until the victim dies.

T. P. Wilkinson writes and teaches politics and literature in Heinrich Heine's birthplace, Düsseldorf. He is also the author of Church Clothes, Land, Mission and the End of Apartheid in South Africa (Maisonneuve Press, 2003). Currently he is working on a book called: 1959: Unbecoming American. He can be reached at beda.v@maisonneuvepress.de.



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