Wednesday, January 31, 2007

Organized Crime.

The TV fiction world of Cosa Nostra bears a close resemblance to the reality described by Joseph Valachi (The Valachi Papers, © Peter Maas 1968). But these real stories are all prior to 1960 and the beginning of a long jail sentence. Whereas the Sopranos are acting out the same scenes at the turn of the century. We are led to believe that organized crime has remained the same small family business of a rather particular kind. That, while everyone else has gone global, New York mobsters are just as parochial as they were forty years ago. How very cozy. How very unlikely.
Somewhere in volume 3 of The Gulag Archipelago, Alexander Solzhenitsyn notes that the criminal slang he had been accustomed to hear in the camps seems to be pervading the rest of society. He wonders if this may not be the audible part of an ideological take over, as words give shape to thoughts. Spreading from the gulag, had criminal ethics replaced communist ones? Solzhenitsyn was thinking this before 1974, when volume1 was published and he was deported. We know what followed and what the situation seems to be now. Alexander Litvinenko (Blowing up Russia: terror from within) being but the latest on a lengthening list.
It is generally taken for granted that Intelligence Agencies conspire to commit murder and other various crimes, such as extortion, blackmail, counterfeit, arms trafficking, drugs and prostitution. Some of these agencies are “civilian” and have a chain of command which leads directly to the head of the executive. But executive power changes hands, presidents come and go, while agencies remain and acquire autonomy. Much has been said and written about J. Edgar Hoover and his personal power. But the Federal Bureau of Investigation is part of the judicial process and brings its cases to court. Whereas secret agents do their deeds in an extra-judicial twilight zone. Which means their accountability is practically nil, as no one need know what they’ve been up to. The end effect may be mentioned, not the means it justifies.
The fall of the Soviet Empire and the end of the Cold War brought down barriers everywhere. This new era seemed to portend huge opportunities for all, except for crime and intelligence gathering. Agencies need cunning and unscrupulous enemies to justify their covert activities. And criminals can organize with greater impunity when law enforcers are busy chasing ideological delinquents.
What new enemy could favor a rebirth of the “intelligence community” and keep the cops occupied? The Russian example in Chechenya was difficult to duplicate. And the Branch Davidian menace was too low key to suffice. But, looking around, “The Base” and its bearded creator could seem a perfect fit for the role. How convenient that they should succeed the most spectacular suicide attack ever attempted. 9/11 was a declaration of war ideally suited to the two organizations for whom conspiracy is second nature. (Secret agents and gangsters don’t tell secrets. Because they are trained not to and, if there’s the slightest doubt, they die before they get a chance to.)
We’ll never know for sure one way or the other, as the perpetrators are dead (except for Zacarias Moussaoui, who remains a doubtful case) and we only have a “video” confession of their commander. Who, considering his past links, could well have been a pawn in the game. Whatever may have been, intelligence agencies were back in business, while police and customs were in total overload. The operation, if it was one, could be considered a complete success.
Even the military got in on the action, in Afghanistan. But they wanted more. They and a few others wanted Iraq. Or they may have been simply over-reacting to events. Anyway, a few letters loaded with anthrax and Secretary Collin Powell shaking a flasket of white powder got things going alright. Better than any imaginable nuclear threat. After all, biological laboratories on the back of trucks did seem more convincing than hidden nuclear installations. What with Hans Blix and the UNMOVIC stamping tirelessly around Mesopotamia looking for just that.
We still don’t know who mailed the fatal bacillus. We were informed that it was a military breed of the germ. And that put a lid on the whole story. Or so it seems. Was this another operation of make believe, with many more to come, or just a happy coincidence on the path to war? So far, incompetence has been blamed for just about everything that has gone wrong. Supposing this to be the case, when does incompetence become treason?
As for the inhabitants of Iraq, after being bombed and starved, they’re now being killed piecemeal at an appalling rate. Meanwhile, the “Coalition” forces are under siege. So what’s the point? Who’s gaining from all this mayhem? Well, there’s one thing that seems almost certain. It’s that oil prices would be much lower than they are, if Iraq was producing the same quantities as prior to 2003. Not to mention prior to 1991.
(July 1990: 3.5 mbd. Feb 2002: 2.5 mbd. Dec 2005: 1.1 mbd.)
http://usgovinfo.about.com/library/weekly/aairaqioil.htm
http://news.bbc.co.uk/2/hi/business/4574954.stm
And we all know who’s been profiting from that wind fall. Then there’s the military who fundamentally like making war. It’s their thing and there’s all the fun of trying out new weapons, tactics and strategies. And combat is always good for promotion. And so what if it’s a dirty war? There aren’t any clean ones around any more. So developing effective counter-insurgency methods is a pressing necessity. And fighting terror with greater terror is a duty. There’s also the war industry. Always eager to supply extra demand. And there are authoritarian governments, who seem most at ease when there’s a war on. Which all adds up to a lot of interest in things remaining as they are.
Some, more numerous by the hour, are beginning to compare the situation in Iraq to South Vietnam circa 1968. An opinion which is strangely superficial, as the fundamental differences seem quite obvious. The time, the place and right down to the body bags. There are no conscripts in Iraq and there are no burning draft cards in the USA. This is a mercenary war made by a professional army that has outsourced all it could. Which means that a large portion the foreign personnel in Iraq and the neighboring Gulf States is made up of civilians working for private companies.
http://www.guardian.co.uk/international/story/0,3604,1103566,00.html
http://hotzone.yahoo.com/b/hotzone/blogs16785
This is probably the most entrepreneurial war since…The 4th Crusade. Or, more recently and more appropriately, since the French occupation of Algeria in 1830. (Alexis de Tocqueville has some very actual things to say in Seconde lettre sur l’Algèrie, which doesn’t seem available in English.)
Notwithstanding the Baker-Hamilton report, the only real problem that Bush and consorts have with Iraq is that it’s costing more than was expected. And even that can’t be bad for everyone.

Microcredit.

Microcredit has had massive news coverage recently, with the Nobel peace prize awarded to Muhammad Yunus and his Grammeen Bank. This not so new form of banking (Yunus granted his first loan in 1974) is a step up from the pawnbroker, inasmuch that the borrower who has nothing to pawn can nevertheless be deemed credit-worthy. These small loans have been widely praised and, if a few have expressed misgivings, fewer still, if any, have considered what debt is all about. Or that Third World microcredit may just be a down-scaled version of the frantic borrowing going on in the First World. We have the mortgages and the credit cards. They get the loose change.
Debts have one vital function, which is to increase demand. Whereas, the paying back of debts reduces demand. This means that demand increases as long as new debts are granted and old debts are renewed, as long as borrowing increases. The question being, is there a limit to borrowing? Can new and larger debts be contracted indefinitely? Logically, the answer is no. Logically, there comes a point where more borrowing is impossible, but no one seems to know where that point is. Not even Alan “Magic” Greenspan.
The price of commodities is partly investment and partly added value. The added value is the nation’s income and is divided into salaries and wages, social insurance, taxes, rent, commercial margins, corporate profit and interest. So what do we see? There’s been a down trend in salaries (with illegal labor) and in social insurances and taxes. Whereas rent, margins and profit have taken all the growth in income, and interest has tried to remain stable by reducing its rates (10% of 1000 = 5% of 2000). And the growth of all this demand is fuelled by borrowing. Or, rather, growth is fuelled by new debts, while all old debts must be constantly renewed.
So debts pile on debts and all payments are postponed by credit. We’ve now reached the stage where citizens of the First World owe on average three years income. One year they’ve borrowed themselves, one has been borrowed by their local governments, and the third is owed in their name by the National (or Federal) State. Europe even has a fourth supra-national (European) level of borrowing. And then there’s the World Bank granting loans backed by First World central banks. It just goes on and on, and we haven’t a hope in hell of ever paying it back, as that would just bring about a recession.
There is, however, a quick way of canceling debts. It’s called inflation and it comes about in several ways. Inflation is generally perceived as rising prices, which can result from demand exceeding supply. Or, more classically, wage demands not linked to increased productivity are compensated by higher priced commodities. However, the most spectacular form of inflation is the result of too much paper in circulation. Paper money, that is. Unable, for some reason or other (e.g. The Weimar Republic), to raise enough taxes, the State pays its expenses by printing bank notes. As this money is not linked to any kind of production, it inflates demand and raises prices.
However, when the State pays its expenses with bonds, instead of increasing demand it merely displaces it. The State spends what others would rather save. Instead of taxing excess income, the State borrows it and pays interest. There is no excessive demand and no inflation.
So the State borrows to balance its budget. And it borrows to pay back previous debts and their interest. And, as the debt accumulates, the amount paid back gets bigger, and so does the amount borrowed. These growing budget deficits are recurrent and may finally cast doubts as to the State’s financial situation.

Adam Smith.

Si le libéralisme nous écrase, c’est la faute à Adam Smith, dit la chanson. Mais, si Adam Smith est pour le libre échange, c’est qu’il vit dans un monde cloisonné par les barrières tarifaires et douanières. En Grande Bretagne, par exemple, une taxe sur le blé importé favorisait les propriétaires terriens, au détriment des mangeurs de pain, en maintenant des prix élevés. Cette taxe sur le blé n’a été levée qu’en 1846, après une lutte épique au parlement entre la rente foncière, qui dépend du prix du blé, et le profit d’entreprise, qui dépend du prix du pain(des salaires). Ce combat a fait de Robert Peel une grande figure de la révolution industrielle anglaise.
Pour en revenir à Adam Smith. A la même époque où François « Laissez faire, laissez passer » Quesnay, était un ardent physiocrate, lui a été l’un des premiers à soutenir que la Richesse des Nations était le produit du travail. Cette notion nouvelle est reprise par Karl Marx, qui explique que le travail, seul créateur des richesses, n’en obtient que la part nécessaire à sa reproduction.
Adam Smith est à l’origine de notre compréhension actuelle de la répartition de la valeur ajoutée par le travail, un découpage en sept.
1. Les taxes et les impôts vont à l’Etat.
2. Les salaires et les assurances sociales rémunèrent le travail.
3. Les loyers reviennent au foncier.
4. Les marges rétribuent le commerce.
5. Les intérêts sont versés à l’argent.
6. Les profits sont à l’outil.
7. Les droits rentabilisent les brevets.
Cette répartition de la richesse produite par le travail n’est pas une abstraction. Elle concerne des personnes humaines. Et c’est là qu’apparaissent les clivages politiques des sociétés industrielles parlementaires. C’est le champ des luttes sociales.
Il y a les agents de l’Etat, ceux de la force, de l’ordre et de l’appareil. Puis il y a ceux qui produisent de leur travail. Enfin il y a ceux qui possèdent le foncier, le commerce, l’argent, l’outil et le brevet. Bien sûr, la ségrégation n’est pas parfaite entre les trois groupes. Des agents et des producteurs peuvent aussi être des possédants. Mais on peut supposer que c’est le revenu (ou le statut) principal qui détermine l’appartenance.
L’Etat, le travail et la propriété privée se partagent les richesses produites. Et chaque groupe doit à son tour répartir sa portion respective. A l’intérieur de l’Etat, le soldat et le clerc s’affrontent depuis toujours pour la primauté. Le travail est séculairement soumis à des échelles salariales, hautes et pentues. Tandis que la propriété, nous l’avons vu, recouvre cinq éléments distincts.
L’Etat se préoccupe avant tout de se perpétuer. Pour cela, il se prête à toutes les compromissions. Le travail, très échelonné, n’a que ses bras et ses têtes. Parcellisé à l’extrême, il agit à l’émotion et au ressentiment. C’est donc la propriété qui mène le jeu politique. Et ses divisions internes expliquent les alternances.
Le foncier, le commerce et l’argent sont les trois propriétés historiques (de l’Antiquité). L’outil et le brevet sont des nouveaux venus. Les anciens et les modernes s’affrontent. Mais les marchands et les banquiers ont des clients dans les deux camps. Ce qui a modéré l’affrontement entre l’aristocratie terrienne et la bourgeoisie industrielle, au 19ème siècle. Aujourd’hui la FNSEA et le MEDEF sont toujours concurrents pour les aides diverses. Tandis que les banques et la grande distribution font affaire avec les deux.
Le système est verrouillé depuis longtemps. Pourtant, il subit des accrocs récurrents. L’offre et la demande se déconnectent régulièrement, à cause du crédit et des emprunts qui s’empilent selon des calendriers précis. Et ces piles de dettes ne peuvent se résoudre sans des taux d’inflation élevés.
Selon une périodicité de 57 ans (J.A.Schumpeter, Business Cycles (1939), p.213), nous sommes confrontés aux mêmes problèmes d’endettement qu’en 1950, multipliés par cent. Mais ce n’est pas sûr que les vieilles méthodes (guerre et chasse aux sorcières) suffiront cette fois-ci. En 1950, la diffusion des nouvelles motorisations (la voiture, l’avion, le train, la tondeuse à gazon et le réfrigérateur) et du pétrole quasi gratuit ont tout relancé. L’informatique, le moteur d’innovation du cycle présent, ne propose déjà plus de nouveautés particulières. Sa virtualité ne semble pas à même de déclancher une multiplication de l’emploi mondial.
… etc.

Candidats.

Tout ce mic-mac autour de la candidature de Sarkozy est présenté comme une querelle de personnes. Notamment Jacques Chirac se remémorant le dévoiement baladurien de son ministre de l’intérieur. Ne serait-ce pas, plutôt, qu’une partie de l’électorat conservateur (et donc leurs représentants à L’UMP) considère que l’hôte de la place Beauvau n’est pas tout à fait assez Français pour occuper l’Elysée. Je remarque que la généalogie du candidat n’est abordée que très discrètement (pour l’instant). Pourtant, ce non-dit me semble être un désavantage bien réel, face à Jean-Marie Le Pen et Ségolène Royal, ses deux principaux concurrents. Et je comprendrais que ceux de son camp puissent être troublés et finalement résignés.

What happened to Africa?

A friend of mine was back from the Congo recently. Not the ex-Belgian/ ex-Zaire/ past and present Democratic Republic/ Kinshasa-Congo. She had been visiting the ex-French/ Popular Republic/ Brazzaville-Congo, in particular the orphanages, and was astounded by the level of corruption.
That this was her first stay in that part of Africa might have influenced her reaction, or she may have been voicing what we hear all the time about that unfortunate continent. Or, again, corruption really is rife from Cairo to the Cape. However, should it be so, who are we to throw the first stone? And, anyway, we must first ascertain whether corruption is causing the breakdown in society and government, or is merely a symptom among others of this breakdown.
The world is a mess, but Africa seems in a worse mess than the rest. Wars and locusts and droughts, most of the world’s illnesses plus a few of their own, and a colonial history as savage as that of the Americas, where the native population all but disappeared. Whereas Africans survived. They survived the slave trade and they survived the forced labor that followed. They even achieved a neo-colonial form of self-government. But they didn’t go farther than that. They weren’t allowed to.
The colonial exploitation of tropical West Africa concerned rubber, cacao, timber, coffee, cotton, peanuts and all possible minerals. These raw materials were shipped to their corresponding European Metropolises, to be transformed and consumed. In return came mining equipment and railways, linking the mines to the coast, and lots of administrators with enough consumer goods to sustain a different life style. As for the natives, they were pressed into the mines and the laying of rails and the collecting of rubber, etc. While an ethnic minority was armed and used as a mercenary force to do the pressing. Along with frontiers and, for some, nasty protracted national liberation and civil wars, this was the heritage of the newly formed African nations: blood, tears and turmoil.
To function, government needs the structures of state. It must dispense security, education, justice and health and, to pay for it all, it must collect taxes. Government depends on some kind of consensus. It must convince a wide majority that the rule of law is superior to the rule of sheer might.
On the eve of obtaining independence, the geographical entities which were to become nations had no state structures and their colonial masters had ruled by constraint for centuries. Many of the new African governments were immediately plunged into civil strife. Sometimes this was due to the ethnic mercenaries of colonial times (Rwanda), sometimes the whereabouts of mineral resources was the cause (Katanga). In some of the smaller countries, those more culturally homogenous, attempts were made at state building. Hospitals and universities were inaugurated, a judiciary system was established, military and police forces were trained, but collecting taxes was problematic. Most Africans were (and still are) living a hand-to-mouth existence. The salaried few were (and still are) mostly state employees. And there are always limits to the taxing of private wealth and corporate profit. In fact, most if not all of state revenue came (and still comes) from the country’s raw materials.
The recognized function of government (other than status, careers and personal enrichment) is to administer and finance the structures of state. Administrations come and go because taxation is always considered excessive and the structures of state are always found wanting, and because taxation and representation are very hard to dissociate.
Autocracy has always been hindered by the state’s dependence on taxation. How much simpler when state expenses do not rely on taxes. How convenient for a despotic régime.
Many African states draw their incomes from the sale of their raw materials, often non-renewables. Those who govern these states are concerned by the world market, by the sale of their produce and the subsequent import of commodities. The rest of the nation’s economy is of no consequence. So the state has nothing to gain in helping development. In fact, post-colonial Africa has not been able to modify its colonial heritage. Raw materials are still shipped to the industrial “first” world. And, in exchange, consumer goods allow an administrative minority to have a different life style. Colonial administration has merely been localized and made plethoric by access to the world market and a better exchange rate. Independence has meant that Africans govern instead of Europeans but, for the rest, nothing has changed. Africa’s raw materials are transformed elsewhere and their market value comes back in the form of consumer goods.
Most of tropical West Africa is not making anything. This has kept it stuck in a pre-industrial time-warp. African farmers are still using hoes to work their fields. And, at the same time, ancient craftsmanship has disappeared – swept away by cheap plastic mass-produced goods. Africans are unemployed because production has been out-sourced a long time ago. Africa has supplied Europe (and the world) with raw materials and received consumer goods in exchange. All the transformations were in Europe, so was the labor and the creation of wealth.
Corruption depends as much on the corrupters as on the corrupted. And corrupters have flocked to the Gulf of Guinea from the start. Guns and trinkets were exchanged for (slave) labor sent to the Americas. Now guns and trinkets are exchanged for the wherewithal of labor, raw materials. We can’t blame African governments for their acts without admitting that we are the prime instigators (and beneficiaries) of the whole situation
However, the Wheel turns and History moves on. And it seems that our labor is being out-sourced to Asia. How long will be able to exchange our raw materials (know-how, patents and copyrights) for Asian consumer goods? How long will we maintain social peace and justice alongside mass unemployment?

Witch hunting.

According to Marvin Harris (Cows, Pigs, Wars and Witches. © 1974. Fontana, 1977, pages 153 & 154),

While the Waldensians and the Vaudois [heretic sectarians] were being tortured, witches still enjoyed the protection of the Canon Episcopi. Witchcraft was a crime, but it was not a heresy - since the Sabbath was a figment of the imagination. [...] But with the passage of time, papal inquisitors became more and more disturbed with the lack of jurisdiction over witchcraft cases. [...] If witches could be tortured like other heretics, their confessions would lead to the discovery of a vast body of secret conspirators. At last Rome yielded. A Pope named Innocent issued a bull in 1484 that authorized inquisitors Heinrich Institor and Jakob Sprengen to use the full power of the Inquisition to extirpate witches throughout Germany.

And, concerning a book written by these two inquisitors,

The Hammer of the Witches concluded with a detailed account of how witches were to be identified, arraigned, tried, tortured, convicted and sentenced. The witch-hunting system was now complete [...] Ready to produce, year in year out, an unending supply of new witches to replace the ones who were imprisoned or burned.

And, page 158,

Most people don’t know that military-messianic uprisings were common in Europe from the thirteenth to the seventeenth centuries. [...] outbreaks of messianic fervor in Europe were directed against the monopoly of wealth and power held by the governing classes. My explanation of the witchcraft craze is that it was largely created and sustained by the governing classes as a means of suppressing this wave of Christian messianism.

And, pages 166 to 168,

If witchcraft was dangerous heresy, as the Inquisition insisted, there is no mystery about why the Inquisition should become obsessed with suppressing it. If, on the other hand, witchcraft was a relatively harmless, if not largely hallucinatory activity, why was there so much effort spent on suppressing it - especially when the Church was being pushed to the limits of its resources by the great military-messianic upsurge of the fifteenth century ?
[...] The assumption that the main business of the witch hunters was the annihilation of witches rests on the professed lifestyle consciousness of the inquisitors. But the contrary assumption - namely, that the witch hunters went out of their way to increase the supply of witches and to spread the belief that witches were real, omnipresent, and dangerous - rests on very solid evidence. [...] The situation demands that we ask not why the inquisitors were obsessed with destroying witchcraft, but rather why they were so obsessed with creating it. Regardless of what they or


their victims may have intended, the inevitable effect of the inquisitorial system was to make witchcraft more believable, and hence to increase the number of witchcraft accusations.
[...] The principal result of the witch-hunt system (aside from charred bodies) was that the poor came to believe that they were being victimized by witches and devils instead of princes and popes. [...] Against the people’s phantom enemies, Church and state mounted a bold campaign. The authorities were unstinting in their efforts to ward off this evil, and rich and poor alike could be thankful for the energy and bravery displayed in the battle.
The predictable significance of the witch mania therefore was that it shifted responsibility for the crisis of late medieval society from both Church and state to imaginary demons in human form. Preoccupied with the fantastic activities of these demons, the distraught, alienated, pauperized masses blames the rampant Devil instead of the corrupt clergy and the rapacious nobility. Not only were the Church and state exonerated, but they were made indispensable. The clergy and nobility emerged as the great protectors of mankind against an enemy who was omnipresent but difficult to detect. [...] You could actually see the authorities doing something to make life a little more secure; you could actually hear the witches scream as they went down to hell.

It all sounds so depressingly familiar that the witch hunting season must be back again. The last time around, we were better dead than red. Now, of course, the new witchcraft is terror. However, there’s no need for conspiracy, because the method is so ingrained and has proven its worth so often that everything falls into place automatically.