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Force and Fraud


by Frank Lee

Statue of Niccolò Machiavelli outside the Uffizi Gallery, Florence

Niccolò Machiavelli Italian politician, Writer and Author, adviser to the Medicis
It seems now overwhelmingly apparent that the ‘West’ has entered a phase of terminal decline – a multifaceted and ongoing deterioration at multiple levels: cultural, political, ideological and economic. Such is the way with all civilizations, particularly those based upon empire. This is not a novel phenomenon; indeed, has become something of a cliché (1). But the process appears to exhibit a recurring historical leitmotif. As the American writer Morris Berman described it:

With the exception of hunter-gatherer societies which have not been interfered with by more complex ones … the pattern of birth, maturity and decay would seem to be inescapable … Where is the glory of Babylonia now? Or that of Egypt, India, China, Greece and Rome? Gone, all gone – that is the historical record. Why, then, should America escape this fate …? The dissolution of (American) corporate hegemony, when it does occur … will happen because of the ultimate inability of the system to maintain itself indefinitely.”The Twilight of American Culture

Note that Berman is talking in general terms apropos of the fate of empires, but his principal target is the US. This process is also applicable, to a greater or lesser degree, to the rest of the American empire including the rest of the Anglosphere, Europe, Japan, South Korea and various other US client/vassal states around the world. This process of regression notwithstanding, many, even on the left, still regard the US and its empire as an unstoppable economic and geopolitical behemoth, all powerful and irresistible. One such is Tariq Ali who seems to think US decline as either not happening, or is not particularly important, a minor setback, stating that ‘the signs of impending collapse or irreversible decline are few.’ (The Extreme Centre – Tariq Ali) ‘Signs of irreversible decline are few.’

Really! Mr Ali seems to have fallen for all the ‘exceptional people’ hype. See note [2]

For those with eyes to see it seems clearly discernible that all is not well in the empire. Indeed, the signs of imperial over-reach are manifest. Endless imperial adventures whose outcomes have been uniformly negative (and enormously expensive), a pointless, stupid and extremely dangerous confrontation with the Eurasian geopolitical bloc (principally Russia and China), an ongoing political and economic crisis in the US; continuing and increasing political and economic turmoil in the EU; unprecedented levels of global debt; a parasitic global economic system which is based upon wealth extraction rather than wealth creation, and a system where speculation, market rigging and outright criminality are commonplace.

Two further points need to be raised regarding current debt levels. Firstly, these rising debt levels might be sustainable if growth in national income (GDP) from debt-driven investments resulted in a level of output which exceeded the initial investment. This, is not the case however. Each input has resulted in a smaller output which means debt grows faster than income. During the 1970s the increase in National Income was about 60 cents for every US$ invested, by the 2000s this had dropped to around 20 cents for every US$. Now for every US$5 invested, national income will increase by only US$1. This process is usually measured by the (public) debt-to-GDP ratio. The US debt-to-GDP ratio has risen from 30% in 1975 to over 100% currently. Particularly since 2010 the rise has been even steeper, from 60% to 106%. In the UK, the debt-to-GDP ratio stood at 40% in 2006 but has more than doubled 90% in 2017.

(This is generally known as the Law of Diminishing returns pace Ricardo, Tendency of the Rate of Profit to Fall, pace, Marx, decline in the Marginal Efficiency of Capital, pace, Keynes, and the Vanishing of Investment Opportunities, pace Schumpeter.)

Secondly, the steepening curve for public indebtedness suggests that this is an accelerating or exponential process and is probably irreversible without massive debt write-downs, a massacre of the zombie companies, widespread bankruptcies, collapse of asset prices – in short, a game-changing crisis. Schumpeter’s ‘gale of creative destruction’ on steroids.

Existing levels of global public and private debt may now be too high for growth and/or austerity to deal with. Reduction of these levels of borrowings would require implausibly high economic growth, deep cuts in government expenditures or higher taxes and very large asset sales … Instead of being dealt with the problem of unrecoverable debt is disguised by lending more, low interest rates and extending maturities to maintain the illusion of solvency.” The Age of Stagnation – Satyajit Das

All things considered it seems increasingly likely that the debt super-bubble will eventually burst (bubbles usually do) since the debtor countries and individuals will not be able to carry the increasing burden of debt indefinitely. We are rapidly approaching or have already arrived at our ‘Minsky moment’ where our capacity to borrow no longer covers our interest repayments or is no longer underwritten by the ownership of an appreciating asset. This means an eventual default either through the front door, outright refusal to repay, or through the back door – inflation. All of which will give rise to a massive economic, political and social crisis similar if not worse than the 1929 Wall Street Crash.

Given the magnitude of this unprecedented post WW2 global crisis the possibility of holding this ramshackle imperial configuration together is going to take a level of resources and crisis management by the PTB which seems beyond their powers. But of course, this won’t stop them trying. The tried and tested mechanisms of rule (democratic or otherwise) are, in Machiavelli’s words – ‘Force and Fraud’.

He counsels a prince on how to act toward his enemies, using force and fraud in war. However, this methodology of rule, as well as being used against external enemies, is also to be deployed against the internal enemies, namely, the mass of the population.

The operation of an openly repressive state apparatus combined with the ideological state apparatus (to use Althusser’s terminology). Generally speaking democracies tend to rely on fraud rather than force. What has been called the ‘Manufacture of Consent’ – see Chomsky and Herman – a process which was long ago identified by Marx and Engels, and latterly by Marxists such as Antonio Gramsci, as well as other radicals such as the great American social theorist C Wright Mills. The objective of this process of thought-control has been to establish ideological hegemony over society which in its turn gave rise to political hegemony. It is worth quoting Marx/Engels in this connexion:

The ideas of the ruling class are in every epoch the ruling ideas, that is, the class which is the ruling material force in society, is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it.”The German Ideology

In passing it should also be borne in mind that the relative ‘kid glove’ approach of thought control used in the imperial heartlands does not necessarily not extend to far flung (neo) colonial domains. It was quite inconceivable that the methods used to enforce order in the British empire could have been replicated in Britain itself. Britain used a combination of force and fraud in India, South Africa, Zimbabwe, Kenya, Ireland, Cyprus, Malaya, as well as the US. As for the white dominions, Australia, New Zealand and Canada, these followed a policy playbook of every white settler regime, i.e., localised violence by the settlers against the original domestic inhabitants. Every one of these outposts of empire was subjected to military force and violence to impose British rule, either through direct repression or imperial violence outsourced to white settlers. As for the record of the US and its informal empire the record of violence around the world is off the charts.[3]

However, this is changing and will continue to change. As Thucydides noted, when the crisis deepens, the methods of controlling empire will come home and be used to control the domestic population at the centre of empire. Force will play an increasing role vis-à-vis fraud.[4]

Given the deep structural crisis of western capitalism/imperialism we can expect increasingly desperate attempts of the degenerate elites to keep control the system through open repression, surveillance and thought control. Indeed, this is openly in play at the present time; a gradual slide into liberal utopianism-cum-neo-totalitarianism. And make no mistake the ruling elites will not play by Marquess of Queensbury rules as the gloves come off. As Bertrand Russell once observed visiting Soviet Russia in just after the First World War and when the wars of intervention against the young Soviet Union was in full swing.

“It seems evident from the attitude of the capitalist world to Soviet Russia, of the Entente and the Central Empires and of England to Ireland and India, that there is no depth of cruelty, perfidy or brutality from which the present holders of power will shrink if they feel themselves threatened…The present holders of power are evil men, and the present manner of life is doomed.” [5]

All of which sounds chillingly similar to the present day.

NOTES:

  • [1] Oswald Spengler, ‘The Decline of the West- first published in 1918. Works, Friedrich Nietzsche – passim.
  • [2] In 1950 the USA produced 50% of world output, and as late as 1983 it produced 33%. By 2015 the US figure has dropped to 22%. This decline is expected to keep falling since Chinese growth rates are three times that of the US. Additionally, China is now the biggest world economy (adjusted for purchasing power parity) and will even overtake the US in absolute GDP in the coming period if growth rates remain the same. China is also the main creditor of the US (the world’s greatest debtor nation) holding US$1.5 trillion in US Treasury bonds.
  • In absolute terms US GDP is US$18.65 trn, however its public debt is US$19.84 trn which means public debt is greater than national income, debt-to-gdp ratio being 106% and moreover, the gap is getting wider.
  • Additional public (federal) debt, augmented by City, State, municipal, household, Financial and Business debt – comes to almost 370% of GDP. Roughly US$65 trn. Now add in government pension and health care commitments which are missing from official budget figures and total US debt rises to 400%, of GDP, in round figures this totals nearly US$95 trillion, more than seven times the published figure.
  • Pace Tariq Ali, these are not just ‘setbacks’. They are the medium and long term palpable indicators of exactly a secular and irreversible economic decline. It might help matters if Mr Ali read both the assets AND liabilities on the US national economic balance sheet.
  • [3] See “Rogue State” by William Blum. Works, Noam Chomsky, passim.
  • [4] “History of the Peloponnesian War”
  • [5] “The Practice and Theory of Bolshevism” (Bertrand Russell – 1920)
  • 18 Comments

    1. Michael Leigh says

      Perhaps, when the China bank holders of USA Dollar nominated debt, find that future sale of these so-called securities of the actual dollars are worth less than the original USA gold based warranties and that they have become worth less than the original amount loaned to the USA ?

      This forthcoming crash becomes more likely each day as the US accounting standards keep changing to hide the true total indebtedness of the USA – does fort Knox even possess the real gold, as opposed to electronic spreadsheet paper gold transfers?

      Like

    2. kweladave says

      I am generally sympathetic to the direction of the article BUT some of the key points are based on a false understanding of how fiat economies (USA, UK, Canada, Japan, Australia etc really work). For example:

      ” China is also the main creditor of the US… holding US$1.5 trillion in US Treasury bonds.”

      The US has an INFINITE supply of US$. If the Chinese decide to cash in their US Treasury bonds it merely requires crediting the Chinese with US$1.5 trillion electronically (as per spreadsheet) in exchange for those bonds.

      Of course the individual eurozone countries – especially Greece – cannot ‘print’ euros.

      The UK’s National Debt is now around 90% of its National Income BUT about one third of that debt is owed to the Bank of England. As the B of E is owned/controlled by the UK state it is akin to saying that the left pocket of your trousers owes the right pocket, say, billions of pounds. It is merely a nominal debt. The UK’s debt is denominated in sterling.

      Of much greater significance is the sharp rise in household/personal debt. Individual households do not have the luxury of being able to legally create their own currency. This increase in personal debt is largely due neo-liberal/austerity policies.

      A final point – Japan has a debt to GDP ratio of well over 200% and yet can borrow funds at all time low interest rates which indicates that lenders have full confidence that Japan will not become ‘bankrupt’ soon.

      Modern Monetary Theory provides a realistic model of how economies work. Further enlightenment here:
      http://bilbo.economicoutlook.net/blog/

      Liked by 1 person

      • BigB says

        I’m glad you brought that up, because it’s (deliberately) not that clear at all who owns the BOE? Or who it’s Court of Directors serve? Or what its relationship is with the shady Bank of England Nominees (BOEN): a non-trading PLC with assets of £2? Their activities are covered by the Official Secrets Act and a Royal Charter. If it’s a State owned regulatory body – why the secrecy? One might think that they were up to no good and not acting in our best interest??? The “Dormant Nominee” function of the BOEN makes me wonder who is investing what, where? I suspect treason and perfidy.
        https://en.m.wikipedia.org/wiki/Bank_of_England

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      • The Bank of England is not owned by the UK. It is a private bank with unknown shareholders which loans money with interest to the British government. The British taxpayers pay these loans and hold the liability if push comes to shove.

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        • Seamus Padraig says

          Just the Fed in the US. It’s controlled by the banksters so that they can make money off of all that debt.

          Like

        • BigB says

          The BOE was nationalised in 1946, and – subject to what I said above – is nominally state owned. It doesn’t lend money to the UK Government. Rather, the Treasury issues bonds to finance the difference between expenditures and tax revenue. It did buy back £60bn ‘Gilts’ last year – as part of QE – but not to finance borrowing. It’s not that what you say is not functionally true: it’s just that they are a bit more subtle about it.
          https://www.whatdotheyknow.com/request/does_the_treasury_borrow_money_f

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        • kweladave says

          “The Bank of England is not owned by the UK. It is a private bank with unknown shareholders”.

          I suggest you go the the Bank of England’s web site http://www.bankofengland.co.uk/ABOUT/Pages/default.aspx

          I quote precisely: “Nationalised in 1946, the Bank is a corporation wholly owned by the UK government.”
          Notice the use of the word ‘WHOLLY’.

          Like

          • BigB says

            Clicked the link: I couldn’t get beyond the monstrous lie – “the Bank’s mission is to promote the good of the people…” Is that why they ‘injected’ £435bn of our wealth to the top 5% of asset owners (to the tune of £128,000 each) in the Great Bank robbery known as QE??? I wouldn’t WHOLLY trust what they say.

            Like

            • kweladave says

              @BigB
              Yes I agree with your sentiment but I was really replying to @Elenits who believes that the B of E is still privately owned.

              Like

    3. Reblogged this on Worldtruth and commented:

      All this and more is happening before our very eyes and yet we do not see it. Soon Perfidious Albion will turn on it’s own – again. The beginnings of which are already underway just as Frank Lee quotes it – “Given the deep structural crisis of western capitalism/imperialism we can expect increasingly desperate attempts of the degenerate elites to keep control of the system through open repression, surveillance and thought control. ” In Britain Laws protecting peoples rights are being attacked and where possible repealed and the police are being used as the attack dogs against public rights to respond. The “nudge” tactics employed by the Tory Government and some right wing opposition members and promoted through acquiescent MSM have indeed seen the fully established “me” culture and the surveillance is now making exponential ground n dictating what we may learn,, think and speak. All going according to plan. The real socialists (not the pseudo left) are the only fly in the ointment, which is why they are under constant assault by the false leftist narrative hell bent on undermining genuine socialist ideology and working hand in glove with the power elites.

      Liked by 2 people

      • N. Hanrahan says

        The “fake left”, Mohander, for they deserve more scorn than “pseudo left” conveys. And, truth be told, they’ve been around for over a century.

        Liked by 1 person

        • N.Hanrahan.
          I stand corrected.
          In truth, they were the “opposition” created by the power elites because they were more manageable and more closely aligned with the elites own interests. By allowing these traitors to the true socialist ideology flourish, they, yet again “nudge” and “hoodwink” people in the wrong direction. I think I despise these fake socialists more than I do the elites – at least we know how perfidious the elites are, while these treacherous faux lefties insidiously slither like snake oil charmers, their way into the socialist parties.

          Like

    4. bevin says

      Ideological hegemony ceases when the ideologists, the media and the academy, cease to understand the most obvious things about the society which they are attempting to bamboozle.
      That this point has been reached is indicated, most obviously, by the complete inability of the punditry to understand the political moods among those at whom they aim their nonsense. It is a classic case of a group which has swallowed its own publicity and actually believes that the lies it promotes (the unemployment stats for example) measure reality.
      As for the ‘left’ whose leaders have grown very comfortable performing in the Punch and Judy show of ‘radical’ politics- they dare not risk sacrificing their comforts (intellectual and material) by recognising that the Revolution they have long called for (‘though not in my lifetime I’m afraid’) has actually begun.

      Liked by 3 people

    5. Dead World Walking says

      Bertrand Russell was a man of great perception.
      He would be horrified, but not surprised, with the direction our psychopathic leaders and their corporate doppelgängers have taken us.

      Liked by 2 people

      • Seamus Padraig says

        Yup. These idiotic new sanctions could end up driving a massive wedge between Washington and the EU, perhaps leading to the downfall of NATO.

        Like

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