The first sections of the article, "The Weaponization of Economic Theory", provides his speculations on how the dilemmas of the current world economic crisis are going to play out. What really bothered me in the early sections was his apparent acceptance of private control over the issuance of money in the form of debt--the most pernicious of all capitalist practices! What I believe is more useful is the last section of the essay which I am reproducing below in its entirety.
He imposes a classic economic liberal framework on the issues, and seems to suggest that present events are the result of abandoning those early beliefs. I think that this is clearly wrong as Marx and Marxists have argued over the past 150 years. This early ideology of capitalism was designed to dismantle feudal institutions and all the restrictions they imposed on privately run commercial enterprises whose sole objective was a sociopathic one of private wealth accumulation.
The other side of the coin of capitalism is power. Together with the accumulation of wealth is the accumulation of power. The system requires endless growth--no one disputes that--thus, wealth and power both grow. The endgame of capitalism is the concentration of wealth and power in the hands of a few people as we are seeing today. Because the system is now running up against resource and ecological limits of our finite planet, the extraction of wealth from industrial growth is becoming increasingly difficult and is threatening to destabilize the entire ecosystem of the Earth. Hence, capitalists see that the most favorable method to increase their wealth is through debt peonage: placing entire populations in debt and working mostly to pay interest to the ruling capitalist class. Because of their huge accumulation of wealth and power, they exhibit the most arrogant attitudes in their determination to accomplish this.
The neoliberal challenge
The term “neoliberalism” misrepresents and even inverts the classical liberal idea of free markets. It is a weaponization of economic theory, kidnapping the original liberal ethic that sought to defend against special privilege and unearned income. To classical economists, a free market meant one free of unearned income, defined as land rent, natural resource rent, monopoly rent and rent-extracting privilege. But to neoliberals a free market is one free from taxes or regulation of such rentier income, and indeed gives it tax favoritism over wages and profits.
Neoliberalism and neo-conservatism are complementary doctrines of power and autocracy combined with deregulation and dismantling of democratic law. The aim is to replace government power as used to protect the people with an oligarchic power to oppress the people.
Today, the neoliberal aim is to cripple government power, enabling a free-for-all for the financial sector. Protecting civil freedoms are also heavily signposted, but the high price of legal representation is a barrier for most. A doctrine primarily of the financial sector, the aim is to un-tax banks and financial institutions and their major customers: real estate and monopolies.
Neoliberalism is a doctrine of central planning, which is to be shifted from governments to the more highly centralized financial centers. This requires disabling public power to regulate and tax banking and finance. As a transition, ideological deregulators such as Alan Greenspan and Tim Geithner have been appointed to the key regulatory positions in the United States.
The result is a doctrine of financial war not only against labor but also against industry and government. Gaining the financial power to indebt economies at increasing speed, the banking and financial sector is siphoning resources away from the real economy. Its business plan is not based on employing labor to expand output, but simply to transfer as much of the existing flow of revenue as possible into its own hands, by capitalizing all such revenue into interest payments, on loans collateralized and pledged to creditors.
The effect is no more democratic than the Roman democracy, which arranged voting by “centuries” headed by the largest landowners – essentially an acre-per-vote, to make an analogy. In the U.S. case, votes are bought not by land as such, but by dollars – mainly from the financial sector. In the end, to be sure, most dollars come from rent extraction.
The result must be economic polarization, above all between creditors and debtors as in Rome. So the end stage of neoliberalism threatens a Dark Age of poverty/immiseration – most characteristically, one of debt peonage. And just as Rome’s creditor class and its predatory imperial expansion brought down the Roman Empire and reduced it to mere subsistence, so the combination of neoliberalism and neo-conservatism today seeks to globalize itself, spreading austerity even as it brings technological progress to sovereign debtors.
