Thursday, July 22, 2010
The Dark Side of the Economic Crises
The following is a translation from the Russian of an interview with Andrei Fursov, the leader of the Center for the Russian Studies of the Moscow Humanitarian University, taken by Mikhail Delyagin, Director of the Institute of the Problems of Globalization. The video of the interview (in Russian) can be found on YouTube. I've taken liberty to skip certain parts of the interview, such as a discussion of a Nassim Taleb's book (new in Russia but old news for the English reader) and certain cultural references which are not likely to be understood and fully appreciated by the English reader.
MD: Our guest is Adrei Ilyich Fursov, the leader of the Center for the Russian Studies of the Moscow Humanitarian University and in my opinion (I can be mistaken) one of the best contemporary Russian historians, if not the best one. Andrei, I've got a very interesting subject to discuss with you. When I was a kid, my grandma used to say this trademark phrase of her when she had to put all the dots over the "i"s in an argument with any person of little understanding: "That's what's printed in the newspaper!" And indeed, this is an approach that's very typical of the contemporary analysts. And intelligent stock market analysts have discovered a shocking thing: a forecast, a serious one, the one that's based on the official statistical data, on good, working models, and on the official messages about how this world is set up, is going to almost always turn out to be wrong. So by trial and error, at the expense of those who trust them, they have established that official information is incomplete, insufficient, and describes the reality in such a way that one can not trust this information only. One has to take into account something else in order to have a professional, complex forecast. So what is that "something else" that's missing in the official macroeconomic models, in what's "printed in the newspapers"?
AF: Well, a lot is missing, willingness to tell the truth for one thing. <...> Seriously speaking, one of the tasks of the official media, of the official scientists, is precisely to mislead people, to form a certain opinion, a certain picture. Recall that with naive simplicity, the US analysts and some Nobel Prize winners admitted after the crisis had began: "Yes, we lied, because on the eve of the presidential elections in the US we could not tell the truth in order to not let down the President. Yes, we lied." -- just like Gollum in the Lord of the Rings -- he also said "Yes, I lied!" So in this sense, the official information does perform its main function: to disorient 90% of the populace.
DM: And therefore this is not so much information and analytics, but, using our old language, propaganda, isn't it?
AF: And disinformation. In other words, informational sabotage.
DM: I see. And what is it that this informational sabotage is hiding and what are the key powers at the world's financial markets, in the global economy, besides the official ones? And what is their role in the crisis that is now unfolding?
AF: Well, in addition to the official powers, there are other powers. But the thing is, these powers act as official ones, too. For example, the Rothschilds, the Rockefellers, the Warburgs, the Morgans -- they keep acting in both the official and the unofficial capacity. It's another matter that the structures they created were indeed semi-official. But looking from a different perspective, there is the Trilateral Commission, quite officially, but most of this structure's activities are unofficial. In general I must say that after 1945, activities of most official structures, including the government and the special services, had been gradually drifting into the shadow, and eventually, at the end of the '60s -- beginning of the '70s, the shadow and its owner swapped places. By the way, Samuel Huntington wrote quite well about it in one of his analytical works. He noted, perhaps in 1982, that in the '50s,'60s and '70s, a re-orientation of the western special services from the service of the State to the service of the transnational corporations took place. So, all the institutions are kind of official, but the main focus of their activities is behind the scenes. And what is in the limelight, turns out to be, just how Galich sung, "All that, my dear redhead, is just for the public".
DM: So you mean, the official institutions which have preserved their appearances, have also changed their contents.
AF: Not even that, they are just functionally subordinate to the unofficial institutions and to their own unofficial activity.
DM: But subordinate to what, what kind of unofficial activity is that?
AF: Well, the thing is that unfortunately, the contemporary social sciences and history are written, using not quite polite an expression, for the sucker. They hide 6/7 of the iceberg and show us only its tip. In reality, one of the main subjects of our world, since the XIX century, remains something which can be called hidden structure of supranational control. I dislike Ivan Ilyin's term "the global behind-the-scenes" -- it's too dramatic, romantic and full of pathos. In reality, there is very little pathos in the activity of these structures. The essence is very simple. The thing is, the capitalist system is unified economically, it's the single global market. But in the political aspect, it's a system of states. It's a sum, not a whole. But all constituents of the global capitalist class, including the burgeoisie as one of the constituents of this class, have interests which are global in nature. And institutions are required to resolve these contradictions. And those institutions did not originally exist in a ready state, they had to be created. Another thing: the more public and democratic was the system of government becoming, the more access was the civil society getting to the process of decision-making (take universal suffrage), the more transparent was politics becoming, the larger was the degree to which the real power was hidden behind the scenes. And already Disraeli in his novel Coningsbi said that the world is ruled quite differently from the way majority thinks it is, and is ruled by very different people. And primarily it is ruled by the financial capital. If we look at the history of the past 200 years, one of the red threads so to speak which becomes more and more red and scarlet, A Study in Scarlet, in the development of the modern world, is the struggle of the financial capital for the political, economical and informational control. And the tipping point was between 1870 and 1950. Starting in the 1870, with the last colonial re-partition of the world, money became necessary and the money could only be provided by the financial capital. And here the financial capital got its hands dirty very actively on the global level. On the level of individual countries, the financial capital of Britain put the country under control in 1846. As soon as the bread laws [Assize of Bread and Ale? CF] were abolished in 1846 [1836? CF], industrial investments became less profitable and by the time of World Exposition of 1867 England was losing the role of the global economy leader, and in the last third of that century the country lost it completely. The financial capital of England, the Rothschilds, sacrificed the industry and agriculture in favor of the financial capital. Same thing happened in the US after Kennedy's death, and to be more precise, after the creeping coup whose first manifestation was Kennedy's death and the last one -- Nixon's impeachment. So here the Americans did a fast-forward of the British scenario. So, starting with 1870, the financial capital begins its struggle for, among other sorts of world power, the political one. And a milestone here is 1913, creation of the Federal Reserve System. To prevent the social resistance, at first a crisis was organized in 1907. To make the society shake they first "induced a spasm", to use Dostoevsky's expression, "to induce a spasm in the masses". And the society was ready to accept the Federal Reserve System, a dozen private banks which began, with the government's agreement, to perform one of the functions of the State.
Even though it may be written "US dollars" on the American money, these are not the dollars of the US Government. The dollars of the US Government had been issued for a very brief time after June 4th, 1963, when Kennedy signed Executive Order allowing the banks to issue money backed by silver. That was a horrible blow to the Federal Reserve System, and I think that was one of the reasons Kennedy lost his life. Nobody abolished this order, but nobody follows it. That was when real American money was issued.
A curious thing: we see American banknotes of various denominations, most frequently $100, but there are American banknotes of $1000, and $5000 and $100,000! And it's very telling whose portrait is shown on the $100,000 banknote: Woodrow Wilson, the man who permitted the Federal Reserve System! He permitted it, and must have gotten a basket of cookies and a barrel of jam [this is an allusion to a certain bad guy from a Soviet children's story The Military Secret by A. Gaidar -- CF], and it is his portrait on the $100,000 banknote.
MD: You put your hand in a pocket, I thought you were about to pull out and show us that banknote.
AF (laughing): Yes, 1913. And note: the Federal Reserve System was created to provide very large loans. And what kind of spending would one need those loans for? War, for one thing. Which is something that happened in 1914.
MD: And nearly happened in 1912.
AF: Nearly indeed.
MD: When Jaurès, French socialist, stopped it.
AF: And by the way note what happened to Jaurès.
MD: Two days before the war broke out, he was shot in a cafe.
AF: One June 30th. And on June 28th, Franz Ferdinand was killed.
AF: And on the 28th, there was an assassination attempt on Rasputin and he had to be taken out of the game, he had been absent for a month. And he himself said that had he been in the capital, Dad, Nicolas II, [Rasputin used to call Nicolas II "Dad" -- CF] would have never gotten into this war. Thus during these few days a few individuals who could stop the war, were neutralized. Here is what's interesting: the war broke out, but six months before that, Pilsudski, not an unknown man, speaking at the French Geographical Society, in February of 1914, dropped these words in a very casual manner: "Soon there will be a big was in Europe... Austro-Hungary and Germany will be defeated first, and then it will be Russia's turn." So all this was in the air.
MD: I see. And is there something of that kind in the air now, also based on the interests of large financial capital which has already created this world?
AF: There is, but it wouldn't be right to skip the very important period of the '20s and the crisis of 1929-1933 which people compare with the present crisis. In 1913 the financiers strengthened their economic position, but their next step was a political one. And their plan concerning Europe was very interesting. Why did they support Hitler? In their opinion, Hitler had to create European Union. They called it European Venice, Venice on the scale of Europe. In 1932, when Hitler lost the elections and was going down, Hjalmar Schacht said: "Never mind, in six months Hitler will become the Reichschancelor and he will unify Europe for us". A few months ahead of Germany's defeat, Hitler said: "I was Europe's last hope". So, that particular attempt to unify Europe had failed, but another one was successful, the one directed from overseas. And a very interesting change took place in the global capitalist class which our Soviet analysts overlooked, which cost them dearly, because it was this young predator faction of the capitalist class who broke the spine of the Soviet Union. People have various names for this faction, I prefer to call them Coprporatocracy. This is a layer of bureaucrats, secret service people, representatives of transnational corporations who interlocked and left the state offside.
MD: The new nomads, as Comrade Attali said.
AF: Attali, exactly. It's another thing that in the first thirty years after the war they could not get much room for operations for a very simple reason: they had to pay off the upper part of their national worker class and the middle class. That's because the Soviet Union still existed and they had to buy popular loyalty, and there was welfare state. But by the mid-'70s the welfare state became overly bureaucratic and began demanding more and more funds. And by mid-'70s, the Western elite confronted this problem: a little bit more industrial development and the welfare state becomes completely socialistic and they would lose their privileges and positions. And then the elite confronted two problems: an economic one and a political one. The economic one was to define the vector of the future economic development. Further development of industries would increase the working class and strengthen its positions -- that would not do. Another option was to get into computer technologies. That would lead to science-intensive production and one could kick the workers' asses and transfer the industry into the Third World, organize the South Korean Wonder and pump profits out of there. And most importantly, computing technologies promised, in addition to all that, a way of controlling reality. It's not a coincidence that the term "globalization" as a scientific term and the term "virtual reality" both emerged in 1983. The second problem the elite was solving was the following: further democratic development spelt a danger to the positions of the elite, and not accidentally, in the report "The Crisis of Democracy", created for the Trilateral Commission by three Western sages, Crozier, Watanuki and Huntington, it was written frankly that further development of democracy in the West would weaken the positions of the establishment. It was openly written there that the task of the establishment was to induce apathy in the masses and to un-democratize the society, explaining to the people that democracy is not a value, but an instrument. And if we recall that... it was not a dogma, but an operating manual. Then market fundamentalists came to power...
MD: When was that report released?
AF: In 1975. In 1979, Thatcher came to power, followed by Reagan, and they started demolishing their middle classes and the working people, but again, as long as the Soviet Union exists, they couldn't go into full swing. They could only pound the Latin American middle class in full swing. As a result of the IMF's structural reforms in the '80s, the Latin American middle class collapsed. 92% went into poverty, 8% became, so to speak, the new middle class. And then it was the turn of Eastern Europe. One can come up with different interpretations of the actions of Gorbachev and Yeltsin, but one interpretation which does not contradict the rest of them is to say that this was a pogrom of the communist "middle class". In 1989, 14 million people lived below the poverty line in Eastern Europe, including former Soviet Union. That isn't a lot.
In 1996, the number became 168 million people. In UNESCO poverty report from 2002 this was called the largest destruction of the middle class in history. The wealth of course moved to the West.
MD: And here is a question... If these are new nomads, what is Genghis Khan's family name?
AF (smiling): Temüjin.
MD: No, the name of the present one?
AF: The present one? He's got a collective name. Collective leadership. This leadership is far from being unified. The Rothschilds are ready to sacrifice the US dollar, but the Rockefellers are not. And Obama, who is about to receive a Nobel Prize, will fight tooth and nail to defend the dollar.
MD: He hasn't got many teeth and nails.
AF: He hasn't and the discontent regarding Obama is growing. Our press and TV simply hide a number of facts. For example, on September 12, this year, there was a demonstration in Washington DC which gathered 1,700,000 people. To put this in perspective, in 1990 we had 240,000-280,000 people marching here under the slogan "Let the Communist Party live on the Chernobyl Nuclear Power Plant" -- and that was impressive. They were shouting "Obama, get out of the White House". Obama boarded a helicopter and flew to a meeting of 15,000 supporters. There is information on the net and in press that people in America buy up ammo, because they believe America is moving towards a most serious crisis, a most serious shake-over, and the demand for ammo went through the roof. When Obama became president, there were 11 or 12 states which did not need subsidies, now there is only one, Texas.
MD: It's worse than we have.
AF: It's worse.
MD: We have more than ten. Even if we forget the crisis, we still have 8 non-subsidized regions.
AF: That's again answering the question of what picture the official media paint. They say "there are problems in the West, but in general it's all fine out there". In reality it's not all fine, they face massive problems... <...>
MD: The global crisis is continuing and roughly speaking, there are two rival groups, which form a coherent whole and within that whole there are two rivals, the Rothschilds and the Rockefellers, right? They disagree, among other things, on the US dollar. Which other groups exist there? Equally significant, equally autonomous? Or just these two?
AF: You know, in general we know very little about the structure of the global capitalist class. In the Soviet Union, all serious studies of the capitalist system were discontinued in the mid-'50s. Both academia and the special services. Stalin's personal intelligence service worked quite seriously on the issue of the ruling families of the West. So did Hitler's team by the way. That Hitler's team had 1,936,000 index cards if I am correct and 678,000 dossiers. On the Freemasons, among others. By the way, Freemasonry archives and the Rothschilds' archives ended up in the Soviet Union after WWII.
MD: We must have given them back by now?
AF: Yes, Boris Nikolaevich Yeltsin gave Freemasonry archives back to the Freemasons and the Rothschilds' archives back to the Rothschilds. That was a very elegant story. The Rothschilds bought for $300,000 a thing of tremendous importance for us: correspondence of Alexander II with his morganatic spouse Princess Yurievskaya, 4,500 letters. They presented this as a gift to Russia, and we reciprocated by giving our gold away in exchange for this necklace of glass beads.
MD: Farm land -- to peasants, plants -- to workers, sea water -- to sailors!
AF: Yes, and dossiers -- to the Rothschilds! As one Western analyst noted, the Rothschilds got for money something that no amount of money could have ever bought. The only archive which remains in Russia and which awaits its researchers, unless someone sells it, is the archive of a German institute with no parallel in history -- the Ahnenerbe. [AF is talking here specifically about the so called trophy archives obtained by the USSR in the course of WWII -- CF].
MD: It's still in our hands, isnt' it?
AF: It is.
MD: And of course with seals never touched.
AF: As one person told me, in order to work with that archive, one needs a top security clearance. But people who have that clearance have never heard of Ahnenerbe.
MD: And usually they don't know the language.
AF: They don't know the language. But the problem is, they have never heard of Ahnenerbe. And those who did hear about it, lack the security clearance.
MD: I see. But still, going back to the two powers: all right, but what about the Chinese clans that are rapidly rising on the basis of the Chinese state -- isn't that a global power?
AF: I believe the situation here is not that simple. Of course, China is fighting for a place in the sun. But take one thing into account. Because the Chinese consider themselves the middle of the Earth and the center of the Universe, for them, as one leading China expert noted, to offer a global project to the world is beneath their dignity. They are not a global civilization so to speak. And in reality, they are interested in one important thing. When we talk about China, we have to be mindful of the fact that 1/3 of Chinese history is disintegration, revolts, crashes. And the Chinese leadership knows that only too well. They know very well how to feed somebody a line. When the Chinese leaders tell us that by 2040 or 2050 the country will reach a very good level economically, they know only too well what will come next. Because revolts and disintegration in China always follow good economic times. Especially since that good economic level is only going to be achieved in the coastal provinces and everyone else is going to suck on their own paw. What are the Chinese doing now? All their policy is directed... And they are accurate people, I believe they forecast and understand very well that after 2050 and maybe earlier, China can disintegrate and the disintegrated phase may last 50 to 70 years. So their goal is to weaken their rivals along the perimeter so that for 50 or 70 years those rivals will not be able to take advantage of the situation. The Chinese are acting in a very professional way.
MD: Along the perimeter, in the globalized world, means the entire world.
AF: Along the perimeter means the US, Russia...
MD: Europe and everybody else?
AF: Europe is pretty far from China, and besides, Chinese have always considered Europe as a counterweight to the US.
AF: But the task... I do not think that the Chinese clans can seriously play in the global arena on their own. The situation is, in my opinion, very simple. No matter how strong China is economically, it's got a very fragile social structure and a fragile ecology system. These talks of China's brilliant future in the XXIst century resemble to me very much some talks of the early XXth century, both in Russia and in the West, that Russia was about to dominate the world by 1930. But they did not take into account the fragile social structure and that's what broke down. In that respect, one ought not to believe the economists with their forecasts. And great many of our China experts are in fact sponsored by China and work in a certain direction.
MF: And even if they are not sponsored by the Chinese, it's human nature to fall in love with the subject of one's studies.
AF: Yes, quite right. When we had a discord in our relations with Mao Tse Tung, our China experts were saying that it's all very bad out there and they overlooked the economic boom. Now they are saying it's all great out there, they want us to be friends with China in every possible way and they are overlooking the negative stuff.
MF: But regardless of how local their goals are...
AF: Objectively speaking, China is a global player.
MF: Objectively, a global player and the local goals are not that important, in any case they act on the global scale.
AF: The thing is, in the globalized world, the contradiction between the local and the global levels is lifted, and Robertson, who coined the term "globalization" in 1983, said in a couple of years: "You know, this term should be changed, this term is not precise, it should be glocalization". But by that time the term has gained momentum and it could not be stopped.
MF: Will this Chinese group be able to counter the Rockefellers and the Rothschilds in their attempts to mop up all of the middle classes and cut their costs?
AF: The thing is, if that happens to be in the interests of that group, I think... not sure about "counter", but it will be able to help.
MF: It will be able to help, but the Chinese middle class will be unavoidably mopped up too in that case, will it not?
AF: Yes of course, and that's a very big contradiction China is facing. In reality, China has a very limited room to maneuver. I am selling you this story for what I've bought it for, as they say, but the late Alexander Alexandrovich Zinoviev told me that when he lived in the US and worked in a certain closed-doors American institute in the early '80s, he saw all the materials regarding our future Perestroika, how the events would unfold, how the Soviet Union would be destroyed, and saw the materials on how they were going to strike China. And while Perestroika was conceived mainly as an attack in the informational sphere, the plan regarding China involved a sharp increase in the difference of the living standards between the coastal provinces and the heartland. In other words, they were planning to provoke a social conflict.
MF: Well, the general plot is more or less clear...
AF: Clear, yes.
MF: Let's take another look some time down the road, time will show, how we, how the Chinese, the Americans and other nationally divided, nationally oriented people, are going to counter that, whether they we be able to do that at all, and what will come out of that. Good luck.
AF: Time will show, good luck to all of us.