Category Archives: Ethics

Karl Marx’s alternative to capitalism 32 – what’s morality got to do with it?

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Most, if not all, people will oppose capitalism on moral grounds, or will at least be motivated by concerns for what they consider fairness and justice.  Marx however was famously contemptuous of morality; it was said by someone who knew him that he ‘burst out laughing every time anyone spoke to him of morality.’

‘The communists do not preach morality at all’, Marx and Engels wrote in the German Ideology, which were early notebooks clarifying their ideas. In the published ‘Communist Manifesto they describe ‘Law, morality, religion, are . . . so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.’

In the editorial quoted in the last post, the Financial Times states that ‘it is a moral imperative to help the neediest.’  But as Trotsky said of it in ‘Their Morals and Ours’, ‘morality is a product of social development . . . it serves social interests; that these interests are contradictory; that morality more than any other form of ideology has a class character.’  The FT editorial confirms both Marx and Trotsky right by stating that ‘lifting people out of economic precariousness is also greatly in the self-interest of the better off,’ this being a euphemism for the capitalist class and its senior management.

Obviously for Marxists and for workers generally it is not the interests of ‘the better off’ that is their concern.  For the working class their interest lies in determining their own needs and their ability to determine how they may be met.

Moral precepts may exist at a very general level but as Trotsky also says – at this level their extent of application is limited and unstable. The real world does not lend itself to abstract moral imperatives as a guide to conduct in situations of change and conflict, the world that actually exists.  Even looking at a paradigmatic case, in which one thirsty person has a bottle of water and requires all of it to survive, but is joined by an equally thirsty second person.  Should the water be shared equally, kept by the first owner or given to the second in order to satisfy a moral imperative?  Or rather, does any moral consideration arise from examination of the actual circumstances of the case; and what exactly is the moral option to be taken in this one?

Such an example demonstrates that what should be done is very much determined by what is, which constrains what can be done.  Each of these is not subject to timeless moral imperatives but to the concrete interests of individuals in society.  Since society and the individuals within it are made up of classes, these classes will have different interests and different moral perspectives.

To attempt to envelope all of them in an all-encompassing morality that is more than abstract generalisation will involve denial of divisions and contradictions, which can therefore only involve denial of the struggle between classes that expresses these contradictions. This necessarily leads to denial of any requirement to discuss how the class struggle should be conducted, since no legitimate class struggle is admitted. Instead, we have appeals from the newspaper of the capitalist class (price £2.90/€3.20 on weekdays) for that class to take a moral stance to avoid class struggle.

For Marxists, the alternative is not to seek some imposed satisfaction of needs as determined by another class but to fight for the separate and independent needs of the working class, as determined by itself.  When discussing the precariousness arising from ‘economic change’ and ‘globalisation’ the ‘Financial Times’ reaches for moral imperatives imposed on the capitalist class.  When Marx discusses the same, in the Communist Manifesto he does so in a very different way and addresses a very different audience:

‘The increasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious; the collisions between individual workmen and individual bourgeois take more and more the character of collisions between two classes. Thereupon, the workers begin to form combinations (Trades’ Unions) against the bourgeois; they club together in order to keep up the rate of wages; they found permanent associations in order to make provision beforehand for these occasional revolts. Here and there, the contest breaks out into riots.’

‘Now and then the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever expanding union of the workers. This union is helped on by the improved means of communication that are created by modern industry, and that place the workers of different localities in contact with one another. It was just this contact that was needed to centralise the numerous local struggles, all of the same character, into one national struggle between classes. But every class struggle is a political struggle. And that union, to attain which the burghers of the Middle Ages, with their miserable highways, required centuries, the modern proletarian, thanks to railways, achieve in a few years.’

The moral imperative is not therefore to ‘help the neediest’ but for the ‘neediest’ to help themselves.  And in this, It is not a question of removing what is bad from society with a set of policies and actions that makes it more perfect, or of ‘polishing off the rougher edges’ as the FT would have it.  It is not seeking a solution based on some moral imperative standing above a flawed, defective or broken society that needs fixed.

When faced with the contradictions of capitalist society and the antagonisms arising from it Marx stated that:

“What constitutes dialectical movement is the coexistence of two contradictory sides, their conflict and their fusion into a new category. The very setting of the problem of eliminating the bad side cuts short the dialectic movement . . . from the moment the process of the dialectic movement is reduced to the simple process of opposing good to bad, and of administering one category as an antidote to another, the categories are deprived of all spontaneity; the idea “ceases to function”; there is no life left in it.”

This is not so much an indictment of the ideologues of capitalism but of those who oppose it with blueprints, plans or policies to make from it a good or just society, rejecting the contradictions within it that they think of as only a problem.  For those who see only the bad aspect of capitalism and seek to remove it, through whatever means, Marx says this:

‘So long as they look for science and merely make systems, so long as they are at the beginning of the struggle, they see in poverty nothing but poverty, without seeing in it the revolutionary, subversive side, which will overthrow the old society.’  (Marx, The Poverty of Philosophy)

So, what should be done is very much determined by what is.  The contradictions contained in what is determines social development (of which morality is a product) and determines what can be done.  It is not the application of moral judgements lying outside existing social development but imperatives that arise from the contradictions within it that determines what can be done.

The contradictions of the capitalist mode of production and their further development can be understood in terms of the contradiction between the development of the forces of production and the associated relations of production.  These have been the subject of previous posts and will be elaborated further in the next.

In the meantime, it would be well to note how Marx perceives what is, what should and what can through repeating the quotation above:

‘This union is helped on by the improved means of communication that are created by modern industry, and that place the workers of different localities in contact with one another. It was just this contact that was needed to centralise the numerous local struggles, all of the same character, into one national struggle between classes.’

It was no answer in Marx’s day to simply denounce the exploitation of ‘modern industry’ and call for a return to purely local development, just as it is no answer for the editor of the Financial Times to do so today.  If we slightly reword what Marx said we can see something else:

‘This union is helped on by the improved means of communication that are created by modern industry, and that place the workers of different nations in contact with one another. It was just this contact that was needed to centralise the numerous national struggles, all of the same character, into one international struggle between classes.’

Only three words are changed; but it shows how mistaken it is to oppose, and try to reverse, the current development of ‘modern industry’ because it breaks the bounds of the nation state and seeks to draw closer into an international union purely national economic and social development.

We refer, of course, to those who supported Brexit on the grounds that it would do exactly this and who did so because modern international economic development was bad and exploitative of the working class.  Action by the nation state, or within its confines, was the supposed solution to this particular expression of the development of modern industry.

In Trotsky’s pamphlet on morality much of the discussion revolves around the idea that the end justifies the means, lazily taken to imply that moral ends cannot justify immoral or amoral means.  It is however difficult to see what could justify adopted means other than the ends pursued.  For a Marxist the ends and means are mutually determining and what are means can be considered ends and what are ends are just further means.  As Marx said

‘Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.’

Some on the Left supported Brexit, though the means by which it was achieved was a catalogue of ignorant propaganda over many years; an ever more right-wing Conservative and wider reactionary movement; and a base of support centred on nationalism, xenophobia and racism.  That the purported ends and the actual means were out of kilter is demonstrated by this Left’s inability to tell anyone, including themselves, what is progressive about what has been achieved and how it has propelled the working class forward.

The EU was capitalist, was therefore bad, and so had to be opposed, by what turned out to be nothing much more than good intentions, or at least for some.  Such imperatives have the abstractness of moral absolutes and are certainly not derived from Marxism.  This Left can get its books out and recall its Marx but doesn’t understand what he said and cannot apply it.

Forward to part 33

G8: The Mafia Empire Part 2

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obama in sunglasses

By Belfast Plebian

In 1967 LIFE Magazine published an exposé on organized crime in America. FBI Director J. Edgar Hoover admitted publicly for the first time that the Mafia did in fact exist and that the Gambino and Genovese families exercised ironclad control over the Waterfront Unions in New York and New Jersey.  Director Hoover had for thirty years refused to publicly acknowledge that the Mafia existed, his conviction was that organised labour in America had much more to fear from Communist and Socialist control than from mobsters. President Nixon stayed true to the FBI spirit when he commuted the jail sentence of Teamster President and Mafia candidate Jimmy Hoffa.

It is now part of common folklore that workers’ unions in the United States were often controlled by Mafia figures, films such as on the Waterfront have confirmed the idea . However what is less well know is the fact that Mafia figures were often encouraged by the spooks and right wing politicians to take control of the labour unions, indeed it is in this division of social life that they came together on mutual terms.  In July 1936 Luck Luciano was sentenced to 30 to 50 years in Sing Sing Correctional Facility. In 1942 the US government struck a deal with him, in return for a commutation of his sentence his union agents would monitor subversive activity on the docks on behalf of naval intelligence.  Here’s a report from a more recent study of the special relationship between the Mafia bosses and the right wing political bosses: 

‘Among the most unusual Federal Prosecutions during the 1980s were the weapons trafficking and murder solicitation trials of a rogue retired Officer of the U. S. Intelligence community, Ed Wilson.  As detailed in Peter Maas’ book MANHUNT, Ed Wilson’s career offered a rare glimpse into the interactions between the CIA and the labour union movement.  Recruited by the CIA while in college back in the dark days of the Cold War, the CIA first sent Wilson through the School for Industrial and Labour Relations at Cornell University in New York City.  After graduation Wilson convinced Paul Hall, the President of the International Seafarers Union to hire him as an Organizer. Hall sent Wilson to Belgium, where Wilson infiltrated the Communists involved in the Union movement and performed various ‘dirty tricks’ against Labour leaders. Wilson then returned to the United States where he obtained work in the International Department of the A.F.L. – C.I.O. Wilson’s biographer relates that while the Seafarers were not aware that Wilson was in fact working for the CIA, the AFL-CIO was aware. This organization has long maintained close ties to the U. S. Intelligence community and to this day labour activists in the United States will jokingly refer to this organization as the ‘AFL-CIA!’ The AFL-CIO then sent Wilson to Latin America to infiltrate the various Communist-dominated labour Unions.

The only point I am making here is that the labour unions are penetrated and controlled much more comprehensively by all sorts of political gangsters than from mobsters, entire union federations have been lost to independent workers. 

Next we come to violence and murder. Let’s compare G8 leader Obama with the very worst of the Mafia killers, Louis ‘Lepke’ Buchalter. Who the heck was he you ask?  Well he was another close associate of Lucky Luciano who back in the day controlled the garment unions of New York.  In the 1930’s Lepke was a pioneer labour racketeer and he wasn’t even Italian, he was in fact Jewish. What made Luciano stand out from the other mobsters was that he wasn’t a nationalist, he learnt his trade from New York’s Jewish mobsters especially Arnold the brain Rothstein and many of his long time friends Frank Costello and Meyer Lansky, who were also Jews. It was this willingness to associate with mobsters from outside of the Sicilian-Italian community that set him on a collision course with the traditional Bosses like Joe Masseria and Salvatore Maranzano.  Since all of the G8 leaders come to Fermanagh acting solely on the so called national interest, they walk at least one step behind the more open minded crime boss.

Lepke had another string to his bow apart from labour racketeering – hiring mobsters that he knew to kill people on contract.  In the early 1930s, Buchalter joined Charles “Lucky” Luciano and other Mob bosses to form the “National crime syndicate”.  Luciano’s associates Benjamin “Bugsy” Siegel and Meyer Lansky formed Murder Incorporated a name applied to them by the media when the first court cases came to light. Originally a band of killers, they were used to fulfil many non-Mob related contract killings. Buchalter and his partner, Albert “the Executioner” Anastasia would take control over Murder Inc. when Siegel and Lansky’s business endeavours became respectable. Buchalter was responsible for contract killings throughout the country, including the killing of the Mob hit man and bootlegger Dutch Schultz.

In 1935, law enforcement estimated that Buchalter and Shapiro had 250 assassins working for them, and Buchalter was grossing over $1 million per year in profit. They controlled rackets in the trucking, baking, and garment industries throughout New York. It is believed the corporate Jewish killers may have killed nearly a thousand people on contract before they were stopped.  The killers were put on a retainer fee and paid an extra $5,000 when the job was done; the most prolific of them Harry Pittsburg Phil Strauss notched up over a hundred burns. If the killers were caught the best Jewish lawyers, money could buy would represent them, and their families were looked after.

Their most famous hit was on one of their own; Dutch Schultz was planning to bump off special prosecutor and later to become a Presidential candidate Thomas E Dewey. The crime syndicate decided that Dutch needed to be taken care of as he was just so reckless.  Lepke the best organiser of Murder Incorporated was eventually caught and executed in Sing Sing prison  in March 1944.

Now this is all very serious stuff but in terms of well-organised killing it is still small-scale stuff.

Obama is openly referred to, even in a few of the mainstream media outlets, as the drone killer, the assassination President, and the police surveillance President.  One person who’s been working hard to expose what he has been sanctioning is investigative journalist Jeremy Scahill, a long-time war correspondent for the Nation and the writer, producer of the startling new film “Dirty Wars,” which hits the cinemas in America just this week. “Dirty Wars” documents Scahill’s exploration of the campaign of drone strikes outside the recognized battle zone, in countries like Pakistan, Yemen and Somalia.  He also found, after digging, the existence of the secret military strike force called the Joint Special Operations Command, or JSOC, which literally became famous overnight after the killing of Osama bin Laden.

He says ‘because Obama is who he is, an incredibly brilliant man who has the trust of the overwhelming majority of liberals — and probably a significant number of traditional conservatives, at least on these issues — he is going to go down in history as creating a systematized embrace of assassination as a central component of U.S. security policy. It’s not that the U.S. hasn’t been engaged in assassination basically from the beginning, but we now have this Nobel Peace Prize-winning transformational president, who is a constitutional lawyer, making it a permanent part of the national security infrastructure. While saying, ‘We don’t want a perpetual state of war,’ he’s building the machinery for a perpetual state of war.”

Here’s an exasperated review of a segment of the new film by journalist Andrew O Hehir  ‘Scahill’s film also spends quite a bit of time exploring the story of Anwar al-Awlaki the radical imam who was born in Las Cruces, N.M., and killed by a drone strike in Yemen in 2011. (His teenage son Abdulrahman, also a U.S. citizen, was later killed, apparently by accident or as collateral damage.) While the moral and legal quandaries posed by killing an American citizen without any pretence of due process have been much discussed – and we may never know exactly why the Obama administration deemed Awlaki such an imminent threat as to merit summary execution – “Dirty Wars” reminded me of the larger and more disturbing narrative that led up to that drone attack in the desert. In the immediate aftermath of the 9/11 attacks, Awlaki, who was then the imam of a Washington-area mosque, frequently appeared in the media as a voice of moderate Islam. He spoke out against terrorism, decried the 9/11 hijackers as Muslim renegades and was invited to speak at the Pentagon on the role of Islam in the contemporary world. The lunch menu that day, Scahill says, included bacon sandwiches. “Which gives you a sense of how awesome the Pentagon’s intelligence was? You invite an imam to come and speak about Islam, and you offer him a bacon sandwich.”

I am not going to pursue the Obama and murder theme any further, if you still need to be convinced, try watching the film ‘Dirty Wars.’

I think I have done enough to show there is a correspondence between the wicked ways of the Mafia Bosses and the self serving ways of the current crop of Political Bosses currently meeting as the G8 in Fermanagh.  I never claimed that they were identical and I would have to admit that the Political Bosses often have to face more complex dilemmas.  There is a serious case for the justification of Machiavellian politics which states that it is much easier for an ordinary person to refrain from doing bad things than it is for a Political Boss to do so.  This implies that a Mafia Boss can simply decide to abide by the law without prejudice to themselves while a Political Boss has no such luxury, if he did he might well bring a heap of trouble onto the citizens of his country.

The natural circumstance of politics is so extreme that the breaking of every moral convention and constitutional law is a sort of fait accompli for every potential the Political Boss. If you can’t stand the heat don’t even get into the kitchen.

Machiavelli is the political philosopher most often associated with training the political bosses to think and act in away that is incompatible with ordinary decency.  Leo Strauss once said he was inclined to the view that Machiavelli was a teacher of evil. This is what he said :

“What other description would fit a man who teaches lessons like these: princes ought to exterminate the families of rulers whose territory they wish to possess securely; princes ought to murder their opponents rather than to confiscate their property since those who have been robbed, but not those who are dead, can think of revenge, men forget the murder of their fathers sooner than the loss of their patrimony; true liberality  consists in being stingy with one’s own property and in being generous with what belongs to others; not virtue but the prudent use of virtue and vice leads to happiness; injuries ought all to be done together so that, being tasted less, they will hurt less, while benefits ought to be conferred little by little, so that they will be felt more strongly; a victorious general who fears that his prince might not reward him properly, may punish him for his anticipated ingratitude by raising the flag of rebellion; if one has to choose between inflicting severe injuries and inflicting light injuries one ought to inflict severe injuries; one ought not to say to someone whom one wants to kill ‘give me your gun, I want to kill you with it’ but merely, ‘give me your gun’ for once you have the gun in your hand, you can satisfy your desire. If it is true that only an evil man will stoop to teach maxims of public and private gangsterism, we are forced to say that Machiavelli was an evil man.” 

We will take it as evident that the political designation ‘Prince’ has wider application than just to a traditional Monarchy – it can refer to States, Heads of States, political parties, heads of political parties and so forth.  The Italian Marxist Gramsci sometimes abbreviated the revolutionary workers party with the designation Prince in his prison writing. In the same study above Professor Strauss referred to the modern alternative to the Politics of the Prince. He quotes Thomas Paine : ‘The Independence of America was accompanied by a revolution in the principles and practice of  Governments…Government founded on a moral theory, on a system of universal peace, on the hereditary Rights of Man, is now revolving from west to east by a stronger impulse than the Government of the sword revolved from east to west.’( Thomas Paine Rights of Man second introduction) 

Professor Strauss seems to be indicating that the new Democracy of America was founded on the basis of a moral and political law that had no room for Machiavellian style dirty politics. The politics of the new democracies were intended to be different from the Roman politics Machiavelli had studied. The G8 seems to point to a higher standard by excluding China, the second economy of the world from their deliberations presumably on the basis that it is not a democratic State.

Professor Strauss is famous for refuting what he called historicist accounts of political and social thought. What he meant by that was the thesis that the political philosophy of a certain historical period was necessarily bound to that period, so much so that it was an expression of it. So the harshness of Machiavelli political philosophy was merely a reflex of the division of Italy into warring city States and foreign kingdoms.  The political thought of Thomas Paine was a reflex of a middle class capitalist development and the political thought of Karl Marx was just a reflex of the early exploitative industrial capitalism of the nineteenth century.

He thought of political philosophy in terms of permanent alternatives rather than passing ideologies always to be superseded by historical change, and he thought of Machiavelli politics as one permanent alternative that could rise up in any era.  He thought of Marxism in terms of historicism and argued it was self- refuting because it predicted its own passing away due to necessary historical change.  How he asked could Marxist thought still claim to be relevant when the nineteenth century conditions that produced the ideas of Karl Marx no longer existed nearly 150 later

We will not seek to rule on Marxism and historicism here but suffice to say that we don’t think Machiavellian or its alternative Marxist politics has been superseded by necessary historical developments.  Machiavelli belongs to the long history of capitalism that includes the Italy of the city state and the merchant capitalism that originated in these very City States.  The politics of imperialism are linked by the capitalist economy so private and public gangster politics are as relevant now as they were in Michiavelli’s time.

G8: The Mafia Empire Part 1

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putin in glasses

by Belfast Plebian

‘We shall not shock anyone, we shall merely expose ourselves to good-natured or at any rate harmless ridicule, if we profess ourselves inclined to the old fashioned and simple opinion according to which Machiavelli was a teacher of evil.’ Leo Strauss

 

The wiseguys are again meeting at a secluded location, not at the Apalachin retreat in upstate New York as depicted in the Godfather movie, they did that one back in 1957, but at a lakeside hotel in Fermanagh. The world’s most feared political gangsters are holding two days of much needed sorting out talks, for their dark mutterings and latent rivalries have reached a point of near breakdown in diplomacy. The quarrels between them have become so heated that they imply in an undeclared war over the future of Syria and beyond that you can see through in the ongoing currency war between them.

It is my contention that there is a strong correspondence between the politics of the G8 and the Mafia politics of the recent past.  When I say correspondence I do not mean identity.

The political gangsters of today are therefore obliged to acknowledge a debt to the late great mafia boss Salvatore Luciano, the mobster who dreamt up the idea of a Mafia Commission to settle intense quarrels over criminal opportunities. Lucky Luciano established the Mafia Commission in 1931, a corporate body to mitigate the violent disagreements among the warring crime gangs.  Luciano wanted to end the chaos that had led to a bloody and self -destructive gang war in New York and Chicago during the 1920s. In 1925 he was grossing over 12 million dollars a year and had a net income of around 4 million dollars after the cost of bribing the politicians, judges and police was deducted.

But his private fortune was put in jeopardy by the intense gang rivalries, which escalated into a fierce street battle known as the Castellammarese War, that raged from 1928 to 1931 and resulted in the deaths of at least 60 top mobsters. So he looked for a way to lessen the strife and violence and found it in the Commission, a corporate body that has endured for over seventy years.

Lucanio did not want to be an Italian- American Caesar. He realised that the best way for him to stay alive and rich was to let the most powerful crime families run there own internal affairs, but establish an administration to settle their differences and to mobilise enough combined muscle to crush any new rivals. He established a mob board of directors known as the Commission to oversee all criminal and business activities and to mediate strife between the contending families. It was to meet every five years and its decisions were non-negotiable.

The Commission officially comprised seven crime families; the heads of the New York five plus, the Chicago Outfit of Al Capone and the Buffalo based crime family led by Stefano Magaddino. The Commission did not stop all gang warfare, but it did reduce the number and scale of them; when one gang transgressed against another it would often find itself at war with all the rest. There was no single ruler of the Commission, but there was a nominated chairman who was oath honoured to stand for the common good.

The Commission largely succeeded, for what we find is that while the personnel of the ‘FAMILIES’ frequently changed, over time the same crime families stayed on top of the underworld from then until today: The Bonanno crime family, the Colombo crime family, the Gambino crime family, the Genovese crime family, the Lucchese crime family, the Philadelphia crime family and finally Al Capone’s Chicago outfit.  They established a better capitalist crime model for themselves than the current rather shaky G8 one and it is the reason why Time Magazine once called Lucky Luciano one of the most influential Americans of the twentieth century.

“I learned too late that you need just a good brain to make a crooked million as an honest million. These days you just apply for a license to steal from the public. If I had my time again I’d make sure I got my license first.”  Lucky Luciano.

The G8 – the people who got  the licence first.

If you succeed in politics you can usually surpass anything a Crime Family Boss can do in almost every division of life including killing and enriching yourself at the cost of others. Take Tony Blair for example.  Everyone knows about his illegal and immoral acts of killing, but what of his wealth? Here is a report just picked up from reading yesterday’s newspaper (Daily Mail Saturday 15, 2013). Depending on how you cut it Blair is now worth £60 million or £80 million.  He has set up a Byzantine network of inter-related companies to funnel his vast tribute for being a useful Prime Minister. Useful for whom you might ask, well useful for the Banksters.

His first tribute after leaving office came from the world’s leading investment bank JP Morgan Chase.  He has been a senior adviser for the last five years on a £2.5 million salary and his preferred mode of transport these days is a rented Gulf Stream V private jet. He says he was able to facilitate the bank’s clients due to high-level political contacts made with the Rwanda government when he was Prime Minister. The former PM has also done a deal to promote the dodgy government of Kazakhstan, he apparently gives it advice on good governance and this has already netted him £16 million

He has been receiving £1 million a year for advising the Abu Dhabi sovereign wealth fund where it is safe to invest their oil money. He is said to be as thick as thieves with the super rich Sheikh Hamad bin Jassim bin Jaber al Thani, the PM of Qatar. One of his other rewards for once holding political office came from the Kingdom of Kuwait – this netted him a swell £27million and his think tank was asked to produce a report on the future of the Kingdom called Kuwait Vision 2035.

There is plenty more of that sort of stuff in the newspaper article. Tony Blair is an example of a political mobster of the very successful type. The thing that makes these ‘democrats’ different is that they have to wait to leave political office before collecting the readies rather than taking it while they are in office, say like ‘oligarchs’ like President Putin, another of the G8 stars.

President Putin officially lists his salary at 5.8 million rubles, about $190,000  a good deal less than Obama’s official salary of $400,000.  He also claims that he has very little personal wealth.  During his election campaign he claimed he had $180.000 in his bank account, owned three Russian made cars and a small apartment in Moscow, so a lot less than Obama’s personal wealth estimate of $12million.

Here is an independent assessment of his personal wealth made by a celebrity magazine:

‘So what evidence is there of Putin’s secret obscene fortune? Let’s start with the small stuff. Putin is known to sport a $150,000 Patek Philippe watch on most occasions and his total collection has been valued at at $700,000.  He also has full access to a $40 million ultra luxury yacht that features a wine cellar, Jacuzzi, helipad and outdoor barbecue area   In terms of living accommodations, Putin has access to 20 mansions throughout the world including a lavish ski lodge and Medieval castle.  The crown jewel of his property portfolio is a $1 billion palace overlooking the Black Sea that he allegedly owns through an anonymous trust.  Furthermore, Putin makes frequent use of 15 Presidential helicopters and more than 40 private jets, many of which feature gold plated interiors . If Vladimir Putin’s net worth truly sits at $70 billion, that would be enough to make him the second richest person on the planet right behind Carlos Slim Helu. It would likely also represent one of the largest personal fortunes ever accumulated by a sitting President. The only other world leader who possibly looted more cash from his country was Muammar Gaddafi who after 40 years of power stashed away a reported $200 billion in ill-gotten oil money.’

It might of course be argued that Tony Blair is a rogue politician, that the Heads of States of our Democracies are usually very different from him and therefore different from the Bosses of the Mafia Families. Yet ex-President Clinton has trousered a lot more tribute than Tony Blair and Obama will certainly get filthy rich when he finally hangs his coat up on the White House door.

Some of our more notorious mobsters believe they have a good handle on the entire thing. Here are a few quotes from Al Capone about living in the world’s purest democracy.  Al didn’t ever get too caught up in the whole democracy thing ‘capitalism is just the legitimate racket of the ruling class’. . . ‘This American system ofours, call it what you will, gives each and every one of us a great opportunity if only we seize it withboth hands and make the most it’. The mobsters can never fathom how they are doing anything different from the politicians and that often is their weakness, the bankers and lawyers of the democracies get the law on their side before they commit the crimes, or if they do the crime without the assistance of the law they get the politicians to amend the law to make sure they avoid the normal consequences of the law.

In every episode of the Max Keiser show on Russia Today evidence is produced to demonstrate how the law is broken and amended to help the financial criminal elite of Wall Street and the City of London. In March of this year a US Senate committee compiled a 300 page report documenting the fraudulent and criminal practices sanctioned by Mr Blair’s favourite bank and the largest dealer in derivatives trading in the world.  Despite all the evidence, no legal action was deemed appropriate, and the CEO Jamie Dimon remains a Consigliere to the President concerning the financial markets.

The late John Gotti was once the Boss of the powerful Gambino family.  is advice to the young included the following: ‘be nice to the bankers. Always be nice to the pension fund managers. Always be nice to the media. In that particular order.’  The Mafia ‘philosophy of self enrichment without conscience’ is perfectly suited to the present condition of finance-dominated capitalism.  It is certainly difficult to spot the difference between what the law calls loan sharking and current legal lending.

The loan shark figures a lot in Mafia books and films, the person or business that offers loans at extremely high interest rates and the smaller the loan the more onerous the repayments. In the early days of Mafia loan sharking it was confined to payday lending on potential wages with most of the customers being office clerks and factory workers. The 1952 film ‘Loan Shark’, featuring mobster favourite George Raft, depicts the whole payday loan racket.

In the 1960s the Mob shifted their loansharking to small businesses as they had assets that could be confiscated if payment was overdue. The irony is that the Mafia historians tell us that payday lending to workers largely disappeared by the 1970s.  Now of course they are back with the sanction of the law and the backing of the politicians. In Britain the Campaign group Debt on our Doorstep campaigns against the practice, if you are interested go to their web site for some horrific stories.

One of the big players in the payday loan racket is Wonga, the sponsor of Blackpool football club.  Last year it declared £45million in profit, by advancing over 4million loans. The annual interest rate on its payday loan is 4,214 percent.  One of Wonga’s main stockholders is Dawn Capital, whose chairman is called Adrian Beecroft who is a donor to the Conservative party.  The Prime Minister David Cameron asked his friend Mr Beecroft to prepare a report on the future of employment law and he recommended that employers be given the right under the law to sack workers at will and without explanation.  The oily rag PM liked the idea but the Liberals thought it was a bit strong for now so it did not become law. Once again the immoral activities of the Mafia mobsters have been superseded by the legal activities of the political gangsters.

Lets move on to tax. The Mafia bosses never like to pay tax, they are very much in the low tax political camp. This brings us to Al Capone; in 1927 it is estimated he made about $100 million, the equivalent of about $1.2 BILLION today.  Despite his profession the authorities could never pin a serious crime on him with the Treasury Department attributing this to his ‘natural Italian secretiveness.’  He was maybe helped by the fact that no witnesses would testify against him, but the main reason was he was generous with his money.  It is estimated he spent over $30 million in 1927 on gifts to politicians, judges and police chiefs.

Al Capone was eventually convicted and sent down because he was a tax evader, yet how was this conviction lawful?  Capone had this to say: ‘the income tax law is a load of bunk. Thegovernment can’t collect legal taxes from illegal money.’  When he was sent down it was the toughest sentence ever imposed on a tax evader. Capone told the newspaper guys: ‘I’ve been made an issue, I guess I’m not complaining. But why don’t they go after all of those bankers who stole the savings of thousands of poor people and lost them in bank failures? How about that?  Isn’t it a lot worse to take the last few dollars some family has saved-perhaps to live on while the head of the family is out of a job-than to sell a little beer.’ 

This of course is an example of trying to get the victims of the capitalist system on to your side when you have just become undone and disgraced politicians frequently play this populist card, nevertheless we appreciate the point. Many respectable people got rich during the prohibition era by selling alcohol as a legal medicine.  The fine novel ‘The Great Gatsby’ is a fictional account of a legal medicinal bootlegger. The father of the Kennedy political dynasty held such a licence and he used it to stock his warehouses in the period just before the end of prohibition.

But what about tax evasion and tax avoidance?  Davis Cameron says this is to be one of the big-ticket items on the agenda of the G8 summit. He claims he wants to see companies pay their fair share in tax but he doesn’t try to define fair. One can just imagine him raising the matter at the G8 to the annoyance of the French President.  Here is what he had to say one year ago to the very day: “If the French go ahead with a 75% top rate of tax we will roll out the red carpet and welcome more French businesses to Britain and they will pay taxes in Britain and that will pay for our health service, and our schools and everything else.”

Let’s now add a little bit more beef to his speech from the G20 meeting in Mexico 2012: “Every country sets its own tax rates, but I think in a world of global capital, in a world where we’re competing with each other, in a world where we want to send a message that we want you to build businesses, grow businesses and invest, I think it’s wrong to have completely uncompetitive top rates of tax.”  The oily rag PM is just playing with the public over tax.

Consider this snippet from a recent white paper covering the status of the UK oversees territories: the UK’s parliament has “unlimited power to legislate for all its overseas territories and crown dependencies”.  He is putting on a show as if to say all he can do is try to persuade Bermuda, Cayman Islands and the Channel Islands etc to play fair on tax, when he could command them to do so.  They will of course carry on as before and Cameron will stand back and shrug his shoulders. You should not be fooled into thinking that the British government is responding to the campaigns of the NGO’s to make tax on companies into a social issue.  What he is defending Britain from is criticism from the other G8 political leaders, especially that coming out of the Congress in Washington who think the political class in Britain have effectively turned the country into one big Tax Haven to the detriment of Uncle Sam and others. 

Public Debt and Private Debt by Belfast Plebian

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public and private debtAbout three months ago I was listening to Max Keiser on Russia Today talking about his participation in the Kilkenomics conference in Ireland. Max is a former stand up comedian, turned Wall Street broker and now a TV commentator on the markets. What he brings to the role is a large dollop of cynicism as to the subjective integrity of the bankers and brokers drawing on his past experience, his collective name for them is ‘banksters’ or ‘financial terrorists’

In this particular show Max went into his cynical routine and the target was the STUPID IRISH. Max was especially indignant with the attitude of the young Irish people attending the economics seminar who consistently said it was the ethical duty of the Irish taxpayers to make good the debts stacked up by the zombie Irish banks. In the world of capitalist finance where Max used to work it is established lore that the only law that really matters is the law of the survivor, the law of the advancement of the strong and the elimination of the weak. Max finished with the sarcastic quip ‘so much for the fighting Irish.’

The truth is that these young Irish have not been educated in a global financial culture that is based on the perspective of the law of the economic jungle. When ordinary folk think about the debt burden it is usually in terms of subjective feeling.

Let us go back to the most basic subjective transaction. If I need 1000 Euro to do something urgent and I don’t have the money I will have to borrow from someone else. If I borrow from a family member or a good friend I might expect to not pay any interest on the loan and I may even expect to overshoot the pay back date, say a year. But no decent person thinks that having borrowed it is right to not pay the debt.

If I have to borrow the money from a creditor rather than a friend I will expect to pay an interest on the loan, say 10 percent. If I honestly can’t make the loan and the interest on the due date then I will try to delay the terms of payment schedule. But I would still think I have an ethical obligation to pay back what I had borrowed.

There are various reasons why I might think that way, one reason being that I might not ever be able to borrow again if I defaulted. This would be a rational reason but the ethical reason is that if I entered an agreement based on a promise to pay then I feel honour bound to keep to the word of the promise. This is a way of thinking that does not belong to the law of the jungle, it is ethical but it might also be inappropriate for the present context.

Some of the young Irish are following a rational way of thinking when they contemplate the country’s debt and they infer that if the debt is not honoured the country won’t be able to borrow again. Others are following the subjective ethical way in their thinking, that is, if a financial promise or agreement is made then it ought to be kept.

Yet there is a big flaw in the way of thinking in the above. The problem is that the young Irish do not see that there is a distinction in kind to be made between private debt and the public debt and a moral rule generally applicable to the former does not necessarily carry over to the latter.

One way of approaching the matter is to argue there is a difference in kind between private debt and public debt. If this is the case then we might be more able to drop our previous adherence to subjective ethical feeling. There is a ready made version of this argument on the Mises web site (Mises Daily Feb 26, 2013).

Making use of the thought of the Austrian economist, Murray Rothbard, the author argues that it would not be unethical for the American President to repudiate the now 17 trillion dollar public debt pile because the people as private citizens had no part in the making of the debt encumbrance; that was all the work of Congress . He quotes an earlier essay by Rothbard from 1992 when the debt pile was thought to be too high at a mere 4 trillion dollars. The argument is directed against those economists who say that it would be a grossly immoral act and in fact a theft on a grand scale to refuse to honour the loans granted to the Federal Government in good faith

‘If sanctity of contracts should rule in the world of private debt, shouldn’t they be equally as sacrosanct in public debt? Shouldn’t public debt be governed by the same principles as private? The answer is no, even though such an answer may shock the sensibilities of most people…When government borrows money it does not pledge its own money, its own resources are not liable. Government commits not its own life, fortune and sacred honour to repay the debt but ours’.
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The argument continues that the contract between the private creditor and the public authority is an inherently disingenuous one from the beginning. This is because the political authority is not borrowing in its own name but in the name of the taxpayer and secondly the creditor is not taking any risk with his friendship or his promise, for they know the government will always seek to pay the debt because it can expropriate somebody else’s money, and even worse they know in advance that governments will always come asking for another loan unlike the private individual who will eventually realises they have to stop borrowing.

The conclusion is that private borrowing and lending is something honest and is guided by an ethical code whereas public borrowing and lending is inherently crooked.

This is not a bad argument as far as it goes especially if it shocks the subjective ethical feeling out of its subordination to the public debt. In fact repudiating the public debt because it is not our subjective debt is a position that all too easily unites the left and right of the political spectrum. The economists of the Austrian school do provide arguments why the public debt should be repudiated in certain circumstances but it comes with a lot of heavy social baggage. This is the sort of economic thinking that is the basis of the Tea Party movement in the United States. It serves as a useful reminder that the slogan ‘repudiate the debt’ is a slippery one. It is important to know the reasons why we should repudiate the debt.

The problem is that some of the public debt can be construed as our debt and so the Irish government is not without the appearance of a rational case though certainly not an ethical one. Some of the public debt exists to fund crucial social services.

If we try to simplify things by going back to our original loan situation. Say for instance a third party known to me but not a friend borrowed the 1000 Euro on my behalf because he knew I really needed the money and could not get it for myself, how would we stand to this kind of borrowing and debt.?

This in fact is what the Irish government’s rational case really comes down to. The government is presenting itself as the third party that is morally obligated to pay the public debt and the interest on it because the public debt is in fact just the sum of all our private debts. The government merely borrows and spends on our behalf.

In the above situation the simple ethical relation between borrower and creditor easily breaks down into the legal or the political and the moral. The honest person I think would contend that legally they were under no obligation to pay back a loan that was taken out on their behalf by a third party but they would still feel morally responsible depending on one other factor, namely the knowledge factor.

If the money was borrowed on my behalf with my tacit knowledge and approval then I still might feel morally obliged to take on the responsibility for repaying the loan. This track of subjective thought is probably what explains the thinking of those young Irish who still believe ‘we’ have to honour the nation’s public debt. To put it in a nutshell, the government borrowed money from its creditors on our behalf and with our tacit knowledge and approval so we have a moral obligation to help the government pay it back .

Of course it is evident to the not so naive that the Irish government is playing hard and fast with the private and public debt distinction. More and more people in Ireland simply want to burn the government’s creditors; are aware that the so called public debt is not the sum of private debts but the debts of only a handful of very wealthy borrowers concentrated in the private and institutional banking sector. If this is all there is to it then the public debt would I think be repudiated

It might take a while to remove the influence of the golden circle over the political parties but in a situation where the many are steadfastly set against the interest of the few the pressure would eventually count. A no frills Marxist of course would likely disagree, knowing that in a capitalist society the few in the form of the top rung of the capitalist strata do in fact have the political clout to dictate the terms any of economic settlement to a popular government. But even the capitalists have to win elections and socialists should at least concede that their control over the political process is at times precarious.

So why has it not happened yet? I can only offer a few stabs in the dark. Some people continue to look at the situation of the borrower and the creditor in subjective terms and transfer this mode of thought to the public debt situation. What this means is that they think about the public debt in terms of the feeling of the private person: if you expect to get a loan in the future you will have to pay off the loan from the past, and this rule they believe applies to whatever government we choose to elect.

What this reels out as is a way of thinking that accepts that the best the government can do is what we individuals would do in a situation of private debt ie try to roll over the debt. This tends to give the government the benefit of the doubt. Other people think of the government situation in purely subjective or ethical terms and are prepared to honour the public debt because the money was borrowed by a third party, namely the government, with our tacit knowledge and approval when they voted for the party of government .

We might like to call such people dupes but surely the bulk of the people are not STUPID. Some have even reached the conclusion that the debt should be repudiated because the government’s case for repayment is a fraudulent one, that the Irish people had no knowledge of what the government was doing in its secret dealings with the various creditors back in September 2008. They have already repudiated the government and good on them. The reservation here though is to worry over the reasons they have for repudiating the debt and what logic they will follow into the next phase.

What is missing in the present national context is an awareness of another key concept: that of class debt. When the national debate is conducted in term of private and public debt the majority of people easily falls into the trap of applying rule of thumb maxims of how private individuals think about borrowing and lending. Or they declare the government’s debt has got absolutely nothing to do with them. Both have no place for viewing things in terms of objective class debt.

The crucial point is that the public debt that should be repudiated is the debt built up by a wealthy minority and foisted onto the working class as their debt. The idea that a workers’ government should not borrow and take on expansive debt on behalf of the working class should also be repudiated.

A rational case can be made for the idea that Ireland should in fact be cancelling old debts and searching for new creditors, there is certainly no shortage surplus savings in the world, borrowing to invest in public goods and ending the artificial regime of austerity. So it is of the utmost importance to understand the class composition and derivation of the public debt and this requires special analysis, something this blog site is at least endeavouring to do.