"The Crash of Western Civilization: The Limits of the Market and Democracy" by Jacques Attali, Foreign Policy, Number 107, Summer 1997, pp. 54-64

Jacques Attali, one of FOREIGN POLICY’S new contributing editors, is a writer, economist, and philosopher and is president of A&A, an international consulting firm based in Paris. For 10 years he was special adviser to the president of the French Republic. From 1990 to 1993 he was the president of the European Bank for Reconstruction and Development.

With the end of the Cold War and the collapse of the Soviet Empire the market economy and democracy appear to have triumphed. Universally praised these two central values of Western society have become the prerequisite for any nation seeking acceptance by the international community or assistance from international financial institutions. Their widespread adoption has been said to herald the end of history or, at least, the final victory of Western civilization. Wherever Western values are not already in place, people seem to be willing to die to achieve them. And the main mission of American diplomacy seems to be their export, at least as long as doing so serves American interests.

Western civilization's most ardent modem champions could perhaps be forgiven for displaying what their earliest forerunners called "hubris." Developed after centuries of evolution and preserved in the 20th century through one virtual and two genuine world wars, Western values are today considered to be the building blocks of economic prosperity and individual freedom and were the driving force behind some of humankind's greatest victories.

Moreover, history would seem to suggest that the market economy and democracy together form the equivalent of a virtuous circle. Not only is it seemingly impossible to have one without the other, but in the long run the two appear to be mutually reinforcing. The market economy needs private property, entrepreneurship, and innovation, which cannot flourish without freedom of thought, speech, and movement. Democracy means that people can choose where to live, what to buy and sell, and how to work, save, and accumulate wealth, none of which is compatible with the collective ownership of industry. In sum, the market economy and democracy appear to be deeply intertwined, with both tied to the fundamental concept of private property.

Yet even the most enthusiastic proponents of both the market economy and democracy would admit that "market democracies"—a shorthand term adopted in recent years by exuberant American policymakers—are not easy to create. The development of a robust market economy in a formerly communist country such as Russia requires more than privatizing industry and allowing the market to determine prices. And the establishment of real democracy in a war-torn nation such as Cambodia calls for more than its much-celebrated free elections. A market economy and democracy can endure only in nations that maintain certain indispensable features: the rule of law, a legal system, a free media, and a social consensus on efficient tax collection.

Despite the prevalent belief that the market economy and democracy combine to form a perpetual-motion machine that propels human progress, these two values on their own are in fact incapable of sustaining any civilization. Both are riddled with weaknesses and are increasingly likely to break down. Unless the West, and particularly its self-appointed leader, the United States, begins to recognize the shortcomings of the market economy and democracy Western civilization will gradually disintegrate and eventually self-destruct.

WHERE THE MARKET AND DEMOCRACY FAIL

While the cracks in the facade of Western civilization are only just beginning to show, an x-ray of its foundation might reveal deep weaknesses that could lead to its total collapse. If we are to prevent such a catastrophe, we must begin by acknowledging that the marriage of democracy and the market economy suffers from three fundamental shortcomings: First, the guiding principles of the market economy and democracy cannot be applied to much of Western society; second, these two sets of principles often contradict one another and are more likely to go head-to-head than hand in hand; and, third, they carry within themselves the seeds of their own destruction.

Inapplicable principles

Consider two core institutions of the West: the private corporation and the civil service. For all of our talk of free markets and equality among individuals, our companies and bureaucracies are organized on the basis of fixed plans and strict hierarchies. Can we imagine a real market relationship between divisions of the same company or between a boss and her assistant? Can we imagine an internal referendum on each decision made by a minister or cabinet secretary? What does it say about Western values that they cannot be applied to such institutions, which are at the heart of the Western system?

Likewise, few Western nations-including the United States-would appreciate an international community where true democracy prevailed. (Imagine, for example, a United Nations where the most important decisions were made not by the Security Council's oligarchy of five nuclear powers but by the entire General Assembly on the principle of "one citizen, one vote" or one state, one vote.") If international financial institutions had followed such a democratic system during the so-called Global Negotiations of the 1980s, there would likely have been a drastic shift in the global distribution of wealth that would have jeopardized the interests of the West in general, and of the United States in particular.

Similarly, applying the principles of the market economy both within and among nations is problematic and undesirable. I know of no Western nation that seeks a free market in justice, law enforcement, national defense, education, or even telecommunications—and with good reason. Few if any Westerners would want to live in a country where court rulings were for sale, citizenship and passports could be purchased at airline ticket counters, and air waves were auctioned off to the highest bidder without regard to content. And among nations, a free market for nuclear weapons, illegal narcotics, high technology, potable water, and pollution would promote the rapid growth of supranational political bodies and powerful nonstate entities capable of challenging national governments.

Inherent contradictions

Contrary to popular belief, the market economy and democracy the twin pillars of Western civilization-are more likely to undermine than support one another. What follows is a list of just some of the ways in which they clash:

- In a democratic society, the promotion of the individual is the ultimate goal, while in a market economy the individual is treated as a commodity—one that can be excluded or cast aside for want of the right education, skills, physical characteristics, or upbringing.
- The market economy accepts and fosters strong inequalities between economic agents, whereas democracy is based on the equal rights of all citizens. By depriving some people of the ability to meet their basic economic needs, the market economy also leaves them less able to exercise their full political rights. Witness the swelling ranks of unemployed workers in much of the West who can vote but are otherwise increasingly disenfranchised and alienated.
- The market economy resists the localization of power, discourages coalitions between participants, and encourages selfishness, while democracy depends upon a clear identification of political responsibility, the coalition of citizens in political parties, and a general appreciation of our common fate. Democracies need political parties that are capable of molding platforms based on compromises between individual points of view, while market economies rely on competing individual centers.
- The market economy creates a world of nomads, whereas democracy can apply only to sedentary people. Even as the free circulation of goods, capital, ideas, and people calls for breaking down national borders, democracy needs to maintain them in order to separate aliens from citizens who have the right to vote. The tensions created by this contradiction are evident in the popular anger and resentment in the United States and Europe toward a growing influx of foreign workers.
- The market economy assumes that the aggregation of selfish behavior by all economic agents is best for the group, whereas democracy makes the assumption that the best outcome for any given group will result from the acceptance by a minority of the decision of a majority. Already, rich minorities on both sides of the Atlantic are increasingly reluctant to support tax systems that would benefit the middleclass majority. Worse than that, younger generations-which make up a minority of the population-may be reluctant to finance the pensions of the older generations that will dominate the industrialized world in the coming decades.

Inevitable destruction

Because each is based on the principle of the reversibility of choices-whether of political leaders, consumer goods, technology, or cultural trends-the market economy and democracy combined cannot provide a sound basis for a lasting civilization. For instance, no market democracy has a lasting health policy or a permanent concept of urban planning, and among market democracies there is no set exchange rate. The market economy and democracy tend to favor the ephemeral, the precarious. They encourage their adherents to follow the path of short-term selfishness, not long-term shared interest.

Both the market economy and democracy encourage a herd mentality that can be deeply destabilizing. Known as the self-fulfilling prophecy syndrome, this tendency can amplify problems, triggering runs on markets and financial institutions and even political crises. Information technology is exacerbating this self-destabilizing and self-destructive tendency-in both economics and politics-by providing split-second market results and polling data.

The destructive consequences of this volatility are enormous: Markets leave less and less room for long-term contracts or long-term investments. Older generations neglect the interests of the young, demanding benefits and pensions that their children will not be able to sustain, much less enjoy themselves upon retirement. In politics, unpopular decisions are deferred endlessly for immediate political considerations. Led by managers and politicians who are increasingly skilled at gauging public opinion and evading responsibility, society grows incapable of dealing with vital long-term challenges, whether by strengthening political and economic institutions or confronting the costs of damage to the environment.

THE RISE OF THE MARKET DICTATORSHIP

While each of these three shortcomings of the main values of Western civilization has disturbing implications, none holds greater peril than the second—the inherent conflict between the market economy and democracy. For when two concepts are contradictory, one of them has to come out on top. It seems obvious that, all over the world, the market economy today is more dynamic than democracy. Stronger forces are backing it. The frantic search for money to fund elections, the spread of corruption, and the scale of the criminal economy are all signs of the ascendancy of the market economy over democratic ethics.

The implications of a triumph of the market economy over democracy would be profound. Powerful minorities seeking to take full advantage of the market economy will want total control of their resources and will come to view the collective democratic decisions of poor majorities as intolerable burdens. As legislatures and courts lose power to central banks and corporations, market elites will become stronger than democratic elites, further shrinking the reach and appeal of the public sphere. Indeed, we will see the emergence of a new class of "high-tech nomads" whose primary function will be to produce or channel information. The media will fall into the hands of huge conglomerates that can sway the behavior of citizens worldwide, deepening their skepticism about political matters and democratic values. New technologies will continue to erode democratic institutions by spurring decentralization. As the printing press led to the collapse of the Holy Roman Empire and to the birth of Protestantism, the Internet will lead to the decline of traditional intermediaries (such as bankers and retailers) and global forums (such as large television networks and wholesale markets) all of which will be replaced by specific players with specific constituencies and direct access to citizens at the local level.

Eventually, democracy will fade away, having been replaced by market mechanisms and corruption. We will have a kind of market dictatorship, a "lumpen market," without strong democratic institutions to serve as countervailing powers. Political outcomes will be bought and sold, and the market economy will rule every element of public life, from police protection, justice, education, and health to the very air that we breathe, paving the way for the final victory of "corporate" economic rights over individual human rights.

Under such circumstances, Western civilization itself is bound to collapse. The decline of national allegiances and the refusal of national elites to exercise their responsibilities, become political leaders, or pay taxes will contribute to a fatal weakening of the traditional nation-state, the emergence of strong authoritarian city-states amidst oceans of informal economies, and conflicts at North-South borders and between city-states for the control of scarce material resources. Meanwhile, aggressive nonstate entities (large companies or, in some cases, illegal entities such as the Mafia, drug cartels, and nuclear traffickers) will exploit the market economy and the absence of strong local authorities to threaten our safety and survival. Even our religious beliefs and social values will crumble, as organized religion becomes corrupted by commercial values and civic virtue gives way to widespread cynicism and despair.

AVERTING THE COMING CRASH

More than any other country, the United States stands to lose from the realization of such an apocalyptic scenario. Internally, the advent of a market dictatorship threatens to replace America's melting pot with a dysfunctional patchwork of self-interested communities. Externally, such a scenario not only endangers a broad array of American interests but the ideological basis of its global leadership as well. In short, the crash of American civilization will precede the crash of Western civilization.

If we want to avert such a crash, we must seek honest answers to several fundamental questions: What is the real influence of citizens in major decisions? What is the reality of democracy among nations? Why are there always the same winners and losers? Can poverty be overcome by market mechanisms?

To find answers to these questions, Western civilization should first become more modest about its own values. We must recognize the need to find a compromise between the market economy and planning and between democratic and authoritarian decision-making mechanisms. We should be exploring ways to organize that compromise rather than indulging in triumphalist rhetoric about the globalization of values that, in fact, have only limited application even to our own societies. Europeans should learn from American efficiency and Americans from European solidarity. Western civilization should learn to stand on its own two feet—on both sides of the Atlantic.

We also should declare openly that Western civilization has something to learn from others. An efficient society should be able to organize both the expression of differences and the creation of an enduring collective view. Civilizations that draw on other philosophical and ethical beliefs-whether Confucianism or Buddhism-seem to be succeeding where we are failing in efforts to maintain human dignity, foster solidarity, and give long-term meaning to our decisions by fostering a vision of what sort of world we hope to have in the 21st century. The fact that the West may disagree with some aspects of Islam as applied in some countries-the status of women, for example~oes not mean that there is nothing to learn from Islamic societies.

Indeed, while many people in non-Western civilizations are trying to imitate the West, a wellspring of opposition to Western values has erupted in many places as well. In Asia, for example, our way of organizing urban life is increasingly rejected, as demonstrated by the Malaysian experience, where planners are considering reorganizing society to deemphasize the automobile. Asian societies suggest possible answers to the contradictory tenets of the market and democracy; by allowing a stronger role for the state in protecting citizens against some of the risks of competition, these societies balance the contradictory forces.

On our own behalf, the West should improve and strengthen democracy in order to achieve a balance with the power of the market. To accomplish that, we must foster a new government role in enforcing the rule of law, supporting the principles of education, ensuring social justice and the participation of workers in corporate decision making, and leading the fight against corruption and the drug economy.

Small nations must unite with their neighbors to achieve a critical mass in the face of market-driven globalization-and to be able to summon the achievements of past generations while not limiting the freedom of choice of future generations (in terms of culture, language, lifestyle, and ethics, for example). The European Union (EU) is an excellent example of such a construction~ne that protects some specific societal differences, such as the rural way of life, the health system, the urban heritage, and the diversity of languages. The EU's Common Agricultural Policy, so much criticized in the United States, has played a very positive role in this respect.

Western societies must decide when and by what means long-term foreign residents can be given the right to vote. As the number of expatriots grows with the development of the global market economy, the right to vote will become essential in any effort to increase the feeling of partnership between people living on the same soil. ultimately the civilizations capable of organizing their diasporas will be the winners. We must begin to understand multidimensional citizenship and to recognize cohesion between groups belonging simultaneously to many different entities (e.g., cities and companies). We also must agree on how to build a flexible long-term framework for democracy that goes beyond national constitutions and their amendments. Some dimensions of human dignity (the right to childhood, the integrity of the genome, and the rights of other species) are not yet well protected by these constitutions.

Western civilization is no stranger to predictions of decline and fall. Some of these predictions have been based on historical theory, others on cultural, economic, or even racial assumptions. For the time being, they have fortunately been proven wrong. But no one should accept the assumption that any civilization, however triumphant, is here to stay. The survival of ours is in our hands.

Want to Know More?

Some basic texts are of interest. First and foremost, Democracy in America by Alexis de Tocqueville (New York: A. Knopf, 1993), discusses in detail the dangers of a weak democracy in a market economy. In a February 1997 Atlantic Monthly article, "The Capitalist Threat", George Soros, one of the world’s premier capitalists, warns that the unfettered spread of market values poses the gravest threat to our democratic society. Joseph Arrow in Social Choice and Individual Values (New York: Wiley, 1963) demonstrates the difficulties faced by a rational democracy in a competitive environment. This question is also discussed in Capitalism, Socialism and Democracy (London: Harper, 1942) in which Joseph Schumpeter explains that only innovation can compensate for the destructive nature of the market. Lester Thurow, in The Future of Capitalism (New York: W. Morrow, l 996), elaborates on the contradictions between democracy and the aging of a modern market economy, and I have discussed, in Millennium: Winners and losers in the coming world order (New York: Times Books, 1991), the concept of a nomadic society. An alternative theory on the crash of Western civilization can be found in Robert Kaplan's travel book, The Ends of the Earth (New York: Random House, 1996), in which he expands upon his February 1994 Atlantic Monthly article, "The Coming Anarchy," arguing that our civilization's collapse will come as a result of thc spread of crime and disease and the type of overpopulation that is common throughout the developing world.

For links to related Web sites, visit Foreign Policy’s home page at www.foreignpolicy.com

"The Capitalist Threat" by George Soros Atlantic Monthly, Volume 279, No. 2, February 1997

What kind of society do we want? "Let the free market decide!" is the often-heard response. That response, a prominent capitalist argues,undermines the very values on which open and democratic societies depend.

IN The Philosophy of History, Hegel discerned a disturbing historical pattern -- the crack and fall of civilizations owing to a morbid intensification of their own first principles. Although I have made a fortune in the financial markets, I now fear that the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society. The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.

The term "open society" was coined by Henri Bergson, in his book The Two Sources of Morality and Religion (1932), and given greater currency by the Austrian philosopher Karl Popper, in his book The Open Society and Its Enemies (1945). Popper showed that totalitarian ideologies like communism and Nazism have a common element: they claim to be in possession of the ultimate truth. Since the ultimate truth is beyond the reach of humankind, these ideologies have to resort to oppression in order to impose their vision on society. Popper juxtaposed with these totalitarian ideologies another view of society, which recognizes that nobody has a monopoly on the truth; different people have different views and different interests, and there is a need for institutions that allow them to live together in peace. These institutions protect the rights of citizens and ensure freedom of choice and freedom of speech. Popper called this form of social organization the "open society." Totalitarian ideologies were its enemies.

Written during the Second World War, The Open Society and Its Enemies explained what the Western democracies stood for and fought for. The explanation was highly abstract and philosophical, and the term "open society" never gained wide recognition. Nevertheless, Popper's analysis was penetrating, and when I read it as a student in the late 1940s, having experienced at first hand both Nazi and Communist rule in Hungary, it struck me with the force of revelation.

I was driven to delve deeper into Karl Popper's philosophy, and to ask, Why does nobody have access to the ultimate truth? The answer became clear: We live in the same universe that we are trying to understand, and our perceptions can influence the events in which we participate. If our thoughts belonged to one universe and their subject matter to another, the truth might be within our grasp: we could formulate statements corresponding to the facts, and the facts would serve as reliable criteria for deciding whether the statements were true.

There is a realm where these conditions prevail: natural science. But in other areas of human endeavor the relationship between statements and facts is less clear-cut. In social and political affairs the participants' perceptions help to determine reality. In these situations facts do not necessarily constitute reliable criteria for judging the truth of statements. There is a two-way connection -- a feedback mechanism -- between thinking and events, which I have called "reflexivity." I have used it to develop a theory of history.

Whether the theory is valid or not, it has turned out to be very helpful to me in the financial markets. When I had made more money than I needed, I decided to set up a foundation. I reflected on what it was I really cared about. Having lived through both Nazi persecution and Communist oppression, I came to the conclusion that what was paramount for me was an open society. So I called the foundation the Open Society Fund, and I defined its objectives as opening up closed societies, making open societies more viable, and promoting a critical mode of thinking. That was in 1979.

My first major undertaking was in South Africa, but it was not successful. The apartheid system was so pervasive that whatever I tried to do made me part of the system rather than helping to change it. Then I turned my attention to Central Europe. Here I was much more successful. I started supporting the Charter 77 movement in Czechoslovakia in 1980 and Solidarity in Poland in 1981. I established separate foundations in my native country, Hungary, in 1984, in China in 1986, in the Soviet Union in 1987, and in Poland in 1988. My engagement accelerated with the collapse of the Soviet system. By now I have established a network of foundations that extends across more than twenty-five countries (not including China, where we shut down in 1989).

Operating under Communist regimes, I never felt the need to explain what "open society" meant; those who supported the objectives of the foundations understood it better than I did, even if they were not familiar with the expression. The goal of my foundation in Hungary, for example, was to support alternative activities. I knew that the prevailing Communist dogma was false exactly because it was a dogma, and that it would become unsustainable if it was exposed to alternatives. The approach proved effective. The foundation became the main source of support for civil society in Hungary, and as civil society flourished, so the Communist regime waned.

After the collapse of communism, the mission of the foundation network changed. Recognizing that an open society is a more advanced, more sophisticated form of social organization than a closed society (because in a closed society there is only one blueprint, which is imposed on society, whereas in an open society each citizen is not only allowed but required to think for himself), the foundations shifted from a subversive task to a constructive one -- not an easy thing to do when the believers in an open society are accustomed to subversive activity. Most of my foundations did a good job, but unfortunately, they did not have much company. The open societies of the West did not feel a strong urge to promote open societies in the former Soviet empire. On the contrary, the prevailing view was that people ought to be left to look after their own affairs. The end of the Cold War brought a response very different from that at the end of the Second World War. The idea of a new Marshall Plan could not even be mooted. When I proposed such an idea at a conference in Potsdam (in what was then still East Germany), in the spring of 1989, I was literally laughed at.

The collapse of communism laid the groundwork for a universal open society, but the Western democracies failed to rise to the occasion. The new regimes that are emerging in the former Soviet Union and the former Yugoslavia bear little resemblance to open societies. The Western alliance seems to have lost its sense of purpose, because it cannot define itself in terms of a Communist menace. It has shown little inclination to come to the aid of those who have defended the idea of an open society in Bosnia or anywhere else. As for the people living in formerly Communist countries, they might have aspired to an open society when they suffered from repression, but now that the Communist system has collapsed, they are preoccupied with the problems of survival. After the failure of communism there came a general disillusionment with universal concepts, and the open society is a universal concept.

These considerations have forced me to re-examine my belief in the open society. For five or six years following the fall of the Berlin Wall, I devoted practically all of my energies to the transformation of the formerly Communist world. More recently I have redirected my attention to our own society. The network of foundations I created continues to do good work; nevertheless, I felt an urgent need to reconsider the conceptual framework that had guided me in establishing them. This reassessment has led me to the conclusion that the concept of the open society has not lost its relevance. On the contrary, it may be even more useful in understanding the present moment in history and in providing a practical guide to political action than it was at the time Karl Popper wrote his book -- but it needs to be thoroughly rethought and reformulated. If the open society is to serve as an ideal worth striving for, it can no longer be defined in terms of the Communist menace. It must be given a more positive content.

THE NEW ENEMY

POPPER showed that fascism and communism had much in common, even though one constituted the extreme right and the other the extreme left, because both relied on the power of the state to repress the freedom of the individual. I want to extend his argument. I contend that an open society may also be threatened from the opposite direction -- from excessive individualism. Too much competition and too little cooperation can cause intolerable inequities and instability.

Insofar as there is a dominant belief in our society today, it is a belief in the magic of the marketplace. The doctrine of laissez-faire capitalism holds that the common good is best served by the uninhibited pursuit of self-interest. Unless it is tempered by the recognition of a common interest that ought to take precedence over particular interests, our present system -- which, however imperfect, qualifies as an open society -- is liable to break down.

I want to emphasize, however, that I am not putting laissez-faire capitalism in the same category as Nazism or communism. Totalitarian ideologies deliberately seek to destroy the open society; laissez-faire policies may endanger it, but only inadvertently. Friedrich Hayek, one of the apostles of laissez-faire, was also a passionate proponent of the open society. Nevertheless, because communism and even socialism have been thoroughly discredited, I consider the threat from the laissez-faire side more potent today than the threat from totalitarian ideologies. We are enjoying a truly global market economy in which goods, services, capital, and even people move around quite freely, but we fail to recognize the need to sustain the values and institutions of an open society.

The present situation is comparable to that at the turn of the past century. It was a golden age of capitalism, characterized by the principle of laissez-faire; so is the present. The earlier period was in some ways more stable. There was an imperial power, England, that was prepared to dispatch gunboats to faraway places because as the main beneficiary of the system it had a vested interest in maintaining that system. Today the United States does not want to be the policeman of the world. The earlier period had the gold standard; today the main currencies float and crush against each other like continental plates. Yet the free-market regime that prevailed a hundred years ago was destroyed by the First World War. Totalitarian ideologies came to the fore, and by the end of the Second World War there was practically no movement of capital between countries. How much more likely the present regime is to break down unless we learn from experience!

Although laissez-faire doctrines do not contradict the principles of the open society the way Marxism-Leninism or Nazi ideas of racial purity did, all these doctrines have an important feature in common: they all try to justify their claim to ultimate truth with an appeal to science. In the case of totalitarian doctrines, that appeal could easily be dismissed. One of Popper's accomplishments was to show that a theory like Marxism does not qualify as science. In the case of laissez-faire the claim is more difficult to dispute, because it is based on economic theory, and economics is the most reputable of the social sciences. One cannot simply equate market economics with Marxist economics. Yet laissez-faire ideology, I contend, is just as much a perversion of supposedly scientific verities as Marxism-Leninism is.

The main scientific underpinning of the laissez-faire ideology is the theory that free and competitive markets bring supply and demand into equilibrium and thereby ensure the best allocation of resources. This is widely accepted as an eternal verity, and in a sense it is one. Economic theory is an axiomatic system: as long as the basic assumptions hold, the conclusions follow. But when we examine the assumptions closely, we find that they do not apply to the real world. As originally formulated, the theory of perfect competition -- of the natural equilibrium of supply and demand -- assumed perfect knowledge, homogeneous and easily divisible products, and a large enough number of market participants that no single participant could influence the market price. The assumption of perfect knowledge proved unsustainable, so it was replaced by an ingenious device. Supply and demand were taken as independently given. This condition was presented as a methodological requirement rather than an assumption. It was argued that economic theory studies the relationship between supply and demand; therefore it must take both of them as given.

As I have shown elsewhere, the condition that supply and demand are independently given cannot be reconciled with reality, at least as far as the financial markets are concerned -- and financial markets play a crucial role in the allocation of resources. Buyers and sellers in financial markets seek to discount a future that depends on their own decisions. The shape of the supply and demand curves cannot be taken as given because both of them incorporate expectations about events that are shaped by those expectations. There is a two-way feedback mechanism between the market participants' thinking and the situation they think about -- "reflexivity." It accounts for both the imperfect understanding of the participants (recognition of which is the basis of the concept of the open society) and the indeterminacy of the process in which they participate.

If the supply and demand curves are not independently given, how are market prices determined? If we look at the behavior of financial markets, we find that instead of tending toward equilibrium, prices continue to fluctuate relative to the expectations of buyers and sellers. There are prolonged periods when prices are moving away from any theoretical equilibrium. Even if they eventually show a tendency to return, the equilibrium is not the same as it would have been without the intervening period. Yet the concept of equilibrium endures. It is easy to see why: without it, economics could not say how prices are determined.

In the absence of equilibrium, the contention that free markets lead to the optimum allocation of resources loses its justification. The supposedly scientific theory that has been used to validate it turns out to be an axiomatic structure whose conclusions are contained in its assumptions and are not necessarily supported by the empirical evidence. The resemblance to Marxism, which also claimed scientific status for its tenets, is too close for comfort.


I do not mean to imply that economic theory has deliberately distorted reality for political purposes. But in trying to imitate the accomplishments (and win for itself the prestige) of natural science, economic theory attempted the impossible. The theories of social science relate to their subject matter in a reflexive manner. That is to say, they can influence events in a way that the theories of natural science cannot. Heisenberg's famous uncertainty principle implies that the act of observation may interfere with the behavior of quantum particles; but it is the observation that creates the effect, not the uncertainty principle itself. In the social sphere, theories have the capacity to alter the subject matter to which they relate. Economic theory has deliberately excluded reflexivity from consideration. In doing so, it has distorted its subject matter and laid itself open to exploitation by laissez-faire ideology.

What allows economic theory to be converted into an ideology hostile to the open society is the assumption of perfect knowledge -- at first openly stated and then disguised in the form of a methodological device. There is a powerful case for the market mechanism, but it is not that markets are perfect; it is that in a world dominated by imperfect understanding, markets provide an efficient feedback mechanism for evaluating the results of one's decisions and correcting mistakes.

Whatever its form, the assertion of perfect knowledge stands in contradiction to the concept of the open society (which recognizes that our understanding of our situation is inherently imperfect). Since this point is abstract, I need to describe specific ways in which laissez-faire ideas can pose a threat to the open society. I shall focus on three issues: economic stability, social justice, and international relations.

ECONOMIC STABILITY

ECONOMIC theory has managed to create an artificial world in which the participants' preferences and the opportunities confronting participants are independent of each other, and prices tend toward an equilibrium that brings the two forces into balance. But in financial markets prices are not merely the passive reflection of independently given demand and supply; they also play an active role in shaping those preferences and opportunities. This reflexive interaction renders financial markets inherently unstable. Laissez-faire ideology denies the instability and opposes any form of government intervention aimed at preserving stability. History has shown that financial markets do break down, causing economic depression and social unrest. The breakdowns have led to the evolution of central banking and other forms of regulation. Laissez-faire ideologues like to argue that the breakdowns were caused by faulty regulations, not by unstable markets. There is some validity in their argument, because if our understanding is inherently imperfect, regulations are bound to be defective. But their argument rings hollow, because it fails to explain why the regulations were imposed in the first place. It sidesteps the issue by using a different argument, which goes like this: since regulations are faulty, unregulated markets are perfect.

The argument rests on the assumption of perfect knowledge: if a solution is wrong, its opposite must be right. In the absence of perfect knowledge, however, both free markets and regulations are flawed. Stability can be preserved only if a deliberate effort is made to preserve it. Even then breakdowns will occur, because public policy is often faulty. If they are severe enough, breakdowns may give rise to totalitarian regimes.

Instability extends well beyond financial markets: it affects the values that guide people in their actions. Economic theory takes values as given. At the time economic theory was born, in the age of Adam Smith, David Ricardo, and Alfred Marshall, this was a reasonable assumption, because people did, in fact, have firmly established values. Adam Smith himself combined a moral philosophy with his economic theory. Beneath the individual preferences that found expression in market behavior, people were guided by a set of moral principles that found expression in behavior outside the scope of the market mechanism. Deeply rooted in tradition, religion, and culture, these principles were not necessarily rational in the sense of representing conscious choices among available alternatives. Indeed, they often could not hold their own when alternatives became available. Market values served to undermine traditional values.

There has been an ongoing conflict between market values and other, more traditional value systems, which has aroused strong passions and antagonisms. As the market mechanism has extended its sway, the fiction that people act on the basis of a given set of nonmarket values has become progressively more difficult to maintain. Advertising, marketing, even packaging, aim at shaping people's preferences rather than, as laissez-faire theory holds, merely responding to them. Unsure of what they stand for, people increasingly rely on money as the criterion of value. What is more expensive is considered better. The value of a work of art can be judged by the price it fetches. People deserve respect and admiration because they are rich. What used to be a medium of exchange has usurped the place of fundamental values, reversing the relationship postulated by economic theory. What used to be professions have turned into businesses. The cult of success has replaced a belief in principles. Society has lost its anchor.

SOCIAL DARWINISM

BY taking the conditions of supply and demand as given and declaring government intervention the ultimate evil, laissez-faire ideology has effectively banished income or wealth redistribution. I can agree that all attempts at redistribution interfere with the efficiency of the market, but it does not follow that no attempt should be made. The laissez-faire argument relies on the same tacit appeal to perfection as does communism. It claims that if redistribution causes inefficiencies and distortions, the problems can be solved by eliminating redistribution -- just as the Communists claimed that the duplication involved in competition is wasteful, and therefore we should have a centrally planned economy. But perfection is unattainable. Wealth does accumulate in the hands of its owners, and if there is no mechanism for redistribution, the inequities can become intolerable. "Money is like muck, not good except it be spread." Francis Bacon was a profound economist.

The laissez-faire argument against income redistribution invokes the doctrine of the survival of the fittest. The argument is undercut by the fact that wealth is passed on by inheritance, and the second generation is rarely as fit as the first.

In any case, there is something wrong with making the survival of the fittest a guiding principle of civilized society. This social Darwinism is based on an outmoded theory of evolution, just as the equilibrium theory in economics is taking its cue from Newtonian physics. The principle that guides the evolution of species is mutation, and mutation works in a much more sophisticated way. Species and their environment are interactive, and one species serves as part of the environment for the others. There is a feedback mechanism similar to reflexivity in history, with the difference being that in history the mechanism is driven not by mutation but by misconceptions. I mention this because social Darwinism is one of the misconceptions driving human affairs today. The main point I want to make is that cooperation is as much a part of the system as competition, and the slogan "survival of the fittest" distorts this fact.

INTERNATIONAL RELATIONS

LAISSEZ-FAIRE ideology shares some of the deficiencies of another spurious science, geopolitics. States have no principles, only interests, geopoliticians argue, and those interests are determined by geographic location and other fundamentals. This deterministic approach is rooted in an outdated nineteenth-century view of scientific method, and it suffers from at least two glaring defects that do not apply with the same force to the economic doctrines of laissez-faire. One is that it treats the state as the indivisible unit of analysis, just as economics treats the individual. There is something contradictory in banishing the state from the economy while at the same time enshrining it as the ultimate source of authority in international relations. But let that pass. There is a more pressing practical aspect of the problem. What happens when a state disintegrates? Geopolitical realists find themselves totally unprepared. That is what happened when the Soviet Union and Yugoslavia disintegrated. The other defect of geopolitics is that it does not recognize a common interest beyond the national interest.

With the demise of communism, the present state of affairs, however imperfect, can be described as a global open society. It is not threatened from the outside, from some totalitarian ideology seeking world supremacy. The threat comes from the inside, from local tyrants seeking to establish internal dominance through external conflicts. It may also come from democratic but sovereign states pursuing their self-interest to the detriment of the common interest. The international open society may be its own worst enemy.

The Cold War was an extremely stable arrangement. Two power blocs, representing opposing concepts of social organization, were struggling for supremacy, but they had to respect each other's vital interests, because each side was capable of destroying the other in an all-out war. This put a firm limit on the extent of the conflict; all local conflicts were, in turn, contained by the larger conflict. This extremely stable world order has come to an end as the result of the internal disintegration of one superpower. No new world order has taken its place. We have entered a period of disorder.

Laissez-faire ideology does not prepare us to cope with this challenge. It does not recognize the need for a world order. An order is supposed to emerge from states' pursuit of their self-interest. But, guided by the principle of the survival of the fittest, states are increasingly preoccupied with their competitiveness and unwilling to make any sacrifices for the common good.

There is no need to make any dire predictions about the eventual breakdown of our global trading system in order to show that a laissez-faire ideology is incompatible with the concept of the open society. It is enough to consider the free world's failure to extend a helping hand after the collapse of communism. The system of robber capitalism that has taken hold in Russia is so iniquitous that people may well turn to a charismatic leader promising national revival at the cost of civil liberties.

If there is any lesson to be learned, it is that the collapse of a repressive regime does not automatically lead to the establishment of an open society. An open society is not merely the absence of government intervention and oppression. It is a complicated, sophisticated structure, and deliberate effort is required to bring it into existence. Since it is more sophisticated than the system it replaces, a speedy transition requires outside assistance. But the combination of laissez-faire ideas, social Darwinism, and geopolitical realism that prevailed in the United States and the United Kingdom stood in the way of any hope for an open society in Russia. If the leaders of these countries had had a different view of the world, they could have established firm foundations for a global open society.

At the time of the Soviet collapse there was an opportunity to make the UN function as it was originally designed to. Mikhail Gorbachev visited the United Nations in 1988 and outlined his vision of the two superpowers cooperating to bring peace and security to the world. Since then the opportunity has faded. The UN has been thoroughly discredited as a peacekeeping institution. Bosnia is doing to the UN what Abyssinia did to the League of Nations in 1936.

Our global open society lacks the institutions and mechanisms necessary for its preservation, but there is no political will to bring them into existence. I blame the prevailing attitude, which holds that the unhampered pursuit of self-interest will bring about an eventual international equilibrium. I believe this confidence is misplaced. I believe that the concept of the open society, which needs institutions to protect it, may provide a better guide to action. As things stand, it does not take very much imagination to realize that the global open society that prevails at present is likely to prove a temporary phenomenon.

THE PROMISE OF FALLIBILITY

IT is easier to identify the enemies of the open society than to give the concept a positive meaning. Yet without such a positive meaning the open society is bound to fall prey to its enemies. There has to be a common interest to hold a community together, but the open society is not a community in the traditional sense of the word. It is an abstract idea, a universal concept. Admittedly, there is such a thing as a global community; there are common interests on a global level, such as the preservation of the environment and the prevention of war. But these interests are relatively weak in comparison with special interests. They do not have much of a constituency in a world composed of sovereign states. Moreover, the open society as a universal concept transcends all boundaries. Societies derive their cohesion from shared values. These values are rooted in culture, religion, history, and tradition. When a society does not have boundaries, where are the shared values to be found? I believe there is only one possible source: the concept of the open society itself.

To fulfill this role, the concept of the open society needs to be redefined. Instead of there being a dichotomy between open and closed, I see the open society as occupying a middle ground, where the rights of the individual are safeguarded but where there are some shared values that hold society together. This middle ground is threatened from all sides. At one extreme, communist and nationalist doctrines would lead to state domination. At the other extreme, laissez-faire capitalism would lead to great instability and eventual breakdown. There are other variants. Lee Kuan Yew, of Singapore, proposes a so-called Asian model that combines a market economy with a repressive state. In many parts of the world control of the state is so closely associated with the creation of private wealth that one might speak of robber capitalism, or the "gangster state," as a new threat to the open society.

I envisage the open society as a society open to improvement. We start with the recognition of our own fallibility, which extends not only to our mental constructs but also to our institutions. What is imperfect can be improved, by a process of trial and error. The open society not only allows this process but actually encourages it, by insisting on freedom of expression and protecting dissent. The open society offers a vista of limitless progress. In this respect it has an affinity with the scientific method. But science has at its disposal objective criteria -- namely the facts by which the process may be judged. Unfortunately, in human affairs the facts do not provide reliable criteria of truth, yet we need some generally agreed-upon standards by which the process of trial and error can be judged. All cultures and religions offer such standards; the open society cannot do without them. The innovation in an open society is that whereas most cultures and religions regard their own values as absolute, an open society, which is aware of many cultures and religions, must regard its own shared values as a matter of debate and choice. To make the debate possible, there must be general agreement on at least one point: that the open society is a desirable form of social organization. People must be free to think and act, subject only to limits imposed by the common interests. Where the limits are must also be determined by trial and error.

The Declaration of Independence may be taken as a pretty good approximation of the principles of an open society, but instead of claiming that those principles are self-evident, we ought to say that they are consistent with our fallibility. Could the recognition of our imperfect understanding serve to establish the open society as a desirable form of social organization? I believe it could, although there are formidable difficulties in the way. We must promote a belief in our own fallibility to the status that we normally confer on a belief in ultimate truth. But if ultimate truth is not attainable, how can we accept our fallibility as ultimate truth?

This is an apparent paradox, but it can be resolved. The first proposition, that our understanding is imperfect, is consistent with a second proposition: that we must accept the first proposition as an article of faith. The need for articles of faith arises exactly because our understanding is imperfect. If we enjoyed perfect knowledge, there would be no need for beliefs. But to accept this line of reasoning requires a profound change in the role that we accord our beliefs.

Historically, beliefs have served to justify specific rules of conduct. Fallibility ought to foster a different attitude. Beliefs ought to serve to shape our lives, not to make us abide by a given set of rules. If we recognize that our beliefs are expressions of our choices, not of ultimate truth, we are more likely to tolerate other beliefs and to revise our own in the light of our experiences. But that is not how most people treat their beliefs. They tend to identify their beliefs with ultimate truth. Indeed, that identification often serves to define their own identity. If their experience of living in an open society obliges them to give up their claim to the ultimate truth, they feel a sense of loss.

The idea that we somehow embody the ultimate truth is deeply ingrained in our thinking. We may be endowed with critical faculties, but we are inseparably tied to ourselves. We may have discovered truth and morality, but, above all, we must represent our interests and our selves. Therefore, if there are such things as truth and justice -- and we have come to believe that there are -- then we want to be in possession of them. We demand truth from religion and, recently, from science. A belief in our fallibility is a poor substitute. It is a highly sophisticated concept, much more difficult to work with than more primitive beliefs, such as my country (or my company or my family), right or wrong.

If the idea of our fallibility is so hard to take, what makes it appealing? The most powerful argument in its favor is to be found in the results it produces. Open societies tend to be more prosperous, more innovative, more stimulating, than closed ones. But there is a danger in proposing success as the sole basis for holding a belief, because if my theory of reflexivity is valid, being successful is not identical with being right. In natural science, theories have to be right (in the sense that the predictions and explanations they produce correspond to the facts) for them to work (in the sense of producing useful predictions and explanations). But in the social sphere what is effective is not necessarily identical with what is right, because of the reflexive connection between thinking and reality. As I hinted earlier, the cult of success can become a source of instability in an open society, because it can undermine our sense of right and wrong. That is what is happening in our society today. Our sense of right and wrong is endangered by our preoccupation with success, as measured by money. Anything goes, as long as you can get away with it.

If success were the only criterion, the open society would lose out against totalitarian ideologies -- as indeed it did on many occasions. It is much easier to argue for my own interest than to go through the whole rigmarole of abstract reasoning from fallibility to the concept of the open society.

The concept of the open society needs to be more firmly grounded. There has to be a commitment to the open society because it is the right form of social organization. Such a commitment is hard to come by.

I believe in the open society because it allows us to develop our potential better than a social system that claims to be in possession of ultimate truth. Accepting the unattainable character of truth offers a better prospect for freedom and prosperity than denying it. But I recognize a problem here: I am sufficiently committed to the pursuit of truth to find the case for the open society convincing, but I am not sure that other people will share my point of view. Given the reflexive connection between thinking and reality, truth is not indispensable for success. It may be possible to attain specific objectives by twisting or denying the truth, and people may be more interested in attaining their specific objectives than in attaining the truth. Only at the highest level of abstraction, when we consider the meaning of life, does truth take on paramount importance. Even then, deception may be preferable to the truth, because life entails death and death is difficult to accept. Indeed, one could argue that the open society is the best form of social organization for making the most of life, whereas the closed society is the form best suited to the acceptance of death. In the ultimate analysis a belief in the open society is a matter of choice, not of logical necessity.

That is not all. Even if the concept of the open society were universally accepted, that would not be sufficient to ensure that freedom and prosperity would prevail. The open society merely provides a framework within which different views about social and political issues can be reconciled; it does not offer a firm view on social goals. If it did, it would not be an open society. This means that people must hold other beliefs in addition to their belief in the open society. Only in a closed society does the concept of the open society provide a sufficient basis for political action; in an open society it is not enough to be a democrat; one must be a liberal democrat or a social democrat or a Christian democrat or some other kind of democrat. A shared belief in the open society is a necessary but not a sufficient condition for freedom and prosperity and all the good things that the open society is supposed to bring.

It can be seen that the concept of the open society is a seemingly inexhaustible source of difficulties. That is to be expected. After all, the open society is based on the recognition of our fallibility. Indeed, it stands to reason that our ideal of the open society is unattainable. To have a blueprint for it would be self-contradictory. That does not mean that we should not strive toward it. In science also, ultimate truth is unattainable. Yet look at the progress we have made in pursuing it. Similarly, the open society can be approximated to a greater or lesser extent.

To derive a political and social agenda from a philosophical, epistemological argument seems like a hopeless undertaking. Yet it can be done. There is historical precedent. The Enlightenment was a celebration of the power of reason, and it provided the inspiration for the Declaration of Independence and the Bill of Rights. The belief in reason was carried to excess in the French Revolution, with unpleasant side effects; nevertheless, it was the beginning of modernity. We have now had 200 years of experience with the Age of Reason, and as reasonable people we ought to recognize that reason has its limitations. The time is ripe for developing a conceptual framework based on our fallibility. Where reason has failed, fallibility may yet succeed.

Copyright © 1997 by The Atlantic Monthly Company. All rights reserved. The Atlantic Monthly; February 1997; The Capitalist Threat; Volume 279, No. 2; pages 45-58.

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The largest differences I see between 1992 and 2010 have to do with demographics, technological change, the structure of government programs and a more mature globalization:

1. Both locally and nationally, as we age there are fewer workers contributing to the economy and a growing percentage of older people, who make large demands on healthcare and pension programs. We see increasing examples of how difficult it is to maintain effective taxation rates to support public service including education, healthcare etc.

2. Technology change is having staggering effects on education at all levels, especially when these institutions are unable to keep abreast of it. Nationally, proprietary for-profit, employment-focused education institutions are the fast growing segment of education. Many consequences ensue, but the cost of education keeps rising in part driven by technology, and at the higher education level governments support it less--students end up with massive loan obligations, and the payoff in "market-ready" skills is problematic.

3. As the national conversation makes clear, entitlement programs increasingly challenge government funding capacity--at the state level the situation is similar. In Hawai‘i we have fallen far behind on funding the EUTF, and Medicaid costs are rising at perhaps unprecedented rates in response to economic dislocation.

4. All of this takes place within a more "mature" globalization than we had in 1992 with significantly increased global interdependence at almost every level, from food, to climate, to tourism, to global order, etc. I situate the great recession squarely within this nexus of forces and suggest that we have done virtually nothing to alter the structural conditions in the global economy that brought this economic catastrophe to Hawai‘i, the nation and the world.

About the author: Deane Neubauer is Professor Emeritus of Political Science at the University of Hawai‘i at Mānoa. He also currently serves as Senior Consultant to the International Forum for Education 2020 Program of the East-West Center, and as Senior Research Fellow for the Globalization Research Center, UHM. His research focus is on policy and globalization, with particular interests in health and educational policy.

Posted by Deane Neubauer on 02/20/2011

The Crash of Western Capitalist Civilization? Politics / Economic Depression Sep 14, 2008 - 11:54 AM By: Richard_C_Cook

Politics

Best Financial Markets Analysis Article“Train-wreck” doesn't even begin to describe what is starting to happen to the U.S. today with the financial crisis, an onrushing depression, and the failure of George W. Bush's war policy as he is faced down by Iran and the Russian bear.

But in an even broader sense, the West, as a civilization, after a century of world war and the utter failure of global finance capitalism, may have reached its limits.

Those with a vested interest in the status quo dismiss any suggestion that something is wrong. This includes Donald Luskin, author of an article in the Washington Post on Sunday, September 14, titled: “A Nation of Exaggerators: Quit Doling Out That Bad Economy Line.”

Luskin writes, “The relentless drumbeat of pessimism in the media and on the campaign trail” is “a virus.”

He continues: “Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.”

Continue reading, and you find out who Luskin is: a campaign adviser to John McCain.

We know that “where you stand depends on where you sit”—and who pays you for advice. So is a catastrophic meltdown coming?

If so, probably a majority of the people in the world are thinking: “Serves them right.” For the last 500 years, the West has been striding across the globe, armed to the teeth with firearms, warships, bombers, and—more recently—depleted uranium, enforcing the “white man's burden” by enslaving nations and peoples and confiscating everything of value—ranging from art objects to gold to oil—that can be carried away.

The financiers behind it all have also used the diabolically clever practice of creating money “out of thin air” to put the natives everywhere into debt, and, when that has proven insufficient, of doing the same to their own populations.

All this is rationalized by various brands of racism, cultural superiority, social Darwinism, historical determinism, “dominion of the Elect,” “God's chosen people,” etc. Or, simply, “might makes right.”

Some call it “The New World Order.”

So today, we Americans, denizens of the “land of the free and the home of the brave,” victors in two world wars, bearers of “democracy” to Afghanistan and Iraq, allies of the brave Israelis who hold high the banner of Judeo-Christian values among the ungrateful Palestinians—well, we Americans owe our own bankers almost $70 trillion at most recent count. With the government takeover of Fannie Mae and Freddie Mac, we owe holders of bad housing loans, including the governments of China, Korea, and Japan, another few trillion.

The bluster of Kissinger, Brzezinski, the Kristols, the Christian fundamentalists, and their paid-off politicians and media millionaires notwithstanding, America—indeed, the entire West—has been found out, perhaps even checkmated on the world stage.

The Bush/Cheney wars in Afghanistan and Iraq have blackened America's name forever. Iran has called our bluff. In Israel the gap between rich and poor is increasing as much as in the U.S. According to an article by Ian S. Lustick, the Palestinians have stood up to the Israelis to the point where more Jews are emigrating from that country than are moving in, and where those who remain are increasingly huddling around Tel Aviv as a safe haven. (Ian S. Lustick, “Abandoning the Iron Wall: ‘Israel and the Middle Eastern Muck',” Middle East Policy , Vo. XV, No. 3, Fall 2008.)

In the 1990s, the European bankers used U.S. and NATO forces to dismember Yugoslavia so George Soros and the Rothschilds could gobble up Balkan resources. But that strategy is failing in the Caucasus, where the Russians fought back against the genocidal attack by Dick Cheney's poodle, Mikheil Saakashvili, the New York-trained attorney the CIA got elected as the president of Georgia.

And now the people of Ukraine, the “Little Russians,” realizing what the West has in store for them, are rushing back into the Slavic fold and may be only a year or so away from reuniting with their “Great Russian” cousins across the border.

What is telling is to watch the Western financier press, chiefly the Washington Post and the New York Times , fume about Russian prime minister Vladimir Putin and his “authoritarian” manner. An example is the article by Times correspondent Ellen Barry on Putin's September 11 press conference in Moscow. She wrote, “In three-and-a-half hours, in tones that were alternatively pugilistic and needy, Vladimir V. Putin tried to explain himself.”

I'm sorry, Ms. Barry. You and your editors may think your writing is cute, but Vladimir Putin is the foremost figure on the world stage today. He will remain so after George W. Bush leaves the White House disgraced.

Putin is heir to an epochal movement of patriots who began in the 1970s to take back Russia from within. It started with a base of operations within the KGB and the Orthodox Church, led to Gorbachev's glasnost in the 1980s, and culminated in the Second Russian Revolution of 1991. At that point, the Western financiers gleefully rushed in to support an assault from the Russian “oligarchs” who were looting Russia of everything it owned.

The oligarchs were the shock troops of a financier assault that had already begun to overlap in the West with the Russian Mafia. Cheered on by the Washington Post and aided by academic advisors from places like Harvard, this international syndicate nearly destroyed Russia during the 1990s. But when Putin was appointed interim president by Boris Yelstin in 1999, and after winning the presidential election of 2000 in his own right, he began to fight back.

From the mid-1970s to today, thousands of Russian gangsters, along with many hard-line Bolsheviks/Stalinists, were allowed to emigrate. Many settled in the U.S. and are here today, and many more settled in Israel. In fact, one reason the price of condos in New York, Miami, Tel Aviv, and elsewhere has inflated so much reportedly is the flood of cash from racketeering.

The crooks have allied themselves with the Colombian drug cartels and have heavily infiltrated the world's financial systems, even setting up their own banks for laundering money and speculating in the commodities markets.

Today, Putin is cleaning out the remaining gangster class. His efforts reached a milestone in January with the arrest in Moscow of Semion Mogilevich, called “the world's most dangerous man.”

Putin has declared that the world will not be governed in a “unipolar” manner; i.e. by the U.S. military as the police force for the global financiers. This does not mean Russia has to be our enemy. In fact the world would be much better off, and much safer, if we joined with Russia as allies in keeping the peace.

But to do that our system would have to change, because finance capitalism is far too unstable to coexist with other nations as equals. It must either grow or die, because it always needs new victims to pay the interest on its usury practices and to finance its speculative balloons. As a last resort, it needs the kind of financial institution bailouts being engineered by Secretary of the Treasury Henry Paulson, where the only remaining stopgap is borrowing from public funds and adding to the national debt.

Once economic growth stops, as has now happened, and all the bubbles to restart it have blown up, as has also happened, the end really is nigh. Especially if the host—the U.S.—is bankrupt.

What is coming at us today isn't just another downturn. If people like McCain adviser Donald Luskin doubt it, maybe, instead of writing campaign propaganda, they should ask the fired CEOs of Fannie Mae and Freddie Mac, the stockholders of Lehman Brothers, whose shares have dropped ninety percent in less than a year, and the millions who are losing their homes.

Presidential candidates Barack Obama and John McCain are calling for “change.” Well, if I were standing on a beach with a 100-foot tsunami roaring in my direction, I would call for change too. Except I would not be standing around arguing about the meaning of the words “lipstick on a pig.”

By Richard C. Cook
http:// www.richardccook.com

Copyright 2008 by Richard C. Cook

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Hope of Monetary Reform will be published soon by Tendril Press. He is also the author of Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age , called by one reviewer, “the most important spaceflight book of the last twenty years . ” His Challenger website is at http://www.richardccook.com . A new economics website at http://www.RealSustainableLiving.com is upcoming with partner/author Susan Boskey. To get on his mailing list, for questions and comments, or to pre-purchase copies of his new book, please write EconomicSanity@gmail.com .
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5 Reasons Why American Riots Will Be The Worst In The World

By Silver Shield, on August 10th, 2011

I wrote an article called 5 Places NOT To Be When The Dollar Collapses. In it I wrote that societies that benefited the most from the dollar would be the worst places to be when it fell apart. While the dollar has not even collapsed yet, the strain in these areas is becoming more apparent. England is number 3 on the list has had 4 days of violent riots as people start to lose it. Israel is number 1 on that list has had massive protests. There is revolution in the air all over the world except in the US.

America is still in deep denial which is still the first stage of the Awakening. This denial will be wiped away when the dollar collapses. For now the economy is still functioning with food and fuel available. Americans still have the illusion of wealth and normalcy. They still are stuck in the false left right paradigm and think some other sock puppet will turn things around.

When the dollar collapses, all American illusions will collapse with it. Deep denial will turn into deep anger. The violence I expect in the other 3 areas on the list and all urban areas in the US, will make all other global riots pale in comparison. America is deeply infused with arrogance, denial, narcissism, drugs and violence. There is no other society that I know of that has the degree of intensity and combination of these factors.

1. Arrogance- All of our lives we have been fed the lie that somehow we are better than everyone else. We believe this so much that we feel it is morally acceptable to stick our noses in everyone’s business. We have 777+ military bases all over the world. Our currency is the world’s reserve currency. We control most international organizations like the UN, IMF and World Bank. We control the world’s shipping lanes. Our media is the most popular and sought after propaganda in the world. Our corporations harvest the resources that our empire provides. This has lead to an American way of life that is not negotiable. We print debt and consume. This way of life was only possible by the very real and hard sacrifices made by Americans long dead. America today is nothing more than a spoiled brat blowing through the last of their inheritance. The only thing the US is number 1 in is spreading debt and death.

This American arrogance will be turned on to other Americans as the dollar collapses. We will no longer be able to maintain the global empire of force without a functioning currency. All of our troops will be forced to come home and we will no longer be able to import 25% of the world’s oil. This sudden shift will turn arrogant Americans on each other as they seek to enforce their inflated sense of self worth on to others. They will think that somehow the world somehow owes them something and they believe that lesser people should make that sacrifice for them. After all, the American way of life is not negotiable… at least that’s what Dick Cheney said.

“Everything is fine today, that is our illusion.” -Voltaire

2. Denial- For those that aren’t arrogant, they are in denial that somehow they are okay because they are good people. They believe that the America will recover and that the American Dream is still alive. They believe this because they either lack the ability to logically see through the lies or they believe that the people ruling them have the same morals as they do. You cannot spread freedom with war. A nation cannot enforce their will on another nation anymore than you can enforce your will upon another. There will always be blow back. Of course that is the plan of your rulers. They do not share the same values as you do. They seek to create chaos and division so that they can garner more power and profits.

“You can ignore reality, but you cannot ignore the consequences of reality.” Ayn Rand

The dollar collapse will end the ability of the average American to deny their active or passive participation in the dominance of the world by spreading debt and death. When people’s entire life’s savings are wiped away, they will wonder what their life has been all about. All of the missed times with their family and connections with others has been stained by the pursuit of material gains. Only when everything is taken from them, will they start to see the real importance of life. Many will not be able to come to terms with this coming reality. Those that are aware and prepared stand a great chance of making it through this paradigm shift and thrive. (Join the Sons of Liberty Academy.)
Why am I not happy?


3. Narcissism- The amount of narcissism in America is epidemic. The fascination with celebrities and their clothes consumes so many women. Men are addicted to worshiping sports figures. We have this fear of competition and view others as enemies. This leads to shallow and transitory relationships. Americans consume their way into debt as they try to create an outer facade to hide a void in their vapid lives.

The Baby Boomer generation is known as the “Me” generation. Their obsessive pursuit for material possessions was matched by their embrace of debt. The dollar collapse is going to hit the Baby Boomers the hardest as they are forced to come to term with the trail of pain they have left in their wake. Broken families and debt are just the tip of the iceberg. The war and debt machine they enabled and unleashed upon the world is a much harder reality they will have to deal with. The real problem is the sad fact that many of them will be too old to have a second chance on life.

4. Drugs- Millions of Americans turn to drugs to fill the void of true purpose in their lives. Instead of dealing with a past a hurt or seeking a higher purpose in their lives by helping others and using their natural talents to make a better world, people turn to drugs. The worst kind of drugs are the ones that people believe are making them better. The powerful psychotropic drugs like Selective Serotonin Reuptake Inhibitors (SSRI) or more commonly known as anti-depressants. These drugs are extremely powerful and can cause psychotic breaks that lead to violence. Go to http://ssristories.com/ to see the list of nearly 4,300 cases of crime related to these drugs. These stories include everything from the Virginia Tech shooting to the mom that drowned her 5 kids in the bathtub. I would say that these drugs are much more dangerous than guns, because they cause the people to break from reality and cause the violence.

I don’t have time to go into the mass medication of America and the real reason why Marijuana is illegal, but I do want to warn everyone of one thing. Nearly 10% of the country or 27 million Americans are on these drugs. Knowing that there is only a one month supply in the system and the kind of psychotic breaks that will happen if people come off these drugs too fast, this is definitely not a good thing. When the dollar collapses, we not only have to worry about the 7 to 10 day supply of food and fuel in the system, we really need to worry about the 1 in 10 Americans who are not going to be medicated while their world paradigm collapses. I can see it now, humanitarian airlifts dropping Zoloft and Lexapro from the sky…

5. Violence- Violence has been apart of our American culture since the beginning of our country. We have the most armed population and the highest crime rates in the world. The violence we will see in some parts of America could become as bad as the Reign of Terror from the French Revolution. I wrote the 2 Coming American Revolutions. One Revolution will embrace founding fathers vision of Life , Liberty and the Pursuit of Happiness. The other Revolution will be some collectivist vision of coercion and fear. Some parts of this country will confront the new post-dollar paradigm by embracing freedom and honest money. Others will try to hold onto power by becoming more tyrannical and finding enemies within their neighbors.

We are surrounded by violence and have been desensitized anti social behavior. Our movies and video games show the killing of others but rarely the consequences of those actions. Even other anti social behavior has been normalized. I even realized my favorite show of all time Seinfeld was all about normalizing anti social behavior. The series finale was based on a man getting mugged and all 4 main characters not only not helping the man, but actually making fun of the man as he is violently robbed. This lack of empathy is at the root of our problems. So here we now have a society that not only cares only about themselves and their materialistic needs, we also have a society that no longer cares about other’s feelings.

The American riots will be the worst the word has seen because of the amount of will be of arrogance, denial, narcissism, drugs and violence in our society. These factors are systemic and infect every level of society. I do fear that our nation is sick enough to unleash a series of false flag events to spread our violence even further. This violent Anger phase in the 5 Stages of the Awakening will not last long and not happen in every part of America. There will be a few months of violence that will shake the faith in mankind. Those that live by the sword, will die by the sword. After the most violent are either killed, brought to justice or burnt out, we will enter in a societal depression as we try to come to terms with what has happened. This period could last for years as we struggle with the loss of wealth and life.

I am hopeful that this collapse will actually be the beginning of something really great for mankind. A new paradigm not based on debt and death is a very real outcome of this collapse. With the collapse of the dollar, those that were lured into a senseless narcissistic consumer lifestyle will be forced to come to the understanding that instant gratification is not why we are put on this earth. Those that were ill prepared for the collapse will start to ask questions, then they will seek answers, then they will want blood. The Elite that created, perpetuated and profited off of this paradigm will be running for cover as the world wakes up to what they have done. It will be nice to have consumerism, militarism and narcissism flushed away. (Read Resonate IV)

This collapse will not result in a One World Order. The Elite that are trying desperately make this happen will no longer be able to operate in secrecy. Their minions will lack any legitimacy with the people they rule. After all who is going to trust a President who says he did not see this coming when you and I can see it coming from miles away. The result after a very violent Anger phase is going to be massive decentralization of power not more centralization of power. Local communities, cities counties and states will assert more power over the daily activities of our lives. Some will will slip into tyranny to make order out of chaos. Others will attract the best and brightest by embracing freedom and honest money. The end result is a life where we can reach our highest and best self. How we get there is a rough road, but one I feel is easily traveled if you are aware and prepared.

http://dont-tread-on.me/5-reasons-why-american-riots-will-be-the-worst-in-the-world/

5 Stages of the Awakening

By Silver Shield, on January 30th, 2011

“Thinking is the hardest work there is, which is probably the reason why so few engage in it.” -Henry Ford

One of the greatest challenges to becoming Totally Free is to be able to think independently from everyone else. You know instinctively that no one cares about you, as much as you care about yourself. Yet we constantly listen to others about what is best for us, instead of thinking about what is best for us. That is because we live in a world where everyone tells you what to think, but no one tells you how to think. We are blasted everyday with advertising, financial sales pitches, political media propaganda, religious dictates and more and more social pressure to conform. Most of our lives we don’t make any real decisions we kind of just fall into a routine. You see when you do not really think, you leave your mind open to those who do think. The real and most often unnoticed danger is a class of predators manipulating societies for their own selfish benefits. If you go along to get along and not think outside of the box, you risk being caught in the undertow of a doomed society or worse.

“In our dreams, people yield themselves with perfect docility to our molding hands. The present education conventions of intellectual and character education, fade from their minds and unhampered by tradition, we work our own good will upon a grateful and responsive folk. We shall not try to make these people, or any of their children, into philosophers, or men of science. We have not to raise up from them authors, educators, poets or men of letters. We shall not search for great artists, painters, musicians nor lawyers, doctors, preachers, politicians, statesmen — of whom we have an ample supply. The task is simple. We will organize children and teach them in a perfect way the things their fathers and mothers are doing in an imperfect way.” - John D Rockefeller

There is a lot of money and power derived off of having a “sucker born everyday.” Our Elite molds societies by educating the people just enough to run the machine, but never enough to ask if this is the best machine for us. Think about it, our controlled school systems teach sex, drugs and multiculturalism in third and fourth grades and not how to even balance a checkbook by high school. The Elite’s system wants utterly dependent people to control for power and profit. They do not want fully aware people, who can see through main stream media lies, Wall St Ponzi schemes, or Federal abuses. They certainly do not want people educating others to our common plight of illusion.

“Our wretched species is so made that those who walk on the well-trodden path always throw stones at those who are showing a new road”- Voltaire

Your thoughts are not your own. I love asking thoroughly indoctrinated people, “do your ideas serve to free you or simply to make you serve?” I then following up with, “who put those ideas there?” I always get two answers back, the first is “uh….” with eyes rolling into their head. The second is the programmed ego self defense mechanism of “I did.” It is sad to see people lie in general, but to see people lie to themselves is absolutely heart breaking. If you ever wonder why most Americans are broke, depressed and lifeless, look no further than whose thoughts they are thinking. If they are listening to the Elite’s financial CONmen, they are constantly stripped of their wealth through a myriad of schemes. If they are listening to the Elite’s MSM, they are depressed because the national problems are too big and the experts say that there is no hope or worse they say hope is coming… someday. If they are listening to the Elite’s medical community, they are hooked on psychotropic drugs and will never get their fire back by tackling their life’s challenges.

“Competition is a sin.” John D. Rockefeller

The Elite give us the illusion of freedom but control all of the choices. The Elite give us the choice of 500 cable stations, yet the same message comes from all of the channels. They give us aisles and aisles of food, yet 90% of it is just corn and soy byproducts. They give us the choice of hundreds of political candidates, yet nothing changes because both sides are bought and paid for by the Elite. They give you the choice of investments of stocks, bonds, and real estate but when this all goes down, you will see that it is all apart of the same illusion of the dollar. This of course is controlled by the Elite. If you do not think independently for yourself, you cannot help but to be controlled, whether you know it or not.

Every aspect of your life is monitored, regulated, taxed and controlled, not for your betterment, but for betterment of others. To do most high paying jobs requires a certification or a license. Most “assets” you have or own out right are not your own. (Try not paying your property taxes on a home you own out right and I will show you the real owner is.) All of your communications are monitored and recorded. Now the Federal government wants these records to be kept indefinitely. Think you own your 401k? Try getting your money out. You want to do anything to your home? You better get permission from the homeowner association or the local zoning board. All of these examples, plus many, many more have nothing to do with making your life better. They exist to create power, profit and a parasitic life for another.

“Until they became conscious they will never rebel and until after they have rebelled they cannot become conscious.” — George Orwell (1984)

Now before you crawl into the fetal position and start sucking your thumb after realizing that you possibly are a slave, don’t worry. There is a way out. My Sons of Liberty Academy is based off of the simple principal of “When you are aware, you can prepare.” I believe that when you see the big picture and understand how you are manipulated, finding the best path for you becomes simple. You cannot become aware unless you rebel against everything that you are now. It starts with putting your foot down and saying, “no more!” You must commit to yourself that you will no longer play the fool for someone else. You will start by doing what is best for you and the ones you love. You will search for truth wherever it is and let that search be your guided light. That simple little rebellion of your mind is just the spark for a much greater fire of enlightenment. You will be reborn a man that is totally aware, completely free and fully alive.

“Judge a man by his questions rather than by his answers.”- Voltaire

I have identified 5 Stages of the Awakening Process that mirror Elizabeth Kubler Ross’s Five Steps of Grief . The reason why they mirror is because it is literally your old self dying. Your body will physically and mentally react as if there was a real death in your life. We identify ourselves by what we do, what we wear, and what we drive. When you are awake, all of that will matter no more. You will transcend the current consumer order and be fully prepared for the new paradigm. I feel it is incredibly helpful to understand this process to not only identify where you are, but where you should be going. I cannot stress to you how important and necessary this process is. If you do not start thinking for yourself, you will be without the skills necessary to survive in a post-dollar world.

“No snowflake in an avalanche ever feels responsible.”- Voltaire

1. Denial- In this stage you dismiss anything that goes counter to conventional wisdom as crazy talk or conspiracy theory. This is really a self defense mechanism the brain uses to protect the ego. No one likes to admit when they are wrong, much less admit when they have been fooled. So it is infinitely easier to deny a truth, rather than to embrace it. It is easier to mock, than to debate. It is easier to hide under the sheets and pretend that there is not a monster in the room. This is where most of our society is stuck right now. They believe that whatever the “authorities” tell them is the truth. They go along with the crowd in fear of being looked upon as strange or crazy.

In my experience, denial comes in two forms. The first is the most common and least dangerous form of denial. It is just not wanting to know the truth that might upset their happy little life. This innocent denial of the “ignorance is bliss” mentality, is held by so many Americans who think that things are going “swell” for them, so why ruin it with the truth. There was a woman who I was working with that shut down on me when confronted with the truth. She literally said to me, “I don’t want to know that 9/11 was an inside job because that reality is too scary for me.” Another person said, “that it would be like finding out his father was gay.” (“Not that there is anything wrong with that…” quoted from the very funny social engineer Jerry Seinfeld.) This form of denial is the easiest to overcome because when things go wrong in their perfect little world, they will have no more excuse not to look for the reason of why their world fell apart. There is no more bliss for them to remain ignorant. This economic depression and political failures of both Bush and Obama have already shook a great many out of this denial.

“As long as people believe in absurdities, they will continue to commit atrocities.”- Voltaire

The second kind of denial is one that is much more pernicious. I view it as guilty denial. This is the denial of people who actually are benefiting off of the illusion of our paradigm. This comes from business owners, government employees or others whose livelihood is derived off of the current debt paradigm. These people actively fight the truth through disinformation or saying, “they can’t keep that a secret” or that is “just a crazy conspiracy.” They would rather create plausible deniability to distance themselves from the reality of their actions/inactions. Their aggressive defense of the illusion shows me that they know what they are doing is wrong. They are too afraid to live outside of this paradigm, so it is better to try to hold it together despite its human costs.

“Anger is just a cowardly extension of sadness. It’s a lot easier to be angry at someone than it is to tell them you’re hurt.” -Thomas Gates

2. Anger- When you start to see that you were fooled, you react violently for being taken for a fool and want to lash out. The Freedom Movement has a lot of this in it currently with talk of “just shooting the bastards.” This action is ineffectual in bringing about positive change for the Freedom Movement. (Those that have proposed this violence to me, I am sure were working for the government trying to find some sucker to frame.) Anger is a very natural reaction and is one that you must go through rather than suppress. Finding out how the world really works is a kin to finding out your significant other has been cheating on you. You may have remained faithful to what this country was about while atrocities were committed behind your back. Anger is just covering up for the fact that you are really hurt for being taken advantage of. This stage is often the shortest, but is also the one where the most energy is expelled. In my anger stage, I redirected my anger to fuel an intense amount of research into making sure I was never fooled again. It eventually lead to the creation of the Sons of Liberty Academy.

3. Bargaining- After you calm down, you reach out to anyone who will listen to tell them what is really going on. This is the most annoying stage of the awakening process. (Remember you are reaching for people who are in stage 1 of Denial.) You ruin Christmas parties telling people about WTC7 or kids basketball games talking about the Federal Reserve. By reaching out and sharing, you are not really trying to awaken people, you are really looking for help. By reaching out, you are seeking guidance or structure in your search for truth. You know that there is something wrong. You know that you cannot go back to ignorance. Without clarity, you cannot go forward. This naturally leads to the next stage of depression.

4. Depression- Now that you have reached out to everyone and nothing seems to happen, depression sinks in. You start saying “it is too big” or “what could I do about it.” The worst kind of depression that permeates the Freedom Movement is the arrogant attitude of “I know it all” or “screw everyone, I don’t care.” This is the most painful stage and the hardest to get out of. Human happiness comes from progress and yet progress in this journey seems to suck you further into a hole. Unfortunately there is no way around this, yet it is necessary to go though it.

“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.” Frank Herbert

5. Acceptance- At the point where you now become comfortable with the oncoming reality and make active, positive steps to prepare for it. This process of making wise choices for yourself and not others, will yield massive positive personal results. These positive results will reinforce your actions and bring about more positive change in your life. People will start to notice the light in your eyes as confidence returns. They will now ask what happened to you and those that once did not want to hear the truth, will be ready to listen. This is ultimately where we need to get to both personally and as a movement.

“Most men lead lives of quiet desperation and go to the grave with the song still in them.” -Henry David Thoreau

I really feel that the reason I have been so successful at waking people up is that I do not try to scare and depress them. (Trust me, I can write doom and gloom with the best of them.) I do try to motivate, encourage and enlighten people in order to take that first step into their highest self. This journey is the most important one they will ever take and is your only hope to ever becoming what you were meant to be free and independent.

“I think therefore I am free.” -Chris Duane

Top 5 Places NOT To Be When The Dollar Collapses

By Silver Shield, on June 23rd, 2011

The dollar collapse will be the single largest event in human history. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but all other fiat currencies, as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide. (Read the Silver Bullet and the Silver Shield to protect yourself from this collapse.)

Thanks to the globalization and the giant vampire squids of the Anglo-American Empire, the dollar is the world’s reserve currency. It supports the global economy in settling foreign trade, most importantly the Petro Dollar trade. This money is recycled through the City of London (not to be confused with London) and New York. This fuels our corporate vampires that acquires and harvests the wealth of the world. The corporate powers suppress REAL assets like natural resources and labor to provide themselves massive profits. This Fascist, Statist, Collectivist model provides the money into the economy to fund an ever increasing federal government. That government then grows larger and larger enriching its minions with jobs to control their fellow citizens. Finally, to come full circle, the government then controls other nations through the Military Industrial Complex.

This cycle will be cut when the mathematically and inevitable collapse of the dollar occurs. In order for our debt based money to function we MUST increase the debt every year in excess of the debt AND interest accrued the year before or we will enter a deflationary death spiral. When debt is created, money is created. When debt is paid off, money is destroyed. There is never enough to pay off the debt, because there would be not one dollar in existence.

We are at a point where we either default on the debt, willingly or unwillingly, or create more money/debt to keep the cycle moving. The problem is if you understand anything about compounding interest, we are reaching the hockey stick moment where the more debt that is incurred, the less effective it is and this leads us to hyper inflation. There are only two actors needed for this hyper inflation, the Lender of Last Resort, the Fed, and the Spender of Last Resort, the government. These two can, and will, blow up the system. I believe they will wait until the next crisis and the whiff of deflationary depression before they fire up the printing presses. That crisis is coming very soon at the end of this summer or fall. The money and emergency measures are worn out. The fact that NONE of the underlying problems that caused the 2008 crisis have been resolved. The only thing that has happened is that instead of corporate problems, we now have nation problems. In this movie Greece will play the role of Lehman Brothers and the United States will play the role of AIG. The problem is there is nowhere to kick the can down the road and there is no world government to absorb the debt, yet… (Problem, Reaction, Solution.)

So this leads me to the Top 5 Places Not To Be When the Dollar Collapses.

1. Israel- This Anglo-American beach head into the Middle East was first conceived by the most powerful family in the world, the Rothschilds, in 1917. The Balfour Declaration said that there will be a Zionist Israel years before World War two and the eventual establishment of Israel. Israel has not been a good neighbor to its Muslim nations and has always had the two biggest bullies on the block at it’s back. When the dollar collapses, the United States will have much to much on its plate both domestically and internationally to worry about such a non-strategic piece of land. This will leave Israel very weak at a time when tensions will be high. This very thin strip of desert land will not be able to with stand the economic reality of importing its food and fuel or the political reality of being surrounded by Muslims.

2. Southern California- The land of Fruits and Nuts turns into Battlefield Los Angeles. 20 million people packed into an area that has no water and thus food is not good to say the least. Throw on top of the huge wealth disparities and the proximity to a narco state and this does not bode well. We have seen riots for Rodney King, what will happen when the dollar is destroyed and food an fuel stop coming into this area. People will get desperate and do crazy things, especially when a huge proportion of its citizens are on anti depressants. If food and fuel cannot get in, what about Zolfot? At a time when people’s world are falling apart they lack the ability to deal with this new paradigm. If people come off of these drugs too fast they suffer psychotic breaks and you will have thousands of shootings or suicides.

3. England- The Land of the Big Brother and former Empire of world wide slave and drug trade will suffer heavily. The stiff upper lip that their the British Elite ingrained into their sheeple will not work anymore as the British population explodes. The human character will sacrifice and unite for a foreign enemy, but not if the enemy has always been the Elite. The Anglo-American Empire may pull off another false flag to distract it’s population on another Emmanuel Goldstein like in 1984, but I feel this collapse will happen before they pull it off. This will make all eyes point at the British Elite as solely responsible for this catastrophe. We have seen massive riots for soccer matches with hooligans. What will happen when this island with very little food and fuel gets cut off?

4. New York City- Another large urban area living too high on the dollar hog. NYC is the area I moved out of in 2008. There is little doubt that all of the wealth in New York, New Jersey and Connecticut is derivative off of Wall Street wealth. The savings and investments of the whole nation and much of the world flows through this financial capital. As the world wakes up to the massive financial fraud, this will lead to the destruction of capital like we have never seen before. This will have tremendous effects on the regional economy as people driving in Mercedes suddenly wonder where their next meal is coming from.

5. Washington D.C.- The political collapse of the Federal Government will wreak havoc on the hugely inflated local economy. As more and more states find it necessary to assert their natural control, the Federal Government will suddenly loose power and importance as the whole world suffers from a Global Hurricane Katrina. The money that they create and spend, will become worthless and the government minions pensions will evaporate. Millions that once relied on the ability to force others to send their money to them, will learn that the real power has always been at the most local level. Massive decentralization will be the answer to globalization gone mad. Local families and communities will forgo sending money and power out of their community, as they will care about their next meal and keeping warm.

“You can ignore reality, but you can’t ignore the consequences of ignoring reality.” -Ayn Rand

To sum up, those areas that have lived highest on the hog in the dollar paradigm will most likely be the worst places to live when the dollar collapses. Many of you will find this article with passing interest, but rest assured this dollar collapse is coming. It is a mathematical inevitability. We will not be as fortunate to muddle through this collapse like we did in 2008 when it was a corporate problem. This time around, it is a national and global problem. The global Ponzi scheme has run out of gas as the demographics decline, as cheap abundant oil declines, as hegemonic power declines. This comes at a time when we reach the exponential or collapse phase of our money. The Irresistible Force Paradox says, “”What happens when an unstoppable force meets an immovable object?” We are about to find out, when infinite money hits a very finite world.

If you want to become aware and prepared for this collapse, please join the free Sons of Liberty Academy.