Chuck Spinney: Financial Coups Destroying Europe

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Chuck Spinney

The core of neoliberalism is a political-economic theory masquerading as a scientifically pure economic theory.  The central claim is that efficiency and economic growth is the means to maximize individual welfare, and in so doing, neoliberal policies maximize the collective welfare.

In theory, Neoliberalism’s key tenets — the supremacy of the market, globalization of capital flows and labour, deregulation, privatization, together with a reduction of government social services — mutually reinforce each other to produce a system of superior moral values by stressing unfettered freedom, fair competition, equality of opportunity, and democracy.

In effect, however, this ideology creates a system of values that subtly discredit the ideas of the public responsibility and popular government in political discourse.  In other words, neoliberalism replaces the nuanced idea of using politics to manage problems in ‘the commons’ [1] with the absolutist ideal that unfettered individualism always ensures optimal social outcomes.  This is a prescription for rape, pillage, and loot.

Neoliberalism sounds good on paper and definitely makes for subliminally seductive political rhetoric (as Ronald Reagan, Margaret Thatcher, and Angela Merkel proved), but like all mechanical theories embodying some kind of an ‘either-or’ absolutism (communism being an opposite case in point), the interplay of chance and necessity, coupled with the absence of limitations, opens the door for mutations that are wildly at variance with the ideology’s soothing claims.

In the United States, for example, thanks to the Supreme Court’s Citizens United decision, the idea that huge multinational corporations are free individuals (built on the precedents established earlier decisions [2]) has mutated into a legal theory that says the expenditure of money to propagandize (and effectively dominate) political discourse is free speech under the protections of the First Amendment.  According the the Supremes, the power of the megaphone is now no different than the power of the whisper when it comes to protecting the rights of the individual.

Mutations over the last thirty years, such as the Citizens United decision, together with the increased frequency of destructive market bubbles and growing disparities of income and wealth, are making it clear the ideology of neoliberal economics is creating an evolutionary pathway for displacing democracy and individual freedom with a global system of oligarchy sustained by protecting increased inequality with austerity economics.

The unfolding stream of financial coup d’etats taking place in the poorer nations of EU, which my good friend Marshall Auerback describes in the excellent essay below, is an instructive case in point.

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[1] The political essence of any discussion involving the “commons” is best described by Garrett Hardin in his seminal essay The Tragedy of the Commons (Science, December 13, 1968).

[2] For example, “Dartmouth College v. Woodward” (1819) recognized corporations as having the same rights as natural persons to contract and to enforce contracts. The language in Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886) led many to argue the Supreme Court recognized corporations as persons under the equal protection clauses of the Fourteenth Amendment.<

Chuck Spinney
The Blaster

THURSDAY, NOVEMBER 10, 2011

A Financial Coup d’etat in the Making?

By Marshall Auerback, New Economics Perspectives

It is said that the European Union is a remarkably inefficient organization in terms of organizing economic rescue packages, but when it comes to subverting democracy, they are as ruthless and efficient as a well-oiled crime syndicate.

Consider the following:  in the space of less than 2 weeks, the eurocrats have managed to eliminate two troublesome elected leaders, whose actions dared to interfere with their broader objectives of finalizing the “European Project” – a project which, to put it bluntly, is looking more and more like a financial coup d’etat.

Read full article.

See Also:

Chuck Spinney: Europe in Crisis Rule by Troika Spain and Hungary Next

Mini-Me: Iceland Breaks the Back of Western Banking

Mini-Me: European-US Banking–Tangled Web — Tell Me Again, Why Shouldn’t We Default and Let the Banks Fry? + Financial Terrorism RECAP