I finally finished reading the 428 page historical report by Mr. Kevin Phillips and my initial reaction is to wonder how different the outcome of the 2004 election might have been if this work had received the recognition it deserved! [Wealth and Democracy was published in 2003.]
For those of you who missed my first diary regarding this work, a diary that only touched on one of the book’s central themes, let me bring you up to speed.
Wealth and Democracy is a sweeping work that examines historical events from the discovery (and subsequent rape) of the New World to present day with an eye towards finance and the role it played in shaping not one but four distinct ‘empires’.
Early on Mr. Phillips admits unabashedly to being a Republican which caused me to mentally brace myself to wade through the kind of tortured logic we are used to from modern conservatives.
I now admit to being ashamed of my initial prejudice because nowhere in this book does Mr. Phillips varnish the truth.
To say this book is a ‘breath of fresh air’ doesn’t do it justice. In this work the truth hits you between the eyes with a sledgehammer...repeatedly.
Yes, good citizen, in this case being exposed to so many naked truths can leave you ‘dazed’.
If you have any illusions about the world and how it works this book is guaranteed to pop your bubble.
To which I would add the additional disclaimer that this book provided me with a sense of vindication, that I had (sadly) been right all along.
That said, I must also confess to being ignorant of the fact that our current set of circumstances is not new and unique (as our politicians like to claim.)
Not only has it all happened before but each time has ended in economic disaster and that alone is the most important point of this book raises.
Now that we have disclosed the reviewer’s prejudices we can proceed with the review itself.
This work is a ‘tough read’ because Mr. Phillips does a thorough job of naming names and displaying the facts in as much as they are known.
It’s easy to get bogged down in who, what, when, and where so that you never arrive at why.
Yet this is the burning question, we all know what’s going on and we also have a good idea as to why, the book merely confirms your suspicions.
Consider if you will the ‘stages’ that a society goes through. It grows from infancy to robust adolescence to, well, maturity and finally, into ‘decline’.
Let’s look at each of these stages through the eyes of the financier.
In the beginning risk and opportunity abound. Some risks pan out while others do not. The middle is about embracing the technology ‘of the time’ to reap the resources that the land and its people have to offer. (Technology ‘of the time’ is key here.)
In maturity the initial investments are, for lack of a better expression, milked for what they’re worth as new technologies are ‘married’ to new opportunities rather than upgrading old, established ones that are generating ‘pure profits’.
This is a critical phase as it is here that the investor’s line of thought turns to return on investment and maximizing opportunity.
The investor knows that the best returns come from marrying the newest technology to the cheapest labor pool...so this is where they invest.
In the meantime the now ‘mature’ society is milked for what they’re worth. Assets are inflated as an ever-growing number of the workforce is idled due to imports (produced in the nation’s the investor has interests in) overtake domestic production.
You may notice that the cold, hard eye of the investor isn’t interested in what happens to the society that is being devastated. They can’t ‘afford’ sympathy. All they need to know is it’s time to move on.
This is the end result that occurred in each of the four examples cited. So far only the first two (Spain & the Netherlands) ‘revolted’ to usher in critical social reforms...
Britain (the third example) has only recently lost its ‘imperial’ status...but with that said, social conditions there are, um, ‘deteriorating’ in much the same way they are here.
One of the most disturbing ‘revelations’ of this book is how the ‘investor class’ is aided and abetted by the government.
In the Dutch and Spanish examples the investor class and the ruling class were (with some exceptions) one in the same.
Mr. Phillips doesn’t delve too deeply into the British politics but he does direct our attention to the ‘high cost’ in the US of attaining public office.
Leaving the past behind Mr. Phillips directs our attention to another disturbing development, the growing ‘democracy deficit’.
It seems some provisions included in the new trade agreements hands over the administration of these agreements to newly created non-government agencies that are populated by appointees.
That said, one need not scratch too deeply to find that most of the real power wielded by government rests not in the hands of those we elect but in the hands of those who they appoint.
This brings us to dire observation.
Nowhere, on the face of this planet, do we find a government that places the welfare of its citizens ahead of the interests of the investors.
Nowhere.
Mr. Phillips does and outstanding job of shedding light on our current situation.
The question, as always, is what are we going to do about it?
Thanks for letting me inside your head,
Gegner