Politics makes a comeback … Prepare for the revenge of politics. For the past few decades, the quants – mathematicians, physicists and technologists – and their younger brothers, the economists, have been in the ascendant. With their mathematical models and their ability to crunch vast quantities of data, they have shaped the way businesses understand the world and operate within it. – Reuters/ Chrystia Freeland
Dominant Social Theme: Capitalism is failing. Perhaps politicians can save it.
Free-Market Analysis: Chrystia Freeland is one of those Reuters commentators who apparently believe that the best way to implement free-market capitalism is to use government to support it. As government is force and free-markets are voluntary, this becomes a questionable proposition, in our humble view. The question becomes: How can force support voluntarism? Isn't that a kind of … oxymoron?
Ms. Freeland doesn't seem to try to address this, even though she makes a lot of other interesting points in this article excerpted above. She certainly has a good deal of intellectual firepower in her arsenal. She is currently editor of Thomson Reuters Digital, but that's not all …
"Prior, she was U.S. managing editor of the Financial Times. Before that, Freeland was deputy editor, Financial Times, in London, editor of the FT's Weekend edition, editor of FT.com, U.K. News editor, Moscow bureau chief and Eastern Europe correspondent. From 1999 to 2001, Freeland served for two years as deputy editor of The Globe and Mail, Canada's national newspaper."
In a previous article regarding Ms. Freeland, we pointed out that she was utilizing the insights of a profoundly anti-free market entity, the CFR. That article was entitled was entitled "Capitalism Is Failing the Middle Class." We wrote:
Freeland doesn't come right out and say it, but if technology is leading to increasing middle class difficulties, then some extracurricular force will have to be brought into play to rectify the situation. This is one of the oldest and hoariest dominant social themes of the power elite: Market failures demand government relief. It is elaborated on many ways round the world every day.
This seems to be a central theme of hers, the idea that government itself must inevitably be the bulwark of the marketplace. A subdominant social theme would be that there is no qualitative difference between business and politics. One is necessary for the other and they must both work together for society to be successful and prosperous.
The problem here is a lack of qualitative weighting. We would argue that the voluntarism of the market is preferable to the force of government and its backers, competition is preferable to regulation, etc.
For Ms. Freeland, these two competing elements are seemingly somewhat value free. One kind of organizational structure is not preferable to the other. Again, we find this to be a contradiction in terms but it is surely one that Ms. Freeland is not alone in sharing. Here is more from her recent article (the one we are analyzing today):
Politics is making a comeback. That was one of the persistent themes at an invitation-only high-powered international conference about systemic risk in the financial services convened by the Global Risk Institute in Toronto this week (I was the rapporteur). As one of the bankers put it, if you want to understand the world economic outlook for 2013, and where your company should invest, you can't just talk to economists anymore: "You need to talk to political scientists."
I tested that idea with two thinkers – one an economist, the other a political scientist – who make their living helping businesses understand the world. Perhaps not surprisingly, Ian Bremmer, the political scientist and founder of the Eurasia Group, instantly agreed.
"When I started the firm in 1998, I had to convince people about the importance of political science, and I was not always successful," Bremmer said. Making that pitch is getting easier – Bremmer now has some 150 employees and 400 clients around the world.
That trend is growing, he believes, and he thinks a major driver is the rise of the emerging markets. Bremmer defines emerging markets as "countries where politics matters at least as much as economic outcomes;" he also points out that over the past five years emerging markets have been responsible for two-thirds of global growth. Put those together and you have a world in which politics matters more.
Bremmer has been betting since 1998, when he started his firm, that businesses should care about politics. Nouriel Roubini has no such professional stake in the issue. Roubini is an economist par excellence – he shot to international fame as "Dr. Doom" when his bleak predictions about the world economy came horribly true with the financial crisis, and his eponymous firm now boasts some 1,100 clients worldwide.
Even so, Roubini agrees with Bremmer's thesis, and takes it one step further. "The emerging markets have emerged, even as the developed markets have submerged," Roubini told me. "Politics have become more important for many advanced countries, too."
Freeland lists seven reasons why politics is becoming more powerful once more. She lists countries where markets are submerging and politics are taking over. Europe, China and the US are all participating in this trend, in her opinion.
And she writes, "We are living in a time of geopolitical creative destruction. Geopolitics are suddenly in play in a way that for the last half-century they haven't been … We are moving from the brief, post-Cold War Pax Americana to a new age of Metternich, and the economic implications are vast, fast changing and hard to figure out."
She also believes that "a dominant theme – or, more accurately, lament – in Toronto was that financial regulation is back." This is another reason that "politics matter" once more.
Finally, she points out that income inequality is rising and thus capitalism hasn't delivered the proverbial goods. She counsels political scientists – young graduate students – to stay the course. She believes that politics will play a predominant role in the 21st century.
Our paradigm is different. We believe the world is run by individuals and families who control central banks along with their enablers and associates. We believe this tiny group of individuals wants to create world government and promotes dominant social themes that are fear-based promotions pushing the middle class toward giving up power and wealth to globalist institutions.
Reuters has an evident and obvious affiliation to this power elite and from what we can tell, those in the employ of Reuters knowingly or unknowingly provide argumentation justifying government control. Government is necessary to power elite plans as they rule via mercantilism, pulling government levers behind the scenes. No government, no control.
For this reason, among others, we would submit that various Reuters articles continually make the value-free government oriented argument, that both force and voluntarism are equally important in creating a civil society.
But how civil can such a society be? Ms. Freeland calls those who provide academic rationales for this process "political scientists." Again, how scientific is it to throw people in jail for nonpayment of taxes or imprison fathers for being unable to pay child support? And what is scientific about the way modern nation-states fund their operations, via impoverishing and out-of-control monopoly fiat money printing.
In truth, the 20th century and now the 21st were never about the "triumph of capitalism." The 20th century, as we can see from the vantage point of what we call the Internet Reformation, was a kind of modern dark ages in which elite directed history masqueraded as a free-market evolution.
But markets in the 20th century were likely more controlled than ever before. Every aspect of Western capitalism, from money to Wall Street to multinational capitalism, was captured by this tiny, secretive power elite, from what we can tell.
The idea that capitalism has been regnant over these past years is simply a misreading of history, in our humble view. What we do believe is that this is a kind of elite dominant social theme: Out-of-control market forces have made increased authoritarianism necessary as well as expanded regulation.
For this reason we have been predicting in numerous articles a neo-Pecora hearing in Washington that will destroy the rudimentary remnants of market capitalism in the United States. From what we can tell, the planning is taking place for these hearings now.
Each stage of freedom's takedown is being coordinated. The Soros-funded Occupy movement demands the incarceration of "banksters" while Reuters columnists celebrate the ascendancy of the political class.
As before, only the very top central banking families will be left unscathed – the beneficiaries of a system that will successfully confuse people about who and what to blame for the dysfunction of their societies and the bankruptcy of their communities.
We shall see if this strategy shall work as well in this century as the past one. The distinguishing feature (a change maker) is the Internet itself.