Free Market Capitalism - Morally and Financially Bankrupt

By Simon Davies and Donald Hunt
SOTT.net

While the world slithers into the black hole of economic collapse, those that head the institutions that sit astride its nations and peoples met in Davos, Switzerland last week for the World Economic Forum. Attendance was, as always, by invitation only and that included the press so we can be sure that whatever came out of Davos 'on-the-record' was intended to. In case you doubt the ability of conference organizers to manage the information flow consider two things; there are numerous "off-the-record" briefings throughout the conference the details of which we never hear, and all those attending, including journalists, want to be invited back for they are members of the Inner Circle and rely on their membership for their place in life.

We were not invited which is somewhat galling given that in October 2005 (The Economic Collapse: An Insider's View) and then again in August 2006 (Signs of the Economic Apocalypse - Update) sott.net (or signs-of-the-times.org as it was then) was hosting podcasts in which the forthcoming collapse of the free market capitalist system was discussed in detail as well as our consistent warnings over the last five years. It is even more galling to find that Nouriel Roubini is being treated as some sort of god for saying exactly the same thing as sott.net after we said it. The upside of not being invited is that you, dear reader, can rest assured of our continued independence of both mind and spirit.

In a conference brimming with talking points the quote of the week award, bestowed for demonstrating a total disconnect from reality so striking that his psycho-pathology shines through, has to go to David Rubenstein co-founder and managing director the Carlyle Group, one of the most powerful and financially aggressive companies on earth who said in an interview:-

"There are six billion people on the face of the earth, and probably about five billion participated in what went on," Rubenstein said in an interview. "Everybody participated in some way or shape or form."

This is the same David Rubenstein whose private equity company grew due to his extraordinary political and financial connections through the use of every aggressive financing tool that Wall Street could invent, tools that relied on the availability of limitless amounts of cheap debt and the financial engineering made possible only by derivatives. He is not a stupid man but he is clearly psychotic and delusional having a complete inability to empathise or see the reality of the lives of billions on this poor planet; the very notion that any more than a very small handful of already wealthy people and perhaps a few who gathered the crumbs from their table benefited from the debt driven private equity bubble is beyond comprehension. Rubenstein was ranked by Forbes magazine as the 165th richest person in America in 2007.

The Carlyle Group has over $90 billion of funds under management (with many times that amount of debt at its disposal), is notorious for being the company with which both Bushes and bin Ladens are affiliated in various ways and boasts current and former employees ranging from Nicholas Sarkozy's brother Olivier to James Baker, former US Secretary of State, and Karl Otto Pohl, former President of the Bundesbank (the German central bank). These are the men who run our world, the men who have created the financial 'crisis' and who plan to profit from it as Rubenstein himself said recently to the Wall Street Journal :-

In a keynote speech at the 15th annual venture capital and private equity conference at Harvard Business School, Rubenstein laid some of the blame for the private equity industry's troubles on investment banks, who competed with each other to see who could offer the cheapest debt with the loosest terms. But he admitted that the buyout industry got carried away, too.

"I analogize it to sex," Rubenstein said. "You realize there were certain things you shouldn't do, but the urge is there and you can't resist."

The top priority now is "to make sure deals from 2004 to 2007 don't go bankrupt," he said. To that end, buyout firms will focus on cutting costs, including through layoffs, buying back the debt on their portfolio companies and holding the companies longer, "So, when the world comes back, you'll have an asset that you can use."

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"Ultimately, the best private-equity deals of all time will be done [during] this time," Rubenstein said.

While the IMF's chief economist declares that, "We now expect the global economy to come to a virtual halt." we have Rubenstein and his ilk licking their lips at the cheap pickings that are soon to be available to those who created this 'crisis'.

The sage words of Warren Buffett are worth remembering when he referred to Rubenstein and private equity firms of his genre as "porn shop operators", "You can sell it to Berkshire [Buffett's fund], and we'll put it in the Metropolitan Museum; it'll have a wing all by itself; it'll be there forever. Or you can sell it to some porn shop operator, and he'll take the painting and he'll make the boobs a little bigger and he'll stick it up in the window, and some other guy will come along in a raincoat, and he'll buy it."

Talking of crisis, the truly global extent of the current collapse is striking:-

IMF expects global economy to come to "virtual halt" in 2009.

The International Monetary Fund (IMF) said yesterday that it expects world economic growth this year to be the lowest since World War II. The Fund's latest update to its 2009 World Economic Outlook forecasts global gross domestic product (GDP) growth of just 0.5 percent - sharply lower than the 2.2 percent annual growth it expected last November.

IMF chief economist Olivier Blanchard declared: "We now expect the global economy to come to a virtual halt."

The global slump is being led by the advanced economies, almost all of which will experience major economic contractions. The US economy is expected to decline by 1.6 percent, the eurozone by 2 percent, Japan by 2.6 percent and Britain by 2.8 percent. On average, output in the advanced economies will fall by 2 percent - the first such collective contraction since the 1930s.

Economies classified as "emerging and developing" will grow by an average of 3.3 percent this year, down from 6.3 percent in 2008. Countries in Eastern Europe, Latin America and Asia are expected to experience the sharpest slowdowns. China and India remain the fastest growing, with expected 2009 growth of 6.7 and 5.1 percent respectively. In neither case, however, is the projected growth rate sufficient to generate enough jobs for the rapidly growing Chinese and Indian urban populations.

The IMF's extraordinary world forecast underscores the inability of world governments to mitigate the economic crisis.

The Fund's revised outlook takes into account the various stimulus packages enacted internationally. It warns: "Given that the current projections are predicated on strong and coordinated policy actions, any delays will likely worsen growth prospects... Downside risks continue to dominate, as the scale and scope of the current financial crisis have taken the global economy into uncharted waters. The main risk is that unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth."

While advocating aggressive monetary and fiscal policies to try to stimulate global demand, the IMF warned that stimulus spending threatened to blow out governments' budget deficits. In advanced economies, these deficits are forecast to reach 7 percent of GDP this year, nearly double the 2008 level.

"The sharp increase in the issuance of public debt could prompt an adverse market reaction, unless governments clarify their strategy to ensure long-term sustainability," the IMF report stated. In other words, while stimulus packages are now required to prevent a deflationary spiral of declining economic activity, in the longer term pressure will build for austerity programs involving deep cuts to social programs to cover government debts.

The world crisis is plunging hundreds of millions of working people deeper into poverty.

The International Labor Organization (ILO) released its annual Global Employment Trends report yesterday. It forecast that as many as 51 million workers could be laid off this year, potentially pushing the global unemployment rate to 7.1 percent (up from 5.7 percent in 2007).

...Mass unemployment is but one aspect of the growing social hardship being experienced internationally.

The ILO forecast that the number of "working poor" - or more accurately, the working destitute, given that the category's criteria is earnings of less than $2 a day - may rise to a total of 1.4 billion people, or 45 percent of the world's employed. Up to 20 percent of those now living marginally above the poverty line may fall back into extreme poverty.

"The ILO message is realistic, not alarmist," Director-General Juan Somavia said. "We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession. Progress in poverty reduction is unraveling and middle classes worldwide are weakening. The political and security implications are daunting."

At the risk of actually being invited to Davos next year, we think that the IMF's forecasts are too optimistic. If the statistics are not manipulated we expect the US, Japanese, Eurozone and British economies to all contact by over 5% and possibly significantly more in the next year. That assumes no external event such as cometary impact, Israel's initiation of a nuclear holocaust in the Middle East or the complete collapse of the free market capitalist system all of which are more than possible in which case all bets, including the next World Economic Forum, may well be off.

What is clear is that while the production of "goods" will be down, the escalation and expansion of suffering will be up this year.

The economic system is psychopathic in nature, pushing suffering downwards through society and profits upwards. Two very telling incidents last week in the United States, one of the wealthiest countries in the world, illustrate the problem and the extent to which the capitalist system has degraded human bonds and humanity in general.

In Bay City, Michigan, Marvin Schur froze to death sometime between 13th and 17th January, the local municipal electricity company having installed a device on his house to limit (to nil?) his electricity because of unpaid energy bills. This "limiter" cut power to his house, and Marvin eventually died from hypothermia amidst a bitter cold front that descended on Michigan that week. Nobody made any effort to tell Marvin that the 'limiter' has been installed much less how to restore electrical power to his home. Marvin was 93.

Following his death city officials, the police, the electricity company and the local newspaper seem to have done their best to bury the story; it only being due to the leg work of the a World Socialist Web Site reporter that the story eventually surfaced:-

The director of the local state welfare agency in Bay County, Bernell Wiggins, refused to be interviewed for this article. Wiggins would not answer questions about services the state of Michigan provides to the elderly in Bay County. His employees are prevented by a state gag order from communicating with the press.

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The callousness of the city, which is dominated by the Democratic Party, is indicative of a social system that regards the market principle - defense of the profit system at the expense of social need - as the holiest of the holies. In fact, even in the wake of Schur's death city officials continue to operate dozens of "limiters" across the city, and have shut off power to scores of households this winter, many of which are doubtless inhabited by the elderly and small children.

Similar suspensions are taking place across the country and regularly result in house fires, asphyxiations, and freezing deaths. These deaths result directly from the policies of the US political and economic elite, which regard heat, water and electricity not as basic human rights, but as lucrative sources of profit for the financial aristocracy.

In another tragic incident, by no means isolated, a Southern California man who lost his job killed his wife and five children and then himself. Ervin and Ana Lupoe both worked for a health company, Kaiser Permanente West Los Angeles which had sought to take action against them following representations they made to "an outside agency" regarding their employment in relation to obtaining some benefit related to childcare. Ervin was told by his administrator at Kaiser Permanente on December 23, "You should not even had bothered to come to work today, you should have blown your brains out."

Both Ervin and Ana were eventually fired by Kaiser Permanente in a manner such that they wouldn't be eligible for unemployment benefits and the company withheld their licenses thereby preventing them obtaining other similar employment. With five children under 8 Ervin clearly felt he had no other options; he faxed a suicide note to a local media office then shot his wife and children before turning his gun on himself.

The San Jose Mercury News quotes Carmen Adame, who said, "Their employer led them to this." She said Lupoe and others in their community were being forced to work under unreasonable conditions. "Employers are abusing this economy because people don't want to lose their jobs," she said.

Another Wilmington resident, Xavier Hermosillo, told city officials, "People are frustrated with their government. This is a societal decline."

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Wilmington, a working class neighborhood located between the ports of Los Angeles and Long Beach, has a population of about 55,000. The annual income of more than half of its households is less than $30,000. Home prices are collapsing, and more than 1,000 homes went into foreclosure from January 2007 to September of last year. Foreclosures are expected to increase significantly when the full impact of the crisis begins to be felt.

Many Wilmington residents who previously worked at the nearby docks have lost their jobs as dock traffic has plummeted in recent months. Longshoremen working on a casual basis have not found work since the end of November. The official unemployment rate for Los Angeles as a whole stands at 9.5 percent, a 14-year high.

Following the Lupoe murder-suicide, investigations into Ervin Lupoe's personal finances showed how this economic climate, combined with the loss of his and his wife's job, was plunging him into debt and increasing desperation. He was at least a month behind on his mortgage, owing $2,500 and a late fee, and owed thousands more on a home equity line of credit.

He also owed the Internal Revenue Service at least $15,000 for back taxes, and a check he written to the agency for that amount had recently bounced. On Monday, Lupoe had called his attorney to check on money he was owed in an auto accident settlement.

[ ]

Within hours of the shootings, Los Angeles Mayor Antonio Villaraigosa set up a news conference outside the Lupoe home, offering his take on the devastating situation. "A man who recently lost his job allowed the despair to put him over the edge," he said. "Unfortunately this has been an all-too-common story in the last few months. But that does not and should not lead people to resort to desperate measures."

The mayor was alluding to the fact that there have been five cases of murder-suicide in Southern California in the last year. The majority of the shooters in these incidents were facing work-related or financial crises.

The mayor also advised people to reach out for financial advice and mental health counseling. Again, there was no mention of concrete measures to provide jobs, or to counteract the housing crisis.

Ironically, the very agencies that provide such counseling are threatened with drastic cuts due to the California budget crisis. Ken Kondo, press spokesman for the LA Department of Mental Health, said that calls to the department's hotline have more than doubled since last year, with 22,000 calls specifically related to economic stress received in the last six months alone.

"Since the rise of foreclosures and unemployment we have seen a huge increase in calls," Kondo told Deutsche Press-Agentur. He said the cuts "would have a terrible impact, especially with the amount of traumatic incidents we are having."

Some of the most brutal incidents in the region over the last year:

- On Christmas eve, a man dressed as Santa Claus arrived at the home of his former mother and father-in-law in Covina, Calif. He killed his ex-wife and eight of her relatives and later killed himself.

- Last October, an unemployed and financially distraught financial manager shot his wife, three children, his mother in-law and then himself in the Porter Ranch area of the San Fernando Valley.

- In February 2007, an apparent murder-suicide claimed the lives of five family members in Yorba Linda. A 14-year-old son survived.

These truly tragic events which are being repeated the world over even as you read this column contrast with the attitudes reported by Bloomberg in Davos this week.

Davos Delegates in 'Denial' as $25 Trillion of Wealth Vanishes

Regret is cheap for some delegates at the World Economic Forum in Davos, Switzerland. Redemption for their role in the worst economic wreck since the Great Depression comes at a steeper cost.

"Nobody in Davos wants to get near a negative like redemption," said Robert Dilenschneider, chief executive officer of the Dilenschneider Group, a public relations firm in New York. "But the truth is that everyone here is part of the problem, and the public will soon begin demanding a pound of flesh."

"No banker or businessman wants to take responsibility," said Dilenschneider, who counts 40 Davos delegates as clients, their identities shielded by confidentiality agreements. "It's their view that everybody else did something wrong."

Questions about responsibility, blame and contrition hang in the cold mountain air at the glitzy Alpine resort this week like so much exhaled breath. With $1 trillion of bank losses and $25 trillion of market value gone missing since the start of the financial crisis, there's much to account for.

"There's a 'Great Gatsby' quality to Davos," said Niall Ferguson, a professor of history at Harvard University in Cambridge, Massachusetts, referring to the novel by F. Scott Fitzgerald. "When people look back at this gilded age, I'm sure there will be images of the investment bank parties at Davos, just as people looked back at flappers after the 1920s. People are still in denial."

Ferguson, author of "The Ascent of Money: A Financial History of the World," and a first-time Davos delegate, said "There's a sense of 'let's have the party anyway,' and 'let's talk about the post-crisis world,' as though that could be soon."

'Stupid Things'

At a panel on leadership yesterday morning before hosting a reception with champagne and canap s at the Hotel Europe Piano Bar, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon expressed frustration at those who seek to pin all the blame on bankers.

"I take full blame for all the American banks and all the things they did," said Dimon, 52, the only CEO of a major U.S. financial institution to attend the conference this year, adding that he knows that's what people want to hear. Regulators, he said, should share some of the blame.

"God knows, some really stupid things were done by American banks," Dimon said. "To policy makers, I say where were they? They approved all these banks."

Stephen Green, chairman of London-based HSBC Holdings Plc, also criticized regulators at a panel about capitalism on Wednesday. Green, 60, a Church of England lay minister who has written a book about reconciling a life in banking with his belief in God, called for "an overhaul of the regulatory environment." He also talked about the need for self-regulation, saying that "no amount of rules is going to enforce good behavior."

'Everybody Participated'

At a press conference on Jan. 28, he dodged the question of personal responsibility, saying only that "the banking industry" has "something to apologize for."

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No Innocents

Ruben Vardanian, CEO of Russian investment bank Troika Dialog Group, said just saying sorry is not enough. "Our values became miserable," Vardanian said. "We are all guilty, and the scope of attrition is large."

Suzanne Nora Johnson, a former vice chairman at Goldman Sachs Group Inc. and a director of American International Group Inc., took a similar view: She said there are no innocents walking Davos's icy streets.

"There's no immunity in any sector," says Johnson, who heads the World Economic Forum's Global Agenda Council on Finance and Business. "No one did a good job."
Spreading the blame around is one thing; whether bankers are ready to atone for their actions is another.

Abu Eesa Niamatullah, executive director of the Cheadle Mosque in Manchester, England, who is in Davos to tend the spiritual needs of global business leaders, says Islam calls its cleansing process "expiation" and that he doesn't expect any takers.

Redemption

"Bankers don't want redemption for the moral wrongs they've committed against humanity," said Niamatullah. "Redemption is a heavy word for Davos Man because remorse must come with sincerity and the desire to atone for the transgression. There are no sincere acts of sorrow in Davos."

That may be because Davos has no time for redemption, says Barry Gosin, CEO of Miami-based global real estate firm Newmark Knight Frank. "If a shark bites your leg off while swimming in the ocean, can you condemn the shark? This was not an intentioned plan to destroy the world. Wall Street was designed to make money."

If atonement is difficult, retribution may prove "brutally difficult," Starwood Capital Group CEO Barry Sternlicht said in an interview in Davos. As Sternlicht sees it, "everyone wants a head, and that's not reasonable. To do that, you'd need to take out the top 20 executives at the 300 biggest financial firms."

Humility, Transparency

The forum's chief redemption officer, John DeGioia, hasn't figured out how to make the moral component a useful part of any economic stimulus package. "This moment requires a real humility about the fact that we built these systems and are responsible for them," says DeGioia, president of Georgetown University in Washington and head of the forum's Global Agenda Council on Society and Values. "None of us has demonstrated the leadership required and humility necessary to respond to the depths of this crisis."

John Studzinski, a 52-year-old senior managing director of Blackstone Group Inc., the New York-based private equity firm, says Davos delegates need more than humility. "People can't be transparent until they start being transparent with themselves," Studzinski said.

It takes a certain mindset to be able to talk with such contrition yet avoid the obvious, a mindset that Walter Bromberg, noted psychiatrist and criminologist, summarised in Crime and the Mind (1965):-

In the area of business crimes, ethics are not so neatly applicable: here the zone of gray, lying between the black and white of right and wrong, becomes significant. Sharp business practices, chiefly by large corporations or cartels, once considered ethical in the larger frame of private enterprise began, on scrutiny, to appear suspiciously like criminal actions. Manipulations arising out of cartels, subsidiaries and monopolies, overemphasis or omissions of vital facts in economic competition, short cuts, circumventions and skimpiness in complying with laws and regulations, self-assigned indulgencies in the matter of exploitation, connivance with governmental officials - all touched on criminal categories.

This mindset is underpinned by one of the greatest slights of hand ever perpetrated upon society; corporations have the legal rights and protections of 'natural persons' but are not held to the same responsibilities. The US Supreme Court even ruling that "business practices and callings are above the law", as Walter Bromberg commented, "The notion that a corporation could be immoral seemed an idea foreign to American thinking". This was summarise by E.A. Ross in Sin & Society (1907), a corporation is "an entity that transmits the greed of investors, but not their conscience".

With the viral spread of just this "American thinking", we see today the results upon the outlook of those at the pinnacle of world power; a thinking that can only be described as "without conscience" and therefore by definition, psychopathic.

All those in attendance at Davos and all the commentators in the mainstream media are imprisoned in their self interest such that they cannot venture to conceive the obvious; that what is at fault is the entire system not the actions or inactions of any one group or groups of players. Whichever stone one turns in examining this 'crisis' one ultimately has to face the fact that the capitalist system as practiced today is morally, ethically, socially and financially bankrupt. It is bankrupt because that is it's nature.

We have been researching the history of the ethics of business and in particular the role of religion in the rise of capitalism. This research is ongoing but one thing is becoming abundantly clear - whatever system of morals and laws that has been conceived at whatever time in history, there has always been a yawning chasm between the purported morals and laws and the daily practices of the time. The medieval ban on usury was easily bypassed by clever framing of contracts and business arrangements and was totally ignored by the Church, Kings and Princes when they needed funding for their pet enterprises and especially in the financing of wars.

In our own time, we have a plethora of morals and laws which stand in stark contrast to the daily actions we see around us and in complete isolation when compared to the actions or those at the forefront of free market capitalism. We should not be surprised for the god of love has been replaced for many centuries by the god of money and power.

Markets

The markets this week (to Feb 2nd)

	Previous week's close	This week's close	Change	% change
Gold (USD)	901.90	928.90	27.00	2.99%
Gold (EUR)	695.43	725.02	29.60	4.26%
Oil (USD)	45.90	41.66	4.24	9.24%
Oil (EUR)	35.39	32.52	2.88	8.13%
Gold:Oil	19.65	22.30	2.65	13.48%
USD / EUR	0.7711 / 1.2969	0.7805 / 1.2812	0.0094 / 0.0157	1.22% / 1.21%
USD / GBP	0.7249 / 1.3795	0.6878 / 1.4539	0.0371 / 0.0744	5.12% / 5.39%
USD / JPY	88.779 / 0.0113	89.920 / 0.0111	1.141 / 0.0002	1.29% / 1.77%
DOW	8,078	8,001	77	0.95%
FTSE	4,052	4,150	97	2.40%
DAX	4,179	4,338	159	3.81%
NIKKEI	7,745	7,994	249	3.21%
BOVESPA	38,132	39,301	1,168	3.06%
HANG SENG	12,579	13,278	700	5.56%
US Fed Funds	0.19%	0.19%	0.00	0.00%
$ 3month	0.10%	0.23%	0.13	130%
$ 10 year	2.62%	2.85%	0.23	8.78%

Africa

The World Bank is projecting lower growth this year (around 3.5%) due to falling commodity prices. The way the free market system works, 3.5% growth would be regarded as fine for developed countries, but for the poorest and most under developed, where all the benefits of growth go to a minute percentage of the poulation much higher growth and much more equitable income distribution would be needed to avoid suffering. Because African countries mostly export raw materials, the sharp drop in commodity prices is hitting them hard. Since most African countries cannot afford large stimulus packages, the World Bank official in charge of African programs called for developed countries to chip in some of their stimulus money:

Obiageli Ezekwesili, the World Bank's vice president for Africa, told reporters today at an African Union summit in Addis Ababa, Ethiopia. "Africa did not create this problem. Africa should not be left to suffer the impact of this alone."

Many governments on the continent don't have the flexibility for stimulus plans that would add to deficits, the official said. Industrialized nations should divert 0.7 percent of their measures to Africa to soften effects of the crisis and improve roads, electric lines and infrastructure, she said.

There's not much chance of the wealthy countries diverting any of their stimulus money to Africa. South Africa, with one of the strongest economies on the continent, plans to implement a $69 billion infrastructure program in hopes of restarting growth, few other African countries can afford to do the same.

Asia

Chinese stocks are holding up well, leading to some optimism about China weathering the storm. Speaking to people we know in China it does seem that aside from the low end manufacturing, there is still reasonable activity within China. Companies which have previously relied on foreign banks for as much as 60% of their funding are finding that as these foreign banks pull back from lending, so far the Chinese banks are stepping into the gap. One company we talked to reported that this year it expects Chinese banks to provide up to 80% of their funding needs.

China's World-Beating Stocks Keep BlackRock Bullish on Economy

The world's largest money managers say China's steepest monthly stock gain in more than a year shows the fastest-growing major economy will avert a
recession.

The Shanghai Composite Index, the broadest measure of shares traded on the mainland, opens after a weeklong celebration of the Lunar New Year and a 9.3 percent gain in January, the best among the world's 10 biggest markets. Last year, the index fell 65 percent, the worst since at least 1996, according to data compiled by Bloomberg.

Chinese shares rebounded after the central bank lowered interest rates five times since September and the government announced a $585 billion stimulus plan. China's economy is expected to grow near 8 percent this year even after expanding 6.8 percent in the fourth quarter, the slowest pace since December 2001, according to fund managers Richard Urwin at BlackRock Inc. and Barclays Plc's Russ Koesterich, who together help manage more than $3 trillion in assets.

"China is going to do what it has to do to keep the economy humming," Koesterich, the San Francisco-based head of investment strategy at Barclays Global Investors, said in a Bloomberg Television interview Jan. 26. "They can enjoy faster growth than the rest of the world in 2009 and in 2010 as well."

In Korea, the Hyundai and Kia auto manufacturers are increasingly targeting China to make up for weaker sales in the U.S.

Western Europe and the U.K.

European stocks rose last week led by gains in bank stocks, of all things.

French workers staged a one-day general strike last week as millions took to the streets to protest Nicholas Sarkozy's policies of bailing out banks while cutting spending for people.

Sarkozy Response Sought by Unions After French Strike, Protests

French President Nicolas Sarkozy is under pressure to review his response to the economic crisis after more than a million people took to the streets yesterday in the biggest protest since he was elected in May 2007.

"The president said 'I hear you,'" Jean-Claude Mailly, general secretary of the Force Ouvriere union, said today on La Chaine Info. "I'd rather have 'I understand you.' With 2.5 million people in the streets, the president should be careful."

Sarkozy, whose €26 billion ($33.5 billion) economic stimulus package to support banks and spur investment was passed by parliament last night, needs to do more to counter rising unemployment and falling purchasing power as the French economy enters its first recession in 16 years, the unions said.

Yesterday's one day general strike disrupted transport, closed schools in large swathes of the country and, according to the police, brought 1.1 million people to the streets in cities and towns across France. Unions Confederation Generale du Travail and FO put the number closer to 2.5 million.

While France has a history of street protests, the global financial crisis has sparked similar demonstrations and unrest in countries from China and Greece to Iceland.

Sarkozy responded in an emailed statement after the demonstrations, saying the "concern is legitimate" and that he is ready for "dialogue." Today, his aides say he won't change his policies.

"No change in direction," Raymond Soubie, the president's social affairs adviser, told RTL radio. Sarkozy "will maintain" his economic and social policies, he said.

Popular Backing

The government will, however, respond, Labor Minister Brice Hortefeux said. "We will respond, but not in an immediate, inarticulate way," he told reporters today.

The strike had widespread backing. About 69 percent of the French people supported the strike, a poll by CSA-Opinion for newspaper Le Parisien showed on Jan. 25.

"French people have turned to their president to say 'this crisis is serious and we need more protection,'" Stephane Rozes, head of CSA-Opinion, said in an interview today. "Missing that point may bring more social protest."

Eastern Europe

Russia raised interest rates last week to curb inflation and support the ruble.

Poland announced it will delay long-term spending plans in response to anticipated loss of revenue. Poland is planning on adopting the euro in 2012 and needs to avoid large deficits.

Latin America

Mexico's economy probably shrank 1% in the fourth quarter of 2008, spurring talk of stimulus plans.

In Brazil, President Lula announced a 12% rise in the minimum wage.

United States

Shocking fourth quarter 2008 Gross Domestic Product (GDP) numbers for the United States came out last week : a 3.8% drop even including inventory sitting in warehouses or on store shelves. Equally shocking was the announcement by Exxon-Mobil of profits of $45.2 billion, the largest ever in US corporate history.

Gold Bubble?

We conclude this week with the thoughts of Naufal Sanaullah on the possibilities of a Gold Bubble in the near and medium term:-

With an insolvent public and no foreign demand for Treasuries, the Federal Reserve will monetize debt [ie. print money] to finance its continued bailouts and economic stimulus. This is purely created capital pumped right into the system. This is not anything new for the Fed, for the past two decades, it has kept interest rates artificially low and created massive artificial wealth in the form of malinvestment and debt-financing. In the past, the Fed has been able to funnel the inflationary effects of its expansionary monetary policy into equity values with its low rates, which discourage saving, causing bubble after bubble, in the form of techs, real estate, and commodities. The excess liquidity (the artificial capital lent and spent because of low interest rates and debt financing) was soaked up by the stock market, which gave the appearance of economic growth and production. With inflation being funneled into equity and real estate over the last two decades, illusionary wealth was created and the public remained oblivious to the inflationary risk and the much lower real returns than nominal.

Now that the "artificial wealth bubble" being inflated for the past two decades is finally collapsing, one of two scenarios can occur: capital destruction or purchasing power destruction. Capital destruction occurs when the monetary supply decreases as individuals and institutions sell assets to pay off debts and defaults and savings starts growing at the expense of consumption. This is deflation and the public immediately sees and feels its effect, as checking accounts, equity funds, and wages start declining. Deflation serves no benefit to the Federal Reserve, as declining prices spur positive-feedback panic selling and bank runs, and debt repayments in nominal terms under deflation cause real losses.

Purchasing power destruction is much more desirable by the Fed. Its effects are "hidden" to a certain extent, as the public doesn't see any nominal losses and only feels wealth destruction in unmanageable price inflation. It breeds perceptions of illusionary strength rather than deflation's exaggerated weakness. The typical taxpayer will panic when his or her mutual fund goes down 20% but will probably not react to an expansion of monetary supply unless it reaches 1970s price inflationary levels. In addition, the government can pay back its public debt with devalued nominal dollars, which transfers wealth from the taxpayers to the government to pay its debt. Inflation is essentially a regressive consumption tax, which the government wants and the Fed attempts to "hide". Not only is the Treasury's debt burden reduced, but the government's tax revenues inherently increase.

The Fed, in an effort to minimize inflationary perception, has for the last two decades supported naked COMEX gold shorts to keep gold prices artificially low. The Fed, as well as European central banks, unconditionally supported these naked shorts to deflate prices and stave off inflationary perception, as gold prices stay artificially low. This caused gold shorts to be "guaranteed" eventual profit, by Western central banks offering huge artificial supply whenever necessary, causing long positions in gold to be wiped out by margin calls and losses.

[The liquidity generated by such quantitative easing (printing of money) will have a similar effect to the excess credit and liquidity boom of the last twenty years - it will seek a home and generate inflation - estimated at 300% at today's liability level before Obama gets to spend a single dollar.]

In order to funnel the excess liquidity into a less harmful asset, the Fed appears to be abandoning its support for gold naked shorts, causing shorts to suffer their own margin calls and cause rapid price expansion in gold. On December 2, for the first time in history, gold reached backwardation. Gold is not an asset that is consumed but rather it is stored, so it is traditionally in what is called a contango market. Contango means the price for future delivery is higher than the spot price (which is for immediate settlement). This is sensible because gold has a carrying cost, in the form of storage, insurance, and financing, which is reflected in the time premium for its futures. Backwardation is the opposite of contango, representing a situation in which the spot price is higher than the price for future delivery.

On December 2, COMEX spot prices for gold were 1.99% higher than December gold futures, which are for December 31 delivery. This is highly unusual and it provides strong evidence to the theory that the Fed is abandoning its support for gold shorts. Backwardation represents a perceived lack of supply (in this case, the artificial supply the Fed would always issue at strategic times no longer existed), causing investors to pay a premium for guaranteed delivery. On May 21, when crude oil futures reached contango, I started waiting patiently for the charts to offer a short sell trigger because the contango represented a supply glut relative to perception and current pricing. Oil was priced at $133/barrel at that time and six weeks later, on July 11, oil topped at $147, and six days later crude broke its 50DMA on volume and triggered a large bearish position against commodities that resulted in some of my most profitable trades last year.

I consider gold's backwardation as a similar leading indicator to the opposite effect - a dramatic increase in prices. Crude began its most recent backwardation in August 2007 at around $75/barrel and increased dramatically over the next nine months to $133/barrel at contango levels. Backwardation, especially in the case of gold prices, reflects a lack of supply at current prices and is very bullish.

But why would the Fed abandon its support for naked COMEX shorts? What makes gold such a desirable asset to attempt to direct excess liquidity into? The unique nature of gold and precious metals provides its desirability in this Fed operation. Gold has little utility outside of store of value, unlike most commodities (like oil, which is consumed as quickly as it's extracted and refined), so its supply/demand schedule has unusual traits. Most commodities and assets go down in price as the public loses capital, because the public has less to consume with and that is reflected in demand destruction that leads to price deflation. Gold is not directly consumed and its industrial use and consumer demand (jewelry) is at a lower ratio to its financial/investment demand than almost any other asset in the world.

As a result, gold is relatively "recession-proof," as evidenced by its relative strength in 2008. Gold prices rose 1.7% last year, which is quite spectacular considering equity values went down 39.3%, real estate values went down 21.8%, and commodity prices went down 45.0% in the same period (as determined by the S&P 500, Case-Shiller Composite, and S&P Goldman Sachs Commodity Indices, respectively). Because gold is not easily influenced by consumer spending, highly inflationary gold prices don't do any direct damage to the public and are a good way to funnel excess liquidity without economic destruction.

Federal Reserve Chairman Ben Bernanke is a staunch proponent of dollar devaluation against gold and is very supportive of President Franklin D. Roosevelt's decision to do so in 1934. In the past, manipulating gold prices to artificially low levels was beneficial because it prevented capital flight into a non-productive asset like gold and kept production, investment, and consumption high (even if it were malinvestment and unfunded consumption).

Bernanke's continued active support of gold price suppression would lead to widespread deflation that would collapse equity values and cause pervasive insolvencies and bankruptcies. Insolvency in insurers removes all emergency "backups" to irresponsible lending and spending, which would surely ruin the economy. Bernanke's plan seems to be to devalue the dollar against gold with huge monetary expansion, causing equity values to rise and economic stabilization. I've heard estimates of 7500 and 8000 in the Dow Jones Industrial Average as being minimum support levels that would cause insurers and banks to realize massive losses, causing widespread insolvencies in them and other weak sectors like commercial real estate that would irreversibly collapse the economy.

This gold price expansion, set off by the massive short squeeze, will continue until gold prices reflect gold supply and Federal Reserve liabilities in circulation. The "intrinsic" value of gold today (called the Shadow Gold Price), calculated dividing total Fed liabilities by official gold holdings, is about $9600/oz, compared to around $865/oz today. This gold price calculation essentially assumes dollar-gold convertibility, as is mandated by the US Constitution and was utilized at various periods of American history. The near-term price expansion in gold, mainly led by abandonment of gold shorts and the first traces of inflationary risk, should show $2000/oz by the end of this year. As the leveraged deals from the pre-crash credit craze mature, with the majority of them maturing in 2011-2014, there will be more monetary expansion for debt repayment, which will structurally weaken the US Dollar (which is inherently bullish for gold) and will also provide new excess liquidity to be funneled into precious metals. This leads me to believe gold will be worth $10,000/oz by 2012.

The US Dollar's strength as the equity and commodity markets collapsed was due to deleveraging and an effect of the Fed's temporary sequestration of dollars, taking dollars out of supply. That is over. Oil seems to be putting in a bottom on strong volume, no one is left to buy any more negative real yield securities the Treasury is issuing, and gold has started looking very bullish.

But a good speculator always considers all situations. Even if deflation is to occur, which I see as next to impossible, gold prices should still rise to $1500/oz levels next year, because it has shown relative strength as one of the most viable assets left to invest in. In addition, the short squeeze occurring in gold will provide substantial technical price expansion, even in the absence of dollar devaluation. Because of this, I suggest gold as an investment cornerstone for the foreseeable future.

...Literally the only thing that I find suspicious in all of this is the fact that I see so many inflationists out there and I even see commercials on TV about precious metals. I usually like to stay contrarian to the public, which I consider irrational and wholly incompetent. But this enormous debt and monetary expansion is a structural problem that common sense may provide better insight for than the most complex of models and theories.

I leave you with this, a quote from Fed Chairman Ben Bernanke about President Franklin D. Roosevelt's 1934 Gold Reserve Act, which was the greatest theft of wealth I've aware of in American history:

"The finding that leaving the gold standard was the key to recovery from the Great Depression was certainly confirmed by the U.S. experience. One of the first actions of President Roosevelt was to eliminate the constraint on U.S. monetary policy created by the gold standard, first by allowing the dollar to float and then by resetting its value at a significantly lower level ... With the gold standard constraint removed and the banking system stabilized, the money supply and the price level began to rise. Between Roosevelt's coming to power in 1933 and the recession of 1937-38, the economy grew strongly."

My predictions: gold at $2000/oz by the end of the year and $10,000/oz by 2012 and silver at $30/oz by the end of the year and $130/oz by 2012.

State Repression and the Establishment of Capitalism

By Simon Davies, SOTT.net

We ended last week saying that "we find ourselves today much as those hapless English found themselves centuries ago; we have been disenfranchised; we are having our "land" in the form of homes, jobs, security, income and inheritance taken from us even as you read this; and we have lost our rights to privacy and to protection from wrongful arrest and imprisonment. We face forces arrayed against us as formidable as any known in history; forces that are preparing, just as those who have come before, to use every tool of repression available to keep us subservient, to keep us ignorant, divided and confused, thereby ensuring our political and economic impotence."

If we are to find a way through the webs of deceit that surround and ensnare us we need to go back to the history of resistance against despotism and tyranny. Despotism and tyranny might sound a little strange if you find yourself reading this seated comfortably in a warm and comfortable home with money in your bank, but if you are not so fortunate you will have an inkling of the appropriateness of these terms. Of course those that have the greatest understanding of despotism and tyranny are those that cannot read this essay because they are illiterate, uneducated, too poor or all of the above. Of course, there are also the many thousands who have been imprisoned without trial, often in our name.

There is an expression that we don't appreciate something until we have lost it. This is particularly true with respect to equality and liberty; the loss of which is initially painless for most people as we have seen these last seven years. The keenness of this loss can however be better felt if we have an appreciation of how hard fought the struggle to gain each aspect of our lost freedoms was. With this in mind let's continue our look back at the making of modern day England.

Due Process

We come across the phrase "due process of law" for the first time in the Magna Carta of Edward III in 1354 chapter 29 which states:-

No man of what state or condition he be, shall be put out of his lands or tenements nor taken, nor disinherited, nor put to death, without he be brought to answer by due process of law.

A remarkably clear piece of law that established that a man must have done something for which he is required to answer and that the answering be by "due process of law" before he can lose that which he has - his freedoms [1]. When we consider the history of Enclosure and the resulting hardships and deprivations of the ordinary people of England we must ask ourselves what happened to this key chapter of Magna Carta, the one that states clearly that to lose what was taken during Enclosure a man must be "brought to answer by due process of law"? Remarkably it has survived, along with just two other chapters, the bulk of Magna Carta having been repealed in various Acts of Parliament in 1863 [2], 1897 [3], 1925 [4], 1948 [5], 1967 [6] and 1969 [7].

Magna Carta was a great law of freedom that provides for certain rights to freedom and equal treatment "to be kept in our Kingdom of England forever" [8] yet this law has all but disappeared. We also find through the very act of Enclosure, that the fundamental tenet of one of its three remaining chapters (clauses) has been cast aside, for it is very doubtful that Magna Carta meant that a man could be deprived of his inheritance, lands or tenements, by the simple process of writing new law, the means by which Enclosure was legitimised.

This single example points to the fact that the ruling elites of England have used Parliament as a fig leaf to go about doing whatever they please. They pass laws through the Parliamentary process as if that process were legitimate, have those laws enforced through extreme violence and murder because "they are the law of the land" yet all the while they are in flagrant breach of far older laws themselves, not to mention morality. The same is true in the US and many other democratic nations.

The Petition of Rights

Men and women have struggled against the yoke of abuse and oppression, despotism and tyranny for great periods of history. In 1607 a revolt broke out in the English Midlands against the enclosure of common land, the protesters used no violence and simply uprooted hedges and filled ditches. The traditional means of dealing with unrest and crime was to call up the people of an area in pursuit of a felon or to call the local militia to arms in the event of a military need. Neither of these forces heeded the call up so the local landowners and their servants took up arms and attacked the protesters killing forty to fifty. The leaders were hanged and quartered. This was typical of the treatment meted out to the ordinary people by the ruling elite.

When it came to the ruling elite not being happy with the status quo matters were handled somewhat differently. In 1626 Charles I introduced two taxes without going through parliament, he also began billeting soldiers in civilian homes, a practice akin to forcing modern citizens to house police officers and agents of the government in our homes today. The burden of these taxes and forced billeting fell upon the landed and mercantile classes. Five Knights refused to pay, were imprisoned by the king but not charged. The king was served writs of Habeas Corpus, refused to answer them properly arguing that royal prerogative overrode Habeas Corpus. The Five Knights argued that they had a right to "due process". The king won, keeping the Five Knights imprisoned.

The House of Commons, not wishing to be seen to challenge the Royal Prerogative, responded with the Petition of Rights in 1628 which it was argued were a restatement of existing rights while in fact being a list of grievances against the king and a significant expansion of the recognised rights of men. The king eventually signed the Petition, which gave it legal effect, only after secretly agreeing with senior judges that it would not damage his prerogative; he signed because he had no intention of honouring the Petition! In other words, George W. Bush did not invent "signing statements"!

The Petition of Rights was the landowners and merchants means to prevent taxation without Parliament's consent, prevent forced loans (effectively another form of taxation), protect themselves from arbitrary arrest and imprisonment in contravention of Magna Carta, ensure "due process", protect them from arbitrary interference of property rights, ensure enforcement of Habeas Corpus and stop the forced billeting of troops and the use of martial law. The Petition is considered to be the origin of the Third Amendment to the US Constitution which reads, "No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law".

It is sobering to observe the similarity between the demands of the Petition of Rights of 1628 and the simple wishes for justice and equality of billions on the planet today. It seems that whoever is in power grants unto themselves power equivalent to Royal Prerogative, absolute powers, while loudly proclaiming otherwise, thus bearing witness to the truth of the expression that "power corrupts while absolute power corrupts absolutely".

John Lilburne

The similarities with today are striking in other regards, most notably the control of the media. In our time the control is through ownership, in the 17th century it was through the licensing of printing presses and their publications and the taxation of newspapers. In 1638 John Lilburne was arrested for distributing unlicensed religious pamphlets, he was brought before the Court of Star Chamber where he was not charged with an offense but instead told to plead; he refused, he said, until charges were brought against him and the law on which those charges were based was shown him in English. He was flogged, pilloried and imprisoned but remained resolute. His stand against King Charles and the Court of the Star Chamber is cited as the basis for the Fifth Amendment to the US Constitution which reads:-

No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

John Lilburne was also cited in Miranda vs Arizona 1966, the case that established the Miranda Rights and the Miranda warning that has to be read to any person arrested in the US. The ruling states:

...The person in custody must, prior to interrogation, be clearly informed that he or she has the right to remain silent, and that anything the person says may be used against that person in court; the person must be clearly informed that he or she has the right to consult with an attorney and to have that attorney present during questioning, and that, if he or she is indigent, an attorney will be provided at no cost to represent him or her.

John Lilburne fought for the Parliamentarians in the First Civil War, was captured by the Royalists in 1642 and later released in exchange for a Royalist officer. In 1645 he was imprisoned for denouncing Members of Parliament who lived in comfort while the common soldiers fought and died for the Parliamentary cause; he was freed on petition of two thousand leading London citizens; he resigned from the army the same year as he refused to sign the Solemn League and Covenant which restricted religion in the Army to Presbyterianism on the basis that it infringed his freedom of religion. He was imprisoned again in 1646 for denouncing his former commanding officer, the Earl of Manchester, as a Royalist sympathizer; the campaign to release him spawned the Levellers movement.

Lilburne and the Levelers were highly influential among the soldiers of the New Model Army, the Parliamentary army. The Civil War was essentially a war between Catholicism and Protestantism and between Royalist and Parliamentarians. The soldiers of the New Model Army were strongly Protestant but were also mindful of their own rights and were without doubt fighting as much if not more for these than for religion. The attitude of the Levellers was simple, the ordinary man was fighting, dying and suffering in pursuit of the freedom of Parliament from royal supremacy and had every expectation that he would gain equal freedoms in victory.

An Agreement of the People

The Army Council of the New Model Army provided the forum for the soldiers to put their views before their commanding officers via representatives called Agitators. Under the influence of Leveller ideas the soldiers appointed new Agitators in 1647, who were inherently distrustful of the King and demanded that England be settled from 'the bottom up' rather than the 'top down' by giving the vote to most adult males. Their views and demands were set out in An Agreement of the People("An Agreement of the People for a firm and present peace upon grounds of common right",) presented to the Army Council in October 1647. It called for the redrawing of electoral boroughs so that each borough had roughly the same number of voters; elections to take place biennially with parliament to sit between April and September of each of the two years of its term; that the power of the House of Commons was inferior to the power of the people, and that the House of Commons could have power over the creation and repeal of laws, "the erecting and abolishing of offices and courts, the appointing, removing, and calling to account magistrates and officers of all degrees, the making war and peace, [and] treating with foreign States"; freedom of religion; freedom from conscription; equality before the law and that "as the laws ought to be equal, so they must be good, and not evidently destructive to the safety and well-being of the people". It is important to be aware that even in these highly religious times the chief draftsman of the Agreement, John Wildman, believed that the Bible provided no model or guidance for civil government; a position that contrasts with the brazenly religious tones of many in Washington and London today and in the recent past.

The republican and democratic nature of An Agreement of the People was strongly resisted by the senior officers of the army who had already agreed another less radical document, The Heads of the Proposals which they hoped the king would accede to. The first part of the Proposals deal with parliament but critically omit the supremacy of the people over parliament, equality before the law and justice of the law while granting essentially 'police powers' to those of parliament; the remaining parts accrue additional powers to parliament including the Cromwellian agenda for the suppression of Ireland.

The Agreement of the People sought genuine freedom for all people while the Head of the Proposals sought power for a select group, the landowners and merchants who made up the House of Commons and its limited electorate. These documents were debated for two weeks after which there were to be three meetings between the various camps. Despite the assurances of good faith given at the debates Cromwell and Fairfax, the army commanders, had no intention of acceding to the pressure of the soldiery so imposed the Heads of Proposals on the army. Those that refused were arrested while one of their leaders was executed. Under threat of being dismissed the army agreed to the Heads of Proposals.

Ten months later in September 1648 the Levellers largest petition, signed by one third of all Londoners and many others, To The Right Honovrable The Commons Of England was presented to Parliament. The funeral of a leading Leveller and member of the House of Commons in October became a substantial Leveller demonstration demonstrating widespread support for their ideas.

A modified version of the Agreement of the People of 1647 was presented to the House of Commons on 20th January 1649; on 30th January King Charles was tried and executed; in February the senior officers of the army banned the petitioning of Parliament by soldiers; in March five Levellers were cashiered from the army after demanding the restoration of the right to petition; in April three hundred infantrymen refused to serve in Ireland until the programme of An Agreement of the People had been implemented, they were dismissed from the army; the same month soldiers in London made similar demands, fifteen were arrested and court martialled of whom one, a former Leveller agitator was hanged.

At his burial a thousand men, in files, preceded the corpse, which was adorned with bunches of rosemary dipped in blood; on each side rode three trumpeters, and behind was led the trooper's horse, covered with mourning; some thousands of men and women followed with black and green ribbons on their heads and breasts, and were received at the grave by a numerous crowd of the inhabitants of London and Westminster.[9]

In May 1649 soldiers in Banbury rose in mutiny over pay and politics. The pay issue was quickly resolved by Cromwell but not the politics; four hundred men with Leveler sympathies, under the command of Captain William Thompson marched to meet other soldiers to discuss their demands, they were assured safe conduct but were ambushed at night by Cromwell. Captain Thompson was killed a few days later and three of the leaders of the mutineers executed; thus removing the influence of the Levellers from the army.

Lilburne continued to write against the injustice and hypocrisy he saw around him. In the following years he was imprisoned, tried, acquitted twice and exiled. In the end he remained in prison under orders from Cromwell until his death in 1657. By the time of his death he had rejected the hypocrisy and narrowness of Puritanism becoming a Quaker.

One of Lilburne's fellow Levellers, William Walwyn had this to say on the eve of the Second Civil War. It speaks truth directly to power, a truth which is as relevant today as it was 360 years ago.

In all undertakings, which may occasion war or bloodshed, men have great need to be sure that their cause be right, both in respect of themselves and others: for if they kill men themselves, or cause others to kill, without a just cause, and upon the extremest necessity, they not only disturb the peace of men, and families, and bring misery and poverty upon a Nation, but are indeed absolute murderers.

In 1649 another group, the Diggers, one of a number of non-conformist groups active at the time, began planting vegetables on common land. The local landowner, who had enclosed substantial areas of common land, tried to get the army to evict them; the army refused on the basis the Diggers were doing no harm. The landowner then hired thugs to attack the Diggers, beat them and burn one of their houses down; he brought them to court in a case in which no defense was allowed and for which a trumped up conviction was obtained. The Digger communities across the country faced similar harassment often being subject to arbitrary arrest and imprisonment. Under the unrelenting pressure familiar to all those who seek to camp on common land in England to this day, the movement had died out by 1651.

The great 'crime' of the Diggers was that they had an idea that if "the common people of England would form themselves into self-supporting communes, there would be no place in such a society for the ruling classes. The ruling elite would be forced to join the communes or starve, as there would no longer be anyone left to hire to work their fields or pay rent to them for use of their property." [10]

A pattern emerges

A clear pattern can be discerned throughout the events chronicled. The Levellers were not a marginal group of crackpots but a rationale and reasoned political body who espoused ideals of equality and freedom. Their history illustrates that those in power never relinquish it without a fight. The methods and weapons that the incumbent power of the 1640s wielded had at their core much of what we see throughout history and up until the present day:-

▪ The will of the people is irrelevant; only being recognised as an expediency to buy time.

▪ The enacting of arbitrary law to suit their momentary and long term needs. The laws of the land are designed not as a means of ensuring a just and equitable society but as a means of ensuring the status quo and protecting the ruling elite of the time.

▪ The application of the law is arbitrary and brutal. The excuse of the potential or imagined "violence of the mob" is used to justify the real and extreme violence of the state.

▪ Widespread use of cruel and inhuman punishment - although not unusual in the literal sense.

▪ The Courts are bound to apply the law but the judiciary, being of the same class at the ruling elite, apply unjust, inequitable and immoral laws as if they were just, equitable and moral.

▪ They will negotiate and draw moderate and reasonable people into discussion while having no intention of acceding to any of their demands. The process of negotiation allows them to identify the most eloquent and able leaders of the people and those most able to be manipulated. The debates and discussions are always designed to lead nowhere with any agreement being reneged upon as soon as the immediate threat that caused negotiations to commence has passed. The capable leaders of the people having been identified are imprisoned, executed or murdered when the opportunity arises. Those that can be manipulated are used as agents, often to promote violence while also often being imprisoned or executed in order to spread fear among the resisters.

▪ Once the leaders are out of the way and an example has been made of a handful of those that protest then under threat the bulk of people buckle. The threat is however often one that would be impossible to fulfill or be self-defeating of those in power if only protesters realised. In the Cromwellian case if all the soldiers had refused to sign The Heads of Proposals the army could never have cashiered them all for then there would be no army left.

In the end it is the use, and threatened use, of extreme violence that is the hallmark of those that seek to remain in power. While seeking power they portray themselves as the champion of the ordinary people but once in power, often on the blood and suffering of the ordinary people, they turn on their foot soldiers and behave in this time-honoured pattern. Nothing has changed although the methods have become more refined.

But, as V said in the film V for Vendetta, ideas are bullet proof, you can't kill an idea. The Levellers pioneered the basic ideas of political democracy and sovereignty of the people; the Agitators pioneered the participation of workers in the running of the workplace; and the Diggers pioneered communal ownership, cooperation and egalitarianism; the underpinnings of modern democratic socialism.

Cromwell died in 1659. The monarchy was restored in 1660 and with it a new wave of religious intolerance. The Church of England was to be dominant with a swath of laws enacted to enforce this dominance. Amid the waves of tyranny thought and ideas circulated and found fertile ground; for it seems that true suffering creates the fire in which truth becomes of paramount importance and all other petty considerations burn up in the flames.

The Bill of Rights

From this cauldron came the Habeas Corpus Act 1679 and the 1689 Bill of Rights. The Bill of Rights stipulated the basic rights of all men in England, the ones of particular relevance today are:-

▪ Freedom from royal interference with the law. Though the sovereign remains the fount of justice, he or she cannot unilaterally establish new courts or act as a judge. The actions of George Bush and other political leaders of the present in the establishment of the kangaroo courts for terrorism stand in contrast to this concept

▪ Freedom from taxation by Royal Prerogative. The agreement of parliament became necessary for the implementation of any new taxes. This is the basis of no taxation without representation.

▪ Freedom to petition the monarch.

▪ Freedom from the standing army during a time of peace. The agreement of parliament became necessary before the army could be moved against the populace when not at war. This right has been trampled by subsequent Acts of Parliament such that the army is now able to be brought out to break strikes and whenever it is deemed by the Home Secretary that the police cannot deal with civil unrest. The brutal occupation of Northern Ireland by the British Army is the most extreme example of the negation of this right. This right of protection is also reflected in the US Posse Comitatus Act 1878

▪ Freedom for Protestants to bear arms for their own defence, as suitable to their class and as allowed by law. This right is reflected in the Second Amendment of the US Constitution - "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

▪ Freedom to elect members of parliament without interference from the sovereign. The basis of free and fair elections - a concept that is increasingly a hollow joke in numerous 'democracies'.

▪ Freedom of speech in parliament. This means that the proceedings of parliament can not be questioned in a court of law or any other body outside of parliament itself; this forms the basis of modern parliamentary privilege. This freedom also extended to the freedom from all harassment in parliament. It has been decisively trampled by the current Labour government in the UK with the recent police raid on the parliamentary offices of Damien Green. Mr Green having been involved in the leaking of information the UK government didn't want to people to know.

▪ Freedom from cruel and unusual punishment, as well as excessive bail. This right is repeated almost verbatim in the Eighth Amendment to the US Constitution which states, "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." Similarly, "cruel, inhuman or degrading punishments" are banned under Article 5 of the Universal Declaration of Human Rights and Article 3 of the European Convention on Human Rights.

▪ Freedom from fine and forfeiture without a trial. The enclosure of land in England breached this right almost immediately upon its enactment. This is also the basis for the Fifth Amendment to the US Constitution which states, "No person shall be ... deprived of life, liberty, or property, without due process of law ..." and the Fourteenth Amendment "nor shall any State deprive any person of life, liberty, or property, without due process of law ..."

Also in 1689 John Locke published, anonymously, his Two Treatises of Government which is considered to have been highly influential in the framing of the US Declaration of Independence, Constitution and Bill of Rights.

We can perceive the line of inheritance of ideas of equality and freedom from the suffering of the 17th century, ideas that became law and constitution for both the British and Americans as well as peoples of the British Empire. Britain, having no singular constitution, relies upon a bed of enacted law and common law instead. The underlying premise of the British system is the separation of powers between the executive, the legislature and the judiciary. A similar but constitutional system exists (in theory) in the US. History makes it clear how crucial it is to maintain a true separation, for without it tyranny quickly rises. This essential separation has been lost in our time both in the US and in Britain.

The 17th century ideas and laws of freedom and equality seem to have been quickly forgotten in England. As we discussed last week, Enclosure increased apace, legitimised through Acts of Parliament yet wholly illegal when the previous laws of England are considered together, especially Magna Carta, the Petition of Rights and the Bill of Rights. Denial of "due process" was key to the theft.

America

However, in America these ideas took root and ultimately bore fruit in the Declaration of Independence in 1776. The rights of men were considered to be natural rights, from Locke amongst others, and therefore not subject to the will of men. Central among these rights is the right of revolution. The Declaration of Independence begins:-

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. - That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, - That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."

The ethical and moral nature of the Declaration of Independence stands as a shining example of the potential of ordinary people to organise for themselves representative and just government and the basis that such government can either be maintained, or overthrown, should the need ultimately arise.

There are however more sober lessons to be gleaned from events following the Revolutionary War. As Laura Knight Jadczyk put it:-

Contrary to popular conceptions and teachings, the American Revolution did not create the American nation as we know it today. The Articles of Confederation actually bound thirteen new nations, each theoretically sovereign in its own right, into a loose confederacy. The Continental Congress could legislate but not enforce. However, the effects of the Revolution had been financially disastrous to everyone. The national and state debts went unpaid (monies owed to the wealthy elite who had financed the war - and for those who wonder, yes, some were Jews and some were not, so don't go off on the Jews on this one!), trade declined and credit collapsed.

Left to their own devices, the New Americans would have eventually sorted these problems out based upon emerging priorities and systems involving barter and mutually satisfying personal agreements. A real Democracy might have flourished, though it wouldn't have been necessarily Capitalistic.

Tradition teaches us that a group of "noble patriots" called a Constitutional Convention to "further the principles of democracy", as spelled out in the Declaration of Independence. Again, nothing could be further from the truth.

The Constitution actually checked the development of democracy.

In some of the states, a moratorium on debt was enacted to relieve the farmers who had fought in the war. But, in the largest and wealthiest states, the planters of Virginia, the manor lords of New York, and the merchants of Massachusetts and Connecticut, refused to give an inch. Massachusetts went so far as to prohibit barter and mutual support schemes to which the impoverished returning soldiers had been forced to resort. Daniel Shay, a Revolutionary captain who had been cited for bravery at Bunker Hill, had come out of the war, as had many others, with nothing. (General Lafayette had presented him with a sword which he was soon forced to sell.) Seeing so many others like himself, he was filled with the injustice of the actions of the wealthy elite. He organized a force of 800 farmers and attempted to prevent the sitting of the courts which were foreclosing the properties of the returning soldiers. Shay's army was dispersed by the state militia but his action thoroughly frightened the upper classes. Samuel Adams begged Congress for federal aid to protect "property rights" and Congress authorized a force designed to prevent any further rebellion. General Henry Knox wrote:

"The people who are the insurgents have never paid any, or but very little taxes -- But they see the weakness of government'... They feel at once their own poverty, compared with the opulent, and their own force, and they are determined to make use of the latter, in order to remedy the former. Their creed is 'That the property of the United States has been protected from the confiscations of Britain by the joint exertions of all, and therefore ought to be the common property of all. And he that attempts opposition to this creed is an enemy to equity and justice, and ought to be swept from the face of the earth.' In a word they are determined to annihilate all debts public and private and have agrarian laws, which are easily effected by means of unfunded paper money which shall be a tender in all cases whatsoever."

Now notice what the good general was saying: he tells us that the PEOPLE of the new land wanted - demanded - that the property of the United States be "the common property of all."

That sounds a bit "Socialistic," doesn't it. Can you believe it? Our forefathers demanded a Socialist government! I don't know about you, but I have half a dozen Revolutionary War soldiers (or more) in my family tree, and it surprised me to learn that my ancestors were demanding Socialism, especially when we all know - or have been told - that Socialism is that evil first step toward Communism; and we all know how evil Communism is, right? Well, we'll come back to this. For now, let me just comment that the "insurgents" may have paid very little taxes, but they paid much blood. (It is also interesting to note that Knox referred to the New Americans as "insurgents." Isn't this word being used pejoratively against those Iraqis who are opposing the US invasion of their country at the present time? My, my!

Nevertheless, seized with fear that a democracy would actually be enacted, the wealthy classes murmured for a government by "the rich, well-born, and capable." (John Adams) Ezra Stiles and Noah Webster were vocal opponents of democracy. Webster claimed that:

"The very principle of admitting everybody to the right of suffrage prostrates the wealth of individuals to the rapaciousness of a merciless gang."

They were well and truly indoctrinated by Calvin, weren't they? And being such good "Christians," it is surprising that they never noted (or at least didn't want to notice) that funny little remark in the New Testament about the "Jesus People" sharing one with another and that they owned "everything in common."

In any event, taking advantage of the situation, Alexander Hamilton induced Congress to call a convention in 1787 to ostensibly revise the Articles of Confederation. Hamilton made no bones about his views that only the wealthy and educated were fit to rule.

"It is usually stated that Hamilton's great achievement was to bring the men of wealth to the support of the new nation, but it could equally well be stated that he brought the new nation to the support of the men of wealth. Indeed it might be said that the new nation was created largely for that very purpose."

Those who met for the Constitutional Convention were, and knew they were, the elite -- wealthy, educated and intellectual. They believed that others like them must continue to rule for their own protection. The public good was a secondary issue (if it was an issue at all). They meant to create a system in which this could be perpetuated, constitutionally, legally, and peacefully.

Adopting strictest rules of secrecy, they proceeded to create the American Constitution. M.L. Wilson wrote in Democracy Has Roots, that the Constitution was "a remarkable achievement in the avoidance of majority rule." It is not surprising that the ratification of this Constitution was popularly opposed. The conventioners promised to amend it at the first regular session of Congress. These promised amendments came to be known as the "Bill of Rights" and it is in these first ten amendments that Americans have their supposed "Constitutional Rights." A sobering thought when one considers that amendments have been repealed in the past.

But for the "Bill of Rights," hundreds of years of blood-letting for personal liberty would have been tossed on the trash heap by the new American Federal Government. This new "Constitutional" government, rapidly propagated the ideals of materialism and capitalism. And, in a process of unadulterated propaganda, these ideals have been inextricably linked with "democracy" as though the two were identical. The result of this has been a vast chasm between the "haves" and the "have-nots" which grows wider and deeper every day, while the former continue to dupe the latter into believing in and sacrificing their lives for that which does not exist and never did.

Thus the money power of capitalism gained a principle foothold in the new nation.

The Police

By the early 19th century the conditions in the towns and cities of Britain were deplorable. Prior to 1829 there was no police force to maintain law and order throughout the country, the system established under the Statute of Winchester, 1285, and the Justices of the Peace Act, 1361, only began to breakdown with the advent of industrial capitalism. Prior to 1361, every town and hamlet was responsible for maintaining the Kings Peace under threat of fine; each town appointing as 'constable' one of its members to be responsible for its collective obligation. In the event of the constable needing assistance everybody was obliged to assist.

The Justices of the Peace Act, 1361, formalized the appointment of Justices of the Peace (or magistrates) by the King, thus relegating the elected constables to mere subordination of the Kings agents. The magistrates were responsible for law and order, were the judicial and administrative authority for their area and were responsible for keeping the peace. With the rise of mercantile capitalism their authority spread to dealing with vagrants and paupers and with the regulation of wages and working hours. The explosion of poverty occasioned by Enclosure and the Industrial Revolution led to rising crime. The response of the ruling elite was predictably repressive. They doubled the number of offenses liable to capital punishment; resorted to using the standing army against the ordinary people; increasingly used the militia and yeomanry (equivalent of the UK Territorial Army or the US National Guard) against the people and started paying blood money to informers. The middle classes formed voluntary protection societies. Many of these actions were flagrantly in violation of the Bill of Rights.

It wasn't until Patrick Colquhoun's ports and river police force of 1798 was legalised in 1800 that a formal police structure was established at which time the magistrates controlling the police became answerable to the Home Secretary (the equivalent of the Secretary of State in the US). The formation of this police force is important for our history for it was motivated to protect the business interests of the merchants using the port of London and it resulted in the change from workers being paid in kind to being paid a money wage. "From the very outset, therefore, there was nothing impartial about the police. They were created to preserve a colonial merchant and an industrial [capitalist] class the collective product of West Indies slavery and London wage labour"[12].

Luddism

With the emergence of Luddism in 1811 the working class were taking their first tentative steps to organizing themselves against the growing industrial capitalism. The Luddites, contrary to popular myth, a myth no doubt propagandised to denigrate their memory and credibility, were not opposed to the new technology of the textile mills. They were textile artisans who opposed the breaking of traditional working practices by the textile mill owners. The new wide frame automated looms could be operated by cheap unskilled labour so the mill owners drove down wages and hired unapprenticed labour. Naturally, faced with poverty, unemployment and the removal of their traditional skilled status, especially at a time of severe economic depression, the skilled artisans were desperate. There being no legal recourse for them the only avenue available was the one they took, the destruction of the machines and the mills that were taking away their livelihood.

The propagandised history of the Luddites fails to mention that they targeted only those mills and mill owners who broke with the old practices and cut prices, those that did not were not attacked. [13]

The movement spread rapidly across the country in 1811 and 1812. As should be familiar to us by now, the reaction of the government was to introduce new repressive law, this time in the form of the Frame Breaking Act 1812 which made frame breaking a capital offense. It is worthy of note that Lord Byron opposed the Act in the House of Lords on the basis that the Luddites were justified in their grievances and that negotiation and just settlement were the better route to restoring the men to work and the country to peace. Unsurprisingly, he was unsuccessful in his opposition for negotiation and justice were (and remain) foreign words to the ears of those afflicted with the ancient diseases of greed, avarice and power. To the mill owners and merchants it was entirely logical for them to use the full power at their disposal, ignore the grievances of those they exploited, and call upon the military and hired thugs to prevent recourse by their victims.

It is at this point that another method of ruling elites comes to the fore, the use of spies and agent provocateurs. The mill owners' thugs and the military were responsible for the deaths of many Luddite protesters while magistrates were clearly intent upon using the Frame Breaking Act to set examples and thereby dissuade protesters from further action. To justify, in the public mind, the use of extreme violence the authorities needed to portray the protesters not as men with legitimate grievances who only acted against property but as a violent mob. John Taylor writing in 1819 described the fact that at a meeting in 1812 ten or eleven of the forty attendees were spies employed by Colonel Fletcher, a Manchester magistrate. Two weeks after this meeting a violent attack upon a factory took place. Taylor is clear in his conclusion that the presence of so many spies was in order to direct the actions towards the resulting violence rather than in seeking intelligence so as to prevent the attack. Twelve men were arrested for taking part in the attack of which four, including twelve year old Abraham Charlston, were executed.

Further executions, including eight in Lancashire and fifteen in York, together with numerous sentences of transportation to Australia broke the back of the Luddite movement which ceased to be active after 1813.

Despite the level of brutality used by the state against those who opposed industrial capitalism ordinary people kept rising against their oppressors, a mark of just how desperate they must have been and a sobering reminder to us all of the price to be paid in opposing free market capitalism today.

In June 1817 workers in Pentrich rebelled unsuccessfully, twenty three being sentenced to transportation and three hanged and beheaded. 1819 saw the Peterloo Massacre, which we discussed last week, in which 11 to 15 people died and over 600 were wounded.

1830 saw rural uprisings, the Swing Riots, across England. The demands of the protesters were a rise in wages, a cut in tithes/taxes and the destruction/removal of the threshing machines that were forcing labourers into unemployment and poverty. Warnings were given to landowners, magistrates and parsons after which, if the demands were not met, workers would assemble and destroy tithe barns, threshing machines and workhouses. Many farmers and magistrates sympathised with the grievances of the protesters so put up little resistance. The government, had different views, responding with familiar brutality, hanging nine protestors and transporting 450 while in 1834 changing the Poor Laws under the Poor Law Amendment Act to make conditions for the rural poor even worse by the mandatory limiting of relief to the workhouse. Needless to add, agreements for increased wages and lower tithes were widely reneged upon.

The uprisings of the ordinary people are always referred to, even today, as "riots", the facts however speak for themselves. These were ordinary people who were time and time again driven to desperation. In our own time, with greater economic woes lapping at our doorsteps, we would be wise to learn the lessons of history, particularly the methods of the ruling elite including their mendacity and treachery.

We should also be cognisant of the observation of G Rude in Paris and London in the 18th Century (1970):-

From my (no doubt) incomplete and imperfect record of the twenty-odd major riots and disturbances taking place in Britain between the Edinburgh Porteous Riots on 1736 and the great Chartist demonstration of April 1848 in London, I have totted up the following score: the crowd killed a dozen at most; while, on the other side, the courts hanged 118 and 630 were shot dead by troops.

The actions of ordinary people are generally directed at the property of the ruling elite while the reactions of the ruling elite are directed at the person. When considered under the light of morality the immorality of the actions of the ruling elite through history beggars belief.

Ian MacDonald, in Race Today, Dec 1973 summarised the ruling elite's masterful next move; a move necessitated by the fact that it was becoming readily apparent that the continued use of the outright brutality of the army would not guarantee a stable society in the long term.

Once the [working] class begins to organise, begins to agitate, begins to demonstrate, you need a force which has all the appearance of independence, which cannot be seen to be visibly taking sides in the class struggle, but which is merely there to enforce the law. The genius of the British ruling class is that they realised the need to have such a force and set about creating it.

It took until 1870 to realise the idea such that the police could be relied upon to deal with crime and public order through Britain. Today, the Police and especially the Special Branch remain potent political weapons in Britain.

We have seen the tactics used by the state and those that control it up to 1832. They controlled a corrupt and unrepresentative political system through which they cynical used the ability to enact laws solely for their own advantage all the while using all and any method to suppress, frustrate and remove all opponents. The depths to which the elites sank to retain power knew no limits yet the history of Britain is presented with most of these facts omitted.

The near complete hijacking, save for the Bill of Rights, of the new United States by the same power that dominated Britain (and many other nations), the money power of capitalism, placed the new country in a precarious position.

Since then the rights and protections established to protect equality and freedom have been cynically abused to effect the whittling down of both. Parliamentary supremacy has been used to enact and impose unjust and wicked laws that seek to sanctify evil acts. The right to "due process" has been removed at both ends of the spectrum such that we can all now be fined without due process and innocent men languish in Guantanamo Bay Torture Camp.

The Predator

The history of oppression is matched by the history of resistance just as, unfortunately, the history of hope is matched by the history of repression. We are driven to ask ourselves how it is that the ruling elite of every age use the same tactics to retain and expand their power. Many might point to conspiracy but such a conspiracy would have to be multigenerational and of extraordinary complexity. There is a far simpler yet more terrifying explanation, it is the explanation given by biology, that ordinary people are subject to the power of a predator.

This predator was described, in part by Carlos Castaneda:-

I want to appeal to your analytical mind. Think for a moment, and tell me how you would explain the contradictions between the intelligence of man the engineer and the stupidity of his systems of beliefs, or the stupidity of his contradictory behavior. Sorcerers believe that the predators have given us our systems of belief, our ideas of good and evil, our social mores. They are the ones who set up our hopes and expectations and dreams of success of failure. They have give us covetousness, greed, and cowardice. It is the predators who make us complacent, routinary, and egomaniacal.

'But how can they do this, don Juan?' I asked, somehow angered further by what he was saying. 'Do they whisper all that in our ears while we are asleep?'

'No, they don't do it that way. That's idiotic!' don Juan said, smiling. 'They are infinitely more efficient and organized than that. In order to keep us obedient and meek and weak, the predators engaged themselves in a stupendous maneuver - stupendous, of course, from the point of view of a fighting strategist. A horrendous maneuver from the point of view of those who suffer it. They gave us their mind! Do you hear me? The predators give us their mind, which becomes our mind. The predators' mind is baroque, contradictory, morose, filled with the fear of being discovered any minute now.

'I know that even though you have never suffered hunger... you have food anxiety, which is none other than the anxiety of the predator who fears that any moment now its maneuver is going to be uncovered and food is going to be denied. Through the mind, which, after all, is their mind, the predators inject into the lives of human beings whatever is convenient for them. And they ensure, in this manner, a degree of security to act as a buffer against their fear. ...

What I'm saying is that what we have against us is not a simple predator. It is very smart, and organized. It follows a methodical system to render us useless. Man, the magical being that he is destined to be, is no longer magical. He's an average piece of meat. There are no more dreams for man but the dreams of an animal who is being raised to become a piece of meat: trite, conventional, imbecilic.

Our predator is the psychopath, a being that appears to be human but isn't; a being that can mimic every aspect of human behaviour yet has none of the emotions nor conscience of a normal human, a being that has an incredible knowledge of the inner workings of normal people such that it can predict our every move and manipulate us at will.

History become less of an enigma when we understand that those that rise to power and those that enforce that power have the same mind, the mind that is "baroque, contradictory, morose, filled with the fear of being discovered any minute now". It is that fear that drives the brutality we see through history for the predator sees any concession as weakness and any weakness as the beginning of its discovery and ultimate destruction. When we see power acting in the brutal and paranoid way that we have examined in these excepts from history we can now know that we are dealing with the predator, the psychopath, in all its terrifying reality.

Just as a religion can be judged by the level of brutality used to enforce it so can an economic system. It is clear from the pages of history that capitalism has fought the ideals of man for equality and freedom at every step. Very few, if any of us have any conception of the precariousness of life during the crucial periods in history when men and women stood against the tyranny of unjust rulers. We have no way of reliving the lives of the Levellers, the proponents of the English Bill of Rights, the American Revolutionaries, the Luddites, the Chartists or the thousands who have opposed tyranny and particularly the tyranny of capitalism throughout the world. It is however essential that we develop our empathy for these people for their struggle and suffering enabled us to benefit from our relative freedoms, before 911 that is.

It is now incumbent upon us to go further and gather their spirit of resistance and learn from the lessons that they have left us. We are at war, we did not declare the war nor did we seek it, it is a war that has been thrust upon us. It is not the "War on Terror' it is the War of Terror waged by the elite of the capitalist system upon us all. Today's ruling elite are the successors of the rulers that hounded John Lilburne to an early death at 42, that perpetrated the great theft of Enclosure, that enacted and enforced laws that forbade ordinary people to gather and form associations, that executed and transported Luddites and Chartists and established our modern system of policing and laws to protect, not society as they loudly claim, but their own narrow economic interests.

With the benefit of history we cannot now stand and claim surprise at the economic collapse that we see taking place, almost in slow motion as in 1929, while the thieves pull off another massive heist of the people no less audacious than Enclosure. What is incredible is that unlike in the past there has yet to be any resistance, or at least any sufficient enough to blast through the wall of lies that passes for modern news. The reasons behind this apparent lack of resistance need to be examined for the lethargy of the bulk of people does not bode well for the survival of any kind of freedom nor for the creation of an economic order based on anything other than exploitation supported by the use and threat of state violence.

The lessons of history point to the nature of our adversary and the methods that are used to suppress those that seek a different order. It is clear that armed rebellion, while arguably entirely legitimate will do nothing other than spread bloodshed and suffering. It is also clear that new peaceful methods of change need to be found, methods that acknowledge the true nature of the war in which we find ourselves.

To be continued....

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[1] This wording differs from the 1297 wording which states, "No Freeman shall be taken or imprisoned, or be disseised of his Freehold, or Liberties, or free Customs, or be outlawed, or exiled, or any other wise destroyed; nor will We not pass upon him, nor [condemn him,] but by lawful judgment of his Peers, or by the Law of the Land. We will sell to no man, we will not deny or defer to any man either Justice or Right."
[2] Statute Law Revision Act 1863
[3] Civil Procedure Acts Repeal Act 1879
[4] Administrations of Estates Act 1925
[5] Statute Law Revision Act 1948
[6] Criminal Law Act 1967
[7] Statute Law (Repeals) Act 1969
[8] Magna Carta 1297
[9] John Lingard, A History of England
[10] http://en.wikipedia.org/wiki/Diggers
[11] M.L.Wilson, Democracy has Roots
[12] Radzinowicz, A History of English Criminal Law
[13] E.P Thompson, The Making of the English Working Class