REVIEWS
- Jeremy Agar
TOO MUCH MONEY
by Max Rashbrooke,
Bridget Williams Books, 2021
If these days we are more aware of the ills brought about by inequality it is largely due to the work of Max Rashbrooke, who has written repeatedly about the subject. Here he traces the history of inequality in New Zealand, outlining where we've been as a country, where we're likely to go, and where we stand in a global context.
He starts with a succinct history of class as a way of looking at society, discussing the various approaches over the centuries. Just what is class and how important is it in determining social outcomes? Is class about money or lifestyle? Is it the main social factor or, at the other extreme of analysis, not important at all?
The Four Capitals
Rashbrooke introduces the concept of capital, the most important thing. For Karl Marx financial capital was the ultimate factor in human relationships. His complex theories were based on the fact that there were bosses and factory owners and there were workers. For Max Weber, another German, a less reductive approach included the role of things like education, which influence the chances people have to enjoy life. This is human capital. Pierre Bourdieu broadened the concept further to consider the quality of personal relationships, social capital, and the ability to enjoy things like the arts and the outdoors. This is cultural capital.
Some progressives, Rashbrooke notes, dislike all the talk of capital with its association with "capitalism" and finance. Rashbrooke agrees that a single focus on economics and the capitalist emphasis on gross domestic product (GDP) alone has not been a good idea, but rather than reject the concept of capital, he wants to broaden it. The most important thing is not money per se; it's social health, and for that to breathe freely, all four capitals need to flourish. The four of them can be grouped as wellbeing.
Organised European settlement in NZ began soon after Jane Austen wrote her novels. Rashbrooke evokes "Pride And Prejudice" to argue that cultural and human capital was important in upper middle class Britain, where people's manners and family background were assessed. A lack of sheer financial worth could be forgiven if people had inherited the approved social graces. That gave rise to talk of "genteel poverty".
These attitudes were imported into NZ through Wakefield's colonising schemes of Canterbury and Nelson. He wanted "labourers, capitalists and gentry" to transport early Victoriana to the Britain of the South. So, the Austen example is well chosen. Wakefield's ideas could never have been implanted as envisaged, but the provoking of inequality and division motivating them could be. Rashbrooke says that the Great Sheep Lords came to dominate, with one bloke on a grand estate near Oamaru said to have commanded £35,000 in assets at a time when a shepherd was paid £5 a year.
In the 1890s, coinciding with the Gilded Age in America, where the first millionaires ruled, inequality in NZ was as great as it had been in pre-revolutionary France. No-one would have talked of capitals, however envisaged. The vast disparities meant that the Great Sheep Lords and their kin were unchallenged top dogs. One quibble: Rashbrooke labels this a South Island thing, but it was a sheep thing, as much Hawkes Bay as Canterbury, and certainly not a West Coast thing.
There was soon a reaction as the Seddon Liberals came to power. No-one had emigrated from hardship and class conflict in order to endure it again. Thus was born the ethic of the "fair go", a phrase that was commonly heard until well on into the next century. Jack was as good as his master. People deserved opportunities to live well, but from then on it was up to them to sort things out for themselves.
Which most should not have found too hard. The number drawing unemployment benefits in 1956 was five. That's the whole country. Up until around the early 80s, wages and prices, including house prices, remained stable and jobs were secure, matching inflation, allowing the basis for wellbeing, even if the word itself was rarely heard. The down side, in an era of bigotries based on religion, ethnicity and gender, was that there was little sympathy for the poor, who tended to be regarded as "deserving", a laid off labourer, say, or "undeserving" (a solo mother).
Rashbrooke follows Thomas Piketty in repeating the finding that the 30 post-war years of relative ease were an unusual interlude within the historic trend of ever-increasing inequality. Normal disservice was to resume, as Roger Douglas and his cronies hurried the country back towards the inequality when the Great Sheep Lords ruled.
The trend has not been encouraging. Rashbrooke reports that globally between 1992 and 2014 "produced capital", the economy and physical products, doubled, while "natural capital" declined by 40%. Prominent in the latter dismal statistic is climate change. The warming planet is playing havoc with three of the four capitals as financial capital fattens.
The One Percenters & The Ten Percenters
Graphs illustrate the distribution of wealth. In NZ the richest one percent's share of pre-tax income was 18% in 1921, generally easing to more modest levels by 1985, when the line climbs, reaching back to 13% by the end of the century as Rogernomics was inflicted on the country. Over the last 20 years the ratio has hovered around 10%.
The graph line for the one per centers keeps going up, as does the line for the ten per centers, if less steeply. The middle and the poorest flatline. In 1893, in the heyday of the Great Sheep Lords, the one per renters owned 65% of all wealth. In 2018 they had to put up with just 20% of it. Rashbrooke warns that the numbers are shaky, probably understating matters, as the "shy wealthy" hide assets. A global perspective indicates where NZ lies within the rich world. Labour income, as a share of national income, a measure of security and wellbeing for working people, is highest in Denmark at 75%. At 59%, NZ lags the median Organisation for Economic Cooperation and Development (OECD) figure of 66%.
Another graph depicts the wealthiest ten percent's share of national wealth in 27 advanced countries. Topping the list, inevitably, is the USA, where they rake in 80% of it. NZ is tenth most unequal, lying in the table between the UK and Ireland. Just as NZ historically prided itself on being the land of the fair go, the US always banged on about opportunity, but the reality is the reverse, America, along with the UK and Italy, being the OECD country with the least social mobility between generations. Scandinavia is healthiest, with mobility between generations being most pronounced in Finland, Norway and Denmark. NZ lies in the middle of the rankings.
Piketty's central point about contemporary neoliberalism is that it rewards those who are already wealthy, inherited assets always tending to increase at a greater rate than do incomes from working. Rashbrooke suggests how we can see this by his metaphor of a conveyor belt. In the time of covid, the escalator is further sped by all the new "printed" money in the economy, bumping up the value of assets, most notably in the price of houses. One of the more extreme graphs in the book shows how comparatively few houses are being built for the non-rich.
The recent history of Auckland exemplifies all the themes of inequality. Rashbrooke points out that in the relatively relaxed post-war years richer Aucklanders wanted to get away into leafy suburbs. The inner city's Ponsonby and Grey Lynn were poorer places with largely Maori and Pasifika residents. When these suburbs became popular with richer Pakeha, brown people, displaced from secure jobs by Rogernomics, moved out to Manukau.
Here he makes a valuable point by suggesting that inequality in NZ tends to be under estimated because of this geography. Compared to London, where rich and poor often live close to each other, Auckland's rich and poor live far from each other. The city is economically and racially segregated. In a supposedly classless society rich white people and poor brown people live different existences. And the conveyor belt economy is extending the gap. This in turn renders the myth of diversity misleading. The typical Pakeha in Auckland, Rashbrooke writes, lives in much the same way as do people in small town New Zealand.
Tax The Rich. Invest In The Poor. We Need A Class War
He quotes American philosopher Michael Sandel, who sees a functioning democracy as one where citizens "share a common life... What matters is that people of different social backgrounds, different walks of life, encounter one another, bump up against one another, in the course of everyday life. Because this is how we come to negotiate our differences, and this is how we come to care for the common good".
Rashbrooke adds: "To put the problem in more prosaic terms: if democracy requires citizens to vote on policies and platforms that will affect the whole country, how can they do so meaningfully if they understand so little about how other people live?". Since publication the dreadful nonsense outside Parliament erupted, confirming this analysis in ways that post-war Epsom and Ponsonby could not have conceived.
The lives of the deprived are narrow in every sense. School principals told Rashbrooke that in Porirua students don't know how to catch a train. In Naenae most of a class had never been to Wellington, half an hour away. The human waste that these details portray is appalling, and it's not just about the quality of people's lives. The fruit of poverty and inequality is the charge it places on budgets for high-cost public functions like welfare, education, justice and health. Scandinavia is the richer in every sense because people there spend more time at school and less time in jail. They know that the four capitals buttress each other.
Are the capitals a way to view Trump's rabble and their disciples here? To what extent is the root cause of their alienation financial, about lost jobs in declining industries? Or is it about the "culture wars"? How precisely are the two, the economic and the social, linked? Trumpery and the anti-everything here are both the very poor and dispossessed and business owners wanting to get cash flowing. Is their irresponsibility brought about by a lack of human, cultural and social capital?
In our 21st Century you never hear talk of class. The good news is that this is partly because some of the archaic absurdities of rank have withered away. In their place we have been induced to adopt the failed American view that legal equality is the basis for opportunity. We tell ourselves that we are all mates and the rich strive to look and sound much the same as the poor. But appearances can be deceiving. We won't become a happy team of five million if we do not challenge injustice through fiscal and monetary policy. Tax the rich. Invest in the poor. We need a class war.
FULFILLMENT:
Winning And Losing In One-Click America
by Alec MacGillis,
Scribe, Melbourne, 2021
The dictionary defines "fulfilment" as the feeling of satisfaction or happiness that results from a sense of having achieved your potential. At Amazon it means filling a customer's order. Fulfilled America delivers almost anything almost immediately. What achievement can provide greater satisfaction than effortless consumption? One click is all it takes to be fulfilled. It's the new century's gift of spiritual nirvana.
So, the magus who presides over this realm might well think it only right and proper that he is said to be the world's richest person. The three wise men brought gifts to the baby Jesus; Jeff Bezos has brought us frictionless consumption and brought himself elephantine wealth. In February 2022 it was announced that he has a "yacht" being built in the Netherlands for something like $US500,000,000.
It's so big a "yacht" that Rotterdam will have to remove a bridge to allow it to sail out to sea. Amazon started just a few years back selling books, a product chosen because the variety of titles meant that no conventional mass retailer like Walmart could match his model of home delivery. Now Amazon has spread beyond goods into all sorts of services, dominating through sheer size.
Amazon Economy Has Replaced Manufacturing Economy
Alec MacGillis traces this history in the context of the declining manufacturing economy that Amazon has replaced, many of its warehouses operating from the last century's steel and car behemoths. Near Baltimore, for instance, where General Motors provided jobs paying an average of $US27 an hour with fringe benefits, ten years later packers at the "fulfillment center" are paid $US12 with few benefits, alongside robots which earn nothing and do not ask for benefits.
Before the robots arrived, fulfilled workers had to pack about a hundred items an hour. With the robots there, they need to process up to 400 items an hour (so the labour cost of an average package is about three US cents). The warehouse stores 14 million items, has 14 miles (about 22 kilometres) of conveyor belts, running 6,000 items an hour. Lest the workers slack off, the company has fitted them out with wristbands to track their movements.
Local politicians were delighted with the thousands of jobs. "I don't have to take off my sweats to get deodorant anymore", said a euphoric state congressman. Amazon had induced his city and the state to provide public money in bribes and subsidies as the company manipulated local governments to compete for the honour of hosting it. The international race to the bottom, which had sped up with the global dominance of neoliberalism, is being supplemented by an intensified race to the bottom within the world's dominant capitalist state. Distribution jobs serving the domestic market cannot be exported.
As recently as 2012, Amazon had "only" 88,000 employees worldwide. By 2019 it had 750,000 employees worldwide and 400,000 more within the US. Three million vendors were selling 600 million items. Since then, the pandemic has delivered a huge boost to the company. Inevitably, with global penetration, it has become evident that Amazon "was allowing its third-party sellers (a third of whom were now based in China) to sell countless counterfeit goods, and clothes made in dangerous Bangladeshi factories that other retailers had stopped buying from, and toys, infant sleeping mats, and other products that had been declared unsafe by regulators". This global web of extreme exploitation is known as Fulfilment By Amazon.
Official America Sees No Evil, Hears No Evil, And Speaks No Evil
MacGillis discusses a time when the truth about extensive collusion between the authorities and the company risked being revealed. The public might have heard about massive pay-outs to Amazon amid the secret bending and breaking of taxation and planning rules to accommodate a planned new warehouse, the prospect of which public opinion detested.
What were they thinking? If the boss can get bridges removed in the Netherlands, do the locals in America think they can control him? Not a chance. The whingers were shut down. Amazon was assured that it need not comply with the Ohio Public Records Act, the local council pledging that: "The City (involved) will refuse to provide the information (sought by investigating citizens) unless compelled by a court order to do so".
Which was never going to happen, not in a jurisdiction where one town could boast a slogan that it hosted "Real People, Real Possibilities", and another town could see itself as being "Where Yesterday Meets Tomorrow". Real people, it seems, were yesterday's human beings. Tomorrow's people and those real possibilities are for robots.
In 2018, as Amazon's fortunes were being hugely fulfilled, the company spent $US4 billion on films and TV shows. This helps explain why in a poll that year Amazon was deemed the most trusted institution in America, ahead of universities, the Government, unions and the press. Of course, it was. That quartet are the "elitist" bastion of the "fake news" liars.
They represent, respectively, the evils of science, social coherence, decent living standards, and accurate news and information. Dismally, this ranking was among Democrats, the only social or political grouping with the potential reach and influence to withstand the Amazonian onslaught. Among Republicans Amazon ranked only third, behind the military and the police.
Corporate Welfare: Domestic Race To The Bottom
Amazon needed a second headquarters building, which would be known as HQ2, and rather than the usual behind the scenes negotiations, it announced a national competition. MacGillis suggests that Bezos wanted to engender a sort of sports league fan base. Why not get the country's cities and towns to make their pitch? To get the ball rolling, the company reminded the competing towns of its "Leadership Principles": "Leaders have convictions and are tenacious. They do not compromise for the sake of social cohesion".
This naked call for anti-social debasement worked a treat as hundreds of towns and counties prostituted themselves. One suburb offered to rename itself Amazon. Atlanta offered to build an Amazon-only train route to "help distribute products around the city". Dallas offered to waive pet adoption fees for Amazon employees (it was known that dogs were popular in Amazonian circles). Various city councillors were forced to sign non-disclosure agreements so that the public would never know what was going on.
Chicago said it would return to Amazon the $US1.32 billion paid annually in taxes by its employees. Columbus, Ohio, offered an inducement of over $US2 billion. Maryland offered $US6.5 billion. Newark, New Jersey, topped that with $US7 billion. In Florida a club presenter known as Purple was photographed with Bezos, overcome with the great honour of having got "to hang out with the richest guy in the world". The local paper was excited: "Could this be good news for Miami's HQ2 bid?".
Alas, it was not good news. The competition was a con. The company had never thought to move to small-town America, the heartland. That was for its warehouses and trucks, its fulfilled precariat and its robots. Amazonian bosses needed to be at the centre of power, and it achieved that by building across the Potomac River from Washington, DC, filling a characterless space just one subway stop from the Pentagon and handy to the Central Intelligence Agency (CIA), from which it had been awarded a $US600 million contract. They got to name the area as National Landing. MacGillis says that no-one is sure what the name means.
Another headquarter building was opened in New York, which appealed for its version of anonymity. As one top guy put it, New York was where there were eight million people and "you can avoid them all". You can live just like a foreign kleptocrat (see the review below). In this spirit MacGillis mentions a food delivery service called Seamless. Not far away a hedge fund manager subsisted in an apartment which had set him back $US238 million.
Bezos had started out in Seattle, Bill Gates' home, a circumstance which prompts sycophantic ribbing referring to the world's two richest men when Bezos returns for company events. Like DC and New York, Seattle was drawing extremes of wealth by exploiting hinterland cities, but all three were doing so by plunging into extremes of inequality. Seattle has the highest rate of homelessness in America.
The vast inequality is the explicit result of the Amazonian business model. Meanwhile back in Baltimore, an extreme victim of the changed economy, a typical house costs five times less than its equivalent in nearby Washington. And the other big profiteers in the one-click age, Facebook and Google and the like, are also based within the coastal belt.
The "Seattle" Economy Versus The "Baltimore" Economy
As MacGillis notes, the frictionless, seamless "Seattle" economy is impoverishing the workers who used to call themselves middle class. These days half of all new retail openings are dollar stores and discount grocers. It's the reverse of the Henry Ford "Baltimore" ethic of insisting that his employees earned enough to buy his product.(As President, Trump chose Baltimore to represent working class America, when he poured invective against the city. It was poor and dirty and full of awful people. It is thus significant that in February 2022 the loathsome Tucker Carlson, a key Trump spreader of lies on Fox TV, followed suit. He was keeping the rhetoric in play).
The transfer of wealth from workers to the 0.00001% has been huge. MacGillis cites Robert Reich, an economist from as recent a time as the Bill Clinton presidency, when he served as Secretary of Labor. (Reich is far from being an anti-capitalist. It was Clinton who introduced America to this latter-day hyper-capitalism).
The dominant department store chain in the disappearing age of retail shops, and thus a sort of predecessor of Amazon, was Sears. Reich says that if Amazon employees held the same percentage of company stock as workers at Sears had in the 1950s, each would now own shares valued at nearly $US400,000 (for a look at NZ's wealth transfer from workers to owners, see the review of "Too Much Money" above).
Amazon is the (im)pure perfection of the neoliberal ethic in the age of Trumpery. When Trump talked of "draining the swamp" he had in mind its opposite: the wish to empower the swamp dwellers. The draining going on is the draining of household savings and the withering away of provincial America. That's fulfilment.
PS: In the US the book's subtitle is "America In The Shadow Of Amazon". Someone, author or publisher, has decided that this gives a more precise indication of the argument than the original words.
AMERICAN KLEPTOCRACY
by Casey Michel,
Scribe, Melbourne, 2021
A kleptocracy is a place ruled by thieves, which explains Casey Michel's rambling sub-title. He is telling the story of "How The US Created The Greatest Money-Laundering Scheme In History". It's often assumed that the small island tax havens that are often in the news must be the main places where the world's super rich hide their usually ill-gotten gains, but Michel accuses America of being the main enabler of the cheats. Through its immense resources and reach, the US attracts the money launderers, who are often clients of that power. Michel looks in detail at several such crooks.
Equatorial Guinea
When oil was found off the coast of Equatorial Guinea (EQ), in West Africa, Teodoro, the despot running the country, became immediately and vastly rich because he controlled everything. Oil revenues became his family slush fund, State institutions being his to rob at will. EQ suffers from what has been called the "resource curse": corrupt places relying on a dominant product - often it's oil - lurch into violence and poverty because of the looting.
The dictator sees his needs to be served by bribing officials, extorting foreign companies, and ensuring the mass of the population has no alternative but to labour for miserable wages. EQ offers few opportunities, the needs of the rest of the economy being ignored. That's the way the world's boss men typically hang around for decades.
Ukraine
A second emphasis looks at an oligarch from Ukraine. Along with various Russian crooks, he laundered money into the US, often by buying up abandoned steel mills and struggling office towers in the so-called "rust belt". Cleveland, for example, hit hard by the changing economy, was promised big things by its apparent benefactor as much of its decaying downtown was bought up at surprisingly high prices. Nothing eventuated.
The Ukraine guy was into "reputation laundering". This involves lavishing generous grants to influential institutions like New York University, the Metropolitan Museum of Art, the Guggenheim, the Council on Foreign Relations, the Brookings Institution, and the Harvard Medical School. Dirty money has compromised the integrity of leading Western cultural and political icons.
Pinochet
Older readers will remember a certain General Pinochet. He was a Chilean who led the 1973 coup against Salvador Allende, a democratically elected President. First the Army invaded his palace and shot Allende dead, then they unleashed terror and murder against his supporters, while plunging the economy into chaos with an extreme version of neoliberal privatisation. Pinochet had outside help, his coup and subsequent reign of terror having been instigated by the USA.
After Pinochet's luck had run out and the general's misrule was finally ended, he was arrested in London for a trial that never took off. The point here is that American researchers discovered 30 bank accounts which Pinochet held outside Chile, all said to be benign havens for "family and salary" purposes. O. Pinochet, as the general identified himself, adopted various disguises for his visits to banks.
Having been protected by the US Central Intelligence Agency (CIA), he had no previous reputation for corruption, the world being assured that he was indeed the brave champion of civilisation and virtue that he liked to claim he was (another champion of virtue was Teodoro, who anointed himself the "Implacable Champion Of Freedom". Implacable champions of freedom, like loud priests of God and virtue, are invariably the degenerate and the amoral).
In America Pinochet dealt through Riggs, renowned as the bank that presidents like Lincoln trusted. Riggs served official Washington and embassies. Since 1836 it had been upheld as a "venerable" host for polite society. Yet Riggs had first solicited Pinochet's business and subsequently kept its involvement secret over the years, even after his arrest.
If institutions like Riggs, which are said to be morally impeccable, were secretly acting as agents for the world's greediest crims, it is not surprising that the always expedient political world has been less than upright. America's federal Constitution has encouraged its 50 states to compete with each other for investors (as we see in "Fulfillment", reviewed above).
Delaware has always played host to hundreds of shell companies and, in more recent times, Wyoming and Nevada have competed with it in an officially created race to the bottom. It's never been a topic for the media to investigate as they find serving up ephemeral trivia an easier way to boost ratings among an audience with an ever-shorter attention span.
Banking Lobbyists Defeated Money Laundering Law
9/11 briefly woke the ruling class, bringing impetus for action. The hijackers had used cash machines in the US to finance the attacks, so there was a new motivation to exert some control over the movement of money between America and the world. The Patriot Act dealt the "biggest blow ever" to the launderers. The new law denied "shell banks" or "correspondent accounts" - as deposits which were shielded from the authorities were known.
But the old dogs in Congress were not about to learn new tricks. Banking lobbyists descended on Capitol Hill, leading to "shouting matches" between them and the politicians brave enough to back reform. The result was that in 2002 the George Bush Treasury announced that "exemptions" would allow business to keep flowing. The exempt included real estate agents, hedge funds, and private equity firms.
Others, such as sellers of private jets and luxury mansions, were granted "temporary exemptions" while Treasury could "study" matters. And despite passage of the Patriot Act, the new rules "wouldn't extend the new anti-money laundering program requirements to things like American lawyers or American art dealers".
The son of Teodoro, the despot from Equatorial Guinea, for instance, a perfect emblem of the pointlessly imperfect, ostensibly in America as a student, owned dozens of luxury cars, so many that he had to garage them all over Los Angeles, and he retained vast arrays of lawyers. We're told that when he went off once to Brazil, he took with him 20 Rolex watches. As bribes for what are called personal services? It seems that all he does is find ways to waste money because that brings him the sort of company he needs. So, after a brief fuss occasioned by 9/11, business as usual, the business of accommodating kleptocracy, was restored.
Trump
The enabler in chief has been Donald Trump, the real estate tycoon. Trump "landed his first kleptocrat" in the form of Papa Doc Duvalier, the dictator of Haiti, who had $US800,000,000, looted from his country's desperately poor citizens, to invest in American buildings. Then, in a pattern resembling Equatorial Guinea, his successor, his son Baby Doc, splurged on a $US6 million yacht, and another $US6 million (in today's money) got him a Manhattan apartment.
Trump and his family have sold hundreds of apartments to foreign kleptocrats, usually in ways that hide their identity. Michel says that the total amount involved in Trumpery's kleptocratic homes is thought to be $US1.5 billion. One Trump family New York high rise is estimated to be 70% occupied by kleptocrats.
In his own Trump Tower, a quarter of the units have been sold to kleptocrats, one of whom, unknown to the Federal Bureau of Investigation (FBI), who were looking for him, was a Russian mob boss (soon to be wasted by a hitman). His ilk were keen for this help in allowing an anonymous introduction to American nurturing, thus helping Trump to make a $US54 million profit in one sale. "The oligarchs", Trump once remarked, "are just fronts for Putin". These relationships might explain why, when the two met early in Trump's presidency, he insisted that no American staff attended.
Trump did all he could to roll back to the bad old days, trying to repeal a law that prevented US business people from bribing foreign officials, calling it a "horrible law" (Ronald Reagan, another Republican icon, had also wanted to get rid of it). Trump did manage to repeal a law aimed at preventing payments to foreign oil officials. A Trump fixer in his real estate days and on into his presidency was Paul Manafort, Trump's original campaign manager, but now jailed for other stuff. How many others will join him behind bars? Or will the system prefer to protect itself and let bygones be bygones?
Hall Of Infamy: From Suharto To Putin
Some other kleptocrats have been in the news in recent decades: the top three are Suharto (Indonesia); Marcos (the Philippines); and Mobutu (Zaire, now the Democratic Republic of the Congo). Between them they stole $US50 billion. Also, Milosevic (Serbia), plundered $US1 billion; and Fujimori (Peru), $US600 million.
These gross numbers are chicken feed when compared to the rape of their country by Russian oligarchs, and now that Putin has invaded Ukraine and Biden and much of the world have sanctioned him, his enabling kleptocrats will be worried that their stolen billions might get frozen. Could they then desert Putin? If they did, his tyranny would collapse. Let's see how it plays out.
Suharto, Indonesia's genocidal dictator for several decades of the 20th Century, is the undisputed world champion of kleptocracy. At the turn of the century CAFCA played a leading role in a high-profile national and international campaign calling on the Government to seize the Suharto family's NZ assets. It got quite a lot of publicity in NZ and attracted the attention of the post-Suharto Indonesian government. Here's the CAFCA Website link to the various Watchdog articles about it. Ed.
THE CONTRARIAN:
Peter Thiel And Silicon Valley's Pursuit Of Power
by Max Chafkin, Sydney, 2021
Peter Thiel is often identified as the inventor of PayPal, the original source of his huge fortune. He conceived the notion, his role being to envisage the possibilities of the project rather than any direct IT (information technology) invention. Around the same time, he made piles from an early investment with Mark Zuckerberg (although a common refrain these days is how much he despises social media). There is no doubt the man is brilliant and visionary. He is also quite mad and very dangerous.
Max Chafkin has provided us with a deeply insightful analysis of what Thiel is all about and why it's important to recognise the threat he poses. The essential thing with Thiel is that he is enormously ambitious and enormously ruthless in his wish to go way beyond PayPal's success and change the world. Chafkin thinks there are three linked motivations in what he calls the Thielverse. Making money of course is the main one, but the money is needed to achieve the other two goals: dominating Silicon Valley and, from that, dominating American politics.
Instant New Zealand Citizenship
Besides his existence as one of the world's richest people, Thiel is known in NZ from having become a citizen soon after having had a chat with John Key and buying a chunk of land beside Lake Hawea. He also had a Queenstown house, dubbed the "Plasma Screen House" by locals as it resembled a giant flat screen TV. It seems that Thiel rarely if ever stayed there but he did add a panic room (the Queenstown place was in the news recently because of legal squabbles over the terms of sale. And there are current plans for a flash hotel beside Hawea, which will generate plenty of controversy).
So, Thiel was not your typical immigrant. The usual requirement for investing migrants to be granted citizenship is an average 1350-day residence. Thiel got his papers in 12 days, Key having recognised a soul mate, and agreeing that California was the obvious place to swear dedication to Aotearoa, Thiel having taken the oath of citizenship in a secret ceremony in the NZ Consulate in Santa Monica. And "that", Chafkin notes, "was effectively the end of his courtship of the country".
Thiel in fact has over a dozen houses in every continent except Antarctica. Chafkin tells of one he had built after he lost interest in NZ. In Hawaii his new $US27,000,000 bach was in a secluded area with a high wall separating it from the road. Chafkin suggests that Thiel "ignored" NZ soon after his meeting with Key because Ardern (bad) and Trump (good) won elections. He cites an article which thought that the Godzone venture had been prompted by Thiel's wish to turn NZ "into the libertarian utopia of his dreams". It appealed as being stable, boring, remote, small and - he would have supposed - homogeneous.
Places like Central Otago and Hawaii are Thiel's best hope of avoiding the chaotic future that he takes to be inevitable. Even better is to create your own world, one where other stupid people do not exist. He has always been interested in "seasteading", the building of islands well out in the ocean, to replace those archaic nation states.
Alternative Realities
Inevitably, a back-up alternative is to establish "space colonies", an idea which all the billionaires go for - the Virgin man, the Amazon man, and of course Elon Musk (a constant presence in Thiel's enterprises). Thiel has devoted a lot of attention as to how these alternative realities might be achieved, investigating practicalities such as how to incinerate human faeces and how to stock up on relatively cheap Chinese cruise missiles to defend himself.
In this he was emboldened by William Rees-Mogg, a journalist whose 1997 book (reissued in 2020) argued that "wealthy people should free themselves from their nationalities" - and of course, 'the nationalist burden of taxation' and the 'exploitation of the capitalists by workers'- by hiring private militias, securing citizenship in low- or no-tax countries, and enjoying a new, libertarian paradise".
Rees-Mogg's son, by the way, is a far-Right member of Boris Johnson's UK government, where he's known as the Minister for the 18th Century. This is based on his distaste for life as it is in 2022. He has a pronounced distaste for neologisms and foreign ways, being apparently unaware that the entire English language is borrowed from foreign sources and has always evolved. This might seem opposite to Dad's preference for the future, but father and son have essentially the same motivation. They don't like society as it is and, like Trump and Thiel, want to break up its conventions so they can deliver us into Reaction.
These days "freedom" has come to mean the right to be do whatever you please, no matter the harm it does to other people. And yourself. In Thiel's America, freedom has always been the first social virtue - as it is for everyone everywhere, even if they don't bang on about it. For Thiel the right to irresponsible freedom is (said to be) the whole mission of the Thielverse.
At first glance this sounds like traditional Republican rhetoric, but when he points out that "I no longer believe that freedom and democracy are compatible", he reveals that something very different is in play. There's a board game devised by cult followers called Ascent which sports a Thiel likeness, identified as a "contrarian hero", who fights a dragon called "democracy", a lion named "fair elections", and an ogre called "monetary policy". So, it can't be said that the Thielverse has not warned us what it's up to.
Doesn't Like Democracy
Thiel doesn't like democracy as it has developed over the last few centuries because his cry is All Power to the Thielverse. And he doesn't like people who aren't billionaires or IT innovators or geeky - and often fellow gay - young men. Beyond these minorities lie the despicable and the meritless. "Since 1920", Thiel explains, "the vast increase in welfare beneficiaries and the extension of the franchise to women - two constituencies that are notoriously tough for libertarians - have rendered the notion of a capitalist democracy an oxymoron".
Chafkin points out that the common assumption that Silicon Valley is a haven for freedom, in the sense of "doing your own thing", as it was put in the 60s, unrestrained by stifling convention and outmoded ritual, has never been accurate. The computer industry has always been financed by government money and Thiel himself has lucrative software contracts with the military. So, the calls to smash restraints and the State are not the call of joyful youth breaking adult shackles. They're the demand for a Thielverse, a development of the shock and awe tactics from the days of Reaganomics and Rogernomics.
Seeks Eternal Life
Another abiding obsession in the Thielverse is how he might get to live for ever - or at least a span way beyond the few years that the suckers have managed until now. Lesser people might go to the gym or do yoga. Thiel goes to sessions where they strive for immortality, and gives hefty donations to an outfit dedicated to this end, the Methuselah Foundation. "Death is evil", the great man tells us, because death is just another challenge to the Thielverse's hegemony.
To build his base for an eventual global Thielverse, Thiel recruits top students from Ivy League universities to convince them that education as practised in America's schools and colleges is "useless". They should drop out. Get rich. Defy convention. "Great education", he tells them, "ought to have an auto-didactic component". Joining Thielverse's fellowship might be "a small step for each of you, (but it will be) a great step for humanity". It's an invitation that appeals to many of the self-regarding geeks who gravitate to their cult hero in the knowledge that those hidebound professors are yesterday's news.
Around 70 years ago another cult leader who attracted an earlier generation of young geeky men (as almost all the disciples are) was Ayn Rand, whose Objectivism taught a similar lesson. Rand claimed to be smarter than the conventional received wisdom. Hers was an intense individualism which claimed a rationalism which insisted that the State had no business interfering with the market - though that term was not in vogue in the 1950s.
Thiel likes to lecture on Rand, seeing himself as her disciple, a fellow apostle with a big brain (it's notable how often Rightwing ideologues claim they are smarter than the rest of us). The lectures include frequent references to the works of writers like JRR Tolkien and JK Rowling. It might be thought that evoking fantasies as evidence for a rationalist reality was contradictory, but it's another common trope within Reaction because rejecting actual social convention through escapism is a motive that trumps logical consistency.
The Thielverse, in fact, denies any reality which might challenge its hegemony. It lives in an eternal present, disdaining other people with their histories and rejecting the laws of physics and biology. Uniting all its strands is its campaign against bourgeois convention and the nation state, against trying to improve and enjoy the here and now, because mitigating existing problems would tend to justify existing processes.
The ultimate threat posed by the Thielverse could turn out to be this very combination of anti-social individualism and irrationalism, the epidemic that thrives in societies that have been induced to lose their memories. This is what unites conspiracists and skinhead fascists and ministers for the 18th Century and seasteaders and outer space colonists. At their core is an insistence on promoting a belligerent unreality, and as we have seen in Wellington and Ottawa, with the banners for Trump, it is gaining ground.
Trump and his instigators are aiming to rule the world (perhaps with Russian help?). So too is Thiel, who will be happy to see his useful idiot dupes milling around, undermining civilised values. Chafkin notes that commentators tie themselves in knots as they ponder Thiel's contradictions, trying to adduce his essence. Chafkin wonders why they find him such an intriguing enigma. Nothing subtle is going on. The Thielverse will say and do whatever serves its immediate needs.
Wants US State Power To Rule Unhindered
It might be thought inconsistent that the man whose prime mission is to get rid of the nation state as a way of living is the same man who wants the United States to take on international terrorism alone, along with its four junior partners in the Five Eyes. Yes, that's us here in our bucolic bolthole. But he does. In fact, he wants US state power to rule unhindered.
One example: he wrote that what was required to finish off Islamic types was "a political framework that operates outside the checks and balances of representative democracy as described in high school textbooks. Instead of the United Nations we should consider Echelon, the secret coordination of the world's intelligence services, as the truly global pax Americana". In the course of his campaign to abolish all governments, Thiel wants the USA government to dominate all else. In the course of escaping to remote islands so that he can sit out nuclear war in his panic room, Thiel advocates the unilateral use of American military force.
A clue to these oddities is revealed in a letter Thiel sent to investors in his hedge fund: "The entire human order could unravel in a relentless escalation of violence - famine, disease, war and death... Against this future, it is far better to save one's immortal soul and accumulate treasures in Heaven, in the eternal City of God, than it is to amass a fleeting fortune the transient and passing City of Man".
He went on to the conclusion that "unlike the reigning faith in efficient markets, however, ours is faith that seemingly now cannot be named". This might not have gone over too well in Wall Street, where he is for ever cultivating influence. Or with his hedge fund clients, who might have been worried that they had forked over $US8 billion to someone operating under the influence of a faith that cannot be named. For a rationalist Objectivist who sees meaning in the amassing of a fortune in a world where he will never grow old, this fundamentalist ranting is odd. And Peter, what's the point in trying for immortality if the whole place is doomed? You want to live for ever in a panic room, burning your shit?
Fascism
Perhaps the starkest contradiction so far has been Thiel's complaint that Google, hyped by the geeks as an Internet liberator, and "Star Trek", a sci fi fantasy out in space, are "treasonous" and "communist". Logic says they should be welcome in the Thielverse. Chafkin suggests that their sin is that they lie beyond the power of what - up till now - had been the embodiment of pure evil: the US state.
Revelling in his self-description as a "contrarian" - to signify his uniquely clever insights - turns out to have an accuracy very different from what the man himself intended. Between them Trump and Thiel head factions of a new barbarism. Despite all the wayward language, what both seek is for US corporate and military dictatorship both externally and internally. Capitalism imposed by a corporate state, backed by armed force and bigotry, is the original definition of fascism.
For more on Peter Thiel, and William Rees-Mogg's New Zealand connection, see Murray Horton's "Remembrance Of Things Past. Peter Thiel & CAFCA's Very First 'Not Of Good Character' Complaint", in Watchdog 150, April 2019 Ed.
TWILIGHT OF DEMOCRACY:
The Seductive Lure Of Authoritarianism
by Anne Applebaum, Penguin, 2021
Anne Applebaum is a much-respected journalist from what used to be the conventional Rightwing of politics. She is a mainstream conservative. As an observer of what's going down these days, she is well placed. American born, Applebaum lives mostly in Poland, where her husband, who shares her values as a "free market" liberal, has been prominent in politics.
The USA, of course, always liked to see itself as the last best hope of freedom, and for all the overcharged nationalism that goes along with this claim, it has a point. After all, America has run peaceful elections for 250 years with only one civil war interrupting the sequence. And not long ago, Poland emerged from centuries of feudalism and theocracy, followed by Cold War suppression, talking up Western democratic values. Was the world becoming cosy and contented?
Now, in America and Europe, Applebaum complains, democracy is under threat. She is right about that. In Poland the Government trashes all citizens and institutions it doesn't care for, and in the US commentators who are not normally given to hysteria ask if a second civil war is imminent. What went wrong and why?
Applebaum starts with an account of a party she and her husband threw in 1999. From her description it seems that the guests were drawn from the emerging Polish liberal leaders, the sort of people who are variously called the "chattering classes" or - by Trump's Deplorables - the "elites". The new century promised to be bright and beautiful.
But The View Soon Darkened
The dawn never got sunny after all and the once laughing and tippling revellers grew morose. Applebaum's subtitle is "The Failure Of Politics And The Parting Of Friends". Twenty years later the happy mates of 1999 had grown so far apart from her that they would not speak. But does her phrasing catch the essence of the malaise? This was not a family quarrel, when friends steer clear from disagreements. It was a social civil war. Applebaum writes that her mates, in their hundreds, rejected her and her liberal values.
At the start Applebaum wanted us to accept that the Poles and Americans she has known are not all the sort of Trump stereotype that we have heard so much about. That's the puzzle and the reason for the book. How could the cool crowd of 1999 become the bigots of 2019? Perhaps her 20th Century guests were not the sophisticates she took them for. Perhaps they were the usual ambitious opportunists that abound near the centres of power and influence in every society. Maybe their plays change according to who's dealing the cards. Such people are not really personal friends.
How could they have been? A witty and charming liberal, given to insider gossip, the stereotype from 1999, would not become a Deplorable fan of the neo-fascists running the show in Poland and Hungary. Can thousands of pleasant democrats wake up one day and become haters? Would TS Eliot have sung country and western? Will Snoop Dogg take up Morris dancing? Can..? You get the point.
Applebaum's explanation is that, despite her subtitle, the divisions are not political. They are psychological. She says that a third of people have an authoritarian disposition. They can't tolerate complexity, and they have no real social ties. Maybe, but this further undermines her initial view that the 1999 partygoers shared her assumptions and values. Liberal intellectuals cherish ambiguity. It's what proves their superiority over the riffraff. There are so many ways the 1999 people could not have been "friends".
One reason for this approach is to refute the likely charge that the latter day Deplorables are necessarily conservatives. Always keen to wave her anti-communist banner, Applebaum ropes in the Soviet Union and its supporters in the West. Yes, authoritarian outfits can be Leftist (or say they are) but the passage saying this is, in this context, gratuitous. In a similar vein, there is a sidetrack leading to Jeremy Corbyn, the recent leader of the British Labour Party, in order to repeat the frequent claim that he is anti-semitic. But neither the relevance of this, nor instances to establish its accuracy, are offered.
These diversions are not helpful because the crudities being served up in eastern Europe are gross. Conspiracy theories, the domain of the deluded who think they have some "special privileged access to the truth", are rife. There is nothing comparable in mainstream British - or NZ - public life. Or should that read: Only very recently has conspiracism been the domain of more than a tiny few.
United States Of Autocracy?
But some American public life these days is exactly like the autocracies of Poland and Hungary. Trump's party, the Republicans, is openly trying to subvert their democracy and replace it with a one-party state like the outfits based in Warsaw and Budapest. In public its politicians are given to the same style of lies and hatred.
Presumably not all of Trumpery really believes the stuff they come up with. Do their Polish equivalents? The question of course is: will there be enough Americans who share Applebaum's liberalism to help their country maintain values like the rule of law and the right to vote. A few years ago, no-one was supposing the USA could topple into a Polish style autocracy. Now it is at least possible.
There's no doubting Applebaum's eloquence or sincerity, but her subtitle is annoying. The nonsenses in Poland and America and outside Wellington's Parliament are not the fault of politics. Quite the reverse. They are the cumulative result of a history of people failing to take politics seriously. In Poland an engaged citizenry might be a new habit, not yet entrenched, but the Land of Lincoln has no excuse.
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