Islam’s Challenge to Capitalism

January 21, 2010 by · Leave a Comment 

Turkey’s “Passive Revolution”

By Geoffrey Cook, MMNS

Berkeley–Although Chihan Tugal is based here in Berkeley, he was asked to talk about his research entitled Passive Revolution: Absorbing the Islamic Challenge to Capitalism, published by Stanford University. It is written from his observations of a district in the above Asia Minor country which is amongst the poorest and most radical on the outskirts of Istanbul.  What is so interesting about this quarter is that it is dominated politically by Islamists even though the Central administration’s Constitution is that of a Secularist Republic.

Amid the Turkish population, the Islamists have scant support.  These Muslims favor a relatively radical type of Islam for a democratic State, and are against the exacting Secularization that Ataturk set in motion during the 1920s.  The majority of these people had supported the Fazilet (Virtue) Partisi (Party) and to a lesser extent other Islamist Parties such as Welfare.  Their thinking had led them to reject contemporary Capitalism; therefore, the anti-American stance of social and economic-introverted gazing.  Turkish Islamism is logical, but a short time ago, 2001, the Justice and Development Party (Adalet ve Partisi) was formed out of a schism between traditionalists – such as ruled this area — and reformers within the Virtue Party by the current Prime Minister Recep Tayyip Endrogan.  On the other hand, the AKP (Justice and Development) program stresses not only democratic reforms but Islamic moral renewal) as well.  (Incidentally many of these  Muslims came from the radical marginal ethnic groups within Turkiye.)  Ethnology is a competent device to comprehend this societal phenomenon. 

These individuals became disenchanted when it became apparent that an Islamist State was beyond their reach.  Many former adherents of the local Islamist groups, who had become disillusioned, defected to the Neo-Liberal (i.e., Neo-Ricardian) Justice and Development Party which is more broadly Islamic than Islamist, and, hence, more accepting of contemporaneous Capitalism — although they still held onto their antagonism to their former completive Islamist, as well, Welfare Party after they switched their positions outside their former religious ideological political stance. 

Those remaining inside the Islamic political organizations are nevertheless not so much anti-capitalistic as anti- markets.  (Your critic here considers, of all things, that many of these Islamist groups actually have affinities with European Christian Democrats!  Both put their spiritual commitments and moral principles in the forefront of their politics.)  Further, those who have stepped over to the Justice and Development Party have accepted some Keynesian theoretics, thus, they have resemblances to the Social Democrats in Europe. 

The Islamists of Turkiye Cumhurieyeti are a virtual compilation of the Subaltern (a range of the lower and lower middle classes).  Shopkeepers and students are against Capitalism in Istanbul, but the proletariat have sympathy for Corporate Capital, strangely enough, (for they see commerce a source for jobs).

Although the State has become more Islamic, their influence have diminished while that of the bourgeois has risen.  This has guaranteed the position of Secularism within the State.  The traditional patronage alliance between State actors within the Republic has been restored as has the alliance with the West — although the Secular elite can be Islamized, if a large scale Islamic revival is generated in the event the European Union denies Ankara’s entrance into the EU.  This (could) lead to a financial emergency that, may perhaps, lead to an economic meltdown in this NATO (North Atlantic Treaty Organization) ally.  

12-4

Survey: Free Market Flawed

November 12, 2009 by · Leave a Comment 

By James Robbins

Twenty years after the fall of the Berlin Wall, a new BBC poll has found widespread dissatisfaction with free-market capitalism.

In the global poll for the BBC World Service, only 11% of those questioned across 27 countries said that it was working well.

Most thought regulation and reform of the capitalist system were necessary.

There were also sharp divisions around the world on whether the end of the Soviet Union was a good thing.

Economic regulation

In 1989, as the Berlin Wall fell, it was a victory for ordinary people across Eastern and Central Europe.

It also looked at the time like a crushing victory for free-market capitalism.

Twenty years on, this new global poll suggests confidence in free markets has taken heavy blows from the past 12 months of financial and economic crisis.

More than 29,000 people in 27 countries were questioned. In only two countries, the United States and Pakistan, did more than one in five people feel that capitalism works well as it stands.

Almost a quarter – 23% of those who responded – feel it is fatally flawed. That is the view of 43% in France, 38% in Mexico and 35% in Brazil.

And there is very strong support around the world for governments to distribute wealth more evenly. That is backed by majorities in 22 of the 27 countries.

If there is one issue where a global consensus seems to emerge from the survey it is this: there are majorities almost everywhere wanting government to be more active in regulating business.

It is only in Turkey that a majority want less government regulation.

Opinion about the disintegration of the Soviet Union is sharply divided.

Europeans overwhelmingly say it was a good thing: 79% in Germany, 76% in Britain and 74% in France feel that way.

But outside the developed West it is a different picture. Almost seven in 10 Egyptians say the end of the Soviet Union was a bad thing and views are sharply divided in India, Kenya and Indonesia.

11- 47

Death of ‘Soul of Capitalism’: Bogle, Faber, Moore

November 1, 2009 by · Leave a Comment 

20 reasons America has lost its soul and collapse is inevitable

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) — Jack Bogle published “The Battle for the Soul of Capitalism” four years ago. The battle’s over. The sequel should be titled: “Capitalism Died a Lost Soul.” Worse, we’ve lost “America’s Soul.” And, worldwide, the consequences will be catastrophic.

That’s why a man like Hong Kong contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: “The future will be a total disaster, with a collapse of our capitalistic system as we know it today.”

Insuring against economic calamity

Gold ETFs are so popular they now hold more of the shiny stuff than most central banks. What will it take to sustain the funds’ big gains? Barron’s Clare McKeen reports.

No, not just another meltdown, another bear-market recession like the one recently triggered by Wall Street’s too-greedy-to-fail banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great “American Economic Empire” for 233 years will collapse, a total disaster, a destiny we created.

OK, deny it. But I’ll bet you have a nagging feeling that maybe he’s right, that the end may be near. I have for a long time: I wrote a column back in 1997: “Battling for the Soul of Wall Street.” My interest in “The Soul” — what Jung called the “collective unconscious” — dates back to my Ph.D. dissertation, “Modern Man in Search of His Soul,” a title borrowed from Jung’s 1933 book, “Modern Man in Search of a Soul.” This battle has been on my mind since my days at Morgan Stanley 30 years ago, witnessing the decline.

Has capitalism lost its soul? Guys like Bogle and Faber sense it. Read more about the soul in physicist Gary Zukav’s “The Seat of the Soul,” Thomas Moore’s “Care of the Soul” and sacred texts.

But for Wall Street and American capitalism, use your gut. You know something’s very wrong: A year ago, too-greedy-to-fail banks were insolvent, in a near-death experience. Now, magically, they’re back to business as usual, arrogant, pocketing outrageous bonuses while Main Street sacrifices, and unemployment and foreclosures continue rising as tight credit, inflation and skyrocketing federal debt are killing taxpayers.

Yes, Wall Street has lost its moral compass. It created the mess, but now, like vultures, Wall Streeters are capitalizing on the carcass. They have lost all sense of fiduciary duty, ethical responsibility and public obligation.

Here are the Top 20 reasons American capitalism has lost its soul:

1. Collapse is now inevitable

Capitalism has been the engine driving America and the global economies for over two centuries. Faber predicts its collapse will trigger global “wars, massive government-debt defaults, and the impoverishment of large segments of Western society.” Faber knows that capitalism is not working, capitalism has peaked, and the collapse of capitalism is “inevitable.”

When? He hesitates: “But what I don’t know is whether this final collapse, which is inevitable, will occur tomorrow, or in five or 10 years, and whether it will occur with the Dow at 100,000 and gold at $50,000 per ounce or even confiscated, or with the Dow at 3,000 and gold at $1,000.” But the end is inevitable, a historical imperative.

2. Nobody’s planning for a ‘Black Swan’

While the timing may be uncertain, the trigger is certain. Societies collapse because they fail to plan ahead, cannot act fast enough when a catastrophic crisis hits. Think “Black Swan” and read evolutionary biologist Jared Diamond’s “Collapse: How Societies Choose to Fail or Succeed.”

A crisis hits. We act surprised. Shouldn’t. But it’s too late: “Civilizations share a sharp curve of decline. Indeed, a society’s demise may begin only a decade or two after it reaches its peak population, wealth and power.”

Warnings are everywhere. Why not prepare? Why sabotage our power, our future? Why set up an entire nation to fail? Diamond says: Unfortunately “one of the choices has depended on the courage to practice long-term thinking, and to make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions.”

Sound familiar? “This type of decision-making is the opposite of the short-term reactive decision-making that too often characterizes our elected politicians,” thus setting up the “inevitable” collapse. Remember, Greenspan, Bernanke, Bush, Paulson all missed the 2007-8 meltdown: It will happen again, in a bigger crisis.

3. Wall Street sacked Washington

Bogle warned of a growing three-part threat — a “happy conspiracy” — in “The Battle for the Soul of Capitalism:” “The business and ethical standards of corporate America, of investment America, and of mutual fund America have been gravely compromised.”

But since his book, “Wall Street America” went over to the dark side, got mega-greedy and took control of “Washington America.” Their spoils of war included bailouts, bankruptcies, stimulus, nationalizations and $23.7 trillion new debt off-loaded to the Treasury, Fed and American people.

Who’s in power? Irrelevant. The “happy conspiracy” controls both parties, writes the laws to suit its needs, with absolute control of America’s fiscal and monetary policies. Sorry Jack, but the “Battle for the Soul of Capitalism” really was lost.

4. When greed was legalized

Go see Michael Moore’s documentary, “Capitalism: A Love Story.” “Disaster Capitalism” author Naomi Klein recently interviewed Moore in The Nation magazine: “Capitalism is the legalization of this greed. Greed has been with human beings forever. We have a number of things in our species that you would call the dark side, and greed is one of them. If you don’t put certain structures in place or restrictions on those parts of our being that come from that dark place, then it gets out of control.”

Greed’s OK, within limits, like the 10 Commandments. Yes, the soul can thrive around greed, if there are structures and restrictions to keep it from going out of control. But Moore warns: “Capitalism does the opposite of that. It not only doesn’t really put any structure or restrictions on it. It encourages it, it rewards” greed, creating bigger, more frequent bubble/bust cycles.

It happens because capitalism is now in “the hands of people whose only concern is their fiduciary responsibility to their shareholders or to their own pockets.” Yes, greed was legalized in America, with Wall Street running Washington.

5. Triggering the end of our ‘life cycle’

Like Diamond, Faber also sees the historical imperative: “Every successful society” grows “out of some kind of challenge.” Today, the “life cycle” of capitalism is on the decline.

He asks himself: “How are you so sure about this final collapse?” The answer: “Of all the questions I have about the future, this is the easiest one to answer. Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.” Success makes us our own worst enemy.

Quoting 18th century Scottish historian Alexander Fraser Tytler: “The average life span of the world’s greatest civilizations has been 200 years” progressing from “bondage to spiritual faith … to great courage … to liberty … to abundance … to selfishness … to complacency … to apathy … to dependence and … back into bondage!”

Where is America in the cycle? “It is most unlikely that Western societies, and especially the U.S., will be an exception to this typical ‘society cycle.’ … The U.S. is somewhere between the phase where it moves ‘from complacency to apathy’ and ‘from apathy to dependence.’”

In short, America is a grumpy old man with hardening of the arteries. Our capitalism is near the tipping point, unprepared for a catastrophe, set up for collapse and rapid decline.

15 more clues capitalism lost its soul … is a disaster waiting to happen

Much more evidence litters the battlefield:

1. Wall Street wealth now calls the shots in Congress, the White House
2. America’s top 1% own more than 90% of America’s wealth
3. The average worker’s income has declined in three decades while CEO compensation exploded over ten times
4. The Fed is now the ‘fourth branch of government’ operating autonomously, secretly printing money at will
5. Since Goldman and Morgan became bank holding companies, all banks are back gambling with taxpayer bailout money plus retail customer deposits
6. Bill Gross warns of a “new normal” with slow growth, low earnings and stock prices
7. While the White House’s chief economist retorts with hype of a recovery unimpeded by the “new normal”
8. Wall Street’s high-frequency junkies make billions trading zombie stocks like AIG, FNMA, FMAC that have no fundamental value beyond a Treasury guarantee
9. 401(k)s have lost 26.7% of their value in the past decade
10. Oil and energy costs will skyrocket
11. Foreign nations and sovereign funds have started dumping dollars, signaling the end of the dollar as the world’s reserve currency
12. In two years federal debt exploded from $11.2 to $23.7 trillion
13. New financial reforms will do little to prevent the next meltdown
14. The “forever war” between Western and Islamic fundamentalists will widen
15. As will environmental threats and unfunded entitlements

“America Capitalism” is a “Lost Soul” … we’ve lost our moral compass … the coming collapse is the end of an “inevitable” historical cycle stalking all great empires to their graves. Downsize your lifestyle expectations, trust no one, not even media.

Faber is uncertain about timing, we are not. There is a high probability of a crisis and collapse by 2012. The “Great Depression 2” is dead ahead. Unfortunately, there’s absolutely nothing you can do to hide from this unfolding reality or prevent the rush of the historical imperative.