Rogue Economics: Capitalism's New Reality by Loretta Napoleonia (NY: Seven Stories Press, 2008 ISBN 978-1-58322-824-1)
(page 2) Shockingly, in modern times, democracy and slavery coexist in what economists see as a strong direct correlation. In other words, the two phenomena show identical trends and one conditions the other. The 1990s confirmed a surreal trend that had already become apparent in the 1950s, during the process of decolonization. As former colonies gained independence from foreign powers and embraced freedom, the number of slaves soared and their cost plummeted. Today the average price of a slave is less than one-tenth of its value during the Roman Empire, a time in history when democracy may well have been at its lowest ebb.
(11) Eva, a former prostitute: "I heard so many stories of Ukrainian women who'd been lured by Russian criminals into prostitution, but I thought, these people are from Chechnya... I was bought and sold several times at the Arizona Market [in Northwestern Serbia] by many traders: Russian, European and even Arab. I became merchandise; yes, this is what we are, products for the global village."
(16) "Hamburg and Berlin are controlled by the Lebanese Mafia," explains Michael. "There's nothing you can do about it. You have to pay for their protection. Those Arabs show up at your bar and ask for the money. If you say 'no,' they nudge their mobile phone in front of you and tell you that a whole bunch of fellas armed with Uzi submachine guns will come within half an hour. So, what do you do? You pay them; that's all I can say. In Cologne it's a different matter, the PKK (Kurdistan Workers Party) controls the business. Again, they are not directly involved in prostitution, but brothels and sex bars must pay them for protection."
(28) Adam Smith, Wealth of Nations: Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property, in which the faith of contracts is not supported by law, and in which the authority of the state is not supposed to be regularly employed in enforcing the payment of debts from all those who are able to pay. Commerce and manufactures, in short, can seldom flourish in any state in which there is not a certain degree of confidence in the justice of government.
(33) The absence of a global social contract, of a solid legislation that regulated minimum wages and workers' benefits internationally, greatly reduced the bargaining power of Western labor.
(49) As pointed out by Veblen, what matters to the leisure class is not the ownership of the means of production, as Karl Marx argued, but the ownership of the means of consumption.
(53) Ironically, 9/11 encouraged global billionaires to relocate in London. "The tough financial legislation introduced in the United States after the attack ended up penalising Caribbean offshore facilities. To this, one should add, the US monetary authorities' global monitoring of dollar transactions. The pound and the euro, therefore, suddenly became very attractive as investment currencies. That explains why they became the favorite currencies for hedge funds," adds Woods.
(64) Until 9/11, the bulk of the $1.5 trillion generated by the illegal, criminal, and terror economies was laundered in the United States and in US dollars.
(65) The Patriot Act succeeded in blocking the entry of dirty and terror money into the United States, but, because it applied exclusively to the United States and only to US dollar transactions, it did not curb terrorist financing, criminal activity, and money laundering abroad.
(66-67) The n'drangheta [Calabrian mafia] offered the drug barons a full service inside Europe: from drug smuggling to money laundering to legitimate investments in euros, something that nobody had been able to provide before.
(71) In 1979, following the Soviet military involvement in Afghanistan, the KGB had predicted that within the next decade, the Communist system would collapse. "The nomenklatura had ten years to restructure itself and to take advantage of the inevitable transition toward capitalism. In 1982, members of the Bulgarian ruling elite began developing joint ventures with Bulgarian state enterprises and fictitious foreign firm[s] located offshore. To fund these partnerships, they borrowed money from Bulgarian state banks, funds that moved offshore," reveals a former member of the Bulgarian Mafia. "This process accelerated toward the end of Communism. Between 1987 and 1988, these fictitious joint ventrues swallowed about $10 billion of Bulgarian state finances. By 1989, when the Berlin Wall came down, the nomenklatura had transferred and secured the bulk of Bulgarian monetary wealth to offshore accounts."
(73) Unemployed and without marketable professions, but with a high degree of cohesion, these athletes were easy prey for the emerging local Mafias, which used them to construct a vital, cohesive, and loyal support network.
In Bulgaria, members of the Mafia offered former champions money, fast cars, women, and new social status. Their post-Communist roles now meant intimidating the population and making sure people understood who ruled the country. "In Sofia you could spot them easily: they were huge, mostly ugly men, often dressed in black, wearing sunglasses," says Zoya Dimitrova, a Bulgarian investigative journalist. Known
as the Mutras, or "ugly faces," these athletes recruited to be Mafia strongmen did not prove unique to Bulgaria. a similar phenomenon took place in Russia, where the local Mafia enrolled, along with athletes, veterans of the anti-Soviet jihad, the so-called Afghanzy, who in addition to physical strength possessed an in-depth knowledge of arms.
NB: Judo clubs in Russia and Putin
(75) By the time the United Nations imposed the embargo in the Balkans, the so-called Yugo embargo (1992 to 1995), to isolate war-torn areas, the Bulgarian Mafia controlled most of the smuggling routes to the West from the Balkans and was ready to profit from the embargo. "The Yugo embargo on oil and arms trafficking in the region was a crucial source of profit for the Bulgarian Mafia. It was during the embargo that the Mafia consolidated its financial power."
(83) While Western philosophy strives to adapt reality to the ideal, conceptualized model, in Chinese culture, such a model does not exist. Reality emerges as the product of circumstances, and as such, it changes constantly. Thus, the fog at Austerlitz becomes the point from which to construct victory, not the exceptional event that leads to defeat. It follows that nothing in Chinese culture is permanent, from the buildings that are erected with perishable materials and are in constant need of rebuilding, as was the case of the Forbidden City, to business contracts. "For a Westerner a contract is a contract, but in China it is a snapshot of a set of arrangements that happen to exist at one time," writes Tim Clissold in Mr. China, a book recounting his failure to do business in China.
(90-91) On a breezy morning in December 2005, thousands of Chinese security forces surrounded the hamlet of Dongshou, a fishing village near Hong Kong. They tear-gassed terrified residents who had gathered in the main square to protest. At about eight o'clock in the evening, live ammunition replaced the gas, scattering the soil with corpses. The incident in Dongshou was the latest in a series of protests that had engulfed the surrounding countryside, particularly in the heavily industrialized eastern provinces of Guangdong, Zhejiang, and Jiansu. Residents wanted to peacefully protest the forced and uncompensated expropriation of their land to build a coal-fired power plant; they also voiced concern about the additional pollution that the complex would generate. This expression of public dissent met with brutal repression not only from legitimate forces but also from criminal gangs....
In line with the role of the market-state, the Chinese government sees itself exclusively as a source of opportunity for individuals, not a protector of citizens: thus, the forced expropriation and the lack of concern about the increased pollution.
(97) Moreover, poverty lies at the root of Chinese cheap labor practices and exploitation; the Chinese people remain less concerned about exploitation than with acquiring the means to feed their families. As put by Pierre Haski, the deputy editor of France's "Liberation", "Behind the industrialized, glitzy coastline, there are rows and rows of poor Chinese peasants waiting for their turn to join globalization. They will work for what may look like a few cents, for what we regard 'exploitation salaries,' but for them is the beginning of the road to riches plotted by Deng."
(106) Ironically, the aggressive marketing strategies of Western corporations benefit the counterfeit industry. Luxury brands' high prices lie at the root of the strong demand for fake designer goods.
(109) One can draw a parallel with the twentieth-century technological revolution, when Fascism and Nazism channeled innovation into ways to sustain expansionary conflicts instead of improving people's lives. The Italian-born Futurist movement even described this phenomenon as the aesthetics of war.
(114) Often, biopiracy goes unnoticed because it takes place through the complex system of patents. Corporations can patent anything anywhere, and from that moment onward they own the trademark, regardless of the origin of the patented material. In 2004, the Dutch company Soil and Crop Improvements patented teff, a cereal from Ethiopia, and all the derivatives of its flower. Teff is the main staple grain of 80 million Ethiopians.
NB: Who owns your DNA?
(115) Yet patent holders across the world, such as the owner of the gene for Hepatitis C, continue to receive millions from research labs around the world.
(121) In Nigeria, 8 out of 10 pills are fake, admits an employee of the WHO.
(122) According to Eli Lilly, the producer of Prozac, for every $1,000 invested in criminal organizations, counterfeit currencies generate $3,300, heroin sales $20,000, cigarette smuggling $43,000, pirated software $40 to $100,000, and medications such as Viagra and Cialis $500,000.
(124) If for a few seconds we could freeze the hectic trade that constitutes the heartbeat of the global market and take a snapshot of what goes on inside the market matrix, we would see the collective responsibilities of those involved in creating and believing in a world of commercial fantasies.
(125) At the same time, many companies define counterfeit too broadly to protect their own products from competition from legal and generic products. "Industry reports [show] that many fakes are instead low-priced, high volume, less conspicuous generic drugs." Therefore, the system of patents is used to block the entry of legitimate manufacturers from the developing world. The oligopolistic, price-fixing nature of the global pharmaceutical industry keeps prices artificially high, as does the perfume cartel discussed in the previous chapter. This strategy creates the profit incentives that drive the counterfeit industry. According to a document released in 2007 by Buko Pharma, a German health-promoting group, price cuts and public health intervention could drastically reduce the size of the counterfeit problem.
(129) Almost every product we consume has a hidden dark history, from slave labor to piracy, from counterfeit to fraud, from theft to money laundering. We know very little about these economic secrets because modern consumers live inside the market matrix.
(130) According the United Nations, slavery is growing at an unprecedented rate. Figures put global slavery at 27 million persons, a generation of modern slaves that, according to the International Labor Organization, produces yearly profits of around $31 billion. Population explosion and great migrations coupled with globalization have boosted the slave trade. "The increase in slavery is linked to globalization," concurs Kevin Bales, author of Ending Slavery: How We Will Free Today's Slaves. "But this is not about sweat-shop workers existing on misery wages. Slaves are under the complete, violent control of another person; they are economically exploited and get only enough food and shelter to stay alive. For millions of victims, their experience differs little in hardship from that of slaves hundreds of years ago."
(134) London pr agent: "No matter how big the warning 'Smoking Kills,' people will continue to smoke." Today, one in every two long-term smokers will die of lung cancer, heart disease, or other tobacco-related illnesses. The percentage of street-drug users who die from an overdose is much lower, yet tobacco is legal, and street drugs are forbidden.
(138) Dr. James J. Kenney: "This is the American model: you get people sick with food they love to eat, and then you treat them with drugs and eventually surgery. All of that is very good for the Gross National Product, because a lot of companies are making money."
(160) Chinese entrepreneurs I met in Second Life confirm that China understands virtual businesses and economies better than any other country. Some estimate that more than half a million Chinese make their livings in virtual economies, ranging from video games to synthetic worlds.
(162) The task of the government, writes Philip Bobbitt in The Shield of Achilles, which brilliantly describes the transition from nation-state to market-state, "is to clear a space for individuals or groups to do their own negotiating, to secure the best deal or the best value for money in pursuing what they want."
To satisfy the needs of the individual, the market-state will stop at nothing. "[It] will [...] deregulate the reproduction of our species [...] by permitting new reproductive technologies like in vitro fertilization."
(163) It seems that at the core of the market-state the individual has replaced society.
NB: No such thing as society, only families and individuals - Thatcher
(165) One third of all fish consumed in the United Kingdom is poached from the Baltic and North Seas, a rogue business that is set to expand in the future. At the beginning of 2007, the Norwegian coast guard warned that in those waters illegal fishing will grow at a rate of 30% per year. Soon the majority of fish consumed in the United KIngdom will be "black fish." From fish-and-chips shops to sophisticated London restaurants, from organic markets to the frozen-food section of supermarkets, consumers will eat primarily stolen sea stock.
(176-177) Over the past decade, sea piracy has risen by 168%, and attacks have become more violent, warned the British House of Commons transport committee in July 2006. Ironically, the report on piracy came in the wake of two successful assaults on vessels carrying tsunami relief supplies to Indonesia.
Twenty-first-century pirates now look predominantly Asian, and they sail globally. They mainly operate in the Arabian Sea, Southern China, West Africa, and in the Straits of Malacca, a 500-mile corridor separating Indonesia and Malaysia, which alone every year suffer 42% of global pirate attacks. Modern Pirates have the latest technology and use hideouts in the South China Sea. "One pirate ship captured [in 1999] in Indonesia was outfitted with bogus immigration stamps, tools to forge ship documents and sophisticated radar, communications and satellite-tracking equipment."
Above all, modern pirates are businessmen engaged in the global trade of stolen goods, a trade that nets an estimated yearly $16 billion.
(181) Workers at a London morgue confirm that the decomposition of bodies has slowed down because of the high percentage of food preservatives in their bodies.
(191) Celebrities belong to the establishment because they own their stardom and wealth to the obsessive marketization of their image. Their loyalty to the market is unshakable since their existence and continues success depend upon it.
(193) What turns a developing into a developed nation is not the amount of foreign aid it attracts, "but how the money is spent," as Carlo Cibo, an Italian diplomat who lived for decades in Africa, reminds us. What really matters is how the African political elite disposes of foreign aid. Most of the half-trillion dollars received by Africa since the 1960s had funded military coups and civil wars, not economic development. Dring the 1980s alone, at least ninety-two attempted military takeovers took place in sub-Saharan AFrica, affecting twenty-nine countries. Between 1982 and 1985, Zimbabwe spent $1.3 out of $1.5 billion of foreign assistance on arms and ammunitions.
(194) Between 1982 and 1985, Ethiopia received $1.8 billion in foreign aid, including the Live Aid contribution. Far from feeding the starving population, the bulk of the money, a total of $1.6 billion, went to purchase military equipment.
(195) Even the World Bank remains adamant that abolishing the debt and increasing aid would further impoverish Africa. Ending agricultural tariffs and the $300-million subsidies that rich countries distribute among their farmers would help much more. Such a strategy could increase African agricultural profits by $100 billion, i.e. $20 billion more than the $80 billion that industrialized countries sent to Africa in aid in 2006. Ending subsidies and tariffs in the developed world would allow AFrican products to freely compete with Western products and generate an inflow of $500 billion, enough to lift 150 million Africans from poverty by 2015.
(201) Data show that the risk of dying in an international terrorist attack in Western Europe and North America was higher in the 1980s than ever before or since. While 287 people lost their lives in the 1970s, 990 perished in the 1980s. The death toll declined to 367 in the 1990s, and with the exception of 9/11, only 330 people have been killed by international terrorism in the current decade.
(212) In 1986, Berlusconi bought AC Milan, one of two A teams in Milan, and led it to several domestic and European titles. In 1994, when he entered the political arena, he used Milan fans, forever grateful to him for all those victories, as the basis of his electorate. He named his party Forza Italia, "Go Italy," a well-known football slogan; he converted football clubs into local party headquarters and members of Forza Italia were referred to as "Azzurri," the nickname for the Italian national football team. Berlusconi's rhetoric swam in football slang, his style was colloquial and direct as if he were talking to fans, not voters, and Italians found this formula refreshing and fell in love with it and him.
NB: The chariot racing teams of the Byzantine Empire, Blues vs Greens, were also political factions
(215) In the global village, a pattern seems to emerge: tribalism, clans, clusters of ethnic and religious groups, i.e. modern tribes, have become the socio-economic vehicles to cope with and to prosper from rogue economics and globalization.
(222-223) A Brookings Institution study, From Poverty, Opportunity, published in 2006, shows that being poor in America costs more than being middle class. Every year, low-income households end up paying thousands of dollars more than high-income ones for everyday necessities, simply because they are poor and live in poor areas.
Banks and building societies often blacklist these neighborhoods, contributing to the lack of social capital and severing links to the "outer" world. In Los Angeles, high-income areas like Manhattan Beach have roughly one bank for every 4,000 residents; Compton, a poor Los Angeles neighborhood, has one for every 25,000. "Instead, it has hundreds of alternative financial services, mostly absent from wealthy areas of Los Angeles, that charge jaw-dropping fees. Cashing checks, for instance, costs 3% or more of the check's value." And "in poor areas, cashing a $500 check in storefront check-cashing services can ranged from $5 to $50 more than it would cost in a bank. Customers who take out a short-term loan can be hit with an annual percentage rate of 400 percent or more, a rate estimated to be more than 35 times higher than the average credit card rate in California."
(226) Across the world, gang life redraws social rules from scratch. New sexual codes and a fascination with death are innovative components, absent in preglobalization gang culture. "The best thing about this life is that you live it to the extreme," explains Necio, who has a tombstone tattoo on his chest with the names of all the friends who have died. "This is the life of the gangster, la vida loca. You stay with your gang and you are protected. But, at the same time, you know that you cannot think about the future, you have no future, there is only the present." The daily interaction with death brings gang members to life day-to-day, in and for the moment. Western political modeling remains foreign to then; they look at life in a fashion similar to Chinese culture: nothing is permanent and everything is immediate, the present is the only existential dimension of the individual.
(229) The cosmopolitan or globalized world is a "world where there are many others; but also where there are no others," writes [Anthony] Giddens.
(236) Modern tribalism seems to be able to emerge from whatever brings people together, from music to sport, from religion to crime. The requisite accessories are rogue economics, globalization, and strong myths around which to embroider the identity of the tribe. Although modern tribalism draws from old myths, which are comforting tales for those who are intimidated by globalization, modern tribalism is defensive and apolitical. But it doesn't have to be that way. On the contrary: it can constitute the platform of a challenging and creative response to rogue economics. The construction of Islamic finance around sharia law illustrates an outstanding example of economic tribalism. To date, this experiment remains the sole real challenge to rogue economics, and as such, it could become the blueprint for the postglobalization economic system.
(237-238) Unlike market economics, Islamic finance centers on the religious tenets of Islam and operates in a way to keep Muslims compliant with sharia, the religious law that comes directly from the Koran. Islamic activists, intellectuals, writers and religious leaders have always upheld the prohibition of riba, the interest charged by moneylenders, and denounced gharar, which refers to any type of speculation. Under this belief, money must not become a commodity in itself to create more money. Islamic finance thus shuns hedge funds and private equities, because they simply multiply cash by stripping assets. Money serves as a means or instrument of productivity as originally envisioned by Adam Smith and David Ricardo. This principle is embodied in the sukuks, Islamic bonds. Sukuks always link to real investments - for example, to pay for the construction of a toll highway - and never for speculative purposes. This principle springs from the sharia's ban on gambling as well as on the prohibition of any forms of debt and activities that trade risk.
(240-241) Partnership is the heartbeat of Islamic economics. "Underlying the system is the philosophy of _risk sharing_: the lender must share the borrower's risk, making the two in effect partners, injecting a strong social component into the financial system. This concept separates Islamic Finance from Western Finance, which seeks to maximize profits and minimize loss through diversification and risk transfer." Also, money must be put to work. Because Islamic finance prohibits interest, it seeks revenues form rents royalties, business profits, or commodity trading; a mortgage, for example, represents a "rent to buy" arrangement. Thus, conceptually, Islamic economics is the opposite of Western finance, which revolves around the individual's self-interest.
Above all, Islamic finance represents the sole global economic force that conceptually challenges rogue economics. It does not allow investment in pornography, prostitution, narcotics, tobacco, or gambling. As discussed above, since the fall of the Berlin Wall, all these areas have blossomed thanks to globalization outlaws under the indifferent eyes of the market-state.
(245) Spurning intervention from the IMF and the World Bank, icons of Western finance, [Dr Mohammed] Mahathir turned to his fellow Muslims to sustain the Malaysian economy. Muslim investors and the Islamic Development Bank put together an alternative rescue package with loans and investments. Unexpectedly, Muslim solidarity rebuffed the standard of Western finance, challenging Western capitalism's traditional rescue packages.
(247) By putting the interests of the Muslim community and the wellbeing of the Umma above the principles of market economics, Mahathir reminded Muslim investors that the strength of Islamic economics is partnership.
(249) According to Moody's, the international rating agency, as of 2004, $41bn in Islamic bonds had been issued globally, and of that total $30bn or 75% in Malaysia and only $11bn in the Gulf.
Sharia-compliant products became key accessories of transnational economic tribalism, and its roots are intertwined with the religious pride of being Muslim. To be sold, a sharia-compliant product requires a fatwa, or religious edict, from a recognized Islamic scholar. This gives Islamic finance a greater degree of flexibility than traditional Western finance, while at the same time it offers investors a degree of security unknown to Westerners. The ethical issue, central to modern finance, does not arise in Islamic finance because the fatwa clears investment from any notion of wrongdoing.
Paradoxically, Islamic finance blossomed under the dark shadow of the neoconservative's "clash of civilizations." In the midst of the War on Terror, which many Muslims perceived as a witchhunt against them, Muslim investors greatly reduced their Western portfolios and turned to Islamic finance
(250) Until the collapse of the Ottoman Empire in 1923, the gold-dinar standard represented a means of exchange for thirteen centuries. It lasted much longer than has our current monetary system, (the dollar standard was born only in 1971, after the collapse of the Bretton Woods agreement, signed in the aftermath of World War II.) In the collective imagination, the gold dinar "holds historical, cultural and theological appeal for many Muslims. Many Islamic economists advocate a rejection of paper money - since it can be created out of thin air - and a return to gold," writes Ann Berg, a former commodities trader turned artist. Politicians, intellectuals, religious scholars, and even terrorists - Osama bin Laden is reportedly among the strongest supporters of the gold dinar - share this view.
NB: Return of the Caliphate - bin Laden and the Khalifat agitation of the 1920s
(253) Saif al Adl, Al Qaeda: "Islamists will promote the idea of using gold as the international medium of exchange, leading to the collapse of the dollar. Then an Islamic Caliphate can be declared, inaugurating the fifth stage of al Qaeda's grand plan, which will last until 2016."
(256) Mussolini's definition of Fascism: "The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential: the deciding power in this question cannot be individual, but the state alone."
(263) In this state [of nature], an individual's action is bound only by his or her conscience, as life takes place outside the rule of positive law. Rogue economics resembles such a state of nature - chaotic, anarchic, and lawless. Inside it, globalization outlaws act to their exclusive personal advantage.
(264-265) Modern tribalism has emerged as the natural response of the residents of the global village to rogue economics.
Modern tribalism seems to be the winning formula for coping with the economic strains of globalization and providing the socioeconomic structure to prosper inside the anarchy of rogue economics. The economic miracle of China and the exceptional success of Islamic finance stand as testimony to this new type of socioeconomic tribalism. As this formula spreads across the vast impoverished Chinese and Muslim populations, its economic benefits are likely to trickle down, and with economic growth, people will enjoy prosperity and feel entitled to social order and stability. At that point, they will want to negotiate a new social contract. It will not look like Jean-Jacques Rousseau's version to end the state of nature described by Thomas Hobbes in the Leviathan, because the new social contract will be drafted in China and the Middle East.
(266) Islamic finance, with its encoded value system, will reduce and eventually crush the power of the outlaws. The rogue nature of the economy will be trimmed by sharia economics. The outlaws will be shunned through a code of ethics that prohibits such businesses as gambling, prostitution, pornography, and trade in illegal drugs. Hedge funds and private equities will be regulated by a financial system that rejects the concept that money can create money.
Patents and trademarks will disappear, reducing capitalism's ancient privileges, giving impetus to hard-working individuals, who will flourish thanks to this form of liberalization. History will lose its shine and be recycled to fit the needs of the moment. The quality of fake goods will improve until it becomes all but impossible to distinguish the original from its replica. Western brands' commercial edge will vanish. This simple fact will trigger a massive redistribution of wealth at global levels.
(275) The essence of the nation-state rests on a few postulates: "Government is trustworthy or legitimate because it promises to a particular coherent nation - both a piece of territory and a fairly homogeneous community - effective defense against outside attack and a high degree of internal stability. The internal stability [is] based on a firm directive hand in the economy and a safety net of public welfare provision. The job of those who ran the state [is] seen as guaranteeing the general good of the community; and its success in managing this [is] the obvious foundation of its claim to be obeyed." Rowan Williams, Archbishop of Canterbury, "The Richard Dimbleby lecture," _Guardian (London), December 12, 2002
(278) "For 27 years we Futurists have rebelled against the branding of war as antiaesthetic... Accordingly we state" ... War is beautiful because it establishes man's dominion over the subjugated machinery by means of gas masks, terrifying megaphones, flame throwers, and small tanks. War is beautiful because it initiates the dreamt-of metallization of the human body. War is beautiful because it enriches a flowering meadow with the fiery orchids of machine guns. War is beautiful because it combines gunfire, the cannonades, the cease-fire, the scents, and the stench of putrefaction into a symphony. War is beautiful because it creates new architecture, like that of the big tanks, the geometrical formation flights, the smoke spirals from burning villages, and many others... Poets and artists of Futurism!... remember these principles of an aesthetics of war so that your struggle for a new literature and a new graphic art... may be illumined by them!" FT Marinetti, _The Futurist Manifesto_, http://www.cscs.umich.edu/~crshalizi/T4PM/futurist-manifesto.html
(286) The lesson to be learned from this fiasco [TSA misuse of security funds] can be summarized as follows: "If terrorists force us to redirect resources away from sensible programs and future growth, in order to pursue unachievable but politically popular levels of domestic security, then they have won an important victory that mortgages our future." David L. Banks, "Statistics for Homeland Defense," Chance 15, no.1 (2002), 10
(289) 4.5 million low-income drivers (households earning less than $30,000 a year) paid on overage 2 percentage points more for their car loans than did middle-calss buyers. Home insurance can be $300 per year higher than in wealthy neighborhoods, and auto insurance in urban areas can cost him $50 to $1,000 more in poor than wealthy areas. In 2006, car insurance in low-income neighborhoods in New York, Hartford, and Baltimore was $400 per year higher than in middle-class neighborhoods. Interest rates on car loans can be up to 25% greater than in high-income areas. Poor people also shop in "rent to own" stores, where interest rates are exceptionally high and absorb up to 60% of their earnings per year. A $200 television set can end up costing $700.
Khalid Howladar, "Sahri'ah and Sukuk: A Moody's Primer," March 31, 2006. http://www.zawya.com/Story.cfm?id=ZAWYA20060601970918&pagename=SukukMonitor
(290) Ann Berg, "Want to buy a sukuk? Islamic financing is growing rapidly and Western institutions are jumping in. What does this mean for the power of the US dollar?" _Antiwar_, http://www.antiwar.com/orig/browne.php?articleid=8627
The first Islamic bank was the Faisal Islamic Bank of Egypt, established in 1976. The bank was the first to have a formal sharia board, consisting of selected ulama from Egypt. This tradition continued with the establishment of the Jordan Islamic Bank (1978), the Sudanese Faisal Islamic Bank (1978), and the Kuwaiti House of Finance (1979), and it went on, with other Islamic banks throughout the Arab countries, Turkey, Bangladesh, and more recently, the private sectors in Pakistan, Albania, and Bosnia.
(292) Benito Mussolini, "What Is Fascism, 1932" http://www.fordham.edu/halsall/mod/mussolini-fascism.html
from Internet Modern History Sourcebook http://www.fordham.edu/halsall/mod/modsbook.html
(page 2) Shockingly, in modern times, democracy and slavery coexist in what economists see as a strong direct correlation. In other words, the two phenomena show identical trends and one conditions the other. The 1990s confirmed a surreal trend that had already become apparent in the 1950s, during the process of decolonization. As former colonies gained independence from foreign powers and embraced freedom, the number of slaves soared and their cost plummeted. Today the average price of a slave is less than one-tenth of its value during the Roman Empire, a time in history when democracy may well have been at its lowest ebb.
(11) Eva, a former prostitute: "I heard so many stories of Ukrainian women who'd been lured by Russian criminals into prostitution, but I thought, these people are from Chechnya... I was bought and sold several times at the Arizona Market [in Northwestern Serbia] by many traders: Russian, European and even Arab. I became merchandise; yes, this is what we are, products for the global village."
(16) "Hamburg and Berlin are controlled by the Lebanese Mafia," explains Michael. "There's nothing you can do about it. You have to pay for their protection. Those Arabs show up at your bar and ask for the money. If you say 'no,' they nudge their mobile phone in front of you and tell you that a whole bunch of fellas armed with Uzi submachine guns will come within half an hour. So, what do you do? You pay them; that's all I can say. In Cologne it's a different matter, the PKK (Kurdistan Workers Party) controls the business. Again, they are not directly involved in prostitution, but brothels and sex bars must pay them for protection."
(28) Adam Smith, Wealth of Nations: Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property, in which the faith of contracts is not supported by law, and in which the authority of the state is not supposed to be regularly employed in enforcing the payment of debts from all those who are able to pay. Commerce and manufactures, in short, can seldom flourish in any state in which there is not a certain degree of confidence in the justice of government.
(33) The absence of a global social contract, of a solid legislation that regulated minimum wages and workers' benefits internationally, greatly reduced the bargaining power of Western labor.
(49) As pointed out by Veblen, what matters to the leisure class is not the ownership of the means of production, as Karl Marx argued, but the ownership of the means of consumption.
(53) Ironically, 9/11 encouraged global billionaires to relocate in London. "The tough financial legislation introduced in the United States after the attack ended up penalising Caribbean offshore facilities. To this, one should add, the US monetary authorities' global monitoring of dollar transactions. The pound and the euro, therefore, suddenly became very attractive as investment currencies. That explains why they became the favorite currencies for hedge funds," adds Woods.
(64) Until 9/11, the bulk of the $1.5 trillion generated by the illegal, criminal, and terror economies was laundered in the United States and in US dollars.
(65) The Patriot Act succeeded in blocking the entry of dirty and terror money into the United States, but, because it applied exclusively to the United States and only to US dollar transactions, it did not curb terrorist financing, criminal activity, and money laundering abroad.
(66-67) The n'drangheta [Calabrian mafia] offered the drug barons a full service inside Europe: from drug smuggling to money laundering to legitimate investments in euros, something that nobody had been able to provide before.
(71) In 1979, following the Soviet military involvement in Afghanistan, the KGB had predicted that within the next decade, the Communist system would collapse. "The nomenklatura had ten years to restructure itself and to take advantage of the inevitable transition toward capitalism. In 1982, members of the Bulgarian ruling elite began developing joint ventures with Bulgarian state enterprises and fictitious foreign firm[s] located offshore. To fund these partnerships, they borrowed money from Bulgarian state banks, funds that moved offshore," reveals a former member of the Bulgarian Mafia. "This process accelerated toward the end of Communism. Between 1987 and 1988, these fictitious joint ventrues swallowed about $10 billion of Bulgarian state finances. By 1989, when the Berlin Wall came down, the nomenklatura had transferred and secured the bulk of Bulgarian monetary wealth to offshore accounts."
(73) Unemployed and without marketable professions, but with a high degree of cohesion, these athletes were easy prey for the emerging local Mafias, which used them to construct a vital, cohesive, and loyal support network.
In Bulgaria, members of the Mafia offered former champions money, fast cars, women, and new social status. Their post-Communist roles now meant intimidating the population and making sure people understood who ruled the country. "In Sofia you could spot them easily: they were huge, mostly ugly men, often dressed in black, wearing sunglasses," says Zoya Dimitrova, a Bulgarian investigative journalist. Known
as the Mutras, or "ugly faces," these athletes recruited to be Mafia strongmen did not prove unique to Bulgaria. a similar phenomenon took place in Russia, where the local Mafia enrolled, along with athletes, veterans of the anti-Soviet jihad, the so-called Afghanzy, who in addition to physical strength possessed an in-depth knowledge of arms.
NB: Judo clubs in Russia and Putin
(75) By the time the United Nations imposed the embargo in the Balkans, the so-called Yugo embargo (1992 to 1995), to isolate war-torn areas, the Bulgarian Mafia controlled most of the smuggling routes to the West from the Balkans and was ready to profit from the embargo. "The Yugo embargo on oil and arms trafficking in the region was a crucial source of profit for the Bulgarian Mafia. It was during the embargo that the Mafia consolidated its financial power."
(83) While Western philosophy strives to adapt reality to the ideal, conceptualized model, in Chinese culture, such a model does not exist. Reality emerges as the product of circumstances, and as such, it changes constantly. Thus, the fog at Austerlitz becomes the point from which to construct victory, not the exceptional event that leads to defeat. It follows that nothing in Chinese culture is permanent, from the buildings that are erected with perishable materials and are in constant need of rebuilding, as was the case of the Forbidden City, to business contracts. "For a Westerner a contract is a contract, but in China it is a snapshot of a set of arrangements that happen to exist at one time," writes Tim Clissold in Mr. China, a book recounting his failure to do business in China.
(90-91) On a breezy morning in December 2005, thousands of Chinese security forces surrounded the hamlet of Dongshou, a fishing village near Hong Kong. They tear-gassed terrified residents who had gathered in the main square to protest. At about eight o'clock in the evening, live ammunition replaced the gas, scattering the soil with corpses. The incident in Dongshou was the latest in a series of protests that had engulfed the surrounding countryside, particularly in the heavily industrialized eastern provinces of Guangdong, Zhejiang, and Jiansu. Residents wanted to peacefully protest the forced and uncompensated expropriation of their land to build a coal-fired power plant; they also voiced concern about the additional pollution that the complex would generate. This expression of public dissent met with brutal repression not only from legitimate forces but also from criminal gangs....
In line with the role of the market-state, the Chinese government sees itself exclusively as a source of opportunity for individuals, not a protector of citizens: thus, the forced expropriation and the lack of concern about the increased pollution.
(97) Moreover, poverty lies at the root of Chinese cheap labor practices and exploitation; the Chinese people remain less concerned about exploitation than with acquiring the means to feed their families. As put by Pierre Haski, the deputy editor of France's "Liberation", "Behind the industrialized, glitzy coastline, there are rows and rows of poor Chinese peasants waiting for their turn to join globalization. They will work for what may look like a few cents, for what we regard 'exploitation salaries,' but for them is the beginning of the road to riches plotted by Deng."
(106) Ironically, the aggressive marketing strategies of Western corporations benefit the counterfeit industry. Luxury brands' high prices lie at the root of the strong demand for fake designer goods.
(109) One can draw a parallel with the twentieth-century technological revolution, when Fascism and Nazism channeled innovation into ways to sustain expansionary conflicts instead of improving people's lives. The Italian-born Futurist movement even described this phenomenon as the aesthetics of war.
(114) Often, biopiracy goes unnoticed because it takes place through the complex system of patents. Corporations can patent anything anywhere, and from that moment onward they own the trademark, regardless of the origin of the patented material. In 2004, the Dutch company Soil and Crop Improvements patented teff, a cereal from Ethiopia, and all the derivatives of its flower. Teff is the main staple grain of 80 million Ethiopians.
NB: Who owns your DNA?
(115) Yet patent holders across the world, such as the owner of the gene for Hepatitis C, continue to receive millions from research labs around the world.
(121) In Nigeria, 8 out of 10 pills are fake, admits an employee of the WHO.
(122) According to Eli Lilly, the producer of Prozac, for every $1,000 invested in criminal organizations, counterfeit currencies generate $3,300, heroin sales $20,000, cigarette smuggling $43,000, pirated software $40 to $100,000, and medications such as Viagra and Cialis $500,000.
(124) If for a few seconds we could freeze the hectic trade that constitutes the heartbeat of the global market and take a snapshot of what goes on inside the market matrix, we would see the collective responsibilities of those involved in creating and believing in a world of commercial fantasies.
(125) At the same time, many companies define counterfeit too broadly to protect their own products from competition from legal and generic products. "Industry reports [show] that many fakes are instead low-priced, high volume, less conspicuous generic drugs." Therefore, the system of patents is used to block the entry of legitimate manufacturers from the developing world. The oligopolistic, price-fixing nature of the global pharmaceutical industry keeps prices artificially high, as does the perfume cartel discussed in the previous chapter. This strategy creates the profit incentives that drive the counterfeit industry. According to a document released in 2007 by Buko Pharma, a German health-promoting group, price cuts and public health intervention could drastically reduce the size of the counterfeit problem.
(129) Almost every product we consume has a hidden dark history, from slave labor to piracy, from counterfeit to fraud, from theft to money laundering. We know very little about these economic secrets because modern consumers live inside the market matrix.
(130) According the United Nations, slavery is growing at an unprecedented rate. Figures put global slavery at 27 million persons, a generation of modern slaves that, according to the International Labor Organization, produces yearly profits of around $31 billion. Population explosion and great migrations coupled with globalization have boosted the slave trade. "The increase in slavery is linked to globalization," concurs Kevin Bales, author of Ending Slavery: How We Will Free Today's Slaves. "But this is not about sweat-shop workers existing on misery wages. Slaves are under the complete, violent control of another person; they are economically exploited and get only enough food and shelter to stay alive. For millions of victims, their experience differs little in hardship from that of slaves hundreds of years ago."
(134) London pr agent: "No matter how big the warning 'Smoking Kills,' people will continue to smoke." Today, one in every two long-term smokers will die of lung cancer, heart disease, or other tobacco-related illnesses. The percentage of street-drug users who die from an overdose is much lower, yet tobacco is legal, and street drugs are forbidden.
(138) Dr. James J. Kenney: "This is the American model: you get people sick with food they love to eat, and then you treat them with drugs and eventually surgery. All of that is very good for the Gross National Product, because a lot of companies are making money."
(160) Chinese entrepreneurs I met in Second Life confirm that China understands virtual businesses and economies better than any other country. Some estimate that more than half a million Chinese make their livings in virtual economies, ranging from video games to synthetic worlds.
(162) The task of the government, writes Philip Bobbitt in The Shield of Achilles, which brilliantly describes the transition from nation-state to market-state, "is to clear a space for individuals or groups to do their own negotiating, to secure the best deal or the best value for money in pursuing what they want."
To satisfy the needs of the individual, the market-state will stop at nothing. "[It] will [...] deregulate the reproduction of our species [...] by permitting new reproductive technologies like in vitro fertilization."
(163) It seems that at the core of the market-state the individual has replaced society.
NB: No such thing as society, only families and individuals - Thatcher
(165) One third of all fish consumed in the United Kingdom is poached from the Baltic and North Seas, a rogue business that is set to expand in the future. At the beginning of 2007, the Norwegian coast guard warned that in those waters illegal fishing will grow at a rate of 30% per year. Soon the majority of fish consumed in the United KIngdom will be "black fish." From fish-and-chips shops to sophisticated London restaurants, from organic markets to the frozen-food section of supermarkets, consumers will eat primarily stolen sea stock.
(176-177) Over the past decade, sea piracy has risen by 168%, and attacks have become more violent, warned the British House of Commons transport committee in July 2006. Ironically, the report on piracy came in the wake of two successful assaults on vessels carrying tsunami relief supplies to Indonesia.
Twenty-first-century pirates now look predominantly Asian, and they sail globally. They mainly operate in the Arabian Sea, Southern China, West Africa, and in the Straits of Malacca, a 500-mile corridor separating Indonesia and Malaysia, which alone every year suffer 42% of global pirate attacks. Modern Pirates have the latest technology and use hideouts in the South China Sea. "One pirate ship captured [in 1999] in Indonesia was outfitted with bogus immigration stamps, tools to forge ship documents and sophisticated radar, communications and satellite-tracking equipment."
Above all, modern pirates are businessmen engaged in the global trade of stolen goods, a trade that nets an estimated yearly $16 billion.
(181) Workers at a London morgue confirm that the decomposition of bodies has slowed down because of the high percentage of food preservatives in their bodies.
(191) Celebrities belong to the establishment because they own their stardom and wealth to the obsessive marketization of their image. Their loyalty to the market is unshakable since their existence and continues success depend upon it.
(193) What turns a developing into a developed nation is not the amount of foreign aid it attracts, "but how the money is spent," as Carlo Cibo, an Italian diplomat who lived for decades in Africa, reminds us. What really matters is how the African political elite disposes of foreign aid. Most of the half-trillion dollars received by Africa since the 1960s had funded military coups and civil wars, not economic development. Dring the 1980s alone, at least ninety-two attempted military takeovers took place in sub-Saharan AFrica, affecting twenty-nine countries. Between 1982 and 1985, Zimbabwe spent $1.3 out of $1.5 billion of foreign assistance on arms and ammunitions.
(194) Between 1982 and 1985, Ethiopia received $1.8 billion in foreign aid, including the Live Aid contribution. Far from feeding the starving population, the bulk of the money, a total of $1.6 billion, went to purchase military equipment.
(195) Even the World Bank remains adamant that abolishing the debt and increasing aid would further impoverish Africa. Ending agricultural tariffs and the $300-million subsidies that rich countries distribute among their farmers would help much more. Such a strategy could increase African agricultural profits by $100 billion, i.e. $20 billion more than the $80 billion that industrialized countries sent to Africa in aid in 2006. Ending subsidies and tariffs in the developed world would allow AFrican products to freely compete with Western products and generate an inflow of $500 billion, enough to lift 150 million Africans from poverty by 2015.
(201) Data show that the risk of dying in an international terrorist attack in Western Europe and North America was higher in the 1980s than ever before or since. While 287 people lost their lives in the 1970s, 990 perished in the 1980s. The death toll declined to 367 in the 1990s, and with the exception of 9/11, only 330 people have been killed by international terrorism in the current decade.
(212) In 1986, Berlusconi bought AC Milan, one of two A teams in Milan, and led it to several domestic and European titles. In 1994, when he entered the political arena, he used Milan fans, forever grateful to him for all those victories, as the basis of his electorate. He named his party Forza Italia, "Go Italy," a well-known football slogan; he converted football clubs into local party headquarters and members of Forza Italia were referred to as "Azzurri," the nickname for the Italian national football team. Berlusconi's rhetoric swam in football slang, his style was colloquial and direct as if he were talking to fans, not voters, and Italians found this formula refreshing and fell in love with it and him.
NB: The chariot racing teams of the Byzantine Empire, Blues vs Greens, were also political factions
(215) In the global village, a pattern seems to emerge: tribalism, clans, clusters of ethnic and religious groups, i.e. modern tribes, have become the socio-economic vehicles to cope with and to prosper from rogue economics and globalization.
(222-223) A Brookings Institution study, From Poverty, Opportunity, published in 2006, shows that being poor in America costs more than being middle class. Every year, low-income households end up paying thousands of dollars more than high-income ones for everyday necessities, simply because they are poor and live in poor areas.
Banks and building societies often blacklist these neighborhoods, contributing to the lack of social capital and severing links to the "outer" world. In Los Angeles, high-income areas like Manhattan Beach have roughly one bank for every 4,000 residents; Compton, a poor Los Angeles neighborhood, has one for every 25,000. "Instead, it has hundreds of alternative financial services, mostly absent from wealthy areas of Los Angeles, that charge jaw-dropping fees. Cashing checks, for instance, costs 3% or more of the check's value." And "in poor areas, cashing a $500 check in storefront check-cashing services can ranged from $5 to $50 more than it would cost in a bank. Customers who take out a short-term loan can be hit with an annual percentage rate of 400 percent or more, a rate estimated to be more than 35 times higher than the average credit card rate in California."
(226) Across the world, gang life redraws social rules from scratch. New sexual codes and a fascination with death are innovative components, absent in preglobalization gang culture. "The best thing about this life is that you live it to the extreme," explains Necio, who has a tombstone tattoo on his chest with the names of all the friends who have died. "This is the life of the gangster, la vida loca. You stay with your gang and you are protected. But, at the same time, you know that you cannot think about the future, you have no future, there is only the present." The daily interaction with death brings gang members to life day-to-day, in and for the moment. Western political modeling remains foreign to then; they look at life in a fashion similar to Chinese culture: nothing is permanent and everything is immediate, the present is the only existential dimension of the individual.
(229) The cosmopolitan or globalized world is a "world where there are many others; but also where there are no others," writes [Anthony] Giddens.
(236) Modern tribalism seems to be able to emerge from whatever brings people together, from music to sport, from religion to crime. The requisite accessories are rogue economics, globalization, and strong myths around which to embroider the identity of the tribe. Although modern tribalism draws from old myths, which are comforting tales for those who are intimidated by globalization, modern tribalism is defensive and apolitical. But it doesn't have to be that way. On the contrary: it can constitute the platform of a challenging and creative response to rogue economics. The construction of Islamic finance around sharia law illustrates an outstanding example of economic tribalism. To date, this experiment remains the sole real challenge to rogue economics, and as such, it could become the blueprint for the postglobalization economic system.
(237-238) Unlike market economics, Islamic finance centers on the religious tenets of Islam and operates in a way to keep Muslims compliant with sharia, the religious law that comes directly from the Koran. Islamic activists, intellectuals, writers and religious leaders have always upheld the prohibition of riba, the interest charged by moneylenders, and denounced gharar, which refers to any type of speculation. Under this belief, money must not become a commodity in itself to create more money. Islamic finance thus shuns hedge funds and private equities, because they simply multiply cash by stripping assets. Money serves as a means or instrument of productivity as originally envisioned by Adam Smith and David Ricardo. This principle is embodied in the sukuks, Islamic bonds. Sukuks always link to real investments - for example, to pay for the construction of a toll highway - and never for speculative purposes. This principle springs from the sharia's ban on gambling as well as on the prohibition of any forms of debt and activities that trade risk.
(240-241) Partnership is the heartbeat of Islamic economics. "Underlying the system is the philosophy of _risk sharing_: the lender must share the borrower's risk, making the two in effect partners, injecting a strong social component into the financial system. This concept separates Islamic Finance from Western Finance, which seeks to maximize profits and minimize loss through diversification and risk transfer." Also, money must be put to work. Because Islamic finance prohibits interest, it seeks revenues form rents royalties, business profits, or commodity trading; a mortgage, for example, represents a "rent to buy" arrangement. Thus, conceptually, Islamic economics is the opposite of Western finance, which revolves around the individual's self-interest.
Above all, Islamic finance represents the sole global economic force that conceptually challenges rogue economics. It does not allow investment in pornography, prostitution, narcotics, tobacco, or gambling. As discussed above, since the fall of the Berlin Wall, all these areas have blossomed thanks to globalization outlaws under the indifferent eyes of the market-state.
(245) Spurning intervention from the IMF and the World Bank, icons of Western finance, [Dr Mohammed] Mahathir turned to his fellow Muslims to sustain the Malaysian economy. Muslim investors and the Islamic Development Bank put together an alternative rescue package with loans and investments. Unexpectedly, Muslim solidarity rebuffed the standard of Western finance, challenging Western capitalism's traditional rescue packages.
(247) By putting the interests of the Muslim community and the wellbeing of the Umma above the principles of market economics, Mahathir reminded Muslim investors that the strength of Islamic economics is partnership.
(249) According to Moody's, the international rating agency, as of 2004, $41bn in Islamic bonds had been issued globally, and of that total $30bn or 75% in Malaysia and only $11bn in the Gulf.
Sharia-compliant products became key accessories of transnational economic tribalism, and its roots are intertwined with the religious pride of being Muslim. To be sold, a sharia-compliant product requires a fatwa, or religious edict, from a recognized Islamic scholar. This gives Islamic finance a greater degree of flexibility than traditional Western finance, while at the same time it offers investors a degree of security unknown to Westerners. The ethical issue, central to modern finance, does not arise in Islamic finance because the fatwa clears investment from any notion of wrongdoing.
Paradoxically, Islamic finance blossomed under the dark shadow of the neoconservative's "clash of civilizations." In the midst of the War on Terror, which many Muslims perceived as a witchhunt against them, Muslim investors greatly reduced their Western portfolios and turned to Islamic finance
(250) Until the collapse of the Ottoman Empire in 1923, the gold-dinar standard represented a means of exchange for thirteen centuries. It lasted much longer than has our current monetary system, (the dollar standard was born only in 1971, after the collapse of the Bretton Woods agreement, signed in the aftermath of World War II.) In the collective imagination, the gold dinar "holds historical, cultural and theological appeal for many Muslims. Many Islamic economists advocate a rejection of paper money - since it can be created out of thin air - and a return to gold," writes Ann Berg, a former commodities trader turned artist. Politicians, intellectuals, religious scholars, and even terrorists - Osama bin Laden is reportedly among the strongest supporters of the gold dinar - share this view.
NB: Return of the Caliphate - bin Laden and the Khalifat agitation of the 1920s
(253) Saif al Adl, Al Qaeda: "Islamists will promote the idea of using gold as the international medium of exchange, leading to the collapse of the dollar. Then an Islamic Caliphate can be declared, inaugurating the fifth stage of al Qaeda's grand plan, which will last until 2016."
(256) Mussolini's definition of Fascism: "The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential: the deciding power in this question cannot be individual, but the state alone."
(263) In this state [of nature], an individual's action is bound only by his or her conscience, as life takes place outside the rule of positive law. Rogue economics resembles such a state of nature - chaotic, anarchic, and lawless. Inside it, globalization outlaws act to their exclusive personal advantage.
(264-265) Modern tribalism has emerged as the natural response of the residents of the global village to rogue economics.
Modern tribalism seems to be the winning formula for coping with the economic strains of globalization and providing the socioeconomic structure to prosper inside the anarchy of rogue economics. The economic miracle of China and the exceptional success of Islamic finance stand as testimony to this new type of socioeconomic tribalism. As this formula spreads across the vast impoverished Chinese and Muslim populations, its economic benefits are likely to trickle down, and with economic growth, people will enjoy prosperity and feel entitled to social order and stability. At that point, they will want to negotiate a new social contract. It will not look like Jean-Jacques Rousseau's version to end the state of nature described by Thomas Hobbes in the Leviathan, because the new social contract will be drafted in China and the Middle East.
(266) Islamic finance, with its encoded value system, will reduce and eventually crush the power of the outlaws. The rogue nature of the economy will be trimmed by sharia economics. The outlaws will be shunned through a code of ethics that prohibits such businesses as gambling, prostitution, pornography, and trade in illegal drugs. Hedge funds and private equities will be regulated by a financial system that rejects the concept that money can create money.
Patents and trademarks will disappear, reducing capitalism's ancient privileges, giving impetus to hard-working individuals, who will flourish thanks to this form of liberalization. History will lose its shine and be recycled to fit the needs of the moment. The quality of fake goods will improve until it becomes all but impossible to distinguish the original from its replica. Western brands' commercial edge will vanish. This simple fact will trigger a massive redistribution of wealth at global levels.
(275) The essence of the nation-state rests on a few postulates: "Government is trustworthy or legitimate because it promises to a particular coherent nation - both a piece of territory and a fairly homogeneous community - effective defense against outside attack and a high degree of internal stability. The internal stability [is] based on a firm directive hand in the economy and a safety net of public welfare provision. The job of those who ran the state [is] seen as guaranteeing the general good of the community; and its success in managing this [is] the obvious foundation of its claim to be obeyed." Rowan Williams, Archbishop of Canterbury, "The Richard Dimbleby lecture," _Guardian (London), December 12, 2002
(278) "For 27 years we Futurists have rebelled against the branding of war as antiaesthetic... Accordingly we state" ... War is beautiful because it establishes man's dominion over the subjugated machinery by means of gas masks, terrifying megaphones, flame throwers, and small tanks. War is beautiful because it initiates the dreamt-of metallization of the human body. War is beautiful because it enriches a flowering meadow with the fiery orchids of machine guns. War is beautiful because it combines gunfire, the cannonades, the cease-fire, the scents, and the stench of putrefaction into a symphony. War is beautiful because it creates new architecture, like that of the big tanks, the geometrical formation flights, the smoke spirals from burning villages, and many others... Poets and artists of Futurism!... remember these principles of an aesthetics of war so that your struggle for a new literature and a new graphic art... may be illumined by them!" FT Marinetti, _The Futurist Manifesto_, http://www.cscs.umich.edu/~crshalizi/T4PM/futurist-manifesto.html
(286) The lesson to be learned from this fiasco [TSA misuse of security funds] can be summarized as follows: "If terrorists force us to redirect resources away from sensible programs and future growth, in order to pursue unachievable but politically popular levels of domestic security, then they have won an important victory that mortgages our future." David L. Banks, "Statistics for Homeland Defense," Chance 15, no.1 (2002), 10
(289) 4.5 million low-income drivers (households earning less than $30,000 a year) paid on overage 2 percentage points more for their car loans than did middle-calss buyers. Home insurance can be $300 per year higher than in wealthy neighborhoods, and auto insurance in urban areas can cost him $50 to $1,000 more in poor than wealthy areas. In 2006, car insurance in low-income neighborhoods in New York, Hartford, and Baltimore was $400 per year higher than in middle-class neighborhoods. Interest rates on car loans can be up to 25% greater than in high-income areas. Poor people also shop in "rent to own" stores, where interest rates are exceptionally high and absorb up to 60% of their earnings per year. A $200 television set can end up costing $700.
Khalid Howladar, "Sahri'ah and Sukuk: A Moody's Primer," March 31, 2006. http://www.zawya.com/Story.cfm?id=ZAWYA20060601970918&pagename=SukukMonitor
(290) Ann Berg, "Want to buy a sukuk? Islamic financing is growing rapidly and Western institutions are jumping in. What does this mean for the power of the US dollar?" _Antiwar_, http://www.antiwar.com/orig/browne.php?articleid=8627
The first Islamic bank was the Faisal Islamic Bank of Egypt, established in 1976. The bank was the first to have a formal sharia board, consisting of selected ulama from Egypt. This tradition continued with the establishment of the Jordan Islamic Bank (1978), the Sudanese Faisal Islamic Bank (1978), and the Kuwaiti House of Finance (1979), and it went on, with other Islamic banks throughout the Arab countries, Turkey, Bangladesh, and more recently, the private sectors in Pakistan, Albania, and Bosnia.
(292) Benito Mussolini, "What Is Fascism, 1932" http://www.fordham.edu/halsall/mod/mussolini-fascism.html
from Internet Modern History Sourcebook http://www.fordham.edu/halsall/mod/modsbook.html
