Month: March 2016

The other day I quoted Paul Valéry (d. 1945) who said that lessons of history are never heeded. He probably meant times olden, but in our own time history is compressed and accelerated.

Never mind learning the lessons of centuries ago – we today are so advanced that we can successfully ignore the didactic value of the economic crisis that supposedly ended in 2008-2009.

Oh we know exactly what caused it: a bubble of public and personal indebtedness, burgeoning money supply taking reality out of currency, irresponsible banks flogging unsecured mortgages and piling layers of derivatives sometimes amounting to 10-15 times the underlying market value of the collateral. In 2008 the combined value of outstanding derivatives equalled three times the GDP of the whole world.

But learning the aetiology of a disease isn’t tantamount to treating it, or preventing a relapse. It’s in this sense that the lessons of 2008 have never been learned.

Personal indebtedness in Britain is growing at the same pace as in the run-up to that calamity. So is our national debt: it has grown from about 80 per cent of GDP then to over 90 per cent now (so much for austerity).

Banks are dangling unsecured low-interest loans before people’s eyes, which predictably light up with acquisitive zeal. New cars, exotic holidays, expensive consumer goods are all being bought on credit with nary a thought for tomorrow. This isn’t just us: in the 10 years preceding the 2008 crisis, personal expenditure in the US had run at three times personal income.

In Britain households are borrowing over £1 billion each month. In total, household debt stands at almost £200 billion, excluding mortgages. Actually, most people don’t take mortgages into consideration, seeing them as sound investment because house values always go up. This ignores Isaac Newton, with his sound observation of things that go up only to come down in due course.

The economic problem is so obvious that even economists, whose crystal ball tends to be murky, are talking about a new bubble swelling and a new crisis looming. Yet the way they put it shows that they don’t understand the situation well enough to offer a practical solution.

For, just like its predecessor, the looming crisis is neither new nor economic. In the sense that it’s woven into the very fabric of modern society, it isn’t new. In the sense that its causes are moral and existential, it isn’t economic.

Because economics is really a study of human behaviour, it’s closer to the humanities than to natural science or maths. It’s human nature, when it’s unfettered by moral restraints, that causes crises, not any immutable economic laws or government policies.

Somewhere along the way we’ve lost eschatology, the realisation that life has an ultimate meaning that extends beyond our earthly existence. Hence it’s the process of life that illogically has got to be seen as its meaning.

Rather than preparing ourselves for eternity, we try to cram as much comfort and pleasure into every waking moment. America’s Founders called this process ‘the pursuit of happiness’, while today we more accurately refer to it as seeking instant gratification.

Just as our progenitors pursued their ultimate goal, so are we pursuing ours, sweeping all obstacles aside. One such obstacle is the lamentably gaping chasm between our incomes and our appetites, and all modern economies are designed to bridge this gap.

That’s why most Western governments manage their finances on the same pyramid-scheme principles that a few years ago landed Bernie Madoff in prison for a surreal term. That’s why they run up national debts that can never be repaid (servicing our debt already costs more than we spend on defence). That’s why individual Westerners pile up debts driving them into bankruptcy and insolvency. That’s why bankers lend irresponsibly, trying to drive their bonuses up.

As always, economists try to explain the world in the terms of their own profession. But the world can’t be squeezed into such narrow confines. It stubbornly refutes theories and rejects remedies. It keeps reminding us that the economy is merely an aspect of human behaviour, and not the most important aspect at that.

With apologies for self-quoting, this is how I put it in my 2011 book The Crisis Behind Our Crisis:

“We have replaced religion with (at best) religionism, freedom with liberty, wisdom with cleverness, sentiment with sentimentality, justice with legalism, art with pickled animals, music with amplified noise, statecraft with politicking, love with sex, communication with sound bytes, self-confidence with effrontery, equality before God with levelling, respect for others with political correctness, dignity with amour propre – in short, everything real with virtual caricatures. We now live in a virtual world – so is it at all surprising that we live on virtual money?”

We already know that the economic crisis is systemic, not symptomatic, and its next act is just round the corner. We don’t know how calamitous it’ll be, but such crises tend to outdo their predecessors. Meanwhile, back to the really important news of Leonard DiCaprio finally winning an Oscar.

As any true Russian worthy of the name will tell you, Russia towers over the materialist West in every respect that matters. And the respects in which it doesn’t tower over the West don’t matter.

Unlike Westerners who only care about scented loo paper, the Russians are animated by their mysterious souls, and hence are positively bristling with spirituality. This is just as well, because in every down-to-earth respect the country finds herself in the lower reaches of the Third World.

Russia’s characteristic disdain for physical life, much vaunted by her great writers, inspires the Russians to take literally the biblical advice “And fear not them which kill the body, but are not able to kill the soul.”

Hence Russia comfortably leads Europe in bodies killed. According to UN data, 70 per cent of all murders on Europe’s territory are committed in Russia, home to only 19 per cent of Europeans. The country’s murder rate is 20 times higher than in Norway, which makes one wonder if perhaps soulless materialism isn’t without its advantages.

Russia comes in at 51 out of 56 countries rated for quality of life, behind Pakistan and Egypt, but then true Russians, living as they do off the legacy of Tolstoy and Dostoyevsky, don’t care about such quotidian nonsense (until they come to the West, that is, where they are seduced into soulless materialism while still clearing passport control).

Alas, however, the country doesn’t do much better in the more spiritually elevated categories either.

For example in the freedom of the press rating compiled by Freedom House, Russia stands at 181 out of the world’s 199 countries, below Sudan, the Congo, Zimbabwe, Bangladesh, Burundi and Chad.

At 195 out of 198 countries in the Verisk Maplecroft corruption rating, Russia also finds herself in a similar neighbourhood, next to Sudan and Burma.

The country’s democracy rating of 129 puts her below that famous bastion of political pluralism Saudi Arabia (!), but – and here one must doff one’s hat – just a whisker above Somalia.

I won’t bore you with any more statistics, but just take my word for it: every survey one cares to look up shows that Russia’s domestic life comfortably fits the cliché of hell on earth.

Her international behaviour doesn’t evoke many serene images of paradise either. During Putin’s tenure Russia has launched unprovoked attacks on Chechnya in 2000, Georgia in 2008 and the Ukraine in 2014.

Currently Putin’s army is busily vaporising Syrian schools and hospitals. The kind of collateral damage that for Nato members can only result from unfortunate accidents, for Russia represents deliberate policy aimed at terrorising the country into submission to Assad, who’s rapidly turning into a Russian puppet.

Russia’s aggressive forays into Turkey and non-stop violations of other Nato members’ air space are pushing the world towards the devastation of another world war. Hardly a day goes by that either Putin or his mouthpieces don’t threaten the world with nuclear extinction, a threat that’s getting more credible by the day.

And still Col. Putin’s kleptofascist regime produced by a fusion of the KGB and organised crime finds its champions in the West, across the whole political spectrum.

Fascists, swelling the membership rolls of France’s National Front, Belgium’s Vlaams Belang, Greece’s Golden Dawn, Hungary’s Jobbik, Italy’s Forza Italia, Austria’s Freedom Party have for Putin that warm feeling politicians reserve for those who bankroll their movements – which a newly pious Putin does with nothing short of Christian generosity.

Conservatives, especially those of a slightly authoritarian inclination, praise Putin for being a strong leader who takes no nonsense from liberals and won’t allow homosexual marriages in his own backyard. We should have such a leader, bleat the Hitchenses and Bookers of our press.

(Presumably they’d also be happy to accept as an inevitable corollary routine political assassinations, arbitrary justice dictated by the state, money laundering as the principal economic activity and suppression of the very press in which they make a living. One can only applaud such selfless devotion to public good.)

Businessmen hail Putin’s disdain for environmental red tape, his dispensing with casuistic legality and treating the taxation system as merely a statement of intent.

Lefties adore Putin’s anti-Americanism, along with his constant diatribes against the West’s decadence and materialism. Being lefties, they aren’t bright enough to weigh the fascist alternative in the balance, for Putin offers no other.

In fact the unreconstructed KGB colonel enjoys as much benefit of the doubt today as Hitler did in the 1930s. The ghoulish führer too was admired by fascists like Mosley, assorted anti-Semites, leftie liberals like Lloyd George, businessmen like Henry Ford, conservatives like Lady Astor’s Cliveden set, some of the more prominent royals and, between 23 August, 1939, and 22 June, 1941, while the Nazi-Soviet Pact was in effect, even the communists.

This climate of benign toleration mixed with adulation created by way of precipitation a demob, appeasement mentality across Europe, which in turn had well-publicised consequences, expressible in millions of corpses.

History is never short of such useful, often life-saving lessons. But then, as the French poet and essayist Paul Valéry correctly observed, we never learn them.