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Too Big to Save: The End of Financial Capitalism
The financial logic of neo-liberal capitalism has devoured the world and exhausted itself in the process. A new model beyond "financialization" is needed, says Saskia Sassen.
The misnamed "Group of Twenty" (G20) meets in London on 2 April 2009 to discuss how to save the global financial system. It is too late. The evidence is in: we don't have the resources to save this system - even if we wanted to. It has become too big to save: the value of global financial assets is several times the size of global gross national product (GDP). The real challenge is not to save this system but to definancialize our economies, as a prelude to move beyond the current model of capitalism. Why should the value of financial assets stay at almost four times the overall GDP of the European Union, and even more of the United States. What do everyday citizens - or the planet - gain from such excess?
The question answers itself. To explore further the inner workings of the financial system that has brought the world to this predicament is also to glimpse a future beyond financialization. The task the G20 should actually address is not to save this financial system but to begin to definancialize the major economies to a significant degree, so that the world can begin to move towards the creation of a "real" economy that delivers security, stability, and sustainability. There is much work to do.
The logic
A defining feature of the period that begins in the 1980s is the use of extremely complex instruments to engage in new forms of primitive accumulation, with taxpayers' money the last frontier for extraction.
Global firms that outsource hundreds of thousands of jobs to low-wage countries have had to develop complex organizational formats, using enormously expensive and talented experts. For what purpose? To extract more labor at the cheapest possible price, including unskilled labor that would be fairly low in the developed countries as well. The insidious element is that millions of saved cents translates into shareholders' gains.
Finance has created some of the most complicated financial instruments in order to extract the meager savings of modest households: by offering credit for goods they may not need and (even more seriously) promising the possibility of owning a house. The aim has been to secure as many credit-card holders and as many mortgage-holders as possible, so that they can be bundled into investment instruments. Whether people pay the mortgage or the credit-card matters less than securing a certain number of loans that can be bundled up into "investment products". Once thus bundled, the investor is no longer dependent on the individual's capacity to repay the loan or the mortgage. The use of these complex sequences of "products" has allowed investors to reap trillion-dollar profits on the backs of modest-income people. This is the logic of financialization, which has become so dominant since the neo-liberal era began in the 1980s.
Thus in the United States - ground zero for these forms of primitive accumulation - an average of 10,000 homeowners have been losing their home to foreclosures every day. An estimated 10-to-12 million households in the US will not be able to pay their mortgages over the next four years; under current conditions they would lose their home. This is a brutal form of primitive accumulation: presented with the possibility (which is mostly a fantasy, a lie) of owning a house, many people of modest income will put whatever few savings or future earnings they have into a down-payment.
This type of complexity is aimed at extracting additional value from wherever it can - the small and modest and the big and rich. This too explains why the global financial system is in permanent crisis. Indeed, the term "crisis" is in some respects a misnomer: for what is happening is more nearly business as usual, the way financialized capitalism in the neo-liberal era works.
The financializing of more and more economic sectors since the 1980s has become both a sign of the power of this financial logic and the sign of its auto-exhaustion. When everything has become financialized, finance can no longer extract value. It needs non-financialized sectors to build on. The last frontier is taxpayers' money - which is real, old-fashioned, not (yet) financialized money. Krzysztof Rybinski's "zombies" are also parasites.
The limit
The difference of the current crisis is precisely that financialized capitalism has reached the limits of its own logic. It has been extremely successful at extracting value from all economic sectors through their financializing. It has penetrated such a large part of each national economy (in the highly developed world especially) that the parts of the economy where it can go to extract non-financial capital for its own rescue have become too small to provide the amount of capital needed to rescue the financial system as a whole.
By way of illustration: the global value of financial assets (which means: debt) in the whole world by September 2008 - as the crisis was exploding with the collapse of Lehman Brothers - was $160 trillion: three-and-a-half times larger than the value of global GDP. The financial system cannot be rescued by pumping in the money available.
This in turn explains the abuses of entire economies made possible through extreme forms of financializing. Before the current "crisis" erupted, the value of financial assets in the United States had reached 450% of GDP that is to say 4.5 times total GDP (see "Mapping global capital markets", McKinsey Report, October 2008). In the European Union, it stood at 356% of GDP. More generally, the number of countries where financial assets exceed the value of their gross national product more than doubled from thirty-three in 1990 to seventy-two in 2006.
Moreover, the financial sector in Europe has grown faster than in the United States over the last decade, mostly because it started from a lower level: its compound annual growth rate in 1996-2006 was 4.4%, compared with the US rate of 2.8%.
Even capitalist economies - leaving aside assessments of whether this is the most desirable economic system - do not need an amount of financial assets that is four times the value of GDP. Thus even within a capitalist logic, giving more funds to the financial sector in order to solve the financial "crisis" is not going to work - for it would just deepen the vortex of financializing economies.
The scale
Another way to portray the current situation is via the different orders of magnitude involved in (respectively) banking and finance. In September 2008, the value of bank assets amounted to several trillion dollars; but the total value of credit-default swaps (CDS) - the straw that broke the system - stood at almost $60 trillion. That is a sum larger than global GDP. The debts fell due, and the money was not there.
More generally - and again, to give a sense of the orders of magnitude that the financial system has created since the 1980s - the total value of derivatives (a form of debt, and the most common financial instrument) was over $600 trillion. Such financial assets have grown far more rapidly than has any other economic sector (see Gillian Tett, "Lost through destructive creation", Financial Times, 9 March 2009).
The level of debt in the United States today is higher than in the depression of the early 1930s. In 1929, the debt-to-GDP ratio was about 150%; by 1932, it had grown to 215%. In September 2008, the outstanding debt due on credit-default swaps - a Made-in-America product (and, it should be recalled, only one type of debt - was over 400% of GDP. In global terms, the value of debt in September 2008 was $160 trillion (three times global GDP), while the value of outstanding derivatives is an almost inconceivable $640 trillion (fourteen times the GDP of all countries in the world).
These numbers illustrate that this is indeed an "extreme" moment - but, again, it is not anomalous nor is it created by exogenous factors (as the notion of "crisis" suggests). Rather, it is the normal mode of operation of this particular type of financial system. Moreover, every time governments (that is, citizens and taxpayers) have bailed out the financial system since the first crisis of this phase - the New York stock-market crash of 1987 - they have given finance the instruments to continue its leveraging stampede. There have been five bailouts since the 1980s; on each occasion, taxpayers' money was used to pump liquidity into the financial system, and each time, finance used it to leverage. This time, the end of the cornucopia is near - we have run out of money to meet the enormous needs of the financial system.
The bridge
The implication of the foregoing is that two major challenges need to be faced:
- the need to definancialize the major economies
- the need to move out of the current model of capitalism.
Both will be difficult, but it will help to focus on some very basic facts. The current estimate of official global unemployment is 50 million; the International Labor Organization (ILO) calculates that 50 million more could lose their jobs as the recession deepens. These figures are tragic for those affected. They are also relatively modest (without minimizing the human reality in any way) when set against the 2 billion people in the world who are desperately poor. But this raises the question: how many "jobs" would be created if there were a system that aimed at housing and feeding those 2 billion? The world would then need those 50 million currently unemployed to go to work - and another billion more workers into the bargain.
If seen in this light, the financial "crisis" could serve as one of the bridges into a new type of social order. It could help all involved - citizens and activists, NGOs and researchers, local communities and networks, democratic governments - to refocus on the work that needs to be done to house all people, clean our water, green our buildings and cities, develop sustainable agriculture (including urban agriculture), and provide healthcare for all. This innovative order would employ all those interested in working. When all the work that needs to be done is listed, the notion of mass unemployment makes little sense.
The technology to underpin this work - in helping to eliminate diseases that affect millions, and to produce enough to feed all - has existed for several decades. Yet millions still die from preventable diseases and even more go hungry. Poverty has become more radical: no longer about having only a plot of land that did not produce more, today it means having only your body. Inequality too has intensified and taken on new dimensions, including a new global class of super-rich and the impoverishment of the traditional middle classes.
The history of the last generation confirms that the neo-liberal form of market economy cannot deliver answers to these problems of disease, hunger, poverty and inequality - indeed it reinforces them. Some mixing of clean markets and a strong welfare state has (as in Scandinavia) produced the best outcomes yet; but for most capitalist economies even to come near to this model would entail sweeping internal change (see Amartya Sen, "Capitalism Beyond the Crisis", New York Review of Books, 26 March 2009).
In any event, the increase in the financializing of market economies over the last generation has further sharpened the negative effects of profit-maximization logics. To move even a little in the direction of addressing the problems financialization has created means entering an economic space that is radically different from that of high finance. The challenge is there for those attending the G20 summit in London - and for those outside the gates.
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34 Comments so far
Show AllWhile I have to admit not being versed enough in economic theory to truly appreciate this article, I think the proposition that the model we've followed is inherently flawed is correct. We experienced the Great Depression, implemented reforms and regulations to "prevent it from ever happening again." After two generations, we completely forgot the lessons learned, rescinded the reforms and regulations while creating new financial monstrosities, and nine years later crashed the global economy. I would say we have proof. The experiment has been repeated. The results have been replicated. We need a different set of assumptions on which to base our economic system. I would suggest that a primary theorem we need to adopt is: Resources are not limitless, therefore, growth can not be limitless.
Let's build an economic system based on realistic, sustainable processes. We need to define a thriving economy with a concept that doesn't require "growth" in the heretofore accepted way. We need to create dynamism that doesn't exhaust resources, and destroy the environment. We need to create "prosperity" that includes everyone on the planet, not just the top 1% (or less).
The Wall Street pirates have never been concerned about wheather their sinister schemes would work...each of them has been making as much each year as their counterparts in other industries will make in a lifetime. They make mega bribes to Congressional and Presidential campaigns to assure that when their schemes fail, the elected officials assure that the US taxpayers bail them out carte blanche. Now those same elected officials are trying to coerce the Europreans into the same immoral kickbacks.
Lets hope that the leaders of France and Germany tell Snobama just where to shove the immoral kickbacks that he has wrought upon America and wants to spread across the globe.
If you're Geithner or Summers or Obama or CNBC or the WSJ and you read the first two paragraphs of this article, you roll your eyes, get a withering sneer on your face and think to yourself: "Who is this dumb, deluded fuck? Who is this girl scout, this Pollyanna? I think she should get into her Volvo or Prius or Smart Car, do us all a favor and drive herself and her Birkenstocks over a steep cliff." They chuckle silently and satisfyingly to themselves. "Nobody tells us where to head in. We tell you."
And unfortunately, since it's the Geitners, the Summers's, the Obamas who get the limelight on the boob tube rather than people like this professor, the American sheeple will believe what they have to say and follow along blindly.
I agree with the general argument of this piece, but not the premise. Why is the fact that financial assets are greater than national or global GDP and especially that they are generally four times as great as GDP treated as some sort of logical inconsistency or impossibility? It's not as if financial assets (which aren't just debt, but also equity) are only made on things produced in a given year, i.e. you can have a mortgage on a house built 50 years ago and it's a financial asset. Seems to me the whole argument of this article, though good, is easy to dismiss because of such a flawed premise.
The way they got us in debt for more than everything on earth is worth was by USUARY. (the act or practice of lending money at an exorbinant rate of interest) By these means, the house built 50 years ago has created more money in the economy than the value of the house. It's the interest!! A method of creating money out of nothing! We must put limits on the rate of interest the banksters can charge!
"Why is the fact that financial assets are ... four times as great as GDP treated as some sort of logical inconsistency or impossibility?"
I'm not an economist but I think the argument goes something like this. Financial assets were monetized (author uses financialized) so mortgages were converted to money and sold as bonds. Now the totality of these and other financial assets is 4 times annual GDP. This means there is enough money in the financial system to purchase the 4 years worth of the entire world's production at current prices. Too much money and not enough goods leads to inflation.
For every dollar that exists in the financial system there is a corresponding dollar of debt. Thus the world has a debt equal to 4 years worth of production.
This is pretty much the end point of unsustainable capitalism. The financial system has won and has almost all the money. Its time to burn it all and start again.
Pouring more money into banks is equivalent to feeding a black hole. It will continue sucking in money and time stands still at the event horizon so nothing will change from the input.
"The financial logic of neo-liberal capitalism has devoured the world and exhausted itself in the process."
"Neo-liberal" used in this context means trade liberalization for conservative banks and corporations.
big fat athletes are too big to fail, too. that's why they get into college without going to classes, then end up running our government if they're good looking enough.
"Thus even within a capitalist logic, giving more funds to the financial sector in order to solve the financial "crisis" is not going to work - for it would just deepen the vortex of financialising economies. "
Exactly ! Unfortunately there are only about a dozen people in the U.S. that get it and Obama isn't one of them.
This is the dawning of the AGE OF AQUARIUS,
This out of control "financialization" is the last dying gasp of what began in Babylon at the ancient temple of NINEVEH.
Yes the beginning of "history" occured at the same time as the invention of recorded DEBT. In fact they were the very same act.
The first fecorded human acts were what you owe the temple, when, and how in arrears you are.
With a payment schedule deliberately OUT OF PHASE WITH THE MOON. All this ws in the age of Apis, with marduk our cowboy god, "the lord is my shepard...etc" This why we all feel likee sheep led to the slaughter... It has been set up like that
(that is it was a fantastic insult to the moon to boot)
Lets put our heads together, Create something new and UNHEARD OF>> or it will be created for you.. name your poison people...
All the kings horses and all the kings men, couldn't put Humpty together again.
Children's stories are often moral warnings.
The financial disaster will continue because the rich and powerful refuse to sacrifice to provide the people who create the wealth the tools to do their job. Innovation comes from the people on the bottom having the time and money to screw around and a few bucks to buy spare parts to bolt together.
Right now life sucks so hard that even the millionaires commit suicide in rising numbers. Most of the US is on anti-depressants except for the people who can afford to get stoned instead.
One pill makes you taller and one pill makes you small.
"Right now life sucks so hard that even the millionaires commit suicide in rising numbers."
Thanks for finding a silver lining!
If capitalism even existed to begin with, there wouldn't be a phoney bailout to begin with and the real failures would have been allowed to happen and paved the road to true recovery. Too bad the pols in Washington would much rather bail them out and soak the taxpayers with more bills !
So right. What capitalism? Plutocracy is the word.
So you're saying capitalism is plutocracy? That wasn't always the case. What capitalism that existed during the Great Depression? When was capitalism ever abolished in this country? Don't you think that there is good capitalism and bad capitalism? I don't mind socialism and even love it but up to a point. Now, if socialism gets to the point that I feel like I'm living in shackles and am restricted in a financial chastity belt, well I might have to switch to the kinder version of capitalism that at least allows us to take some control of our finances. So please explain to me just exactly how you equate plutocracy with capitalism because I'm not quite seeing it that way?
"There have been five bailouts since the 1980s..."
Fool us once, shame on them. Fool us five times - we deserve the screwing.
I think this article would be more easily understood by many if instead of "financialism" the author used the simpler and more common words of debt and interest. As I understand it, money is debt. Money is created by creating more debt. The debt has interest due, and when the principal is paid the original debt is neutralised, but the interest paid by the borrower to the lender is the lenders income. When more debt/money is created, more interest is due. When the amount of debt gets big enough that the interest due is greater than work done and stuff produced, ie income made by borrowers, then they cannot repay their debt and the lenders become owners of the borrowers assets. This process is exasperated and made quicker by the federal reserve lending ratio, 9:1, which means for every $9 banks lend they need only hold $1 in reserve (as "assets"). The other $8 is simply created out of thin air, digitally, and is only accepted because the public has confidence in the banking system. This creation of money as debt is a mystery to most people. They think that the money banks loan comes from depositors funds. Mostly it does not. This is the crux of the problem, along with interest payments.
The other part to the equation is simple arithmetic. Perpetual growth in a finite world is illogical, and our growth is exponential. To see a fantastic explanation of the implications of this very simple fact go to http://www.albartlett.org/presentations/arithmetic_population_energy.html He explains it so much better than I ever could!
We need more articles like this one in mainstream media. We need more people to understand how and why our system is failing. We need more discussion like this on what alternatives we would like to see, starting with which values (competition or caring? profit or sustainability?) we would like to place as most important.
Absolutely wonderful post!
And thank you for the link . . . although unfortunately i couldn't seem to get it to work.
One workable solution I've seen is that government issues the money, charges interest on loans but maintains the money supply at a reasonably constant level through their taxation policy. Good government then equates with no inflation and stable prices.
Of course the financial elite will and have killed to prevent such a system.
}}{{{{{These numbers illustrate that this is indeed an "extreme" moment - but, again, it is not anomalous nor is it created by exogenous factors (as the notion of "crisis" suggests). Rather, it is the normal mode of operation of this particular type of financial system.{{{{{{{
A very incisive analysis. Insane financialization of economies is the inevitable ultimate development of Capitalism. Let's take a look at the basics. Neither in theoretical terms or in practice is Capitalism a narration of the human specie's attempt at building a good life for the specie as a whole. Essentially the accumulation of capitals is the raison d'ete of Capitalism. Everything else is "collateral".
It starts by making "zombies" out of all workers. Then with this first barrel of gold cruelly extracted from the "zombie workers" the capitalists start to play among themselves ,in an exclusive club, by means of the instrument we came to call "financialisation of the economies". The aim of this relentless game is to try to turn this "zombie-workers produced" first barrel into many more imaginary, intangible "barriels of gold".
These imaginary, intangible barrels of gold is what we now called "Zombie-Banks". Now US Government and the Fed is creating more "imaginary barrels of Gold" to keep these "zombie-Banks" going.
After decades of governments telling us that there is no cash for services like public transit, food inspection, flood control, health care, education and all those other social services that ordinary citizens use, governments can pull billions out of a hat to bail out big business and Wall Street? People don't need long words like "financialism" to tell them that they have been screwed.......again. It's just so egregious this time that everybody sees it. Hopefully everybody will start doing something about it now.
Yes, financial capitalism caused a great harm, but unfortunately, the average
Joes/Janes will end up paying up to repair the damage and the financial capitalists will end up richer with the result of more concentration of wealth at the top and lower living standards and porverty everywhere else.
"This time, the end of the cornucopia is near - we have run out of money to meet the enormous needs of the financial system."
Not exactly. The Fed and central banksters from governments all over the world are printing more money all the time. The G20 just agreed to pump $750B into the IMF. Of course, it costs them next to nothing to print, but we the people keep exchanging these funny money notes in the market. It is a global fiat system, inflationary in every respect. Amazingly, you could go to jail for adding zeros to the end of all your paychecks -- while the thugs in government walk away (almost) every time.
the left should stop whining about obama and repress its bleeding-heart wonkish side.
instead it must make an effort to popularize punchy lines of devastating and unchallengeable substance that can trigger the *selfish* anger of *individualistic* non-bleeding-heart types against the upper crust (especially now during the season when they have to file their taxes !). the bleeding hearts are progressive already!
let's generate and popularize arguments that will anger poor and middle-class non-bleeding-heart types into rejecting the pro-rich plans of the demoblicans.
only then will obama have any room to change course, when most of his party and the media will be compelled to stop obfuscating about "saving the economy by stabilizing wall street and the bankers" and speak frankly and plainly about "saving the gambling portfolios of the upper crust". as lone ranger they would just kill obama in a sec.
in yesterday's ny times joe stiglizt took a first loud denunciatory step in the right direction. we all should continue arguing to stop the bailout of the upper crust.
and let's stop talking about the middle men in wall street and the banks. it's the upper crust that is about to be ruined by its trillions in toxic assets and that the demoblicans want to save by giving it our taxed money.
it's crucial to stop the bailouts by denouncing them as a gift of hard-earned taxpayer cash to bring back to life the portfolios of the upper crust after its financial gambling binge.
after the banks will go bust, obama will have the freedom and the duty to start giving credit to entrepreneurs directly w/o worrying about the ruined financier middlemen anymore. everything will become possible then, even reforming the fed, etc.
and at that point nothing will bring back to life the ruined upper crust anymore, certainly not the assassination of obama !
and the way to get there is full of opportunities too, since changing the discourse from "saving the economy by stabilizing wall street and the bankers" to "exchanging hard taxpayer cash for the upper crust's portfolios of worthless financial vaporware" will compel the republicans and venal democrats to come out and defend publicly and explicitly that it is "freedom-loving", "patriotic", and "american" to give trillions in taxpayer money to the ultra rich !
This is how you intend to bring the "success-money-oriented" middle class to the cause of the down trodden? You will fail because you do not understand the middle claasses of America. They are selfish and individualistic, and worship their rich, famous and powerful upper classes. The richer ones in the middle class actually believe they themselves should be classified with the "top crust" (Your definition).
Re erplus April 3rd, 2009 5:25 am, who says in part,
"let's generate and popularize arguments that will anger poor and middle-class non-bleeding-heart types into rejecting the pro-rich plans of the demoblicans."
Great idea. Try this on:
"If we have to have socialized bank failures, why can't we have socialized health care to help ease the pain?"
I'm sure this will work, because it's part of a letter that my local daily (owned by USA Today publisher Gannett) refused to print.
The fact is that the entire system is corrupted. By narrowing the target down to just the "upper crust" we would be guilty of subverting our progressive cause. The enemy can easily divert our attention and pacify the growing discontent by sacrificing a few men (with unimaginable massive under the counter compensations) and then maintain the good old bloody system and carry on business as usual.
Sassen's article is good.
Here's what I wrote countering David Brooks' deceitful column in the NYT today (fri) in which he argues that this was all --- a matter of misunderstanding and stupidity:
David, spare us the BS.
"The primary problem is not the greed of a giant oligarchy. It’s that overconfident bankers didn’t know what they were doing."
Empires are not built on stupidity!
The ruling-elite 'corporate financial Empire' that now fully controls our country (and partially others) by hiding behind the facade of a two-party 'Vichy' sham of democracy (and aided by an equally 'Vichy' corporate media) planned and executed this CRIME of theft by negative externality cost dumping --- with fully knowledge of what they were doing.
Hell, David, they designed this scheme, hired the computer experts, and sales shills as much or more than Bernie did in his looting scheme.
In four words here is the problem and more importantly the truth: Empire, Elitism, Externalities, and Extinction.
My article, "Empire, Elitism, Externalities, and Extinction" is available on CD and OpEd News
Democratization (along with eliminating the pathology of 'free capitalism', i.e. 'free looting' of the commons, are now seen as essential to global survival, species survival, and human sustainability.
And this truth is seen by many, many empathetic and progressive minds --- David Korten, George Lakoff, Joseph Stiglitz, Paul Krugman, William Greider, Kevin Phillips, Naomi Klein, the late Hannah Arendt, etc., etc., etc. etc.....
For a really good analysis of all of this and how we have been screwed by our own government and wall street, read Matt Taibbi's article in The Rolling Stone - here is the link:
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
the left should stop whining about obama and repress its bleeding-heart wonkish side.
instead it must make an effort to popularize punchy lines of devastating and unchallengeable substance that can trigger the *selfish* anger of *individualistic* non-bleeding-heart types against the upper crust (especially now during the season when they have to file their taxes !). the bleeding hearts are progressive already!
let's generate and popularize arguments that will anger poor and middle-class non-bleeding-heart types into rejecting the pro-rich plans of the demoblicans.
only then will obama have any room to change course, when most of his party and the media will be compelled to stop obfuscating about "saving the economy by stabilizing wall street and the bankers" and speak frankly and plainly about "saving the gambling portfolios of the upper crust". as lone ranger they would just kill obama in a sec.
in yesterday's ny times joe stiglizt took a first loud denunciatory step in the right direction. we all should continue arguing to stop the bailout of the upper crust.
and let's stop talking about the middle men in wall street and the banks. it's the upper crust that is about to be ruined by its trillions in toxic assets and that the demoblicans want to save by giving it our taxed money.
it's crucial to stop the bailouts by denouncing them as a gift of hard-earned taxpayer cash to bring back to life the portfolios of the upper crust after its financial gambling binge.
after the banks will go bust, obama will have the freedom and the duty to start giving credit to entrepreneurs directly w/o worrying about the ruined financier middlemen anymore. everything will become possible then, even reforming the fed, etc.
and at that point nothing will bring back to life the ruined upper crust anymore, certainly not the assassination of obama !
and the way to get there is full of opportunities too, since changing the discourse from "saving the economy by stabilizing wall street and the bankers" to "exchanging hard taxpayer cash for the upper crust's portfolios of worthless financial vaporware" will compel the republicans and venal democrats to come out and defend publicly and explicitly that it is "freedom-loving", "patriotic", and "american" to give trillions in taxpayer money to the ultra rich !
The fact is that the entire system is corrupted. By narrowing the target down to just the "upper crust" we would be guilty of subverting our progressive cause. The enemy can easily divert our attention and pacify the growing discontent by sacrificing a few men (with unimaginable massive under the counter compensations) and then maintain the good old bloody system and carry on business as usual
erplus,
Your really think your "selfish and individualistic" rich middle class can find common cause with the working class? You are naive and dead wrong. These worshippers of money who are ever ready to help trounce the poor are at all time keeping their mouths wide open and their face tilted upwards towards the upper crust. Any noise they makes is aimed at getting those from the upper crust to throw some craps into those waiting open mouths.
If the progressives indentify with these "selfish and individualistic" (your words) rich middle class money worshippers they would corrupt their own cause.