In democracies a few families own controlling
stakes of the capital that is invested in strategic sectors of the
economy. This gives them, for example, the control over the media and
ensures them the power to shape public opinion. And so the political
decision making process is rendered captive of a public opinion that is
being constantly framed around the interests of big capital holders.
Life in democracies has literally been made captive of the ideology of big capital holders. But they are nevertheless regularly forced to quell the rebellion of citizens angered by extreme levels of inequality. To preserve institutions that serve well their interests capital holders and their managers/technicians have taken the habit of manipulating the citizens into submission. With Obama it was “Change we can believe in”, more recently, Trump has been shouting “MAGA” and “Drain the swamp”. But after reaching a certain threshold manipulation fails and real answers have to be implemented or angry people break the system. The choice of answers is limited between force and reform or a combination of both that imposes changes to the system. But over the long run the demands of the citizens for a reduction in inequalities only receive answers on the margins just so that societal systems escape destruction. Sometimes they don’t escape destruction and revolutions take over… All signs point to the fact that until now Western societies’ answers are not working. Could break-down and destruction be around the corner?
Before 1980 the economic game was largely a national affair and external conflicts between nations occurred frequently to ensure advantages to the economic actors of nations in competition with one another. After 1980 Western biggest capital holders imposed globalization as a means to expand the reach of their capital base to the whole world and multilateral organizations were charged with the management of the relations between nations. This gave way to a relatively peaceful moment that lasted some 40 years. But now capital holders have split in two camps – the internationalists want to deepen globalization, – the nationalists want to retreat within their national borders. If big capital holders seem to be divided the professional class is largely in the internationalist camp. In contrast the ‘working class’ is definitely in the nationalist camp which explains the recent electoral bombshells...
The fact of the matter is that the uni-polar order imposed by Western big capital holders gradually weakened with the increasing economic might of the rest of the world. China was the elephant in the room. Its economy grew so fast, and Western big capital holders benefited so much from it, that they literally were sleep-walking. When they awakened, after 2015, China was already the biggest national economy (PPP) and it was owned by a competitor of Western big capital holders, I mean, Chinese state capital. And horror of horrors that competitor was investing in the biggest ever project of economic unification in world economic development: the new silk roads.
Once Western big capital holders awakened to this new reality they suddenly discovered that their dream to own a globalized world was at risk of slipping out of their control. The protagonists of Neo-liberalism entered into frenetic action to counter what was by now seen as the threat of a revisionist power. This necessarily signified tension and conflict. And so, while a conflict was being engaged with China, Western big capital owners ended up being divided between, – those who refuse the new economic realities want to return to a pre-1980 national reality (MAGA) by implementing protectionism, – and the internationalists who would prefer to integrate China, by force if necessary, inside the multilateral institutional order put in place by the US since 1945.
While Western capital holders are divided, and Western societies have atomized, the Chinese society has reached its highest levels ever of societal cohesion and its people are highly optimistic about their future. It is in such a particularly beneficial context that the Chinese state is sizing the opportunity to protect itself from Western aggression by uniting with other national powers. While it is reinforcing its trade exchanges with the rest of the world, minus the US, it is engaging in a deepening relation with Russia in all fields. Russia recently proved that it has the military might to counter Western aggression and this buys the necessary time for China to further rush its own modernization.
History will not fail to remember that the most important factor in the present historical moment is that MAGA and other types of proliferating Western nationalism is destroying the very possibility of a future unification of the world under the banner of Western centric multilateral institutions that are captive of Western big capital holders. And so, for the first time since the start of Modernity, the center of gravity of the economy-world is slipping out of Western control. How on earth could the West have sleep walked out of its hegemony?
This is a historical turning point indeed!
1. The industrial revolution impulses consumerism & elections
By the end of the eighteen century British long distance merchants, who were importing cotton into the United-Kingdom, started to invest their capital into research and development of spinning and weaving technologies that eventually would allow them to produce mass produced cotton socks and other goods. As a result – people were dragged away from their farms to work in factories, – and their wages went to buy mass-produced socks and other commodities. At this stage the ideology being peddled by big capital holders was consumerism and the individual freedom to choose the products of one’s liking.
By the end of the 19th century high levels of social inequality, and the extreme misery of most of the workers, resulted in political tensions that big capital holders and their captive state institutions were under pressure to quieten. And so by the end of the nineteenth century liberalism and socialism emerged in Europe with the proposal to expand, the principle of individual freedom that is at the heart of consumerism, to the political domain by expanding the electoral vote to all working males.
The expansion of the electoral vote, and the use of force in extreme moments of street violence, succeeded to quell internal social tensions. By that time the activities of capital holders were still largely circumscribed within the borders of their nations but this was going to change rapidly.
2. Globalization and financialization
By the end of the sixties profit generation within the Western nation-state was reaching a plateau and to further expand their profits big capital holders thought they had to expand the territory of their activities to the whole world. Their strategy was to convert the national establishment of all countries on earth to their new creed of “open borders” and “free movement of capital”. To ensure the conversion, of the ‘elites’ to that creed in the United States in Western Europe in Japan and Canada, David Rockefeller founded “The Trilateral Commission”. Interestingly its Asian regional group also included 9 members from China, Hong Kong and Taiwan. By 1980 the elites, of the US, EU, and Japan, were converted and rapidly implemented the expansion of globalization and financialization. This is also when China opened up!!! And, oh miracle, the geographical reach of the reason at work within capital soon expanded exponentially to the whole world.
As we have seen the ideology of consumerism within nations had been expanded to the political realm with the values of individual freedom and democracy.
A 2nd layer to this ideological construct was added with globalization and financialization. Open borders and free movement of capital expanded the territory, where capital holders could be investing, to the whole world. And specialized multinational institutions (SWIFT, BIS, WTO, WB, IMF, ...) were set up to manage the rights of capital to access the whole world.
A 3rd ideological layer was then added that was intended to choke nation-states and to muzzle their public opinions. This 3rd layer is Neo-liberalism and the strategy it is impulsing is triple-headed:
- destroy social redistribution policies, environmental policies, and much of the power of the nation state. The strategy is indeed to limit the activities of nations-states to their institutions of power (justice, police, military).
- impose the rule making power of multinational institutions to the nation states
- tolerance of tax avoidance by Multi-National Corporations : “close to 40% of Multi-Nationals’ profits – defined as profits made by multinational companies outside of the country where their parent is located – are shifted to tax havens in 2015” (1).
3. The reach of capital expands from the nation to the world
Globalization through financialization transitioned the domain of activity of capital holders from the nation state to the whole world. At this stage big capital holders are trying to divert much of state institutions’ power to manage the rules of the societal game, as well as their implementation, to transnational systems controlled by an elite professional class that is at their service.
3.1. Global capital or the control of the biggest Western capital holders
In the new globalized game those who own a controlling stake of the world's total capital base, or world wealth, are the masters of the universe:
- Peter Phillips puts the total world wealth at 255 Trillion US dollars in 2017 (2).
- Credit Suisse puts the total global wealth as of mid 2017 at $280 trillion
- Peter Phillips further states that some 66% of this wealth is owned by EU and US capital holders! This shows how the weight, of past capital accumulation, is still weighing so much on the present reality...
- Leslie Sklair (3) adds some social texture to these figures. He writes that the transnational capitalist class divides into four main sectors:
- owners and controllers: big capital holders do not generally invest their capital on their own names. It is managed by large assets management firms who act as controllers for the owners who remain hidden...
- globalizing bureaucrats and politicians: they write the rules of the globalized game and implement their execution.
- globalizing professionals: the managers of the corporations that have received investment by owners or through their controllers
- consumerist elites: the merchant network that buys and sells the goods of the corporations and spreads the ideology of hyper-individualism and hyper-consumerism.
While the figures here above and the sociological distribution of the “capitalist class” are enlightening this does not offer a clear picture about who are the big capital holders controlling the world economy. In my view the approach of the authors here above is misleading on 2 fronts:
- by stratifying the global net worth of the individuals Phillips and Skair avoid to focus on who owns the controlling stake of the world’s total capital base.
- The notion of global net worth is not synonymous with global capital. Global net worth includes savings that have not been transformed into capital yet and does also not include historical capital formation that most often is hidden in tax haven countries. The correct way to go would be to apply the following formula: total capital ownership = (Global net worth – bank deposits & liquid funds) + historical capital formation.
The Swiss Federal Institute (6) published a study in 2011 that analyzed the different forms of ownership between 43,060 trans-national corporations (TNCs). The team of researchers found that some 1,318 companies form the core of the global economy while 147 control 40% of their total wealth. What’s more the top 25 among these 147 are the world’s top asset management firms. The 25 can “be thought of as an economic ‘super-entity’ in the global network of corporations” (6). This raises two questions
- “Firstly, what are the implication for global financial stability”? Very densely connected networks are prone to systemic risk…
- “Secondly, what are the implications for market competition”? Their connection by ownership could inspire the formation of blocs and anti-competitive behaviors…
By pointing to the role of asset management firms as the real decision makers, the authors of the Swiss Federal Institute are hiding the role of the minority, among capital holders, that owns the controlling stake of the world’s total capital base. The owners, of the assets played by asset management firms, are indeed hidden. Furthermore their investments outside of those asset management firms are invisible in the study..
But there is no escaping the fact that the ownership, of the controlling stake of the world’s total capital base, procures its holders with ‘the ownership’ of the game of power played by Western big capital holders.
3.2. The technicians and managers of the institutions of power.
The members of b, c, and d in Leslie Sklair social texturing, constitute a power elite of some 6 to 7000 individuals. It is a kind of “Superclass” that is 94 percent male, predominantly white, and mostly from North America and Europe. “Rothkopf (5) claims that these are the people setting the agendas at the G7, G20, NATO, the World Bank, the WTO, etc... They are members of the highest levels of finance capital, transnational corporations, the government, the military, the academy, nongovernmental organizations, spiritual leaders, etc ”(3). These are the technicians in charge of maximizing the interests of the owners of the controlling stake of the world’s total capital base.
4. Net wealth shrinking in the West
The figure of Global Wealth, as of mid 2017, given by Credit Suisse as $280 trillion is sufficiently close to the figures of IIF, which puts the Total Debt as of Q1 2018 at $247 trillion, to get a valid impression of the size of net Global Wealth in 2017.
Again we have to distinguish between global wealth and total capital ownership. The formula, “total capital ownership = (Global net worth – bank deposits & liquid funds) + historical capital formation”, points to 2 different realities:
- Investment: before globalization investments were realized by profit conversion while after globalization investments were mostly covered by debt which explains why the World’s Net Wealth is rather small indeed.
- These last years Global debt increased 3 times faster than global wealth which is the reason why Global Net Wealth has been decreasing. And it appears that such a contraction in Global Net Wealth is mostly due to the West. The following graph shows how this materialized in the US; “over the past ten years, the dollar amount of cumulative government deficit spending exceeded the dollar amount of GDP growth. Put another way, in the absence of deficit spending, GDP growth would have been less than zero for the past decade ” (6).
This graph is testament that the US economy has been in a natural state of recession over the past ten years at the least. This reality has been hidden by debt spending. But the net wealth, generated by the country during this last decade, does not lie. Net annually created wealth = annual wealth increase – annual debt increase. The graph clearly shows that the US increase in annual net wealth was negative over the last ten years and this implies that social discontent must have been rising.
5. social inequality + societal atomization ---> societal collapse
This last decade, for each dollar of debt the US contracted, the economy grew by less than 50 cents. The fact that the decision makers were willing to spend at a loss indicates that they were in panic mode and felt that the debt expansion was justified by the risk of social explosion. But increasing debt by 1 dollar to get less than fifty cents in growth can only be sustained for a very short time before the reality sinks in the minds of investors and then the music stops. That’s why the US has no choice. It will very soon be forced to confront head-on its economic reality and its social reality or it will cease to exist. If the political decision making process does not bring answers to this dire twin reality the facts on the ground are going to unfold naturally to a new equilibrium. What this means, I’m afraid, is that such a natural process unfolds in human barbarity.
When social inequality is perceived as the result of a morally unjust behavior, by the masters of the universe, those who suffer from that inequality don’t feel they are having any skin in the game any longer. And they search desperately for means to quieten their anger. But most generally anger first discards reason. Then it searches for a ‘high’ in violence and destruction of all signs of what is perceived as an unjust society.
Such a context made of inequality, anger, and violence is furthermore amplified by the disappearance of any sense of belonging. The loss of the traditional religious worldview has not been compensated by a new holistic narrative based on the new values of Modernity. And the resulting vacuum forces people to retreat inside themselves where, in order to keep their sanity, they invent their own narrative. And when everybody has his own narrative societies come totally unglued.
The combination, of an atomized societal landscape with a shared feeling of anger for what is perceive as an unjust inequality, is a highly flammable combination that always results in a violent societal collapse. What I do mean here is that Western countries have entered the territory of un-governability. I’m unfortunately not the only one to think so. The actions of Western national authorities are showing that they think along the same lines. And so they prepare for the difficult days ahead by transforming their countries, under our eyes, into totalitarian societies hoping that control by force will keep their societies from falling apart. And so freedom of speech is gradually eliminated, the police is being militarized to wage war on the citizens, and the Neo-liberal ideology is manipulating the minds into thinking that the individuals are responsible for their own misery, in other words blaming poor people for being poor.
And so in the globalized territory of capital holders “nation-states become little more than population containment zones, and the real power lies with the real decision makers who own global capital ” (4).
6. The Western worldview and Art
In Early-Modernity Europe lost sight of what the ancients considered the first societal principal among all; that societal cohesion is an absolute necessity. A society that loses its cohesion is indeed no longer able to ensure its reproduction over the coming generations. But how did we all come to forget a principle that had been so central in the past?
To try to solve this mystery we have to go back to Early-Modernity.
In Early-Modernity the worldview of Christianity was allowed to survive along the new values of the new rich long distance merchants:
- a strengthened individualism,
- the fetishization of material possessions,
- the devotion to the reason at work within capital.
They used visual art as their preferred instrument to spread the idea that their values were more useful that religious values (8). Their success soon inspired the envy of all and so art was basking in its newfound glory. The expanding popular success, of the new values of the new rich long distance merchants, was seen as a confirmation of the artist’s exceptionalism.
Envy is an extremely powerful motivator and so, over the span of the next 5-6 centuries, these new values have been spreading like a wild fire around the whole of Western Europe imposing a near religious devotion in people’s minds for the reason at work within capital. This devotion called for ever more “knowings” to put in action the reason at work within capital. By “knowings” I mean sectionally applied-knowledge or knowledge that applies to narrow fields of interest.
By the end of Early-Modernity “knowings” definitely took precedence, in the eyes of big capital holders, over the religious holistic narrative and they financed research and development of new production methods. With hindsight it appears that “knowings” acted very much like chemical reagents that cause the transformation of a substance. They indeed caused the transformation of the substance of merchant capitalism, trade in luxury goods, into the substance of industrial capitalism: the production of commodities.
It took a further two-hundred years for mass-consumerism and globalization to erase religious narratives from people’s minds. But the system of stacking “knowings” that is called science failed to propose a holistic narrative about what reality is all about. And in consequence citizens were no longer offered a worldview that could glue their minds into a cohesive societal whole. In other words rationality and science failed to replace the narrative of a Christian religious worldview that no longer was adapted to High-Modernity.
Not being steeped in long haul observation science has been missing to observe humanity’s imperative need for strong societal cohesion. Because of this very fact science never understood the societal importance recognized to worldviews. And because it does not understand the fundamental role played by worldviews science fell in the trap of rejecting religions and other worldviews by pitching non-believers against believers and this resulted in an unnecessary and counter-productive polarization of societies.
But the prioritization of “knowings” by big capital holders over religious knowledge resulted nevertheless in a dramatic increase in societal change. As a result daily individual life experiences had to adapt to the shock of the new: – speed of transportation, – communication at a distance, – electricity, – and so on. In other words the perception of reality was evolving furiously and the sensitivity of artists urged them to recognize that rationalism was the real source impulsing these changes. This explains how they fell impelled to integrate it in their art and they called thus for nothing else than the representation of reality at a more profound level than anything that had been done in the past.
But while feeling very deeply the urge to illustrate such a deeper narrative about reality the avant-garde artists nevertheless were not equipped with the necessary knowledge to invent such a narrative that would be adapted to the cultural traits of High-Modernity. The stacking of rationalist “knowings” does not indeed constitute “knowledge”. Knowledge is a holistic interpretation of the whole of reality while knowings are only interpretations of small bits of reality. The direct consequence, of the avant-garde’s knowledge limitation, was that modernism fell into the trap of “whatever” and its productions erred into the territory of absurdistan.
Modernism shocked the traditionalist sensitivities of Western populations and in reaction they looked in the other direction simply ignoring it. And so Modernism ended up in an impossible societal condition. In the moment of its creative impulse it had lost sight of the societal picture and subsequently it lost sight of art’s “raison d’être” which is to produce visual signs of the worldview of the men of knowledge of the day for all to share in order to strengthen societal cohesion. Being marginalized by Western societies Modernism awakened later to the possibility that art was dead. But not everyone was lost in the confusion. Where Hitler and his ilks had reacted against Modern art in a populist fashion declaring it degenerate others saw opportunities to exploit it for political and financial gain.
After the 2nd World War, In the context of the cold war, some thought, rightly so I must admit, that modern art could be a very powerful vehicle to spread propaganda. Let’s remember the mural that Rockefeller commissioned Diego Rivera to paint in the new Rockefeller Center. That mural contained a portrait of Lenin that Rockefeller wanted removed but Rivera absolutely refused to remove it. In the end the mural was taken down. This episode showed the power of art to big American capital holders and they decided to castrate it by forcing the primacy of form over content. This agenda also coincided with the agenda of the CIA which wanted to use art as an instrument of propaganda.
By the end of the forties Tom Braden was the first chief of the CIA's “International Organizations Division”. In his eighties he told the following about what had been the purpose of the IOD. "We wanted to unite all the people who were writers, who were musicians, who were artists, to demonstrate that the West and the United States was devoted to freedom of expression and to intellectual achievement, without any rigid barriers as to what you must write, and what you must say, and what you must do, and what you must paint, which was what was going on in the Soviet Union. I think it was the most important division that the agency had, and I think that it played an enormous role in the Cold War" (9).
As I explained here above “Life in democracies has literally been made captive of the ideology of big capital holders” and it is obvious by now that this ideology is responsible for the quagmire in which art landed in Late-Modernity. We just saw how the rightful search of Modernism for meaning had crashed on the wall of societal reality and what was suddenly encouraged was “expressing one’s own feelings” as in the words of Jackson Pollock.
Populism and the market are the right hand and the left hand of consumer capitalism and so, to please its right hand, the art-market showed a preference for works that represent feelings and shuns works that represent ideas or societal narratives. In atomized societies ideas invite debates and rejection and this goes against the grain of the art-market that searches to maximize the appeal of the work for the largest segment of art buyers. But ideas may suddenly become useful when they frame a competitor or an enemy of the US. By granting such works and their authors exposure in US media they function as instruments of propaganda discrediting a competitor and this in turn gains such works value that is readily exploited by art merchants. This mechanism has been at work continuously after the 2nd World War until this very day.
More generally the ‘rejection’ of meaning by the art-market limited the artworks to their form. Once form becomes the real thing the work can easily be transformed into a commodity. But the market is opportunist and likes to recuperate anything that is already popular. That’s how powerful ideas, like the ideas of Che Guevara for example, were trivialized into a commodity by dis-aggregating and re-formalizing them into a graphical icon. But art form for the sake of form is nothingness… Many times in history art prefigured the future culture of society at large. With nothingness Western art has essentially been prefiguring what Late-Modernity would be all about: nothingness, emptiness, and the loneliness of the individuals in their atomized societies in waiting to die.
From whatever angle we look at the Western art-scene there is no escaping the conclusion that the ideology of big capital holders has castrated art and in the operation it lost its societal power. This contradiction was not lost on the Post-Modernists for whom the conflict with modernism focused on the rejection of grand narratives. In other words they suspected meaning to be a trap that they thought they could escape by deconstruction and concentration on the fragmented pieces. To me this feels very much like looking back over one’s shoulder and practicing in reverse what was happening by the end of Early-Modernity when ‘knowings’ definitely took precedence into the minds of big capital holders over the religious holistic narrative. This whole process then snowballed and I concluded that “with hindsight it appears that ‘knowings’ acted very much like chemical reagents that cause the transformation of a substance. They indeed caused the transformation of merchant capitalism into industrial capitalism”. As such, whatever the critique we might have for this development, the devotion of the reason at work within capital engaged a highly constructive and enthusiastic societal move that is exactly the opposite of the move undertaken by Postmodernism.
By concentrating on the fragmented pieces, whatever ironical and playful the artist’s attitude might be, the fact of the matter is that he is initiating a snowball effect that rolls back in time to the origin of the formation of ‘knowings’ in Early-Modernity. This very fact did not escape the powers that be. They had indeed been in a fight, these last hundred years, against social movements that grand political narratives had glued into cohesive opposition groups. One such group, the Communist party in 1917, succeeded to take over Russia, then another group nearly took the control of Germany, and such groups have been since threatening the whole of Western Europe. To the agents of power theories about the rejection of grand narratives were like a gift from the sky. They controlled the institutions of higher education, they had vast state budgets, and rushed their most famous institutions into hiring the best known Postmodern French star theorists. The rest is history.
The reason at work within capital and the ‘knowings’ leading to rationality and science were full of the energy of life that frenetically pushes for ever more complexity. In contrast, it seems to me, Postmodernism goes against the grain of societal evolution and it is harmful to the physical and moral well-being of the individuals. But perhaps this is again all at the image of the loneliness of Western individuals in their atomized societies in waiting to collapse...
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Notes
1. “The missing profits of nations” by Thomas Tørsløv, Ludvig Wier, Gabriel Zucman. In Vox 2018-07-23
2. Giants: The Global Power. By Peter Phillips. 2018
3. Leslie Sklair, The Transnational Capitalist Class, Oxford, UK, Blackwell, 2001.
4. The Network of Global Corporate Control. Stefania Vitali, James B. Glattfelder, Stefano Battiston. Published by PLOS. October 26, 2011
5. Superclass: The Global Power Elite and the World They are Making. By David Rothkopf. Farrar, Straus and Giroux. New York. 2008
6. Global debt / Global wealth:
– the Institute for International Finance: total debt as of Q1 2018: $247 trillion (318% of GDP).
– Credit Suisse Global Wealth Report 2017: total global wealth as of mid 2017: $280 trillion
7. Is The U.S. Economy Really Growing? by Peter Cook, Mar, 16, 2018, in Real Investment Advice.
8. The 3 obliged subjects of painting in Early-Modernity.
The primary values of the new rich merchants were individualism, materialism, private property and they thought that their devotion to the reason at work within capital would materialize these values for them. The arts, primarily visual arts, were the instrument to spread the idea that their values trumped the religious values. In this ideological battle the new rich merchants commissioned arts works that represented exclusively 3 subjects: – landscapes around their mansions, – portraits of their family members, – and stills of the objects on their tables.
9. “Modern art was CIA 'weapon'”. By Frances Stonor Saunders. In The Independent. 1995-10-22.
See also:
- “Abstract Expressionism, Weapon of the Cold War.” by Eva Cockcroft, in “Artforum” 1974. This article should have caused a reassessment about “The New York Art School”. But by then the art market, and the inertial weight of its investment, worked to obviate that possibility.
- “Speaking Out. I'm glad the CIA is 'immoral': By Thomas W. Braden, The Saturday Evening Post, 20 May 1967.
- “How New York Stole the Idea of Modern Art”. By Serge Guilbaut.
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