Tuesday, July 19, 2011

Chickens Running in All Directions (I)

To continue :

According to the economist Karl Polanyi (1886-1964)  http://uncharted.org/frownland/books/Polanyi/POLANYI%20KARL%20-%20The%20Great%20Transformation%20-%20v.1.0.html “…by the end of the nineteenth century the peoples of the world were institutionally standardized to a degree unknown before.”

Though Polanyi refers to the 19th century, what he had in mind was not only that one century or the universal bureaucratic infrastructure crabbing and sterilizing governments, but how that same standardization “…enforced [a] uniformity of domestic systems [which] hovered as a permanent threat over the freedom of national development….”.  The result was, as Polanyi calls it “anarchistic sovereignty”, which became “…a hindrance to all effective forms of international cooperation….”

The failure of the international system in the 1920s and 1930s or as Polanyi says, “the passing of capitalist internationalism”, then “…let lose the energies of history …, the tracks of which were laid down by the tendencies inherent in a market society.”

The above thought may be carried forward to Latvia today, because the Latvian government has for all these years of failed capitalist internationalism presumed to join (in the name of Latvians) that very failure, justifying the course as the only way to escape the Bolsheviks. While such a presumption is not of all Latvians, it was presumed such by those who bought into the system of institutional standardization, which had preoccupied so much of the energies of the 19th century.

The standardized system became the system in Latvia today by way of liberal capitalism teaming up with individual rights and buying with ‘good’ money a sustained period of growth. Even so, though a significant number of people in the West have indeed had access to ‘good’ money, their sustainability and their money is illusory. The Latvian government however does not see it thus and has no intentions of hiring scholars and other experts to research alternatives for any eventuality.

Too, both liberal capitalism and human rights became identified with ‘freedom’ as sold by a more or less libertarian America in a fit of temporary success. The Latvian-Americans who arrived in America mid-20th century were America’s vanguard. They were not ones to discover the ebb in the tide of a free and self-controlling market and, therefore, in of the potential damage to their own that an ebb in their prescribed course would bring.  

Most Latvians fleeing the Soviets went to Germany (mostly) and then migrated to other Western countries (particularly the U.S.A.) during the late 1940s and early 1950s. As their arrival in America coincided with America’s and Western Europe’s post WW2 economic boom, the ‘right way’ of both politics and the economy for Latvians became what Polanyi called “failed capitalist internationalism”. In other words, few people, let alone Latvians, remembered Polanyi’s observation or perceived it as prescient http://ardictionary.com/Prescient/11143 .

This is one of the reasons why the Latvian government, having escaped the clutches of the Soviet Union, continued with its rightward tilt. Not surprisingly, Latvia is now caught up in the collapse of capitalist internationalism the second time around, this time however known by the name ‘globalization’ a la neo-liberal capitalism. And not surprisingly, Latvian politicians and business leaders continue to insist that no such collapse is taking place or is ever likely to take place.

All the same, the economic collapse of the West along with the value of its monies—the dollar and the euro—is foreseeable more clearly than ever. Given that economically Latvia is among the last of the European Union’s countries, it ought to be among the first to jump off the wagon known to be running out of tracks.

It is interesting that with the passing into retirement of President Valdis Zatlers [assuming that Zatler’s Reform Party will fail due to an early stall] and the aggressive implant of President Andris Berzins as the new President by the market forces, the opportunity—perhaps the last—for Latvians to escape death as a singularity has passed.

Currently the ‘word’ of the Latvian government is best expressed by the mantra: “Latvia is an example to the rest of the world”, sometimes also called “The Latvian Option” http://www.guardian.co.uk/commentisfree/2010/dec/20/latvia-debt-economy-europe-austerity / . The Prime Minister has written a book called “How Latvia came through the financial crisis” http://www.dailymotion.com/video/xjn59w_latvian-prime-minister-launches-his-book-about-financial-crisis_news , though no crisis has as yet been overcome.

No, no one in Latvia is jumping off the wagon or the system.

Though Latvia’s wagon has no engine, it rolls on. Though the system is now run by bad or fiat money, and few Latvians of former times would recognize themselves in the world of today, the cultural vacuum or debasement smiles on. To end with the words of Karl Polanyi: “Not economic exploitation, as often assumed, but the disintegration of the cultural environment of the victim is … the cause of disintegration ”.

Part 2 to follow.

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