Report from the Fronts #14: Unusual Banknotes

I recently acquired two banknotes that are pertinent to these reports. The first is a one rupee note issued in February 1916 by the Deutsch-Ostafrikanische Bank (German East Africa Bank).  It is actually an Interims-Banknote, a provisional banknote, which is hardly surprising inasmuch as the German colony was being invaded from every side.  Cut off from Germany and losing all the major towns, the colonial authorities began printing these emergency bills, ultimately using every sort of paper – even wrapping paper and wall paper – they could get their hands on.  When the regular paper ran out, they began using paper made from jute.  Coins were being minted from shell casings.

General Paul von Lettow-Vorbeck

General Paul von Lettow-Vorbeck

Interims-Banknote - obverse

Interims-Banknote – obverse

Interims-Banknote - reverse

Interims-Banknote – reverse

 

When Lettow-Vorbeck had to abandon the capital, Dar es Salaam, Governor Heinrich Schnee accompanied him and insisted on bringing the four tons of remaining banknotes.  This load required 400 porters and slowed the march, causing Lettow-Vorbeck to threaten to burn the lot if he was delayed again.  When in 1917 this supply was gone, along with the mints in Dar es Salaam and Tabor, Lettow-Vorbeck used a child’s printing kit to make crude Buschnoten, bush notes.

Buschnote - reverse

Buschnote – reverse

Governor Heinrich Schnee

Governor Heinrich Schnee

Buschnote - obverse

Buschnote – obverse

One wonders what a single rupee would get one in 1916 Tanganyika.

 

 

The second is more interesting – well, at least to me.  This is a ten perpera note issued in July 1914 by the Kingdom of Montenegro – Краљевина Црнa Горa (Kraljevina Crna Gora).  Why is this interesting?  Because although Montenegro was a discernable and frequently independent principality from the 16th century and was formally recognized as a kingdom by the Treaty of Berlin in 1878, it issued its own currency for only twelve years – or perhaps less.

10 perpera - reverse

10 perpera – reverse

10 perpera - obverse

10 perpera – obverse

 

 

 

 

 

 

 

 

 

 

 

 

In the second half of the 19th century Montenegro was using the Austria-Hungarian kroner (at least I think so, inasmuch as the new Montenegrin currency was based on the kroner), and this remained the case after 1878.  Prince Nikola I Petrović-Njegoš, ruler of Montenegro since 1860, introduced a national currency in 1906, the perper, named after the currency of Serbia. The king of Serbia, Alexander Obrenović, was assassinated in 1903, and Nikola believed himself to be the successor of the now extinct Obrenović dynasty and would unite all the Serbs.

Nicola and friends

Nicola and friends

Proclamation of the Kingdom of Montenegro

Proclamation of the Kingdom of Montenegro

Nikola I of Montenegro

Nikola I of Montenegro

The 1906 issue was of small denomination coins, and gold perpera coins appeared in 1910, when Nikola proclaimed himself king. The first banknotes were not printed until 1912. In January 1916 both Serbia and Montenegro were overrun by the Austrians, and Nikola went into exile, ultimately in France. The Austrians subsequently overprinted existing perpera notes and in 1917 issued vouchers in perpera amounts.

The royal family before the war

The royal family before the war

The royal family in exile after the war

The royal family in exile after the war

In December 1918 Montenegro disappeared as an independent state, absorbed into the new Serbian dominated state of Yugoslavia, and Nikola was declared deposed, dying in exile a few years later. When Yugoslavia disintegrated in the 1990s and Montenegro became independent again, the government decided to use the Deutsche Mark and then the Euro. Thus, Montenegro essentially only issued its own currency from 1906 to 1916 and banknotes from 1912 to 1916.

 

 

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Pssst! Wanna Buy a Country?

(Now that there are a lot of you I would like to conduct a survey.  Read one of the chapters from the novel I am writing (look for Hear, O Israel) and let me know: 1)great stuff, keep writing or 2)don’t quit your day job.  Thanks)

 

Ads have now begun appearing on these posts, which I suppose is a sign of having arrived.  I could prevent the ads from appearing by buying that service from Word Press for $30 a year and allowing them to pocket the income or I could establish a private domain for $18 a year and request a share of the income.  This did not seem a hard choice, especially since outside the rainforests and high Himalayas everyone on the planet is well accustomed to being bombarded by advertisements.  I am, consequently, now www.qqduckus.com.

 

Advertising, or more generally, marketing, is almost a made-in-America product.  Sellers have been touting their wares and services for millennia, but until recently that marketing was confined essentially to hawking and very limited and primitive signage at the place of business.  It was the United States, with its booming free market economy and emphasis on freedom of speech, that developed modern marketing in the nineteenth century and exported it to the world, especially with the globalization of business after the Second World War.  With the emergence of electronic media and sophisticated information technology advertising now extends into virtually every nook and cranny of our lives, and marketing has become, I believe, perhaps America’s greatest problem, more pernicious than the incredibly exaggerated threat of terrorism.

 

Marketing inherently involves the distortion or outright elimination of truth, particularly when the product, such as toothpaste or gasoline, is essentially the same as that produced by competitors.  Unfortunately, advertising serves as a sort of educational medium for an increasingly uneducated and ignorant populace, especially television advertising.  For many television cloaks everything it presents in at least a minimal air of reality, particularly when an attractive personality, like a sports or movie star, is involved, and the viewer’s understanding of the world, in most cases already filled with gaps and distortions, is further detached from reality.

 

There is clear and simple evidence that many people believe what they see and hear via advertising: it works.  Companies would hardly spend millions on marketing if it did not sell products; Procter & Gamble would not have run all those ads for so many years if Mr. Whipple did not move the rolls of Charmin off  the shelves.  Of course, many – I hope most – will buy the product not because they believe it is truly softer than other brands, but because when confronted with a choice among similar products they remember the amusing Mr. Whipple and grab his brand.  Assuming all travel websites to be essentially the same, I chose Priceline because I like Captain Kirk, not because I thought they were any better than the others.  Perhaps this is the reality for most consumers, but then what is “brand loyalty” based on?  I suggest that many begin to believe their choice is better when using the same brand year after year.  (Am I being too cynical here?  Listen to popular talk shows or read letters to the editor to see just how stupid many of our fellow citizens are.)

real person

real person

Permitting pharmaceutical companies to advertise was easily the biggest mistake the FCC has ever made, and every doctor I have asked agrees.  Seeing a drug touted on television leads many a patient to ask or demand that drug from his physician, making the latter’s  job harder.  The drug companies no longer have to bribe doctors with free stuff; they now in effect persuade the patient to sell the drug to the physician.  Big pharmo constantly justifies outrageous pricing on the grounds that research and testing is so time and money consuming (and the government contributes to this), yet for the past several years the major companies have spent more on PR than R&D.Without question the second most pernicious advertising is that produced by major international corporations, most especially those, like the oil companies, that engage in activity certainly, probably or possibly damaging to the environment or other public interests.  British Petroleum is not attempting to sell you a tankful of gas with its endless ads about the Gulf but rather to convince you – against all evidence – that despite the spills and obvious lies they are just as environmentally and socially conscious as any other global corporation (which of course is not at all).  The point of the millions spent on such marketing is not to sell a product but to create a more attractive (and generally false) image, one that will move public opinion away from any thought of regulation and limits on their business.  It is propaganda, inevitably deceptive propaganda, and apparently people believe a lot of it or why would they bother?  Remembering the state PR of the old Soviet Union, I am minded to call this corporate advertising “capitalist realism.”

"we care."

“we care.”

The most pernicious advertising?  That found in our elections.  With their splendid understanding of humanity and society the Founding Fathers created in the Constitution a document flexible enough to accommodate inevitable change yet difficult enough to alter that stability and basic principles were not threatened.  At the end of the eighteenth century, in the early morning of the Industrial Revolution, it was clear to all but the seriously dense that the world was steadily and fairly rapidly changing, yet marketing was still pretty much what it was in antiquity, despite the development of cheap paper and the printing press.  As a result, the Fathers could not possibly have comprehended the incredible danger it posed to the system.

 

An election campaign is essentially the marketing of a product – the candidate.  In the late eighteenth century this would involve some advertising – broadsheets, leaflets and support in newspapers – but for the most part the candidate had to sell himself by making the rounds, giving speeches and engaging in debates.  He was bound to stretch the truth sometimes, but deception is much more difficult when you are in such close contact with the voters and most of the issues can be fairly easily understood.  In a nation of over three hundred million people and mass electronic media this is no longer the case, and the candidate has become a carefully groomed and  presented product, generally unavailable to the average voter except as an unapproachable speaker at the end of the hall.  He is marketed exactly like laundry detergent or fast food: simple phrases, compelling imagery and a complete lack of any meaningful content.

 

The perfect political marketing storm came in the wake of World War II when television joined radio and spread rapidly and when international corporations began seriously evading the regulation of any single nation  The candidate could now theoretically reach every voter in the country and sell himself over and over and over without ever being challenged.  As the modern dictatorships have demonstrated, repetition and saturation is the key: it works in commercial advertising and it works in political advertising.  Thus, one result is that the candidate is elected more on the basis of ignorance than  knowledge – look at the number of astonishingly, embarrassingly stupid people in Congress, especially the on the extreme right.

 

The second and more fatal result of the marketing storm is the enhanced power of money in our political system.  Economic power is political power, and it consequently must always find access to the political apparatus, regardless of whether it is a kingship or a democracy.  As a result, through most of history the wealthy class has been the political class, but in an age of democracies and corporations this is no longer the case.  Granted, most of the people in Congress are rich, but the real economic power in society is now in the hands of international corporations and a few unbelievably wealthy individuals.  And marketing has provided them with an easy and legal mechanism for dramatically influencing, almost to the point of controlling, the political apparatus.

for sale

for sale

It is simply impossible to launch a credible campaign for national office (or even most state offices) without a huge amount of money, inasmuch as you cannot get elected without television advertising and that is fabulously expensive.  (It is also virtually impossible to do it without representing one of the two established parties, thus helping to preserve their shared monopoly.)  It now costs a billion dollars to run for President, a billion dollars.  But there are equally fabulous sources of money out there: wealthy individuals, organizations with a cause, lobbying groups and most of all, corporations.  All these entities will have some interest in influencing the government, and there is a perfectly legal way for them to do that – campaign contributions.  Political action committees can expedite these transfers of money, and of course the recent laughable Supreme Court decision that corporations are “persons” allows the really big boys to pour in as much as they want.

 

Regarding these “contributions,” the notion is frequently expressed, generally by the recipient, that this money comes with no strings attached.  Is there actually anyone who believes this?  Successful businesses do not give away millions unless something is coming in return.  It is clear and oh so obvious bribery, and we get the best government money can buy, which is of course one not at all beholden to the people.  Our present government may seem a collection of incompetent fools, but you may rest assured that the big donors will still get their exemptions, contracts, favors and whatever.  This is the way it has worked since the beginning of civilization, and the only difference now is that the economic elites are completely vulgar.

Funny Money

(Medical stuff has caused me to miss the last post and abbreviate this one.  [I would like conservative free-market privatized health care advocates to spend three hours in an emergency room.]  I present a variety of unusual bank notes.  The images could be better, but removing all the bills from their frames was too much work.)

We start with inflated notes.  (For the greatest inflation ever see the earlier post The Sad History of the Hungarian Pengo.)

Most of you have probably seen the classic Zimbabwe bill.

This is one of the last notes printed by the collapsing Yugoslavian government.

This one is from the short-lived country of Serbia Krajina, which consisted of the Serbian parts of Croatia that seceded in 1991; it was reincorporated into Croatia in 1995.

Here are some notes issued by Germany during the acute inflation of the twenties, not by the state but by the railway system.

Also from this period, Notgeld (“emergency money”) issued by the city of Gotha for local use.

Here is the earliest bill issued by the Weimar Republic – 1919; it still has the imperial eagles of the Second Reich.

More “German” money from the Third Reich.  The top bill is for the puppet state of Serbia, the bottom is for the puppet state of Bohemia and Moravia (the remains of Czechoslovakia).

Moving east, we encounter money issued by a couple of very brief authorities.  From the nightmare of the Russian Civil War (1917-1922) notes printed by the two major White powers.  The first is from Kolchak’s Siberian army; 50 kopeks, not much.  He ended up dead.

The scond bill is more impressive, issued by the Don Cossack Military Government  in the south, but a 10,000 ruble bill does not suggest widespread confidence.  Denikin and Wrangel and their friends also ended up dead.

 

And more emphemeral money, these from the State of Chihuahua during Mexican Revolution (1910-1920).  The two men portrayed on these 1914 notes, Mexican President Madero and Chihuahua Governor Gonzales, had both been assassinated the previous year.

 

And finally, the last issue of the Khadafi government in 2009, the famous “Jack Benny” bill.

Hegemonic Folly: Defense Spending

With the predictable failure of the of the budget super-committee comes the blunt ax of sequestration, which is likely the only time the military budget will ever be threatened with cuts.  Such will never happen, of course, but the cries of putting our national security at risk are already flying, mostly from Republicans, but also from Democrats, since no politician wants to be accused of being soft on defense.  The military has naturally also chimed in, and who is a more impartial judge of the nation’s security needs?

Some figures on just how big our military is.  In 2010 we spent $687 to $698 billion (an exact total is not available to mere mortals) on the military, which is more than the next 17 nations combined and about 43% of the total world expenditure.  The next largest budget, that of China, is 7.3% of the world total.  Our expenditure was in 2009 4.7% of GNP; only five countries – Saudi Arabia, Israel, United Arab Emirates, Oman and Eretria – exceed that and for obvious reasons.  Only the UAE, with a population of only 8 million, exceeds us in per capita spending; in 2009 our military cost every man, woman and child in America $2141.  One specific and particularly relevant example: though our battle fleet has indeed shrunk in the last 20 years, it is still larger than the next 13 navies combined – and 11 of those are our allies.

The stated justification for this mammoth spending on arms are all the threats to our national security, but apart from sundry individuals, who are hardly any threat to the nation (see the article The Terrorist Nuisance), exactly who poses a serious threat to our motherland?  Only an advanced nuclear power could possible threaten our shores, and there are only two who are not our allies, Russia and China, and neither is likely to attack the US in the face of total devastation.  The truly dangerous nuclear states, North Korea, Pakistan, Israel and perhaps Iran, may threaten their neighbors, but for the foreseeable future they simply cannot deliver warheads to North America.

Of course a regional power could threaten to disrupt our supply of resources, but there is really only one that is absolutely vital to our welfare, oil, and it is hard to image that even Iran, unless pushed to the brink, could possibly be stupid enough to launch a war in the Gulf.  Rolling in money, the Gulf   states are already armed to the teeth with modern weaponry, and given the rapidly declining need of large ground forces to repel an invasion, how many carrier groups would it take to smash Iran?  A nuclear equipped Iran is a different story, but the real powers in that country, the Supreme Council and the Revolutionary Guard, have, unlike Ahmadinejad, not demonstrated the complete irrationality necessary to contemplate an action that would bring absolutely no benefit to Iran and lead to massive retaliation from virtually all the developed nations dependent on Gulf oil.

We want to protect our friends, but how many of them need protecting?
Europe? Japan? Canada? Australia? Mexico?  The Philippines do not want us there any more and are making their own arrangements with the other offshore Asian powers. Taiwan and China are forging more and more economic ties, and China’s economic relationship with the US makes it increasingly unlikely she will do anything that would seriously offend her most important market. China is seeking to increase her influence in Southeast Asia, but the only thing that threatens is American influence in the area.  Possessing nuclear weapons and the most powerful military (after Turkey?) in the region, Israel hardly needs American help, and given her behavior, one wonders how much of a friend she would be were it not for her seeming stranglehold on American politicians.  The one serious friend who is actually threatened is South Korea, and while an invasion from the north would result in immediate and extensive casualties, North Korea could be rapidly and utterly defeated by the South Koreans and minimal US forces.  And if the military is the real power in Pyongyang, would they sacrifice themselves for nothing?  Further, China, which ultimately controls the food and energy supply of her socialist ally, has absolutely no desire to see even temporary chaos in the Korean peninsula. They also can hardly be enthusiastic about the emergence of a seriously nuclear North Korea, since that could bring on the nightmare of a nuclear South Korea and Japan.

Not many military leaders, especially those who are quasi-political, have ever supported cutting their budget and reducing their forces, the major reason why threat assessments emanating from the Pentagon must be consumed with a boulder of salt.  For American politicians, who are achieving unheard of levels of self-serving behavior, reducing the military is virtually unthinkable, since they would suffer the wrath of sundry powerful lobbies and blocs of ignorant voters whipped up by their opponents.  After 60 years of having the most powerful military in the world and 20 years of virtual hegemony around the planet many Americans see any cut back in “defense” as a sign of surrender and decline.

We are no longer in the nineteenth or early twentieth century, and not only territorial but also military-based hegemonic empires are obsolete.  Gunboat diplomacy only works when the threat of military intervention is real, and although world opinion and international law did not stop the US in places like Grenada, Panama and Iraq, it is clear that military operations of any scale are incredibly expensive and self-defeating in the long run.  And against the backdrop of American arrogance, disregard for international law, increasing violation of other nations’ sovereignty and traditional inclination towards violence rather than diplomacy, our 13 carrier groups certainly appear to be the twenty-first century equivalent of gunboats.

Finally, not only is large-scale warfare rapidly becoming prohibitively expensive but with the emergence of a globalized economy it has also become counterproductive for the developed nations. Whatever their rhetoric or ideologies, they are all now inextricably bound together in a world capitalist web in which the economic misfortunes of one will inevitably affect the others.  At least in the industrialized world less and less does national security depend on huge military establishments and more and more on sound economies, which are ill-served by wasting treasure on weapons systems with no opponents and wars resulting in nothing but dead human beings.  Large scale violence must only be contemplated when there truly is no alternative, and given the increasing interconnectedness of the planet, there will almost always be an better alternative.

Then again, it is cool to be the baddest dude on the earth,  even though that might be at the expense of everything else.  Ask the Spartans how that worked out.

Were the Leftists Right? The Crisis of Capitalism

Presidential candidate Ron Paul recently stated that we
should eliminate, as a costly waste, the Federal Emergency Management Agency, a
completely inane pronouncement that underscores the extremes to which the
libertarian and small government types are willing to go.  Libertarian ideas certainly resonate with
those of us who oppose the nanny state and government attempts to determine
citizen behavior, but there is a limit, especially regarding the economy.  Back in the eighties I met the Libertarian
presidential  candidate and suggested
that without government regulation the Seven Sisters (big oil) would control
the country within 48 hours.  His reply
was that the consumers would refuse to buy their product until they acted
reasonably, which struck me as naive to point of stupidity.  How do consumers go without oil or power or
food?

And now Republicans and Tea
Party types are adopting these extremist views, suggesting, it seems, that the
only legitimate functions of the federal government are fighting wars, keeping
close watch on the citizenry and prohibiting recreational drugs.  These people appear to inhabit a world where
poverty is always the result of personal failure and the market forces really
do work to solve all problems, where only good Christians are truly virtuous
and science is always suspect.  This is a
dream America,
one that has never existed, even in those halcyon days of the nineteenth
century when a (white Christian) man was a man and businessmen were free to
build America
unencumbered by silly government regulations.

With 312
million people and the largest economy on an increasingly interconnected planet
the United States
is a very complicated place, a social and economic structure of a complexity
that is seemingly beyond the intellectual capabilities of many on the
right.  This is no longer a nation of
small farmers and a predominantly white Protestant citizenry, and we have long
since moved beyond the village economy where the forces of supply and demand
operated more or less freely.  Yes, the
free marketplace has traditionally regulated itself, but in the long run
and with complete disregard for the welfare of the humans involved.  American growth in the nineteenth century was
spectacular, but it was paid for with the emergence of an economically
marginalized class of industrial workers and an endless cycle of boom and
bust.  And now the evolution of the
financial markets in the twenty-first century is threatening capitalism’s
ability to right itself even in the long run.

Unregulated
capitalism, whatever its touted dynamism, has historically produced a number of
effects deleterious to society as a whole.
First, and most obvious from American history since the Industrial
Revolution, there is the inevitable emergence of monopolistic practices, which
skew the marketplace and deprive the consumers of the basic benefits of
competition: lower prices and innovation.
This development is most dramatically displayed by the Robber Barons of
the nineteenth century, but despite more than a century of anti-trust
legislation the problem remains, particularly in the energy, banking and
information industries.

Second, and
plain to see around the planet, untrammeled capitalism has no regard for the
environment, no matter what industry public relations say.  There are of course those who feel that
economic growth justifies a little smog and the odd patch of scarred terrain,
but now in the twenty-first century the potential magnitude of such pollution
undercuts the growth excuse.  It is no
longer just a question of unsightly landscapes or a few people poisoned by
toxins in the earth or water; rather it is oil spills that injure the lives of
millions and destroy huge habitats and air pollution so serious that we are
actually affecting the climate and threatening a global catastrophe.

Finally, the
market place is dumb.  Even if supply
actually freely followed demand, which is unlikely on the large scale, the
market would be responding to the short-term desires of the consumer and the
typically short-term profit motives of the producer.  Such is generally conducive to neither the
most efficient use of resources nor the best long-term interests of the society.  An auto company would, for example, have
absolutely no reason to market a more efficient engine if consumers were
content with the current price of fuel, even if it was perfectly clear that
fuel was disappearing.  The market spurs
innovation for immediate profit not to solve future problems or for the
betterment of society.  It can in fact
injure the interests of society: if more money can be made by growing sugar
cane for ethanol instead of grain for food, concerns about hunger are not
likely to prevent the switch.  To put it
another way: the proper purpose of business is to make money, not to
demonstrate any regard for humanity.

The history
of deregulation in America
during the last 30 years would appear to underscore these concerns.  Deregulating the airlines has in fact
generated some lower prices, but has also sent the industry into such chaos
that airline companies come and go with depressing regularity and it is
increasingly unclear who actually owns the plane you are flying on.  Deregulating the savings and loan industry of
course led to a spectacular collapse and cost the taxpayers almost $90 billion.  When allowed to, states that chose to opt out
of regulating their power companies have seen the price of electricity rise and
service and reliability drop.  Check your
cable bill for the impact of “free competition” in that market.  The free market and human greed are a toxic
mix, less likely to create jobs, as the free marketeers  claim, and more likely to create misery.

All this,
however, pales before the threat of a non-regulated financial sector in the
twenty-first century, as the recent economic collapse makes very clear.  A relative handful of greedy men brought the
global economy to the brink and thereby threatened the lives of virtually
everyone on the planet.  Hedge funds and
private equity firms did not even exist when the banking industry was brought
under control in the 1930s, and their arcane workings have helped shield them
from government attention.  As late as
1985, when serious deregulation began, profits made by socially useless
financial institutions were at most 16% of the profits of all American
companies; they now constitute more than 40%.
These are not “job-creators,” to use the new Republican term
for the wealthy; they create absolutely nothing, essentially using the economy
as a giant casino.  For all that they
treated their workers like chattel, the Robber Barons actually produced goods
and services and helped build the country and economy.  The new lords of Wall Street do nothing but
injure the economy, all the while enriching themselves to a degree that would
impress even the Morgans and Rockefellers.

It should
now be perfectly clear to all but the densest conservatives that these masters
of financial manipulation and legerdemain with their arcane and opaque
instruments are far more serious a threat to our country than any group of
traditional terrorists.  Anybody can blow
up a building; blowing up a national economy, now that’s something.  Yet even in the wake of the collapse of 2008 nothing
effective has been done to bring these clever greedy people under control, and America’s
new flirtation with the extreme right and our fervent embrace of stupidity
fairly guarantees that nothing will be done.

The
realization that serious money can be made from economic downturns leads
inevitably – as it has – to the emergence of a coterie of
“businessmen” who have zero interest in the state of the economy,
because money can be made regardless of that state.  This is incredibly novel since traditional
industrialists and businessmen always preferred a prospering economy; you made
more money by selling more stuff and expanding your business.  If, on the other hand, you will make huge
profits through bond manipulation if the Greek economy completely tanks, you
will obviously hope for such an Hellenic bankruptcy, regardless of the economic
devastation that could result.  You in
fact will help bring it about: as the markets learn serious investors are
betting on Greek insolvency, Greek credit ratings will suffer further and
reluctance to extend more bailout money will grow.

But why stop
at hurting single countries when it is actually possible to hurt everyone on
earth?  The hedgers have discovered there
are huge profits to be made in playing with commodities on a global scale, and
one of those commodities is food.  This
is unbelievably pernicious.  A recent UN
study reveals that while speculation in food stocks has nothing to do with
actually producing and delivering goods, it does indeed impact the real world
by creating prices that have nothing at all to do with supply and demand.  And those artificial prices are inevitably
higher than real market forces would determine.
In a one year period running from 2010 to 2011 world food costs rose
39%, two critical commodities, grain and cooking oil/fats, rising by some 70%,
and virtually all this increase was due to trading in agricultural securities
rather than shortages.  There is plenty
of food in the world, yet millions are starving.  Some miniscule part of the problem is due to
inefficient distribution, but for the most part it is because prices are too
high, all because people who have nothing whatsoever to do with the food
industry are making billions manipulating it.

Confronted
with this global outrage, Alan Knuckman, one of the new stars of commodity
investment, replied: “The age of cheap food is over,” seemingly
oblivious to what that bald statement means to most of the people around the
globe.  Or perhaps he does: he added
“Most Americans eat too much, anyway.”  Well, there are in fact some Americans who do
not get enough to eat, but more important, there are several billion poor souls
around the world who must spend an average of three quarters of their income on
food.  For them the higher prices generated
by Knuckman and friends are not an inconvenience but a matter of life and
death.  And meanwhile this loathsome
creature is making millions, essentially by making life more miserable for
humanity.

These people
are hurting humanity in a way that sundry terrorists can only dream of, and
they have it in their power to bring the global economy to collapse.  Yet little is being done to protect us from
these predators, who make BP and Exxon Mobil look like socially responsible
companies.  The European Union and United
States are aware of the threat but finding
it difficult to produce regulations that are effective, especially since the
financial industry is globally interconnected and to a degree can dodge the
restrictions of any single country.  The US
has prohibited banks from engaging in dangerous speculation, but the
speculators simply left the banks for other venues.  A measure of the lack of progress: in the US
the “shadow banks,” as the hedge funds and private equity
institutions are known, hold $16 trillion in debt, while traditional commercial
banks hold only $13 trillion.  This is a
financial weapon of mass destruction just waiting to go off.

And while we
all wait helplessly for the next crisis, a novel question is now being debated,
at least in Europe:
Were the leftists right about capitalism after all?  With the economic failure of the Soviet
Union and the emergence of capitalist enterprise in China
collectivism as an economic system seemed to be finally and utterly discredited
and the free market economy triumphant, but now it seems that some of the
traditional cracks in the capitalist edifice are becoming fissures that could
bring the whole structure down.
Ironically, however, collapse of the system will not arise from oppression
of the working class by industrial magnates, as predicted, but from something
that Marx and Lenin could hardly have foreseen.
It will not be brigades of angry workers in the streets but clever young
men surrounded by computer screens in dark rooms.