Archive for September 15th, 2008


September 15, 2008


So far the luxury economy seems to be doing all right as Roger Cohen notices (September 15 2008:”Premiumize or Perish“). The rush towards luxury is not just about soberly replacing Hawaiian vacations by fancy candy. There is a more sinister side to it. Luxury is about putting the entire socioeconomy to the service of the rich. It’s both a symptom and a further way for the rich to dominate.

In a functional democracy (“peoplepower”), the middle class has the power. The lower class is too low, too uneducated, too unenlightened. The lower class does not have enough power to free enough time-energy to study and find out what’s up and what’s down, hence it is led by the nose always. The question is by whom. (Call this an elitist argument, if you will, but it’s really happening, to deny it is futile, just as it is futile to deny gravity.)

So the struggle for power is always between the higher class and the middle class.

Some may object to some big revolutions where it looked as if the lower classes fought for control. Such cases, such as 1917 Russia are irrelevant to this essay. In 1917 Russia, the budding democracy was wiped out by the fascist methods that arose much more naturally from the then unfolding, massive war; the point being that Russia did not have the time to develop a democracy yet (somewhat similarly, but much more excusably, than today). The same mechanism was at work in France in 1793/94 and 1870/71: each time, as in Russia, or in China during the “Long March”, a war situation involving an external aggressor had developped, and was the main aggravating factor. Instead we are looking in this essay at the milder cases of a social collapse occuring for internal reasons related to wealth inequality. No external aggression is involved in the beginning (although war often shows up in the end, it does in the way it shows up in Orwell’s “1984”, namely as fascism’s best friend and ultimate justification!) 

When the upper, moneyed class grabs power, that, by definition, is “moneypower”, plutocracy.

The plutocracy makes itself perennial by putting the entire economy to its own service: not only is it nice to have ever more servants, and trinkets nobody else has, but, the more so, the less power the middle class has (because since more economic activity is directed at luxury product, less is directed at products for the people, increasing the relative cost of those). Hence luxury products thrive, and real estate becomes stratospheric. Indeed, such evolutions weaken in turn the middle class some more (causing it difficulty from fewer cheap products, and expensive lodging).

This phenomenon occurred in Rome, 2,200 years ago, as the Second Punic war made the rich way richer, thanks to a lot of policies that should have been made unlawful in a timely manner. Thye measures that were not taken: as rent control, prevention of a real estate bubble, and help to small holders of agricultural land. Later they were coumpounded by the rich buying elections (don’t laugh if all this sounds eerily familiar, we are not making it up…). As those people friendly measures were not taken, Rome started its colossal, six centuries descent to hell, from republic to theocratic terrorcracy. Now, of course, we have seen it all before, and thus it will not happen again, because history is something we all know really well… 

The present world shows all the symptoms of a mighty struggle between democracy and plutocracy.

An example of the resistance of the People is the crashing and burning of the financial sector. It can be interpreted as a struggle between the People, who is fed up feeding banks and other rich financial sector manipulators (so people tend to refuse to pay the money they owe, or to pay for credit they don’t want to engage in). In this sense the present crisis is healthy, and a very good sign: the People is putting finance, and its associated plutocrats, on a diet.

An example of the aggressivity of the rich is Putin’s invasion of Georgia. It seems Putin and his multi billionaire friends are immensely rich through ways that should not be legal; by attacking another country, and threatening others, Putin and his fortunate friends create a state of war, favorable to fascism, antipathetic to democracy… Inside Russia itself. That state of war is adverse to looking at what Putin and friends are really doing. Thus allowing them to proceed, ever more. It’s often like this with plutocrats and fascists; having crossed a few Rubicons, they have no choice, but cross some more. Criminals cover their crimes through bigger crimes.

Of course, it goes without saying that the plutocrats and oilocrats around Bush used the invasion of Iraq in a similar way (they were serving only themselves, and not the USA, because, long term, having killed so many Iraqis, and destroyed the country so much guarantees that ultimately all Iraqis will hate and despise the USA).

So there we see, just as with the Second Punic war, that some wars can serve the rich (the difference being that Carthage and Hannibal really attacked the Roman republic, whereas neither Georgia nor Iraq was a threat for those who attacked them, and, clearly, Russia is not much of a republic, and, arguably, the USA has been increasingly behaving like a plutocracy already).

To orient the socioeconomy to few, rare, extravagant products is another, softer sort of war against the People by those who own most. Luxury is a form of usury.

Patrice Ayme