John Adams and Thomas
Jefferson after him, former US presidents both (2nd and 3rd
respectively), were committed to the idea of educating all the citizens of the young
United States, because they were persuaded that the more general diffusion of
learning would have the effect of fragmenting political and social power, which
always seems, when seen through History’s prism, to want to coagulate around
wealth and birthright. On September 15, 1813 John Adams wrote to Thomas
Jefferson that by the broad dissemination of learning, “Worth and genius would
thus have been sought out from every condition of life, and completely prepared
by education for defeating the competition of wealth and birth for public
trusts (Jefferson Correspondence, Vol. XIII, p. 400).”
A little earlier in the same letter (XIII, p. 375) Adams also
expresses sympathy with the following sentiment: “The conclusion of the whole [speaking
of an anonymous work that Adams had received] is that an aristocracy of bank
paper is as bad as the nobility of France or England. I most assuredly will not
controvert this point with this man.”
So we are reflecting on two ideas – 1) that
We the People, of philosophical necessity, must dare to darken the corridors of
knowledge and learning so that Power cannot not just simply be passed down according
to Wealth and Inheritance; and 2) that an Aristocracy of finances is no
different from any notion of Old World Nobility – both are exceptionalist (read neo-conservatively = elitist), neither is naturally committed to
the philosophical idea of We the People, and neither concept of aristocracy is
based on Intrinsic Merit. The aristoi
(the best) in this sense are not necessarily the best in virtue nor in personal
achievement nor in excellence, but are rather those who control the Wealth.
At this moment of our
incursion into History, it would seem that the metaphors are mixing anew—because,
as others have once said, in this best of times and worst of times that we
are busy with, a very deep philosophical Winter of our discontent is settling
in for the long haul. Our Times, currently, are being made toxic by a steady climate
of financial (and other) warfare and woe. Now I do not wish to diminish any
sort of human suffering, but a Karl Marx would suggest that economic imbalance
and woe has been the hallmark of human exchange ever since the first
cave-fellow started bartering with his neighbor. According to Marx, Injustice
was born the day one cave-fellow decided to overcharge the other because of
some odd notion whereby one believes that over and above the material parity (and
therefore fairness or justice) in the exchange, one also has some inalienable right
to an additional ‘added value’, which we add on additionally, arbitrarily, to
the basic or inherent value of an item. We call this additionally added-on
value, profit. Marx was pretty
persuaded that, in the end, both parties left the bartering table winterfied in
discontent, because by paying more than the real or actual worth of the item (i.e., the item + the additionally
added-on value or profit), each bartering
cave-fellow pretty much thought that he had gotten the short end of the stick
in the deal—that the deal was therefore no deal.
This, in turn, engendered in both parties at least the psychological sense of personal devalue or insufficiency, even if perhaps
not the material presence of any lack.
In
the news we regularly hear about the European
nations that are in economic difficulty. Greece, Spain, Portugal, and Italy, of
course, are in dire straights; and the language of bankruptcy and the withdrawal
of Greece from
the Euro zone is on all the media lips. There was a collective “Ça, alors!”
from the French when France’s S&P
note was downgraded, then the media pundits floated the possibility that Germany’s credit
rating was maybe, perhaps, potentially, and possibly being threatened with a downgrade
(GASP! or OMG! for the younger philosophers)—all was a-flutter & a-twitter for
the coterie of bankers and financers, because it actually became imaginable
that Germany might not perhaps be as ‘sound’ an investment, at this juncture,
as it was Tuesday morning last! What a relief when S&P changed
their mind!
But
what does all this mean to the Phrontisterion
philosopher who is gazing at this world (apparently) coming apart at the seams?
Our media journalists tell us in the flood of news concerning the woes of these
European countries that a downgrade
in their S&P
note means that the cost for them to borrow money from banks and other
financial institutions is going to increase. So, the more dismal a country’s
financial troubles become, the more it gets to pay in interest costs (i.e., profits)
the Princes of Finance to borrow the money to get out of the hole—the deeper
the hole, the happier and wealthier become the Princes of Finance…and the
crankier it seems, which in turn drives up the borrowing rates! The Logic of
Money seems to be fundamentally emotional – because the cost of borrowing money
increases as one’s need for that
money increases. As was suggested above (talking about cave-fellows), this
situation is not new. By way of anecdote, I remember reading in some
interminable history on the Wars of France that one of the French kings, who
was busy trying to get on with the business of waging war with the Dutch on his
northern borders, had to keep leaving the battlefield to go back to Paris for
meetings (and dinners!) because some financier, from whom he was borrowing money
to pay his soldiers and to keep his canonniers in shot and powder, did not think
the king’s S&P rating was keen enough to keep lending against the increases
in the price of shot and powder. Voilà a simple example of kings of countries bending
the knee to princes of finance in the name of supply and demand economics.
My problem with this
situation is philosophical in nature, because, although I generally keep my own
financial house in order, it is evident from this analysis that I must not be a
very insightful economist; for I cannot find a reasonable defense for Predation
of this sort. Now the principle at work in this type of logic is obviously Predation,
and it is a Predation that goes straight
for the jugular vein. Scenario One: Greece has no particular economic woes, but
just needs a little regular jingle in the pocket to keep the Hinges of State
lubricated (her S&P rating is high); so Bankers and Investors lend money
cheaply. Stately Pockets are a-jingle, Bankers and Investors are making profits
from the interests on their loans – everyone is happy.
Scenario Two: Greece has significant economic difficulties
(for any and all possible reasons, so her credit rating is downgraded), and the
Hinges of State are rusted completely closed; so although Bankers and Investors
continue to agree to lend money (albeit under increasing duress), they significantly boost their lending rates
and shorten repayment times. Let’s pretend I’m Greece, and let’s do the math. I
have a BIG debt [debt-1] because I am a big thing
called a State and I have to pay for all the state employees like police and
military, in addition to all my infrastructure, such as roads, bridges, metros,
buses, public buildings, hospitals, museums, airports, ships, etc. I don’t have
quite enough jingle in my coffers to cover all my immediate BIG debt payments
and costs, because things get more and more expensive as we go along, so I borrow
money to cover that debt (which means I acquire debt-2 to make the payments on
debt-1); but I now also have to pay interest on debt-2, which means that while
I still have the equivalent of debt-1 (although d-1 is now paid off by the
acquisition of debt-2), I must now also pay whatever higher interest the Bankers
and Investors are requiring for the borrowing of debt-2. So I now have d-2 + high interest rates.
One
learns from uncritical Bright-Lights of the media that the justification for
the higher interest on debt-2 is that, in Scenario Two, Greece has less
‘credibility’ because it has significant liquidity problems (and isn’t it just
so obvious that Greece has no
collateral to guarantee its debt!), and therefore has to keep borrowing additional
money to pay its debtors. The Lenders and Investors have become skeptical that
Greece will actually be able to pay back its full debt (d-2 + higher interest rates + additional short-term
loans, etc.), either entirely or on time (this explains the cyclical downgrade
of the S&P rating), a skepticism that is otherwise well-justified because these
same Lenders and Investors did the math before
lending to Greece, and they know that the interest payment alone for Greece,
not to speak of the debt itself, is phenomenal, and pretty much beyond the
possibility of repayment by mere mortals, even though they be such as these
illustrious Guardians of Olympus.
So what have we learned from
this philosopher’s doing of the math? One: he should not quit his day job. Two:
the Lenders and Investors always make money, and they are making a ton of money
in this situation – we must not forget that, for such as these, Interest equals
Profit, including for those Lenders and Investors who are presently speculating
on the successes and failures of the various European states. Three: that the
more money Lenders and Investors lend and invest (whose money is this anyway?),
and therefore the more profit they make,
the grumpier they become and the more they charge for lending and investing.
Four: that Lenders and Investors do not seem to be interested in Big Ideas,
neither in the idea of working out the kinks in a Democracy, nor in the idea of
the Greek State, nor even in the more complex idea of whether this particular incarnation
of Greece fails or succeeds as a national entity. These Lenders and Investors
are interested only in guaranteeing good returns on their investments. Five:
that Lenders and Investors consider themselves above and beyond the interests
of ordinary men and states.
And, finally, Six: that in
the world of ideas the philosophes of
America’s youth, John Adams and Thomas Jefferson, have lost this battle for an
idea—soundly. The American Revolution of the 18th century had its
fifteen minutes in the Light of men’s Reason thanks to the Founding Fathers;
the Industrial Revolution of the 19th century, although still on
life support in some places, is in America mostly just resting on its laurels
under some shade tree; and Wall Street financialization, the Tacit Revolution of the 20th century, has carried the
day, chucking out on its way the ideas and principles of Old Glory’s philosophes while We the People forgot
to pay attention. We are become a Nation of philosophical Foundlings, for while
We the People were out working hard trying to scratch out a living, the –cracy
of the People was exchanged for a –cracy of the Pluts.
In
our version of a brave New World, Wealth has come to trump Education; and the Aristocracy
of bank paper in which we live, breathe, and have our being is, in truth, no
different from the nobility of Old Europe – it is neither committed to the
philosophical idea of We the People, nor even interested in personal virtue, or
personal achievement, or personal excellence. So the winner is: Wealth, and its
devotees who harvest and consume the fruit of other men’s labor.
Is it still time for We the
People of the United States of America to charm these new Financial Aristocrats
back into the safely of our philosophical keep? Or is that page of America’s
history forever turned?
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