Napoleoni - Rogue Economics (2008) - Synopsis

UFPPC (www.ufppc.org) Digging Deeper LXXIV: February 23, 2009, 7:00 p.m. Loretta Napoleoni, Rogue Economics: Capitalism’s New Reality (New York: Seven Stories Press, 2008). [Thesis: By “rogue economics,” Loretta Napoleoni means unfettered capitalist economics free of domestic political control. Napoleoni once aspired to stop this, but has given this up, considering it not only “an impossible task, but also an unnatural one” (ix). However, she advocates resistance to rogue economics through forms of “tribalism,” and is optimistic about the eventual chances of success (79-80) after a tumultuous period of historic transition (26367).] Acknowledgments. Thanks to family, friends, and even to those “who have not been compassionate” during the period of loss (father, then grandmother) and illness during which this book was written (ix-xii). Introduction. The spread of democracy after the fall of the Berlin Wall also spread slavery; this is a consequence of rogue economics (1-3). Obesity and “the low-fat promotion” exemplify consumers’ “fantasy world” (3-5). This book shows the endemic character of rogue economics and aims “to empower consumers with knowledge of the world we inhabit” (5-6). Chapter 1: In Bed with the Enemy. “[P]olitics enslaves economics to redefine the rules of the market” (7). The Marshall Plan (8-10). When the Cold War’s aim was achieve, “the state lost control of the market” (10). Flood of Slavic women as prostitutes (10-17). Its success has been accompanied by changes in morality (17-18). Only the marketers benefit (18-21). The fate of the Russian economy illustrates how economics has become a rogue force (2130). Chapter 2: Nobody Controls Rogue Economics. “In fifty years . . . the American Dream has turned into a nightmare” (31). The end of the Soviet Bloc began “the deflationary global era” (32; 32-34). Ricardo’s comparative advantage no longer applies (34-36). Americans have been borrowing more than they can afford (36-40). “Hyperdebt” has spread illusions, induced

widespread confusion and “an existential trance” (44; 40-45). Widening income inequality (45-50). The American middle class, which has grown decadent because “[t]he quest for money” typified by hedge funds “has pulverized moral and ethical barriers,” wants not to change the world but only to be permitted to fantasize; ours is an age reminiscent of The Great Gatsby (1925) (50-56). Chapter 3: The End of Politics. Epigraph from Gramsci: “Man is essentially political” (57). Sketch of the operation of the n’drangheta, the criminal organization of Calabria (the toe of the Italian boot), as a coercive society that eliminates politics (and freedom, its correlate, according to Hannah Arendt) (57-70). “Politics, as freedom of choice, then remains the sole force able to prevent economic and social injustice” (68). Bulgarian crime organizations’ expansion was a natural and foreseen consequence of the collapse of the Communist system (7077). But politics will survive, as “a part of our nature to seek freedom” (78; 77-80). Chapter 4: Land of Opportunity. China’s “lateral thinking,” based on “circumstances,” is well adapted (as opposed to the West’s “modeling” approach) to a world ruled by “rogue economics” since “Chinese culture lacks a definition of politics”; this shares key characteristics with Bulgarian organized crime and Calabrian n’drangheta (92; 81104). Chapter 5: Fake It. The complex industries producing counterfeit products or skirting patent laws bring rogue economics into our homes (105-19). Chapter 6: The Market Matrix. Food (salt, sugar, and fat are “matrix agents” [137]), medicine, diamonds, gold, exemplify the “market matrix,” a web of illusion in which “blissfully ignorant” (131) consumers are trapped, which is based on slavery (“booming on a global scale . . . 27 million persons” [130]) and produces enormous income for companies (121-39). “Almost

every product we consume has a hidden dark history, from slave labor to piracy, from counterfeit to fraud, from theft to money laundering” (129). Chapter 7: High Tech: A Mixed Blessing? China is the epicenter of “the black market in play currencies” used in video games (14144) and also in “online and software piracy” (144-46). Electronic currencies: PayPal, Neteller, and E-Gold (146-50). Internet pornography (151-55). Second Life, a virtual realty game (155-60). The Internet, where democracy and politics do not rule, is “rogue economics’ most successful colony” (163; 160-63). Chapter 8: Anarchy at Sea. Fish piracy is one of the latest progeny of rogue economics (165-76). Resurgence of piracy (176-79). Pollution of ocean waters (179-83). Climate change and the sea (183-87). Chapter 9: Twentieth-Century Great Illusionists. Politicians tell people what they want to hear (189-92). Many wellmeaning initiatives end up fueling the ills they mean to combat thanks to rogue economics; “The problem of Africa is not economic but political . . . African economists remain adamant that Africa does not need more foreign aid, but a bourgeois revolution” (197; 192-98). Vignette of airport security (198-200). Terrorism and the politics of fear have opened up vast new fields of opportunity for illusionists, bent on creating a “mythology . . . to legitimize the marketstate” (200-06). Chapter 10: The Mythology of the Market-State. The traditional left-right political dichotomy has disintegrated; in this context the politics of fear is used as a political tool and has “reorganized political loyalties along mythical lines” (210). Forms of tribalism are being activated: Berlusconi with football, Chavez with rap (211-15).

tribalism as resistance to the development of the open society invoked (228-36). Chapter 12: Economic Tribalism. The unfolding “success story” (250) of Islamic finance, based on “[p]artnership between leaders and clerics” (240) and a culture antithetical to individualism, as the only real challenge to rogue economics in the contemporary world (237-41). Malaysia (243-53). The challenge is similar to the one represented by fascist economics after WWI, but fascist economics was based on a corrupt and repressive state, whereas “sharia economics” is based on the aim of honoring “the values of the community, the Umma, it serves” (258); economic tribalism remains useful in the context of the crisis of modern globalization (253-62). Epilogue: The New Social Contract. Rogue economics on a global scale has produced a period of transition like the Industrial Revolution; as in that period, most of the population cannot see clearly what is happening (263-64). “Modern tribalism seems to be the winning formula for coping with the economic strains of globalization and providing the economic structure to prosper inside the anarchy of rogue economics”; examples: China, Islamic finance (265). Eventually, a new “postglobalization social contract” (265) will emerge, along with a “new world order . . . ruled by an invisible axis stretching from Beijing to Cape Town. Europe and America will lose out. Africa and the Middle East will provide the necessary resources for new global economic leadership. Eventually, nanotechnology will consolidate the scenario, but that is a topic for another book” (267 [last sentence]). Notes. 24 pp. Index. 15 pp. *****

Chapter 11: The Extravagant Force of Globalization. The criminal colonization of urban enclaves (217-23). Gangs, while spurred by the social disintegration stemming from globalization, also are another form of tribalism, representing loci of resistance, because they based on territory (223-28). Popper’s notion of reversion to

[Critique. An interesting, eye-opening, provocative book; very outside-the-box. But also a very self-indulgent one. Conceptually, its oddest feature, given its subject, is the lack of any discussion of the corporation as a socioeconomic institution, and no sustained discussion of the most important political

institution, the state, or of multinational corporations. Napoleoni is perhaps typical of certain lightweight Italian intellectuals inclined to portentousness (e.g. Julien Benda, Nicola Chiaromonte). Napoleoni does not use terms precisely and does not define terms, including “rogue economics” (in her Mar, 31, 2008, interview with Amy Goodman of Democracy Now! she asserts that “all Western economies are rogue economies,” but she does not use the term “rogue economy” in the book); “GDP” is used for “annual growth in GDP” (45); she misspells Philip Bobbitt as “Philip Bobbit” (79, 295) but also gets it right on one occasion (162); a key reference to Hannah Arendt refers only to an anthology in Italian, not the original (275n.23). Napoleoni’s rambling discursive style may be due to her desire to incorporate topics to which she has devoted journalistic work. Napoleoni also writes in a journalistic style, using short, simplistic, punchy sentences. She tends to toss out statistics, then move on. There is a regrettable tendency to hyperbole in her writing: “American middle-class families cannot plan holidays, birthday parties, even a future for their children, because they do not know if tomorrow they will still have a home” (43). “China’s overwhelming and unchallenged absolute advantage revolves around an endless supply of cheap labor, a resource so powerful that it has stripped industrialized economies of their comparative advantage” (35). “It is in the domain of chaos, therefore, that Western thinking fails” (82; actually, Western thinking has been extremely fruitful in the domain of chaos: cf. Henri Poincaré, Jacques Hadamard, G.D. Birkhoff, M.L. Cartwright and J.E. Littlewood, Stephen Smale, Edward Lorenz, Benoît Mandelbrot, James Yorke, Robert Shaw, Albert J. Bichaber, Mitchell Feigenbaum, etc.; see James Gleick, Chaos: Making of a New Science [1987]); “foreign aid is the true cause of the malaise of Africa” (196); Islamic finance is “growing at the speed of light” (252).] [About the Author. Loretta Napoleoni was born in 1955 and holds degrees from the London School of Economics, the Paul H. Nitze School of Advanced International Studies at Johns Hopkins, and the University of Rome with a Ph.D. on the Red Brigades. In addition to works on economics, she has published novels and guide books. Her best

known work is Terror Incorporated, which has been translated into twelve languages. She has worked for banks and international organizations. She promoted Rogue Economics on Democracy Now! on Mar. 30, 2008. She is married with children and divides her residency between London and Whitefish, Montana. — She maintains a web site — www.lorettanapoleoni.org — where she advertises herself as “an expert on financing of terrorism” but nothing seems to have been posted there in the past ten months.]