Humbly submitted for your consideration, a commentary by a citizen in sheeple's clothing.
A New World Architecture
Author's Apology: I am no expert in any field. I have no grounds upon which to state anything authoritatively. What follows are my reflections
upon an op-ed piece by Mr. George Soros, Chairman of Soros Fund Management and of the Open Society Institute.
Some of my assumptions or premises may not be correct, and I hope the less shy erudite reader may correct me as he or she sees fit. I welcome the
education. Through out this commentary I may occasionally emphasize
text to stress
a point or to identify
elements of verbiage
that seem particularly noteworthy or relevant to me.
The original from which I draw the text is located at www.project-syndicate.org...
, should you want to read it without my
NEW YORK – Twenty years after the fall of the Berlin Wall and the collapse of communism, the world is facing another stark choice between two
fundamentally different forms of organization: international capitalism and state capitalism.
To whom is he speaking, one must wonder? Certainly not those who were mere children when the hallmark event took place. To those he addresses, one
must assume a like-minded impression that 'Communism' somehow collapsed. Who believes this? Certainly not everyone.
It would be much more correct to say that the Soviet Socialist Republic collapsed; but even that would be an oversimplification at best. The economic
collapse of a nation that spent nearly it's entire lifespan in some kind of 'state of war' is an odd way to allude to the choice between
"international capitalism and state capitalism."
And frankly, calling the former Soviet Union a communist state is as inaccurate as call the United States a democracy. Some would argue that true
communism is a practical impossibility. But let's not mince words..., nope.... I am mincing words here...
Mr. Soros declares in his opening that like then, "the world" is facing a choice between two
fundamentally different forms of
: international capitalism
and state capitalism
Now, mind you, I can't seem to accept that THEN (at the time of the collapse of the Soviet Union) "the world" faced any such choice. But then,
whose going to argue with a billionaire? (I am, at least in my own mind.)
It is obvious that what is important to him in this opening statement is the establishment of the axiomatic idea that a 'stark choice' between two
forms of capitalism is upon us.
We shall see.
The former, represented by the United States, has broken down, and the latter, represented by China, is on the rise. Following the path of
least resistance will lead to the gradual disintegration of the international financial system. A new multilateral system based on sounder
principles must be invented.
Mr. Soros has declared the United States "broken down." I suppose the nature of the break should be evident. But Mr. Soros does not explain it.
We must accept, axiomatically once again, that it is actually 'broken down' whatever that means to him.
He declares also that the People's Republic of China is on "the rise." Presumably this also needs no elaboration, as at least to Mr. Soros, the
nature of this 'rise' must be too obvious to explain.
Now this "path of least resistance" is clearly something relevant to his audience, no? It must be a bad thing. Means some 'hard' choices have to
be made lest we see the "gradual disintegration of the international financial system.
Wait, what? The current state of international economic affairs is the result of some systemic
process? If that
process has gotten us
to this point, what the hell would we want to keep it around for? More of the 'systemic' exploitation that has created the economic imbalance in
the first place?
Isn't it possible that this 'gradual' change is a "correction" of a system that allows for the exploitation of many for a precious few while the
rest languish? Is THAT what we want to avoid? THAT'S a "bad" thing? Perhaps it is for Mr. Soros' intended audience, I suppose.
Mr. Soros boldly calls for an 'invention' to be made reality. This invention would be both "multilateral" and based on "sounder [presumably
economic] principles." Vague enough for ya?
While international cooperation on regulatory reform is difficult to achieve on a piecemeal basis, it may be attainable in a grand bargain that
rearranges the entire financial order. A new Bretton Woods conference, like the one that established the post-WWII international financial
architecture, is needed to establish new international rules, including treatment of financial institutions that are too big to fail and the role of
capital controls. It would also have to reconstitute the International Monetary Fund to reflect better the prevailing pecking order among states and
to revise its methods of operation.
This is the stuff of nightmares. Remember, I am concerned with his audience, those who are supposed to be 'moved' by his musings. The question of
to whom he is speaking becomes more important with each word penned.
He laments the difficulty of regulatory reform on an international level, implying that cooperation can only be achieved piecemeal. Evidently, he
desires a quick decisive "grand bargain" to achieve his ideal - the rearrangement of a new "financial order." It's like he doesn't want new
furniture, he just wants to move it around. Notice he tacitly confirms the immortal status of the 'too big to fail' institutions, and implies that
role of 'capital controls' need to be "defined." "Capital controls" are the domain of sovereign states... unless he has his way.
He calls for the reconstitution of the IMF as a means to 'reflect' the "pecking order" of states. In one fell swoop he relegates the State to a
position subordinate to the "International Financial System" and determines that IMF operational "methods" need revision.
In addition, a new Bretton Woods would have to reform the currency system. The post-war order, which made the US more equal than others,
produced dangerous imbalances. The dollar no longer enjoys the trust and confidence that it once did, yet no other currency can take its
I object to the assertion. No amount of reasoning can justify the notion that the US has ever been "more equal" than others, and I find the
Orwellian allusion insulting. Perhaps the robber barons and transnational corporations that used American citizenship to their advantage can be said
to have considered themselves 'more equal', but that is NOT the definition of the United States. Maybe we're getting closer to the answer of to
whom he is speaking.
Mr. Soros, of all people should recognize that the condition of the dollar is the effect of coordinated international monetary policy. This was no
accident. And I expect he knew of this objective for quite some time. He declares that the US dollar no longer enjoys the trust and confidence that
it once did; which makes sense for a gambler and an opportunist. Sadly, the mere fact that he makes the assertion reinforces the matter. After all
this is THE George Soros we all hear so much about.
If he is correct that no other currency can take it's place, then the most direct path to correcting the flaw is to reestablish the trust and
confidence in the dollar. But obviously this is not where he's headed.... here comes the 'invention.'
The US ought not to shy away from wider use of IMF Special Drawing Rights. Because SDRs are denominated in several national currencies, no
single currency would enjoy an unfair advantage.
OK, the dollar has had an unfair advantage.... really? Is that's why it's convulsing on the floor? He fails to explain that with SDR's only
'certain' currencies are represented, those who cooperate with the new 'financial order' probably. And he certainly doesn't note the
'imbalance' which will be built into the new 'order' for those currencies which the 'financial system' deems 'nonconvertible.'
The range of currencies included in the SDRs would have to be widened, and some of the newly added currencies, including the renminbi, may not
be fully convertible. This would, however, allow the international community to press China to abandon its exchange-rate peg to the dollar and would
be the best way to reduce international imbalances. And the dollar could still remain the preferred reserve currency, provided it is prudently
Oops, spoke too soon; how embarrassing. The Chinese People's money is already pre-destined for a 'special rating' in Mr. Soros' mind. But of
One great advantage of SDRs is that they permit the international creation of money, which is particularly useful at times like the present.
The money could be directed to where it is most needed, unlike what is happening currently. A mechanism that allows rich countries that don’t need
additional reserves to transfer their allocations to those that do is readily available, using the IMF’s gold reserves.
Hang on, isn't that the same principle as Central Banks use? They 'create' money and then charge nations interest for the privilege of using it?
He just wants to make it possible to do on an international scale.... I can see the abuse now. The profiteering at a national level is the result of
allowing monetary policies to be handled for private profit; so the solution is to extend the private for-profit practice outside national
sovereignty? Who defines what a rich country is? Does that mean China is going to be doling out wealth to smaller nations like Sudan and Paraguay?
Voluntarily? Really? (come on, really?) Simply moving the fulcrum to change leverage is not an improvement of the economic model.
Reorganizing the world order will need to extend beyond the financial system and involve the United Nations, especially membership of the
Security Council. That process needs to be initiated by the US, but China and other developing countries ought to participate as equals. They are
reluctant members of the Bretton Woods institutions, which are dominated by countries that are no longer dominant. The rising powers must be present
at the creation of this new system in order to ensure that they will be active supporters.
So the UN Security Council is especially important to this 'invention' huh? The folks who deal with the application of force on an international
level? Interesting that military considerations are so important to this 'need' Mr. Soros' "invention" addresses. He suggests that China should
be considered equally, as well as other 'developing' countries (ostensibly in the Security Council). That seems an interesting idea, considering
the audience he must surely be addressing.
I sure hope Mr. Soros isn't advocating coercion to comply with this new "Bretton Woods" institution he is inventing. After all, the leaders of the
world might like the idea if it guarantees their posterity and status; but not all people will be blind to the deck chairs being rearranged while
their masters man the life boats.
The system cannot survive in its present form, and the US has more to lose by not being in the forefront of reforming it. The US is still in a
position to lead the world, but, without far-sighted leadership, its relative position is likely to continue to erode. It can no longer impose its
will on others, as George W. Bush’s administration sought to do, but it could lead a cooperative effort to involve both the developed and the
developing world, thereby reestablishing American leadership in an acceptable form.
I finally found something with which I can agree: "The system cannot survive in its present form, and the US has more to lose by not being in the
forefront of reforming it."
As per usual, Mr. Soros obfuscates the 'position' of the US with it's ability to endure abusive monetary policy and financial manipulation by
trans-(or supra)-national banking cartel fiat. This perspective is to be expected, for his success is part and parcel of that systemically-engendered
Interestingly, Mr. Soros characterized the US as having tried to "impose its will" during the Bush administration. For him I would have to point
out that his corporate robber baron predecessors have been using the US to impose their will on the world since the early 1900's. Please, Mr. Soros;
read a book that isn't predisposed to reinforce your mis-characterizations. In fact, it seems that the entire point of "American" international
'leadership' is a somewhat clever way of identifying the use to which corporations put the 'national leverage' of their particular exploitation.
The alternative is frightening, because a declining superpower losing both political and economic dominance but still preserving military
supremacy is a dangerous mix. We used to be reassured by the generalization that democratic countries seek peace. After the Bush presidency, that rule
no longer holds, if it ever did.
Mr. Soros raises the specter of a potential for "America" (as he defines it) to use it's so-called military supremacy to 'reclaim' it's
standing, calling it dangerous. Mr. Soros actually believes that "America" wants
to wage war on the world. The only one's capable of
moving the nation to war are the corporations who are entrenched in the government. Does Mr. Soros know something about the military industrial
complex that might shed light on this assertion? Or is the audience already aware of that?
Mr. Soros continues the false meme of Democracy having something to do with peace. And uses the anti-Bush paradigm to reinforce the
oversimplification. Somehow he wants the Republican and the Democrat to represent some kind of difference between the pursuit of peace, and the idea
of war as a tool of supremacy.
In fact, democracy is in deep trouble in America. The financial crisis has inflicted hardship on a population that does not like to face harsh
reality. President Barack Obama has deployed the “confidence multiplier” and claims to have contained the recession. But if
there is a “double dip” recession, Americans will become susceptible to all kinds of fear mongering and populist demagogy. If Obama fails, the
next administration will be sorely tempted to create some diversion from troubles at home – at great peril to the world.
Democracy is in trouble? Democracy? That's a real shame. Let's see, the idea that the citizens have a voice which carries weight and authority is
'in trouble.' I think the illusion of the democratic paradigm established by the media is in danger of being 'revisited' by the common man, and
the common man is proving alert enough to understand how it has been abused. Assuming the abuse is soon to be commonly recognized, and his audience
would rather it not be, might justify the turn of phrase he chose.
Notice the "population that does not like to face harsh reality" comment? Assuming harsh reality is something HE faces and enjoys facing, I would
agree. I have a few 'harsh realities' I could mention that I believe he doesn't want to face.
On th heals of the 'harsh reality' reference, he speaks of "President Barack Obama" in a rather revealing way. (I find myself wondering if the
revelation is just my own perception gone mad). "President Barack Obama has deployed the “confidence multiplier”
".... note -
"the" confidence multiplier. Not "a" confidence multiplier. It seems to me to reveal exactly who the architects of the 'solution' were, and
Mr. Soros was obviously among them. Yet, his next phrase proceeds to deflate any confidence you may feel about the 'solution.'
to have contained the recession." So, the efficacy of President Obama's (presumed) "confidence multiplier" it appears, is
to be considered only worthy of a 'claim.'? Why would that be, or is economy not a science, Mr. Soros?
I won't debate what "contained" means in this sense, and only can expect it means he has achieved an understanding of the parameters of the results
of the financial manipulation, and has some sense of a time-line and performance expectations... under the influence of this "confidence
The alarms went off on this one .... "But if there is a “double dip” recession, Americans will become susceptible to all kinds of fear mongering
and populist demagogy." Oh my, Mr. Soros, should I infer that even YOU acknowledge that which your ideological opponents have been saying all
along, that this so-called recovery is merely a hiccup on a graph. Another dip is coming?! Oh my, shocker! Only people like Mr. Soros, who maintain
the media line are misreading this - or mis-characterizing the financial trend and manipulation, would be susceptible to what he characterizes as
"fear mongering and populist demagogy", (of course those to whom he applies the inference would certainly call it something less sophisticated
like..., "the truth.")
In fact, speaking from a particular point of view, Mr. Soros is engaging in the very "fear mongering and populist demagogy" he is warning about.
It get's even better ... "If Obama fails, the next administration will be sorely tempted to create some diversion from troubles at home – at great
peril to the world." Wow, like, of course NOT Obama; but the next
administration. Interesting? It's like some folks are paying at
'turns' on a game board, no? What do you know Mr. Soros, about the next administration? Can you define it already? And the "diversion" - what
an interesting image that conjures..... You audience must be riveted by now!
"If Obama fails..." Should have been the title of your op-ed; it would have been political gold.
Obama has the right vision. He believes in international cooperation, rather than the might-is-right philosophy of the Bush-Cheney era. The
emergence of the G-20 as the primary forum of international cooperation and the peer-review process agreed in Pittsburgh are steps in the right
So we have now segued into the political.... this must be the reference he intended when he said earlier "Reorganizing the world order will need to
extend beyond the financial system..." evoking UN Security Council 'control'. But not without first reminding everyone of the mask the previous
administration wore during their part in this pathetic play "the might-is-right philosophy of the Bush-Cheney era." At least he named the actors..;
but I'm still waiting for people to recognize the playwrights for who they are. Oh wait.... "The emergence of the G-20 as the primary forum of
international cooperation...." let's see, the Central Bankers of the top 20 financial institutions grouped by UN ..... OK, I can accept that as a
possibility - just for now.
What is lacking, however, is a general recognition that the system is broken and needs to be reinvented. After all, the financial system did
not collapse altogether, and the Obama administration made a conscious decision to revive banks with hidden subsidies rather than to recapitalize them
on a compulsory basis. Those institutions that survived will hold a stronger market position than ever, and they will resist a systematic overhaul.
Obama is preoccupied by many pressing problems, and reinventing the international financial system is unlikely to receive his full
Mr. Soros demands we recognize that "the system is broken and needs to be reinvented". He has brought us full circle to the premise which he wants
accepted. It is the SYSTEM that is broken and a new "invention" must replace it.
A moment of clarity follows... "the financial system did not collapse altogether, and the Obama administration made a conscious decision to revive
banks with hidden subsidies rather than to recapitalize them on a compulsory basis."
I suppose the financial system could have been intended to collapse altogether; but what could possibly constitute the basis for that to be
engineered? Surely not stupidity, greed, power lust, and other such human failings. I don't understand why,but the construction of this thought
makes me consider that the financial system was intended
to collapse, and Obama's "conscious" decisions to covertly prop up the beasts,
while good for the beasts, was not for the 'plan'. Also, I have to wonder if we could substitute the words "rather than to recapitalize them on a
compulsory basis" with "rather than let them face bankruptcy."
Mr. Soros is correct of course that the mega-businesses are now more entrenched in the national edifice than ever, though he states it differently.
But he does point out that due to this newly crystallized security from consequences, they will not be prone to cooperate with the idea of systemic
change that might lessen that security.
But Mr. Soros states next what appears to be a prefabricated excuse... he's too busy to give this issue appropriate attention. Interesting. The
President is preoccupied. Isn't that why he has a cabinet? Or did he appoint cabinet members who are not capable of handling their areas of
responsibility.... I know the inevitable answer to THAT question.... more Czars.
China’s leadership needs to be even more far-sighted than Obama is. China is replacing the American consumer as the motor of the world
economy. Since it is a smaller motor, the world economy will grow slower, but China’s influence will rise very fast.
China must appreciate the show of confidence. They are truly blessed with the precept that the State is more important than the citizen. Hence the
poison food, shoddy materials, and desperately transparent manipulation of the flow of information. Don't worry China, George is on your side....
For the time being, the Chinese public is willing to subordinate its individual freedom to political stability and economic advancement. But
that may not continue indefinitely – and the rest of the world will never subordinate its freedom to the prosperity of the Chinese state.
Such a crying shame that Americans are NOT willing to sublimate individual freedom, which we regard as personal sovereign inalienable right to benefit
the colossal corporate enterprise of the state and it's entrenched business activities. I understand Mr. Soros' perspective of that being a 'bad
thing'; but I disagree with the assessment.
You see, if the government cannot proceed to operate while engendering and actually protecting those freedoms, it is the government's operation that
must change to accommodate it, not vice-verse, which presupposes that those benefiting from the operation of government (like certain businesses)
deserve more consideration than anyone else.
As China becomes a world leader, it must transform itself into a more open society that the rest of the world is willing to accept as a world
leader. Military power relations being what they are, China has no alternative to peaceful, harmonious development. Indeed, the future of the world
depends on it.
Just as in America, China, Russia, or ANY nation state on this planet, the meme of 'world leader' MUST be destroyed. It is only an excuse to
justify the coercive application of force based on a single set of priorities determined unilaterally. It also provides the stereotypical illusion
that the shadow puppetry of diplomacy in politics is the guiding force of the human condition.
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Copyright: Project Syndicate, 2009.
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