Max Newton, The Australian, August 1, 1989, p. 15.
Around the world, self-perpetuating oligarchies are tumbling into ruin and the consequences are going to be as earth-shattering as the earlier collapse of seemingly invincible and permanent oligarchies that took place in 1914-18.
Whole edifices of power are crumbling. Tumult and confusion will take over in the financial markets. Opportunities will abound. The common man and the common woman are being heard.
And a common theme of these events is the people’s resentment of the power of the State and reaction against the privilege and priorities of the oligarchs, who seized control of the State apparatus long, long ago.
There is more dissolution to come: new fortunes will be made, old ones will be destroyed, along with the privileges that often made them.
The following self-perpetuating oligarchies already find their existence threatened and their support in popular acquiescence disappearing: the Soviet Communist Party, the Japanese Liberal Democratic Party (LDP), the United States House of Representatives, the G-7 Central Banks and the Australian Triad — big business, big labour and big governments.
All these oligarchies are now seen to be increasingly irrelevant and to have become actual barriers to the desires and needs of the people of the nations over whose affairs they have ruled for so long.
The Soviet Communist Party, in power for over 70 years, has manifestly failed to deliver material well-being. The oligarchs who controlled the party, and the Soviet Union, substituted their own imperial priorities for the true needs and desires of their subjects.
The Soviet Communist Party became the planner and executor of Russian imperialism — its true goal. To achieve this, the well-being and needs of Soviet subjects were ignored for so long that we now stand amazed — and somewhat aghast — as the vast imperial domain splits into its nationalist and ethnic fragments.
The Soviet empire is too far gone to be able to maintain cohesion in its present form. That is over.
Before 1914, there were other vast European oligarchies, ruled by families, most closely related in England, Germany, Austria-Hungary and Russia. There was a family squabble, a war, and the imperial oligarchies disappeared in a sea of blood, taking millions of lives in the process.
They ignored the true needs and desires of their people and substituted their own imperial priorities. They paid with their own destruction.
Since 1945, Japan has been ruled by an imperial oligarchy called the LDP. This ruling clique was formed from the leaders of money, industry, farming, trade and labour and was held together by pervasive monetary corruption. Now it is dissolving.
The priority of the LDP imperial oligarchy was an industrial global empire for Japan. All the country’s energies were harnessed to achieving this aim; Japan has become the leading industrial empire. In the process, the needs and desires of the Japanese people were ignored: they were forced to suffer poor living standards, dreadful infrastructure, abysmal housing and high taxation.
This was necessary because the LDP/industrial banking/trading house group, linked by a common desire for power and money, needed to be able to mobilise the entire available wealth and savings of Japan in the furtherance of their imperial plans.
Now the Japanese oligarchs are being challenged by a surge of resentment and anger that will sweep them aside. It has already begun.
In the US, another oligarchy is being challenged: the House of Representatives. Because of the gerrymander and immense money corruption, members of the House, who serve two-year terms, are routinely re-elected more than 95 per cent of the time. A sitting member virtually has a permanent job unless he becomes involved in corruption that is simply too blatant.
Even here, though, the people are beginning to demand major change. Dominated by the Democratic Party, the House of Representatives has behaved so badly that, in revulsion, the American people have elected Republican presidents — in fairly honest elections — in five of the past six presidential elections.
By 1992, the US, with a permanent Democratic majority in the House of Representatives, will have had a Republican president for 20 out of 24 years.
With the resignation of the Speaker, Jim Wright, recently, it appears a sea change has begun, one that reflects the anger and frustration of the American people over the attitudes and priorities of the oligarchs in the House.
As the House is the big spending chamber, the destruction of this power base will result in an extension and deepening of the revolt against big government in the US.
Revulsion is widespread as the people daily learn more of the corruption of their government: in the savings and loans fiasco, the HUD scandals, the defence procurements disgrace and now in the Internal Revenue Service.
The corrupt, venal House of Representatives — the heart and soul of the ruling oligarchy in US government — so arrogant and so indifferent to the stink, is lurching and tottering.
Another oligarchy that has neglected the needs and desires of the people is the G-7, the leading central banks whose priorities have become so remote from those of the governed. The G-7 has pursued a priority of exchange rate-stability and attempted to fix a crucial world price — the price of the US dollar.
In the process, the G-7 has made inflation worse and is about to make deflation worse than needed. In 1987, as the US dollar weakened in response to the foolish and desperate Volcker policy of monetary expansion in the US in 1985-86, the G-7 sought to hold the greenback up.
It achieved a 30 per cent increase in US dollar reserves of the non-dollar world and laid the foundations for the inflation we are all fighting today.
As the greenback revived in 1988 and on into 1989, the G-7 oligarchs sought to hold it down. In the process, they froze the cash base of the world financial system in 1988 and, in the first half of 1989, have achieved a contraction of it.
This is already leading to a collapse of commodity prices, grave weakness in the gold price, slowing economic expansion and the signs of a substantial deflation.
This deflation will cause governments to fall. National government will watch in impotence as the G-7 oligarchs destroy the basis of their popular support.
Resentment and anger against the G-7 will develop as deflation spreads and as the people of the world realise it wasn’t necessary.
In Australia for the past 50 years, the ruling oligarchy has been the triad of big business, big labour and big government. These have been locked together by mutual interest in extracting the maximum benefit from high tariff protection and import controls, high personal taxation and a regulatory apparatus that has made business beholden to unions and to government.
Under the Hawke-Keating Government, the triad’s powers have been substantially expanded, but the formalisation and tightening of the links in Australia’s ruling oligarchy has been producing grave problems for ordinary Australians.
They are already finding considerable difficulty in financing their homes; soon they will be engulfed in a recession and a financial crisis. The needs and desires of the ordinary people have been lost in the pursuit by the ruling oligarchy of their own priorities.
Yet ordinary Australians can already see that this small ruling group has landed them in a drastic situation; huge debts have to be serviced somehow and ordinary Australians will ultimately pay the bill, either in taxes or in the form of unemployment and loss of personal assets through inflation or bankruptcy.
One cannot forecast how the breakdown of these huge self-perpetuating oligarchies worldwide will evolve, but a common theme in their collapse has emerged — the resentment and frustration of millions of ordinary human beings over the manner in which their true needs and desires have been ignored in favour of the needs of a powerful few who rule.
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