Monday, May 28, 2018

Those Weird Italians: do They Really Think Italy is a Sovereign State? A Comment on the Recent Failure of Forming a New Government


The political history of Europe during the past 5 centuries or so. Note how nation-states crystallized in the current form mostly during the 19th century. These entities turned out to be extremely resilient and they survived two major world wars and all sorts of disasters. Nation-states are much less important today in the age of the Globalized empire, but they are still alive and kicking. The recent events in Italy the attempt of creating a more independent national government clashed against the international political imperatives. It is all part of a general trend that may lead to the disgregation of the Eurozone and, perhaps, to a Seneca Collapse for the weaker European economies, including the Italian one.



A few things became clear in Italy during the past few days. One is that Italy is not a real "sovereign state," as it became evident when President Mattarella refused to accept a government which included people who had taken critical positions against the European Union and against the Euro. It was a necessary outcome of the situation: from 1943 Italy has been occupied by the troops of the victorious American Empire. Only a certain degree of fiction has been maintained to imply that Italy is able, in principle, to take independent decisions in matters dealing with the economy and foreign policy.

In practice, whenever Italian officers tried to take such independent decisions, they discovered that it was an unwise choice - even for their own physical survival. There have been several instructive cases in the past, starting with Enrico Mattei, president of the Italian National Oil Company (ENI). He pursued a politics of independence for the Italian energy system and he died in a mysterious (but not so much) airplane crash in 1962.

History, as usual, rhymes with itself and, recently, the winners of the latest Italian elections, the leaders of the M5s and the Northern League (now simply the League) parties, tried to form a government with a program of sweeping reforms which included an attempt to gain a larger degree of independence from the European Union in financial matters. The program didn't include anything equivalent to the British "Brexit" but it was, clearly, a step in that direction.

It didn't work, and it should have been obvious from the beginning that it couldn't. The rules of the imperial game are not based on democracy: defeated and occupied countries can't vote for their independence (it happened to Catalonia, too). Try a little exercise, imagine that, after the defeat of Queen Boudicca, the Celts of Britain had voted for a National government pursuing a policy of independence from Rome. You get the point, I think.

What's perhaps most surprising is how a lot of Italians reacted to the events. They took Mr. Mattarella's decision as an insult to the sovereignty of Italy. That is, they seem to believe that such a thing as an Italian sovereign state exists, despite the American troops occupying Italy with more than 10,000 men in at least a hundred military bases (all your bases are belong to US). And the military occupation is just a marginal element of a much more in-depth political and financial occupation.

Yet, in a certain sense, the Italians are right. In politics, often beliefs are stronger than reality - politics creates its own reality. And so, if Italians truly believe that Italy is an independent country, then at least it could become one. It is what happened in 1861, when Italy was created as an independent state for the first time in history.

Now, there are events that highlight long-term trends. The power scuffle about the new government in Italy is one of these events. It shows that the Global Empire is still strong, but also in evident decline because it could be challenged - although unsuccessfully - by the winning parties of the recent Italian elections. Empires are fragile things in the sense that they need a lot of energy to keep moving - and they tend to have a short lifetime in comparison to the more resilient entities we call "nations." Empires, in other words, are subjected to the kind of rapid collapse that I call the "Seneca Collapse"

The Global/American Empire is no exception. It is the product of the power of fossil fuels and it will persist only as long as fossil fuels are cheap and abundant. That can't and won't last forever, although at present it is impossible to say for how long. Rome was said to be eternal at the time of the Roman Empire, but it wasn't. The same is true for Washington D.C. (and for Brussels, which will probably fall earlier).

So, at some moment Italy may become again an independent state, as it was from 1861 to 1943. Most Italians, right now, seem to think that it would be a good idea. But will it be? Think about this: after the Roman Legions left Britain, were the Britons richer? Or happier to be ruled by tribal chieftains? Debatable, to say the least.

The people who are proposing that Italy should leave the Eurozone seem to think that all the problems for the Italian economy are financial and political. They don't understand the structural problems of an economy which is almost 100% dependent on the import of mineral commodities, and of fossil fuels in particular. Leaving the Eurozone or making cosmetic changes in the taxation system won't do anything to address this dependency. And, if it is true that nation-states are more resilient than empires, they too can suffer the Seneca Collapse if they lack the energy needed for their economy to function. So, the future is obscure, as always, but one thing remains clear: "Fortune is of sluggish growth, but the way to ruin is rapid" (Lucius Annaeus Seneca, 4 BC-65 AD)





29 comments:

  1. Some little error, the northern league is now simply the league, no motre northern, and kingdom of Italy was declared in 1961, not 1951.

    ReplyDelete
    Replies
    1. Right, it was in 1861 (not 1961, either!). Too many events in history....

      As for the Northern League, you are right, although many people in Italy tend to keep calling it in that way.

      Delete
    2. Sorry for the error, obviously was 1861 ha ha

      Delete
  2. It seems at this point there might be more countries who are pushing to leave the EU than are clamoring to join.

    So maybe that tells us the trend has changed direction, but it will take a while for things to manifest themselves more clearly with actual losses of EU control and territory.

    ReplyDelete
  3. "Think about this: after that the Roman Legions left Britain, were the Britons richer? Or happier to be ruled by tribal chieftains? Debatable, to say the least."

    No. They were invaded & colonised by the English (me). That said, I cannot think of any country that wants to invade Italy, aside from all of Africa perhaps

    ReplyDelete
  4. Stanford professor Ian Morris's "lucky latitudes" and the voice coming in this article are another clear and loud invitation calling on the world to look at, and understand Energy from different perspective;

    Rather than consuming the last drop of gold-grade fossil fuels supplies wasting it into the current style of the world - a dry, can figures, like Smil, Morris, Bardi and many others, pull off a new world-wide movement, blueprinting for Energy Phase II on Earth?

    Why not we share some of the budget allocated for the ongoing Fusion Reactor project, for instance, with such a new movement?

    The bottom line, humans cannot manufacture energy - it has to come from the past and stored for future use.

    This recently coined constraint should be made central to humans consciousness, rather than watching all the world becoming another free-falling, always-collapsing Iraq if we continue playing with ourselves this silly Fossil Fuels Musical Chairs game?

    ReplyDelete
  5. "Rome was said to be eternal at the time of the Roman Empire, but it wasn't. The same is true for Washington D.C. (and for Brussels, which will probably fall earlier)."

    I think it's a pretty comparable situation to the late Roman Empire having 2 centers in Rome and in Constantinople. Similarly, we should expect Brussels to fall first as Rome did. However in this case, the second center won't last an extra millennium.

    ReplyDelete
  6. Also, while leaving the Eurozone wouldn't allow Italy's economy to completely rejuvenate itself, the ability to devalue the currency would help quite a bit.

    ReplyDelete
  7. Complex systems, like EU, are notorious for being difficult to maintain, sustain and service, so if Italy regains at least some of it's independence there will be less complexity. In hard times less complexity is advantage, there is no need to waste energy on some huge bureaucracy.

    Unfortunately, it's also impossible to address problems like global warming at national level. Some kind of cooperation between nation states is needed.

    ReplyDelete
  8. Beautifully said, Ugo! I concur fully. Let's see how the people will react in voting in the new elections. Unless, some really scary (not sure what else they can conceive for a stick) or enticing things come out of Brussels, (unelected) President Mattarella's veto to a popular government may have precipitated what he tried to avoid.

    ReplyDelete
  9. Here is my take on what is happening right now.

    Since 2008, capitalism has changed. The classical approach for accumulation of capital has been owning the means of production, which is, as I said before, a continous bet on growth.

    Recently, as growth stagnated, a new method of accumulating capital has emerged. The very rich, represented by investment banking or hedge funds (i.e. Goldman Sachs), today accumulate more and more riches by directly siphoning capital from mation states, which they keep in a modern form of perpetual debt peonage. These capitalists and their fronts are supranational powers. Nation states and national governments on their own have become too weak to deny them their will .

    This has a destabilizing effect on democracy everywhere as it erodes the legitimacy of modern nation states and the representative democracy.

    We have structures like the nation states, because of the things we do for each other. Our governments collect taxes, which the representatives we elect allocate to certain tasks we need to get done as a body of people. (Education, health care, military, police, justice system, administration, research, etc. ..)

    With every euro, dollar or pound, misallocated to "saving banks", privatization, etc., meaning directly used to make the rich richer, the nation state's legitimacy erodes.

    The global capitalist elite is able to control nations by threatening to move its capital away from any nation that is unwilling to accept austerity, privatise the common wealth and pay its debts. (See Greece or Argentina on the effects of not paying).

    In short nation states have become powerless entities, a remnant of a pre global past. The only hope against this development was the formation of supranational entities, like the EU, that in theory would have enough power to regulate global capital.

    Sadly global capital was able to take over most of the EU institutions and it utterly failed in regulation global capital in many regards (maybe it was even created to fail?). Rather than being a tool for controling capital, important EU institutions (like the ECB) became a means to control unruly nation states and its people.

    This may or be not realized by most of the inhabitants of nation states, but many certainly feel, that looking back in history, nation states somehow "worked" better. Many are unable to realize that there is, and always was, a systemic flaw in the assumption of perpetual growth and accumulation of capital, especially those who are rather "Conservative" and tend look back to history for answers.

    Those leaning to the right tend to favor nationalism. They misunderstand the reasons behind the current erosion of the nation state and react by idolizing a (fictional) historical nation state.

    Rather than realizing the real systemic flaws of global capitalism or the real shortcomings of the EU, they tend to blame fictional "others" (The Immigrants, the Roma, the Jews, the Muslims, ....). The EU is not seen as an instrument of global capital, or an instrument of supranational control of capital, but as a group of those "others" that are ostensibly the reason for the national crisis.

    Many nationalistic tendencies work in favour of the global capitalist elite. There is one thing nationalists like Lega Nord od Cinque Stelle, (or left governments like Syriza) could do that might erode the power of global capital. These guys might just be crazy enough to call the bluff and dare the global elite to take their capital out.

    This is the one thing the Lloyd Blankfeins of his world must be afraid of right now and this can never be allowed. This is why now Italy is ruled by a banking technocrat again.

    ReplyDelete
    Replies
    1. Well maybe, but keep in mind that banks have been siphoning off money for hundreds of years, not just since 2005. You might find it interesting to take a look at Nomi Prins and All the Presidents Bankers, not a quick read but it covers some of what you are talking about. It's been like this for a long while...

      Delete
    2. I concur, but it has become a principle strategy and the main strategy for accumulating wealth. Never before 2008 have bankers so directly meddled in the sovereignity of nation states, at least not in european countries. I mean how many ex World Bank or Goldman Sachs bankers were made heads of state before the crisis?

      I admit it surely has happened in the global south for far longer. Maybe the major change iss today that even western countries now suffer the treatment that was before reserved for the former colonial countries.

      Delete
    3. This system has been going on since the establishment of "national" banks they aren't actually government entities replacing treasuries as the issuers of currency. It has just become far more blatant and extreme since 2008.

      Delete
    4. @Yvan:
      Thanks for suggestin Nomi Prins, she actually has a new book out this year, called collusion. Its quite interesting what she has to say about the post crisis era in this interview with Max Keiser:
      https://www.rt.com/shows/keiser-report/417765-episode-max-keiser-1184/

      Delete
    5. Even more specifically aligned with my point is this interview with Nomi Prins: https://www.youtube.com/watch?v=WyboFlLHZOU

      Delete
    6. I do not despute that this is something old, but combined with ressource extraction, climate change and peak oil it is.

      Actually I think it is interesting to note, that in the times of the great revolution at the end of the 18th century, due to the 2nd 100 year war, nations like Brittain and France were so heavily indebted that debt related payments made up to 75% of the national budget.

      Obviously at that time the dominant system (Monarchy) had lost its legitimacy, which in the end led to the revolutions that toppled it.

      Obviously the debt crisis of that time was far from the only reason for the systemic collapse, interesting enough a climate change happening due to a vulcanic eruption on Iceland also played its part, but its importance is recognized by history nonetheless.

      Delete
    7. Alien, will look at the Nomi Prins links, thanks. Wow, 75%! Did not know that...

      Delete
    8. Concerning the changes since 2008 one thing stands out, and it is closely related to italy. Since 2017 all across most industrial countries, especially the USA, EU, Australia, Canada, New-Zealand etc., the way banking crisis are manged have changed fundamentally, and Italians with the Monty dei Paschi bust, were the first people to swallow the bitter pill.

      Monte deo Paschi crisis was not, as it was for decades before, handled as a bail out, but as a bail in!

      Entities, (People, companies, cities, villages etc.) with accounts lost most of their money and have not been saved by a bail in, by the italian state. All the money in the accounts of Monte dei Paschi went to the OWNERS of the bank, the share holders.

      If you own a small business and you go broke, you loose your money. Today state intervention, state power, is seemingly there to protect the capitalist elite and not the citicens.

      These new laws issued mostly 2017, ensure that the owners of the banks, in short the moneyed elite aristocracy, the few that really own the world, will not carry any burden from any future crisis, while the tax payers and the stake holders will have to burden ALL costs.

      Delete
  10. If you wanna be free, then do few debt only.
    If you don't want pay your debt, then don't do debt at all.
    If you declare a bankrupt, then you have to know that nobody will loan you even a penny in the future.

    All italian political parties don't want to pay italian debt, and they don't care about Punic War II because of climate change and african demographic bomb.

    http://lafrecciadellastoria.blogspot.com/2017/07/gli-italiani-sono-bolliti-ma-ancora-non.html

    So those foolish and thief people look at the short term only, and they will try in every possible way to expand italian sovranity debt, but pretty soon Italy will declare bankrupt because already italian debt is not sustainable. Italy is not still in bankrupt only because Draghi's QE program, it will finish in September 2018 in any case in 31/10/2019

    http://mio-radar.blogspot.com/2017/10/il-vituperato-quoziente-debitopil-e-le.html

    As I said many times ago, Italy is getting closer 31/10/2019 and the next BCE chief will be a german man, someone who will think that Savings not Debt, it sustain Investments.

    http://mio-radar.blogspot.com/2017/11/fiscal-compact-e-stati-uniti-deuropa.html

    I think that if Italy will not declare bankrupt before 31/10/2019, I guess that next BCE chief will start rapidly to sell italian Treasury Bonds, because BCE is already too exposed at the italian default risk. As you may easy understand, if even BCE start selling italian BTP from 31/10/2019, it will be fast disaster of many FINANCIAL MEGATONS, I estimate about up to 1400BILLION of Euros with a bankrupt ratios about 61%.

    http://lafrecciadellastoria.blogspot.com/2017/10/il-declino-economico-italiano-la-crisi.html

    It needs hard political force to declare a bankrupt ad remaining in Eurozone.

    It need hard political force to exit from Eurozone and to drive Italy into high buring inflation, doing a national suicide with pieces of italian penisula whom will declare secession to come back Eurozone.

    http://mio-radar.blogspot.com/2017/11/quello-che-i-politici-non-dicono.html

    It will be great fun for me, on looking how my extrapolations will be right!.

    ReplyDelete
    Replies
    1. If all that debt goes "poof!" do we get lots of deflation? Hummm...

      Delete
    2. Yes, the debt disappearing would be deflationary, especially because of the derivative exposure and the way it would cause a bunch of other banking institutions to probably implode.

      Delete
    3. @ Yvan Roy
      No :-) because India, China, sud Korea, Taiwan, sud America, USA, Canada don't care of italian 1400BILLION of FINANCIAL MEGATONS detonation.

      Different situation in France, Germany, Spain, Great Britain will have severe financial damages, probably they will do the same solution as for Greece bankrupt. All french, german, spanish, british banks will trash the toxic junk italian treasury bonds into a trash can financial vehicule at price of parity, then the german BCE chief could finance this stuffs.

      Italy will have strong import duties on italian goods, for sure Ue will protect all goods made in Euro, and blocking all italian goods.

      Meanwhile after a couple of years a tremendous burning super inflation will destroy the unity of the italian nation. First sign will be that all italians will be wiped out from Internet, phones, cars, ships, airplanes, because in Italy will run out energy, I mean, all type of Energy. Then it will be lots of military problems and the end of the Rule of Law, it will start to various part of the italian penisula declarations of secession to come back desperately into Eurozone, meanwhile the 670000 of illegal immigrants will never ever line up peacefully and silently on the italian docks to be repatriated in their nations so... you can imagine what kind of military problems it will come out from the italian hell. May be a little jugoslavia war, or something like that, in any case, it will be The End Of The World As Italians Know It for their nation.

      At the end of the burning and transformation process, I estimate at least 9 new countries replacing the Italian Repubblic along the italian penisula

      https://express.yudu.com/item/details/1676247/guerre-puniche-II-nel-nuovo-medioevo

      What If, in the next 30-40 years Chartagos will rise, it will be yet another bloody story...

      Delete
    4. Italy produces exquisite things---and has done for centuries...clothes, food, cars, buildings, art.---all perfection

      but all this perfection requires energy

      specifically cheap surplus energy.

      this is what Italy is now short of, while her politicians rant on about debt and money---the real shortage is about the necessary fuel with which to produce all those lovely toys, and leave something over for the Italian people to live on the profit of thier enterprises.

      Italy is trying to support a cheap energy economy using expensive energy

      And Italy is now conforming to my law of nations:

      /////if a nation doesn’t produce enough indigenous surplus energy to support the demands of its people, they must beg, buy, borrow or steal it from somewhere else, or face eventual collapse and starvation until their numbers reach a sustainable level.///

      It is not an exclusively Italian problem, it is a world problem. but different countries succumb to it at different rates

      https://medium.com/@End_of_More/universal-law-16d41003fe2

      Delete
    5. Approaching Signals expected towards Pessimistic Universe in Mediterranean Areas, consistent with WWIII road map theory and Puic Wars II, please stay posted at:

      http://lafrecciadellastoria.blogspot.com/2016/03/attese-di-approaching-verso-luniverso.html

      Delete
  11. AO has it right. The timing is a little off as it started...I mean really cranked up started about 8 to 10 years earlier when TPTB got all of the info on the converging constraints, aka limits to growth.

    Coming up against the constraints of infinite growth on a finite planet the one and only option open to TPTB is to make the only thing they DO have control over infinite...MONEY...!

    Interestingly enough it actually has postponed collapse...not solved anything and in fact has only made things worse in the end. This element alone is what will guarantee that collapse is Seneca not parabola.

    ReplyDelete
  12. It's Dani Rodrik's trilemma: you have democracy, nation states and globalization. You can have any two; but you can't have all three.

    ReplyDelete
  13. Richard WillmsenJune 5, 2018 at 10:26 AM

    Una brutta notizia: I don't think your new fascist buddies in la Lega are going to share your enthusiasm for climate science, no matter how happy you are to go along with their genocidal racism.

    ReplyDelete
  14. Richard WillmsenJune 5, 2018 at 10:33 AM

    Ecco il vostro nuovo duce https://www.wired.it/attualita/ambiente/2018/03/29/salvini-cambiamenti-climatici-migrazioni/. Pff.

    ReplyDelete

Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014). His most recent book is "The Seneca Effect" (Springer 2017)