Arabs not supporting Hamas?

Elan Journo observes that Arab regimes in the past “would pounce to vilify Israel’s efforts at defending itself from Palestinian aggression, but curiously, many have been quiet amid the Gaza war.”

Why so?

One explanation, sketched in this New York Times piece, is that the Arab states view the Islamists of Hamas (whose patron is Iran) as a major problem, a higher priority than their (unwarranted) enmity toward Israel. If so, that implies these regimes understand the Islamist threat better than many in the West.

An exception of course is , pointed out by the Washington Times, is the Terrorist State of Iran.

Hamas rockets are Iranian rockets. The rockets that have been fired into Israel from Gaza have Iranian fingerprints all over them. The longer-range M302 and M75 rockets were smuggled to Hamas courtesy of Iran. Hamas has indigenous rocket capabilities thanks to Iranian training.

And the ‘Arab street’? There's a negative tinge to some of the online chatter too.

Content is copyright PC.BlogSpot.Com © Please contact author for permission to republish: (organon at ihug.co.nz)

Capitalism vs. crony capitalism

Guest post by Richard Ebeling

In the minds of many people, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets and economic liberty, and laissez-faire capitalism, rightly understood.

During the dark days of Nazi collectivism in Europe, the German economist, Wilhelm Röpke(1899-1966), used the haven of neutral Switzerland to write and lecture on the moral and economic principles of the free society.

“Collectivism,” he warned, “was the fundamental and moral danger of the West.” The triumph of collectivism meant, “nothing less than political and economic tyranny, regimentation, centralization of every department of life, the destruction of personality, totalitarianism and the rigid mechanization of human society.”

If the Western world were to be saved, Röpke said (and after the war, he did more than most to save it), it would require a “renaissance of [classical] liberalism” springing “from an elementary longing for freedom and for the resuscitation of human individuality.”

What is the Meaning of Capitalism?

At the same time, such a renaissance was inseparable from the establishing of a capitalist economy. But what is capitalism? “Now here at once we are faced with a difficulty,” Röpke lamented, because, “capitalism contains so many ambiguities that it becoming every less adapted for an honest spiritual currency.”

As a solution, Röpke suggested that we “make a sharp distinction between the principle of a market economy as such . . . and the actual development which during the nineteenth and twentieth centuries has led to the historical foundation of market economy.”

Röpke went on, “If the word ‘Capitalism’ is to be used at all this should be with due reserve and then at most only to designate the historical form of market economy . . . Only in this way are we safe from the danger . . . of making the principle of the market economy responsible for things which are to be attributed to the whole historical combination  . . . of economic, social, legal, moral and cultural elements  . . . in which it [capitalism] appeared in the nineteenth century.”

In more recent times it has become common to use the term “crony capitalism,” implying a “capitalism” that is used, abused, and manipulated by those in political power to benefit and serve well connected special interest groups desiring to obtain wealth, revenues and “market share” that they could successfully acquire on an open, free and competitive market by offering better and less expense goods and services to consumers than their rivals.

Corrupted Capitalism vs. Free Market Capitalism

This facet of a corrupted capitalism is, unfortunately, not new. Even as the classical liberal philosophy of political freedom and economic liberty was growing in influence in Europe and America in the nineteenth century, many of the reforms moving society in that freer direction happened within a set of ideas, institutions, and policies that undermined the establishment of a truly free society.

Thus, the historical development of modern capitalism was “deformed” in certain essential aspects virtually from the start. Before all the implications and requirements of a free-market economy could be fully appreciated and implemented in the nineteenth century, it was being opposed and subverted by the residues of feudal privilege and mercantilist ideology.

Even as many of the proponents of free market capitalism and individualist liberalism were proclaiming their victory over oppressive and intrusive government in the middle decades of the nineteenth century, new forces of collectivist reaction were arising in the form of nationalism and socialism.

Three ideas in particular undermined the establishment of the true principles of the free market economy, and as a result, historical capitalism contained elements totally inconsistent with ideal of laissez-faire capitalism – a free competitive capitalism completely severed from the collectivist and power-lusting state.

The Ideas of “National Interest” and “Public Policy.”

In the seventeenth and eighteenth centuries, the emergence of the modern nation-state in Western Europe produced the idea of a “national interest” superior to the interests of the individual and to which he should be subservient. The purpose of “public policy” was to define what served the interests of the state, and to confine and direct the actions of individuals into those channels and forms that would serve and advance this presumed “national interest.”

In spite of the demise of the notion of the divine right of kings and the rise of the idea of the rights of (individual) man, and in spite of the refutation of mercantilism by the free-market economists of the eighteenth and nineteenth centuries, democratic governments continued to retain the conception of a “national interest.”

Instead of being defined as serving the interests of the king, it was now postulated as serving the interests of “the people” of the nation as a whole. In the twentieth century, public policy came to be assigned the tasks of government guaranteed “full employment,” targeted levels of economic growth, “fair” wages and “reasonable” profits for “labor” and “management,” and the politically influenced direction of investment and resource uses into those activities considered to foster the economic development viewed as advantageous to “the nation” in the eyes of those designing and implementing “public policy.”

Capitalism, therefore, was considered to be compatible with and indeed even requiring activist government. In nineteenth century America it often took the form of what were then called “internal improvements” – the government funded and subsidized “public works” projects to build, roads, canals, and railways, all which transferred taxpayers’ money into the hands of business interests interested in getting the government’s business rather than that of consumers in the marketplace.

It also manifested itself through trade protectionism meant to artificially foster “infant industries” behind high tariff walls. Selected businesses ran to the government insisting that they could never grow and prosper unless they were protected from foreign competition, at the expense, of course, of the consumers who would then have fewer choices at higher prices.

Today, it still includes public works projects, but also manipulation of investment patterns through fiscal policies designed to target “start-up” companies considered environmentally desirable or essential to “national security.” It also takes the form of pervasive economic regulation that controls and dictates methods of manufacturing, types and degrees of competition, and the associations and relationships that are permitted in the arena of commerce and exchange both domestically and in international trade.

In the misplaced use of the phrase “American free market capitalism” there is little that occurs in any corner of society that does not include the long arm of the highly interventionist state, and all with the intended purpose and resulting unintended consequences of political power being applied to benefit some at the expense of many others.

Perversely, the interventionist state in the evolution of historical capitalism has come to mean in too many people’s eyes the inescapable prerequisite for the maintenance of the market economy in the service of an ever-changing meaning of the “national interest.”

Central Banking as Monetary Central Planning

Whether in Europe or the United States, the application and practice of the principles of a free market economy were compromised from the start with the existence of monetary central planning in the form of central banking.

First seen as a device for assuring a steady flow of cheap money to finance the operations of government in excess of what those governments could extract from their subjects and citizens directly through taxation, monopolistic central banks were soon rationalized as the essential monetary institution for economic stability.

But the German economist, Gustav Stopler, clearly explained many decades ago in his book,This Age of Fable (1942), the government’s control of money undermines the very notion of a real free market economy:

“Hardly ever do the advocates of free capitalism realize how utterly their ideal was frustrated at the moment the state assumed control of the monetary system . . . A ‘free’ capitalism with governmental responsibility for money and credit has lost its innocence. From that point on it is no longer a matter of principle but one of expediency how far one wishes or permits governmental interference to go. Money control is the supreme and most comprehensive of all governmental controls short of expropriation.”

Once government controls the supply of money, it has the capacity to redistribute wealth, create inflations and cause economic depressions and recessions; distort the structure of relative prices and wages so they no longer reflect the values and choices of the buyers and sellers in the market; and generate misallocations of labor and capital throughout the economy that brings about imbalances of resource uses inconsistent with a market-based pattern of consumer demands for alternative goods and services.

Then, in the face of the market instabilities and distortions caused by the government’s mismanagement of the money supply and the banking system, the political authorities rationalize even more government intervention to “fix” the consequences of the boom-bust cycles their own earlier monetary central panning policies created.

The “Cruelty” of Capitalism and the Welfare State

The privileged classes of the pre-capitalist society hated the market. The individual was freed from subservience and obedience to the nobility, the aristocracy, and the landed interests.

For these privileged groups, a free market meant the loss of cheap labor, the disappearance of “proper respect” from their “inferiors,” and the economic uncertainty of changing market-generated circumstances.

For the socialists of the nineteenth and twentieth centuries, capitalism was viewed as the source of exploitation and economic insecurity for “the working class” who were considered dependent for their livelihood upon the apparent whims of the “capitalist class.”

The welfare state became the “solution” to capitalism’s supposed cruelty, a solution that created a vast and bloated welfare bureaucracy, made tens of millions of people perpetual wards of a paternalistic state, and drained society of the idea that freedom meant self-responsibility and mutual help through voluntary association and human benevolence.

A “capitalist” system with a welfare state is no longer a free society. It penalizes the industrious and the productive for their very success by punishing them through taxes and other redistributive burdens under the rationale of the “victimhood” of others in society who are claimed to have not received their “fair” due.

It weakens and then threatens to destroy the spirit and the reality of individual accomplishment, and spreads a mentality of “entitlement” to what others have honestly produced. And it restores the fearful idea that the state should not be the protector of each citizens individual rights but the compulsory arbiter who determines through force what each one is considered to “rightfully” deserve.

Peaceful and harmonious free market competition in the pursuit of excellence and creative improvement is replaced by the coerced game of mutual political plunder as individuals and groups in society attempt to grab what others have through a redistributive system of government force.

Free Market Capitalism was Hampered and Distorted

The ideal and the principle of the free market economy, of capitalism rightly understood were never fulfilled. What is called “capitalism” today is a distorted, twisted and deformed system of increasingly limited market relationships, as well as market processes hampered and repressed by state controls and regulations.

And overlaying the entire system of interventionist “crony” capitalism are the ideologies of eighteenth century mercantilism, nineteenth century socialism and nationalism, and twentieth century paternalistic welfare statism.

In this warped development and evolution of “historical capitalism,” as Wilhelm Röpke called it, the institutions for a truly free-market economy have either been undermined or prevented from emerging.

As the same time, the principles and actual meaning of a free-market economy have become increasingly misunderstood and lost. But it is the principles and the meaning of a free-market economy that must be rediscovered if liberty is to be saved and the burden of “historical capitalism” is to be overcome.

The socialists and “progressives” twisted and stole the good and worthy concept of liberalism as a political philosophy of individual rights and freedom, respect and protection of honestly acquired private property, and peaceful and voluntary industry, production and trade. It was usurped and made into the “modern” notion of liberalism as paternalistic Big Bother government controlling every aspect of life in the name of the “social good.”

Restoring the Ideal of Free Market Capitalism

The word “capitalism” was used as a term of abuse by the socialists almost from the beginning. But it also meant a system of creative and productive enterprise and industry by free and self-guiding individuals, each pursuing their peaceful self-interests through honest work, saving, and investment. The “self-made” man of capitalism was an ideal and model for the youth of America. The man who was motivated by his own independent self-responsible vision, who built something, new, better, and greater as a reflection of the potential of the reasoning and acting human being who sets his mind to work.

His wealth, if successfully accumulated, was honorably earned in the marketplace of ideas and industry, not plundered and stolen by force and political power. No individual is robbed or exploited on the truly free market, since all trade is voluntary and no man could be forced into an exchange or association not to his liking and consent.

Free competition sees to it that everyone tends to receive and earn a wage that reflects the estimation of his productive worth to others in society. Each individual is free to improve his talents and abilities to make his services more valuable to others over time, and earn the commensurate higher wages from possessing more marketable skills.

Wealth accumulated enables investment and capital formation for the production of new, better and more goods and services wanted by the consuming public, the majority of whom are the very wage-earning workers employed in the production and manufacture of those goods under the market-determined guiding hands of successful businessmen and entrepreneurs.

Free Market capitalism makes the consumer “king” of the marketplace who determines whether businessmen earn profits or suffer losses, base on what they decide to buy and how much they are willing to pay.

It is free market capitalism that helps make each man and woman a “captain” of their own fate, with the freedom about what work and employment to pursue, and the liberty to spend the income they earn in their own personal, desiring way to live the life they value and want, and that gives meaning and purpose to their own life.

No person need put up with humiliation, abuse or disrespect from a bureaucrat or political official who has control over their fate through the power of government planning, regulation and redistribution.

Free market capitalism offers people opportunities and choices as consumers, workers and producers, with the liberty to change course whenever the benefits from doing so seem to outweigh the costs in the eyes of the individual.

Free market, or laissez-faire, capitalism makes this all possible because it rests on a deeper political philosophical foundation based on the idea and ideal of the right of the individual to his own life, to be lived as he desires and chooses, as long as he respects the equal right of others to do the same.

Free market capitalism insists that there is no higher “national interest” above the individual interests of the separate citizens of a free society. In a system of free market capitalism government should no more control money and the banking system than a limited government should control the production and sale of shoes, soap, or salami.

And free market capitalism calls for each individual’s peacefully earned property and income to be respected and protected from plunder and theft, and that includes any created rationale and attempted justification to rob Peter to redistribute to Paul through the coercive power of government.

The good name of “capitalism” has to be recaptured and restored, just as the good name and concept of “liberalism,” rightly understood, should be returned to the advocates of individual liberty and free enterprise.

But this task requires friends of freedom to explain and make clear to others that what we live under today is not “capitalism” as it could be, should be and properly really means.

The reality of that “historical capitalism,” about which Wilhelm Röpke spoke, is the “crony capitalism” that must be rejected and opposed so that free men may some day live under and benefit from the truly free market capitalism that is the only economic system consist with a society of human liberty.

---

Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).

“So, How Come You Keep Bashing Religion?”

A FEW FRIENDS, and friends-of-friends, and friends-asking-me-on-behalf-of-other-blog-readers (“it’s not for me, it’s for a friend”) have kept asking me the same question over and over for the last ten years.

The question usually goes something like this:

“How come you keep bashing religion on your blog? Especially at Easter and Christmas!”

To me, the answer’s bleeding obvious. But to these blokes (and blokesses), it’s obviously not, so here’s my effort to answer.

First answer is: because it’s absurd. And I despise absurdities.

My job as a blogger, as I see it, is to be somewhat of a provocateur; to challenge your thinking; to pull on your coat a little about the small absurdities, and to annoy the bejesus out of you on the big ones. 

And as Richard Dawkins says (and as most us probably thought to ourselves last Friday and Sunday when a mad alliance of religionists and unionists stopped us buying beer and wine if we wanted to) why should religion’s many absurdities get a free pass?

Ukraine: It’s the only news story this week [update 2]

There’s only one real news story this week, and it’s not the bumblings of David Cunliffe or the trial of a South African sprinter.

The only story that matters is what Russia is doing in to the Ukraine, and what western “leaders” are doing in response.

Not that any of them are obliged to respond. Few, if any, have any directly selfish reason for responding at all – but their reactions, or lack of them, betray the weakness that Putin obviously thought he could exploit.

Quote of the Day: On the Iranian ‘breakthrough’ [update 2]

"We are in essence paying Iran $5 billion to $10 billion, which it can use
to continue enriching and of course sponsoring terrorists. The communist 
adage that capitalists would sell them the rope to hang the capitalist is turned
on its head; we are now paying our enemies to manufacture the rope.”
- Jennifer Rubin, “The Iran deal makes clear it pays to enrich,” WASHINGTON POST

[Hat tip Terry V.]

UPDATE 1:

On the other hand:

“The principal benefit of the negotiations between Iran and the P5+1 nations on November 23 is that Iran and the United States were able to down to talk and reach an agreement on something…
“[However,] the United States and its partners appeared tough and got very little. Iran appeared tough and gave up very little.”
- William Beeman, “The Iran Accord -- Profoundly, and Primarily, Symbolic,” HUFFINGTON POST

[Hat tip David McGregor]

UPDATE 2: Robert Tracinski on the alleged “breakthrough”:

It is important to understand that the Iran deal is not itself an actual agreement. It is an agreement to negotiate an agreement…
    I'm not sure whether any of this agreement is going to end up binding the Iranians, but I'll bet that it will bind the Western powers. It will set up exactly the kind of diplomatic regime that has prevailed with North Korea for the past few decades. It is an endless dance in which they break the agreement and we ratchet up the sanctions, and then we pull back the sanctions to induce them to come back for another round of negotiations, which look like they're going somewhere until they don't, and the whole cycle starts over again. As North Korea shows, none of this needs to stop when the Iranians actually manage to develop an atomic bomb. It just enters a new stage.
    Yet I can see why President Obama likes it…

“Hey History Guy, What the Heck is Up with Egypt?!”

My favourite online historian, Scott Powell, reckons history is desperately needed to understand how Egypt’s crisis has unfolded, and where it is headed …

What could possibly save Egypt?

News overnight that Egyptians are being killed en-masse by their government is hardly inspiring--especially since the reasons for the bloodletting this time are not going away.

Sixty years of state brutality has suppressed violent Islamism, but not killed it—and brutalised all of Egypt in the process. And democracy has failed—delivering at first the radical Islamism the majority seem to want, and now a return to the brutal suppression that has characterised too much of “modern Egypt.”

So how to save Egypt—and the few liberals there that are the only genuine source of hope?

A suggestion comes from an unusual source, a former foreign policy adviser to Jimmy Carter, who says instead of heading for democracy they should become a secular republic with one important constitutional criterion:

What Egypt should focus on instead is the formulation of a new constitution, employing it as an opportunity to seek a basic understanding about the future of the regime to which both side can subscribe. This is unlikely to be simply a procedure like free elections. Rather, it could be a principle: separation of state and religion…
   This approach would allow Islamic groups to feel free to promote their way of life without limiting the secular liberals’ freedom to pursue theirs, inasmuch religion would not be promoted as a matter of law but through social means. Such a separation of state and religion may seem at first a very American idea. However, it is not alien or even novel for Egypt…liberals would find such a separation far from unfamiliar because they lived for decades under Mubarak in a nonreligious regime… [And] Over the last forty years, the Muslim Brotherhood was first oppressed and then tolerated, but it was never was able to draw on the state to promote its religious agenda. Despite this limitation, it spread its ethos by providing social services. Skeptics who might ask why they would settle for something they always had should take into account that in the past the regime tried to curb and hinder the religious groups; under the new deal they would be sure to flourish.

Too much to hope they might eventually become (classical) liberals themselves, but they might, perhaps, hopefully, maybe, eventually, realise that brutal state imposition of Sharia on those who don’t want it is neither desirable nor necessary.

So why would either side agree to this?

    In pondering what might prompt the pro-Morsi and anti-Morsi camps to reach a compromise, I thought of a line I heard from the reformers in Iran during a meeting in Isfahan. The leader of the reformist group stressed that he and his comrades were anticlerical but not against religion. He put it this way: “we do not want to force people to pray; we want people to want to pray.” When applied to Egypt, this dictum would be best satisfied by a constitution that renders the state largely neutral on religious matters. Thus it would not ban the consumption of alcohol, not penalize women who refuse to wear a headscarf, and so on. At the same time religious groups and organizations (such as the Muslim Brotherhood and even the Salafis) would be free—and even financially supported by the state in their running of private schools and their provision of social and medical services…

…well, he is a former adviser to Jimmy Carter…

[Hat tip Robert Tracinski]

12-year-old Egyptian boy condemns Islamism, excoriates Muslim Brotherhood

This 12-year-old Egyptian boy knows what’s going on.

Huffington Post has some background to the interview:

In a video interview with Egyptian news outlet El Wady, first grader Ali Ahmed delivers an incredibly precocious condemnation of the Muslim Brotherhood that will leave you speechless.
    Touching on topics like Egypt's wealth inequality, lack of rights for women, and oversize influence of religion on politics, Ahmed's articulate censure of the Egyptian government -- although filmed back in October -- is more apt now than ever, as the military removed Egyptian president Mohammed Morsi from power on Wednesday, just one year after he was elected to office.
    While some Reddit commenters have questioned whether the interview was improperly translated or may have been staged, Arabic-speaking commenters say the translation is accurate, and the boy's evident passion in speaking suggests his tirade was not scripted.

Middle Eastern democracy, in pictures

It’s not true just for Egypt. It’s true for every Islamic nation … 

(Click the pic to enlarge)

which is why it’s best never to confuse democracy with freedom.

[Hat tip Julian P. and Russell W.]

Don’t Egyptian protestors know what they want? [updated]

Last year after protests against Hosni Mubarak’s military rule, President Morsi of the Muslim Brotherhood was installed as leader.  And everyone went home. Now, a year later, anti-Morsi protestors  have stormed and ransacked the Cairo headquarters of Morsi's Muslim Brotherhood group (while police and army stood around and watched), they have collected over 22 million signatures asking for his departure, and they are asking the Egyptian head of state to resign by 5 p.m. tomorrow.

And the military are ready to take over again.

What’s going on? Don’t Egyptian protestors know what they want?

They do. The anti-Morsi coalition seems to be an unstable mixture of those who abhor the authoritarianism of military rule but who want a secular Egypt (the military being the most powerful institution standing for secular rule), and those who want the increasing Islamicisation of the country, and even the full imposition of Sharia, but who don’t think Morsi was going fast enough.

So, somewhat like Syria, really.

And nothing like anything than can end well.

UPDATE: Robert Tracinski is more optimistic:

When Egypt had its first revolution to overthrow Hosni Mubarak, some people saw Egypt's young, educated, secular liberals marching side-by-side with the Muslim Brotherhood and thought that this was normal and natural and heartening and showed how a pious Muslim religious party could embrace democracy.
    The rest of thought this couldn't possibly last.
    Since Tahrir Square, it has become pretty clear what the Muslim Brotherhood thought: thanks, liberals, for making this revolution for us—but now we're taking over.
    Brotherhood leader Mohammed Morsi's rule has become increasingly authoritarian, and at the same time he has done nothing no revive the nation's collapsing economy, to establish public order and the rule of law, or to rein in rampant corruption. Egyptians have begun to fear they're getting the same old regime, but in an even more restrictive, Islamist version.
    Resistance to the Brotherhood's rule has been building up and exploded over the weekend with the "Tamarod" or "rebel" protests that brought millions into the streets.

        "The scale of the demonstrations, coming just one year after crowds in Tahrir Square cheered Mr.
    Morsi's inauguration, appeared to exceed even the massive street protests in the heady final days of
    the uprising that overthrew President Hosni Mubarak in 2011....
        "Demonstrators said they were angry about the near total absence of public security, the desperate
    state of the Egyptian economy and an increase in sectarian tensions. But the common denominator
    across the country was the conviction that Mr. Morsi had failed to transcend his roots in the Brotherhood,
     an insular Islamist group officially outlawed under Mr. Mubarak that is now considered Egypt's most
     formidable political force. The scale of the protests across the country delivered a sharp rebuke to
    the group's claim that its victories in Egypt's newly open parliamentary and presidential elections gave
    it a mandate to speak for most Egyptians."

In effect, Egyptians are asking for a do-over on their revolution: this time, can we do it without the Brotherhood? And the answer is clearly: yes, they can.
    Tom Friedman puzzles over the purpose of street protests in a democracy, where the people presumably have recourse to the ballot box. Part of the answer is that folks in Egypt (and Turkey) aren't so sure they are going to have recourse to the ballot box. They are demonstrating because they think the Islamists are going to take away their political freedom. But there is another purpose massive protests serve even in societies where the right to vote isn't in doubt: they are an opportunity for the people to make their numbers known in an unmistakable way, as a kind of shot across the bow between elections.
    The massive street protests brought out such a significant portion of Egypt's population—some have calculated that it is the equivalent of 30 or 40 million people in the US—that they have undermined any claim Morsi and the Brotherhood have to claim the consent of the governed.
    As a result, the Egyptian military has stepped in—with it own ulterior motives, no doubt—to issue an ultimatum for Morsi and the protesters to come to an agreement within 48 hours…. That sounds to me like the military intervening to basically push Morsi into resigning, or at least into calling a new election.
    At any rate—and I am happy to say that I managed to be a little ahead of the curve on this—the Tamarod movement, along with the recent protests against Recep Tayyip Erdogan in Turkey, constitute a new phase in the Arab Spring, a new revolution against religious authoritarians rather than secular ones.

In Istanbul (and Constantinople):The Rise & Fall of Society

Guest post by Chris Mayer of “Capital and Crisis”

Istanbul, not Constantinople, as the song goes. In this history is an omen for any powerful state (read: the U.S.). A somewhat obscure essayist knew all about it back in 1959. His little book deserves wider circulation. Below, we'll take a look.
     Constantinople was once the seat of a vast, rich empire. As successor to Rome, under the name of Byzantium, it ruled over a land that stretched from the Caucasus to the Adriatic, from the Danube to the Sahara. The Dark Ages were only completely dark if you ignore the flourishing civilization on the Bosporus.
    Historian Merle Severy writes:

Medieval visitors from the rural West, where Rome had shrunk to a cow town, were struck dumb by this resplendent metropolis." There were half a million people here. Its harbours full of ships, "its markets filled with silks, spices, furs, precious stones, perfumed woods, carved ivory, gold and silver and enamelled jewellery.

    This civilization lasted for a thousand years.
Actually, it lasted for 1,123 years and 18 days after Roman Emperor Constantine made the city his new Christian Rome. On May 29, 1453, Constantinople fell to the Turks.

The Hagia Sophia -- once a cathedral, then a mosque,
now a museum -- the bones of a dead civilization.

    The city would serve as the seat of yet another great empire, the Ottoman. And this one would last nearly five centuries. In the 16th and 17th centuries, the Ottoman Empire was perhaps the most powerful state on Earth. It was at least on one heck of a roll. After Constantinople, the Ottomans took Athens in 1458. Then it was on to Tabriz (1514), Damascus (1516), Cairo (1517), Belgrade (1521), Rhodes (1522), Baghdad (1534), Buda (1541), Tripoli (1551) and Cyprus (1571).
    They almost took Vienna. The powers of Western Europe drew the line in the sand there. Just.  Interesting to think what would've happened if the Turks took Vienna. All of Western Europe would have been at their feet. If they had succeeded, perhaps the majority of Europeans would be answering the call to prayer, echoing from the minarets of cathedrals-turned-mosques...

Your author inside the courtyard of the famed Blue Mosque...

    Yet the Ottoman Empire, too, would crumble. It was constantly at war. By one historian's reckoning, the longest period of peace was just 24 years in nearly six centuries of reign.
    In 1923, with the founding of the Republic of Turkey, Ankara became the seat of government, and in 1930 Constantinople was renamed Istanbul. As historian John Freely notes: "For the first time in 16 centuries, the ancient city on the Golden Horn was no longer reigning over a world empire with only the presence of the monuments to remind one of its imperial past."
    It is not hard to think of the U.S. in the context of these great powers.

*** Enter Chodorov
    One of the books I had tucked in my bag that I read while in Turkey was Frank Chodorov's The Rise & Fall of Society. This is a slender 168-page book by a great, if somewhat forgotten, essayist and editor. It gives a tightly reasoned answer to the question "Why do societies rise and fall?"
    Chodorov's thesis is that "every collapse of which we have sufficient evidence was preceded by the same course of events."
   The course of events goes like this:

"The State, in its insatiable lust for power, increasingly intensified its encroachments on the economy of the nation..." and finally gets to the point where the economy can no longer support the state at the level it is accustomed to. Society can't meet the strain, so "society collapsed and drew the State down with it."

The pattern is always the same, regardless of size or ideology. The state can grow only by taking.

Since the State thrives on what it expropriates [Chodorov writes], the general decline in production which it induces by its avarice foretells its own doom.

    Chodorov bases much of his thesis on what he calls "the Law of Parsimony." In essence, it is simply that people try to get the most satisfaction with the least amount of effort. It is a natural law of human behaviour.
    The law does not say they always achieve this goal, of course. It simply says it is what people try to do. Cooperation with others enhances the ability to satisfy. "Sociability thrives on the mutual profits of cooperation," Chodorov writes, "and when we observe how an acquaintance ripens into friendship as the mutually created wage level rises, it is hard to tell which is cause and which is effect."  The marketplace is the binding of society and coexistent with it. No marketplace, no society. No society, no marketplace.
Now enter the state (whose origins Chodorov covers, but I will pass over here). The state is also made up of men. They, too, are subject to the law of parsimony. So they will make efforts to enlarge and better their position, which they can only do by confiscation (taxes, fines, etc.).

Rome had its make-work programs, its gratuities to the unemployed and its subsidies to industry [Chodorov writes]. These things are necessary to make confiscation palatable and possible.

    Another tourist hot spot, the Topkapi Palace, where the sultans lived decadently... at the expense of the taxpayers, of course.
    How, by various ways of obscurantism and promises, the state is able to grow ever larger and more powerful is the main narrative of the book. Chodorov's writing is honey smooth and his ideas reflect the learning and thought of a lifetime pondering such questions. (He was 72 at the time of publication.)
    Though the book is a slender, easy read, it is packed with ideas. Chodorov, long known as a great teacher, has a gift for stating ideas simply in well-turned phrases. (My copy has plenty of highlighted passages.) And his defence of the network of voluntary exchange that we call a marketplace is downright eloquent.
    One of my favourite chapters is "The Humanity of Trade." There he writes about how the markets make it possible that the fish of the sea reach the miner's table. Northerners enjoy tropical fruits because they can trade for them with goods and services that make life in the tropics easier.

It is by trade that the far-flung warehouses of nature are made accessible to all the peoples of the world, and life on this planet becomes that much more enjoyable. Trade not only improves our material wealth. Trade brings an influx of ideas, stories of interesting people and other cultures that in turn enrich our own literature, arts and 'operatic repertoire.

    Reading Chodorov, one can't help but marvel at the powers of voluntary social cooperation and exchange. Yet there is this never-ending cycle of the rise and collapse of societies. Can we break this depressing cycle?
Chodorov gives an answer in the last chapter, titled "One Can Always Hope." He writes: "None has as yet been discovered. Nevertheless, the search for a formula for the 'good society' has never been abandoned, hope being what it is, and out of the laboratory of the human mind has come congeries of utopias."
    A bleak ending, perhaps. But Chodorov leaves out the possibility that in the U.S., at least, it may be possible to impede the state. Americans still have "a folklore of freedom." This libertarian tradition may yet be revived. "It is worth a try," Chodorov writes. He ends his book with a sentence that captures the most critical idea of all: "The will for freedom comes before freedom."
    The Rise & Fall of Society is a little treasure of a book.  I have all of Chodorov's books -- The Income Tax: Root of All Evil, One Is a Crowd: Reflections of an Individualist, Out of Step: The Autobiography of an Individualist and the posthumous collection, Fugitive Essays. Chodorov is among my favourite libertarian writers, a list that includes Murray Rothbard, H.L. Mencken, Albert Jay Nock and Lysander Spooner. For whatever reason, I had never read The Rise & Fall, but it is classic Chodorov and worth a read.
You can pick up a copy here.
Or you can get Chodorov's The Rise & Fall of Society free, when you join the Club. Plus, you'll get every e-book ever published by Laissez Faire, as I've done, when you join here.

Istiklal Caddesi on a Tuesday afternoon, a bustling street of shops,
restaurants and plenty of people.

As I walked around Istanbul, admiring the architecture -- the bones of a lost civilization -- I still managed to feel optimistic. Life in Istanbul is, in fact, far better for the typical person than it was at the height of any of the dead empires. In material wealth, people live longer and far healthier lives today. They are literate and technologically more advanced. They have greater leisure and access to a wealth of ideas unimaginable in the old days.
This is despite the ugliness of states. And that, after all, is some consolation for the ideas of human progress and liberty.

Sincerely,
Chris Mayer
Editor, Capital & Crisis

Chris Mayer is managing editor of the Capital and Crisis and Mayer’s Special Situations newsletters, a contributor to the Daily Reckoning, and author of Invest Like a Dealmaker, Secrets of a Former Banking Insider.

I come not to praise Churchill but to bury him

Posterity will ne’er survey
A nobler grave than this:
Here lie the bones of Castlereagh:
Stop, traveller, and piss
- Byron

Author Paul Reid has just finished the third and final part of William Manchester’s magisterial Churchill biography [interview here with RadionNZ’s Jim Mora], which has helped make Churchill relevant yet again.

Churchill is everywhere. In poll after poll he is voted as Britain’s Greatest Briton, the Greatest Man of the Greatest Generation, the Man of the Century. In the words of the Reid/Manchester biography he’s “a lion,” “the defender of the realm.”

Is this fair? Is it a good thing?

I say “no.”

The figure of those biographies and those histories on which those polls and evaluations is based is a myth.

The first half of the twentieth-century was one of the most blood-drenched in history. It was the age of total war, totalitarian torture, and the collectivisation of much of the globe—and it was followed by a Cold War and the slow economic strangulation of the West. Despite the mythology, Churchill helped it all happen. Much as Mr Churchill is lionised, it’s a simple fact he was a prime mover on the wrong side of every issue in which he was involved in all but one moment in history. The only argument I can see worth having is whether that one moment of right makes up for all those of being egregiously wrong.

Let’s make a list, then examine it:

AGAINST CHURCHILL: Tonypandy; Ireland; Antwerp; Gallipoli; Lusitania; Great Depression; Mussolini; Yalta; NHS; Iron Curtain; the Welfare State and “No Future”.
FOR CHURCHILL: Oratory; non-appeasement; pugnacity; inspiring Britons in their darkest hour; Chartwell.

I’ll start with the praise, it will be shorter. And mixed.

Oratory: Churchill was an undeniably brilliant speaker, one of history’s most quotable. As his own son observed, his father had “spent the best years of his life writing his extemporaneous speeches.” It was time well spent. That many of them were delivered drunk only heightens one’s admiration.
The resistance against Hitler that Churchill galvanised was done almost single-handedly from his pen, over the despatch boxes at the Commons and out—by radio—around the world. From Dunkirk to the final days of the Battle of Britain, when Britain stood virtually alone, he was immense.
Like many an orator however he had no compunction about letting facts cloud his good stories. As Robert Menzies, the Prime Minister of Australia, noted of Churchill: "His real tyrant is the glittering phrase so attractive to his mind that awkward facts have to give way."
So it was too with his military strategy, as we shall see.

Non-Appeasement: All through the thirties, British Prime Ministers gave Hitler everything he wanted—given in the hope, against all the lessons of history, that in giving an aggressor everything he wanted he wouldn’t keep coming back for more. Churchill told the country that it wouldn’t stop another world war, and would only make Hitler stronger when it started. He was right.
But Churchill never opposed the appeasement of either Japan or Italy--in fact, he encouraged it. It wasn’t a policy he himself followed on any principle then (indeed, he never held a principle he didn’t later betray), but only to achieve prominence.
Churchill himself was only occasionally even opposed to Hitler. In 1937 he wrote, "Three or four years ago I was myself a loud alarmist. . . . In spite of the risks which wait on prophecy, I declare my belief that a major war is not imminent, and I still believe that there is a good chance of no major war taking place in our lifetime. . . . I will not pretend that, if I had to choose between Communism and Nazism, I would choose Communism. . .one may dislike Hitler's system and yet admire his patriotic achievement. If our country were defeated, I hope we should find a champion as indomitable to restore our courage and lead us back to our place among the nations.”
Indeed, if he was eventually “right” on Hitler at all in 1939, it was only because at that moment his compass had swung around again, and because in these “wilderness years” he was predicting disaster everywhere simply to attract attention, crying wolf about everything from the abdication crisis the General Strike to Indian independence.
If there had been a winebox around, then like his namesake he would have managed to build a new career on the back of it.
Churchill was right about non-appeasement, but only by accident.

Pugnacity: Churchill was always right, even when he was wrong. His pugnacity, much admired when he was in the right (rarely), was nonetheless a massive liability when he was not (which was much more often). He could hold his mind to anything, until he changed it.

Inspiring Britons in their finest hour: After half a century of being wrong, Churchill’s one moment of undisputed greatness was in steeling British resistance against Hitler during the Battle of Britain, in the darkest days of the war when Britain stood virtually alone against the Nazi machine. It was his finest hour too.

Chartwell: His house in Kent—much of it built with his own hands, with its study looking across the Downs and out across the English Channel—was to die for. If you ever get a chance to visit, head to his study and savour it.  A man who could build that couldn’t be all bad, could he? Could he?

Boer War: An enthusiastic self-promoter, Churchill first achieved real prominence as a journalist in the Boer War, where he quickly learned he had a taste both for for being under fire and talking himself up. His despatches from the conflict quickly became more about him than about the war. In retrospect, this was good training for his later Histories, especially those of the Second World War in which he featured again as both author and leading protagonist. Those protagonists who write history are able to benefit thereby, as he well knew.
That said, he did find time to express his “irritation that kaffirs should be allowed to fire on white men,” and to write about the world’s first concentration camps, built by the British to house Boer prisoners. Observing these camps in which 115,000 people were housed and 14,000 died he said they produced “the minimum of suffering” possible.
Having by his despatches achieved the prominence he always craved, he left South Africa to enter parliament.

Tonypandy and beyond: Churchill joined the Tory Party when they were in power, then switched to the Liberal Party when they were, then reverted back to the Tories when they took power back. He was his country’s early-century Peter Dunne except much more militant.  He was a gunboat diplomat even in internal affairs.
As a Tory Home Secretary in 1910, he infamously sent soldiers in to break the miners’ strike in the Welsh coal fields. In a riot at Tonypandy, following Churchill’s order, the soldiers fired into the crowd, injuring hundreds. Later in Llanelli however, several miners were shot dead when soldiers fired on them for blocking a rail crossing. He sent gunboats up the Mersey as a persuader to recalcitrant strikers there. And he backed police who charged and brutalised suffragette protestors in Parliament Square in November of the same year. 
He never lost his love of firepower in defence of “public order.” During the 1926 General Strike, he was reported to have argued, unsuccessfully, for machine guns to be used on strikers.
Despite this, Churchill was among those who pushed (as a Liberal MP) for pro-Union legislation, especially the Trades Disputes Act of 1906 that exempted unions from the charge of common assault for violence on picket lines,  from charges of racketeering for threatening non-union labour during strikes, and from responsibility for property damage by their wrecking crews—putting them in effect above the law.
Churchill was wrong on everything in his Internal Affairs portfolio, and helped set up the pro-union legislation that helped make post-war Britain the sick man of Europe.

First World War: In 1925, he wrote, "The story of the human race is war." It is not. The great story of the human race, especially evident in the enormous prosperity produced in the world since the Industrial Revolution, is increasing peaceful cooperation and the efforts by some to stop it through war. However, for Churchill, periods without war offered nothing but "the bland skies of peace and platitude."
Asquith, his own Prime Minister, wrote on the eve of World War One, the most pointless war of bloody destruction in all of human history, and fought for no good reason other than that Europe was bored with peace: "Winston very bellicose and demanding immediate mobilization . . . has got all his war paint on." Churchill backed war from the start, and when the final crisis came, Churchill was all smiles and the only cabinet member to harbour no qualms at all about entering the conflict—a war that destroyed European culture and released the nihilism, relativism and collectivism that poisoned the whole century.
Historian Niall Ferguson said of the First World War it "was nothing less than the greatest error in modern history.”
Winston Churchill was wrong on the First World War.

Antwerp: Virtually his first action as a War Lord—which as First Lord of the Admiralty he was quite literally—was to promote a pointless defence of an Antwerp the Belgians themselves had already abandoned, and the rest of the British High Command refused to countenance, a personally-driven action that cost 2500 lives in defence of a pointless position the Germans would have been unable to hold even if it had been lost to them.

Lusitania: Wanting America in the First War, and enticing them by every means at his disposal (just as he did in the Second) Churchill did everything he could to get innocent Americans killed, telling the President of the UK Board of Trade a week before a German U-Boat torpedoed the American passenger liner Lusitania that it was "most important to attract neutral shipping to our shores, in the hopes especially of embroiling the United States with Germany."
He encouraged neutral liners to bring armaments, as the Lusitania did, and ordered merchant ships to ram German U-Boats when they could—which, primitive as they were in this first Battle of the Atlantic, was easier than it sounds.

Gallipoli: New Zealanders should not need reminding of the debacle that was the Gallipoli campaign—that ill-fated debacle dreamed up to attack Imperial Germany through the “soft underbelly” of Europe. What they might need reminding of however is the man whose brainchild this debacle was, springing as it did entirely from the head of Winston Spencer Churchill, First Lord of the Admiralty at the time—an entirely political appointment.
He was sacked, and dispatched to the Western Front.
Churchill was wrong on Gallipoli—and 130,000 soldiers died to prove it.

Socialism: Rather than being an opponent of socialism, Churchill as a Liberal member was a student of the Fabians, Visiting Germany before the First War, he was in awe of Bismarck’s system whereby he enlisted souls in the German state. "My heart was filled with admiration of the patient genius which had added these social bulwarks to the many glories of the German race." He set out, in his words, to "thrust a big slice of Bismarckianism over the whole underside of our industrial system."
In 1908, Churchill announced in a speech in Dundee: "I am on the side of those who think that a greater collective sentiment should be introduced into the State and the municipalities. I should like to see the State undertaking new functions." Churchill even said: "I go farther; I should like to see the State embark on various novel and adventurous experiments." During the 1914-18 war he declared, "Our whole nation must be organized, must be socialized if you like the word."  And despite Churchill describing during the 1945 election his partners in the national unity government, the Labour Party, as totalitarians, it was Churchill himself who had accepted the infamous Beveridge Report that laid the foundations for the post-war welfare state and Keynesian (mis)management of the economy.
As Ludwig Von Mises wrote in 1950, "It is noteworthy to remember that British socialism was not an achievement of Mr. Attlee's Labor Government, but of the war cabinet of Mr. Winston Churchill."
Churchill was wrong on socialism, and helped to deliver it to the whole English-speaking world—and we are all still paying for that.

Great Depression: Churchill found political power again after the First World War ended. Britain entered the war as the wealthiest country on the planet. After the slaughter and the borrowing and money-printing to pay for it, it found itself after the war as an economic loser.
As Chancellor of the Exchequer however, Churchill faced the choice in the mid-twenties of how to go back on the gold standard after the financial losses and the war’s massive monetary inflation. Never one to let his complete ignorance of a subject affect his decision-making, he decided (based on no economic knowledge whatsoever) that his patriotism dictated that the British pound must go back onto the dollar at precisely the same rate as it was before the great calamity. “The pound must look the dollar in the face,” he said.
The effect of his decision was to promote a massive devaluation of the pound (causing such economic gloom that Britain missed out on most of the twenties boom enjoyed in the rest of the developed world), and a massive gold loss to the States that the newly created Federal Reserve countered with historically unprecedented low interest rates and massive infusions of printed paper, pumping up the American boom and spreading the bubble into the stock market, where it burst in the Great Crash of 1929.
Churchill was wrong on money. And the whole world suffered because of it.

Fascism: During Britain’s 1926 General Strike Churchill praised Mussolini’s labour policies. In showing the world "a way to combat subversive forces,” he said, the Fascism of Benito Mussolini had "rendered a service to the whole world." Writing to Mussolini, Churchill told him, “If I had been an Italian I am sure I should have been whole-heartedly with you in your triumphant struggle.
Franco, meanwhile, was a “great man” who had “united his country.”

Italy: In Word War II Churchill repeated his mistake of the First World War, repeatedly insisting that the Allies waste precious resources attacking Europe through what he again insisted was the “soft underbelly if Europe.” 60,000 Allied soldiers died proving him wrong—no campaign in Western Europe cost more than the Italian campaign in terms of lives lost and wounds suffered by infantry forces—a campaign that proved to have  no strategic importance whatsoever to victory in Europe; fought in the end only to prove to Stalin that his Allies were “doing something” while the Soviets bore the brunt of Nazi aggression.

India: In 1943, India endured a terrible famine. As a War Prime Minister, Churchill was ultimately in charge of the Empire’s food rationing—he had made it so—and was directly involved in denying food shipments to India, berating the population for "breeding like rabbits and being paid a million a day by us for doing nothing by us about the war."
When Churchill requisitioned the Bengalis boats, essential for the distribution of rice, Earl Mountbatten made arrangements for 10% of the space on his battleships to be put aside for rice distribution. Churchill promptly withdrew 10% of Mountbatten's battleships.
Between three and four million people died in the Bengali famine, four times the number who perished in the Irish famine.
Churchill was wrong on India.

Stalin: Churchill brought Stalin on board as an ally in the world’s fight to the death against totalitarianism. If that sounds absurd, it gets worse.
Britain was at war because Nazi Germany had invaded Poland; on the same day, Stalin’s Russia invaded Poland from the other side—yet war was declared against one totalitarian invader, and two years later when the dictators finally fell out Britain became an ally of the other.
When challenged over befriending a dictator he had previously opposed, Churchill told Parliament his single-minded aim was to defeat Hitler, and "If Hitler invaded hell I would make at least a favourable reference to the devil in the House of Commons." 
He did much more than that.
Despite starting the war over Poland, under Churchill’s leadership Britain helped deliver into the hands of the Russian devil the British intelligence service, Poland (over which Britain’s war began), German industry and the German rocket programme, and the entire population of Eastern Europe—delivering over 40 million human beings into inhuman bondage behind what he himself later identified as an “Iron Curtain.”
Churchill was dead wrong on Joseph Stalin.

Yalta: Churchill’s great capitulation to the man he called “Uncle Joe” was at Yalta, the meeting of Roosevelt, Stalin and Churchill in which Churchill presented the murderer of Christians, Jews and Muslims alike with a crusader’s sword, declaring him to be a defender of the Christian West. Stalin just smiled, and proceeded to let Churchill and Roosevelt help him fleece and dismember conquered Europe, and deliver it to the Soviet Union—along with the unconquered populations and escapees from Stalin’s brutality FDR and the champion of the free west delivered up to him on a plate to murder—around to million souls who were the Victims of Yalta, “repatriated” to Soviet Russia at the point of western guns to face Stalin’s firing squads when they got there.  Not to mention the half-million German workers he and Roosevelt agreed could be sent to Stalin as slave labourers as part of the “reparations” for a war fought in part against totalitarian slave labour.

The Welfare State: Some of you might recall that the title of George Orwell’s 1984 was a numerical anagram. It wasn’t set decades in the future, it was set in the Britain of 1948 when it was written—the grey, poverty-stricken post-war Britain of ration cards, import restrictions and nearly complete collectivisation that Churchill had done so much to create.
Modern mythology insists that the British Labour Party created the post-war British welfare state. Yet as a war-time Prime Minister it was Winston Spencer Churchill that accepted and began implementing the Beveridge report that became the Labour Party template for wall-to-wall nationalisation, borrow-and-hope Keynesianism, die-while-you-wait healthcare and the cradle-to-grave Welfare State.
No surprise really, when we recall his pre-WWI time in the Liberal cabinet when he sponsored the National Insurance Act, the first minimum-wages legislation, and a budget including the introduction of new taxes on the wealthy to allow for the creation of new social welfare programmes—helping transform liberalism from the classical laissez-faire liberalism of the nineteenth century to the progressive big-government liberalism of the twentieth.
And how easily it is forgotten that as Conservative Prime Minister again from 1951, taking over a country that had just thrown out in disgust the Attlee Labour Government they held responsible for the transformation of their formerly green and pleasant land, Churchill did precisely nothing to reverse their experiment—essentially making a cross-party consensus thereby that cemented in place the Welfare State from that time to this, and (by virtue of the influence that it still retained in the world) for most parts of the post-war world.
And when Margaret Thatcher attempted to pick up the dregs of Britain from where this consensus had left it (before being knifed by her party for betraying the consensus)—the nadir it had reached when John Lydon looked at the Britain his elders had made and sang about ‘No Future—it was ironically the Britain, and the world, her own hero had done so much to create.
Because it was he that helped transform both conservatism and liberalism from forces for freedom and small-government to the virtually identical Tweedledum and Tweedlumber of big government they are today.

Is there any part of the globe or of politics his multiple errors of judgement have not touched?

Not the British Empire, which during the war he declared it was his solemn mission to protect and preserve , the same Empire that over the course of that war he helped to bankrupt and denude, and which ten years later as post-war Prime Minister he helped to dismantle.

No, not even Ireland. After the First World War, when Irishmen and women were debating their country’s future—should it be with or without Britain?—Winston Churchill made up their minds for many of them by sending over the soldiers known as the Black and Tans, emptying the slums and prisons of Britain so it was said to send armed hooligans over to Ireland to burn homes, shoot civilians, and so persuade all Ireland they were right that all Englishmen were murderers.
In the rightful abhorrence against these scum felt by virtually all of Ireland, Winston Churchill helped create the IRA.

Not Yugoslavia or Greece. More interested in military action itself than what the action was for, he promoted communist partisan leaders in both places, utterly disinterested in the consequences. (In post-war Greece it was a communist interregnum and a bloody civil war. In Yugoslavia it was communist rule until the bloodletting of the 90s following the death of former partisan leader Tito.)
When an aide pointed out that Tito intended to transform Yugoslavia into a Communist dictatorship on the Stalinist model, Churchill retorted: "Do you intend to live there?"

Not the Middle East either. He set up Transjordan and Iraq simply by drawing lines on a map, solely to ensure secure oil supplies for the British navy—which he as First Lord had converted from coal.
After the First World War, it was discovered that Britain had promised the Palestine it had removed from the Ottomans to everyone—to Jews, to Arabs, to an “international zone” of Palestinian Arabs. As Secretary of State for the Colonies in 1922 he issued a white paper fudging the issue, effectively kicking the can down the road for later generations to handle.
That can has exploded every decade since.

So how, with that litany of disaster behind him, can Winston Churchill feasibly be considered among the greatest men of the twentieth century? How has history been so kind to him?

Because he had no principles, Churchill leaves no message and no vision for the future. All he left behind was a vision of the past he ill-defended, and a legacy for the future of a compromised conservatism and socialised liberalism. Does this deserve any credit?

Churchill himself told his secretary Robert Boothby some years after the war that the final verdict of history on him should take into account the political results of his actions during the war and added, "Judged by this standard, I am not sure that I shall be held to have done very well."

Perhaps the answer lies in his own finest hour, inspired by everything that made him, that was by a fluke of history important to all of us. American civil rights leader Richard B. Moore, observed it was “a most rare and fortunate coincidence” that at that moment “the vital interests of the British Empire” coincided “with those of the great overwhelming majority of mankind.”

Another reason perhaps is because he represents that century so well—in part because he helped make it, and us, the way it was and is.

Another is because whatever else he was, he remained a consummate politician. And as psychologist Michael Hurd recently observed, “politics is not based on actual accomplishments nor even reality at all. It’s all about perception and manipulation.”

And maybe in the end history has been so kind to Winston for reasons he himself expected. "History will be kind to me,” he said, “for I intend to write it."

Peace in the Middle East?

Peace in the Middle East? Who are you kidding?

It’s not peace, it’s just a ceasefire.

A temporary cessation of hostilities in which Iran can re-arm Hamas with more rockets to fire at civilians, the chatterati can lambast Israel for responding, and Hamas can celebrate “victory” by broadcasting “death to Israel” music on the very day the “ceasefire” began.

In which  a “blockade” still exists, but only on weapons—which Hamas seem to have no problems getting anyway—and there’s a memory black-hole about the border Gaza enjoys abutting Egypt.

In which folk can twitter about “atrocities,” while ignoring those those perpetrated by Hamas—executing people without trial before dragging them through the streets; using women and children and even journalists as human shields for their missile launchers; lobbing rockets day after day into Israeli houses as long as the supplies hold up, regardless of whether Israel’s response is passive or aggressive.

In which folk can pretend Israeli aggression is the only impediment to a permanent peace, and ignore the permanent jihad against Jews called for in Hamas’s charter.

In which they can pretend if Israel didn't exist, all Mideast problems would be solved. (That is the thinking. Or not thinking.)

In which they can ignore that in calling for the destruction of Israel and the genocide of the Jews—for permanent jihad until “even the rocks and trees cry out: O Muslim! there is a Jew hiding behind me, come on and kill him!”—Hamas’s founding charter is itself a virtual declaration of permanent and ongoing war.

Peace in the Middle East?  That will never happen as long as jihadis view women and children and everyone other than themselves as expendable, and as long as their annhilationist charter remains.

Here’s Pat Condell:

Is #Hyperinflation About to Light a Middle Eastern Powder Keg?

The latest experiment in printing money is turning into another disaster. Someone tell Russel Norman.*

Is Hyperinflation About to Light a Middle Eastern Powder Keg?
Gues post by Marin Katusa, Casey Research Chief Energy Investment Strategist

In the third century, greed got the best of Rome's emperors. As they spent through the silver in the treasury, one emperor after another reduced the amount of precious metal in each denarius until the coins contained almost no silver whatsoever.

It was the world's first experience with currency debasement and hyperinflation. As people saw the value of their savings evaporate, society grew angry and demanded a scapegoat. Christians became that scapegoat, and Romans turned on them with incredible violence.

This pattern - currency debasement leading to social upheaval and violence - would repeat many times over.

In medieval Europe, the number of women on trial for witchcraft climbed in sync with the debasement of currency. In revolutionary France, the Reign of Terror that slaughtered 17,000 wealthy counterrevolutionaries aligns perfectly with the deterioration of the purchasing power of the assignat note.

And in the most vile example: dramatic hyperinflation in Germany in the 1920s allowed Hitler to rise to power by blaming Jews for the country's economic woes.

The connection between currency debasement and social upheaval makes sense - hyperinflation only occurs in times of domestic drama. For example, in 1946 Hungary experienced the greatest episode of hyperinflation on record - in the context of a small, economically limited nation wracked by the Great Depression and then Nazi occupation in World War II. Zimbabwe earned second place in hyperinflation's record books when its dollar inflated 7.96 billion percent from early 2007 to late 2008. The cause? Robert Mugabe's land-reform policy slashed agricultural output and destabilized a fragile society.

That brings me to today... and to Iran, where that volatile mix of domestic drama and hyperinflation is pushing a fragile society to the brink of revolution.

If history repeats itself and Iran descends into revolution, the outcome is both unclear and obvious. In the unclear category: the details of the resulting regime and how far an Iranian revolution might spread through the Middle East. What is obvious, though, are the generalities: a post-revolution Iran would remain Islamist and vehemently anti-US.

Another generality is also crystal-clear. An Iranian revolution - and the potential for that to spawn a new set of Shia-based alliances across the Middle East - would be very good for oil.

And if Iran's currency continues its dramatic nosedive, that revolution - and oil-price spike - might be just around the corner.

Dark Days for Iran's Rial

On October 3, riot police converged on Tehran's Grand Bazaar. With water cannons and batons, they dispersed a large crowd of demonstrators who were calling President Mahmoud Ahmadinejad a traitor for his mismanagement of Iran's economy.

The location was significant: The Grand Bazaar is often described as Tehran's economic heartbeat, and its merchants kick-started the 1979 revolution that ended Iran's monarchy and ushered in the Islamic Republic.

The spark that lit the protest flame this time? The Iranian rial had lost a third of its value against the dollar in the three previous days.

But that was simply the latest drop in a currency devaluation that has been both rapid and profound.

The rial had been slowly losing value against the US dollar since international sanctions against the country's nuclear program took effect in mid-2011. The devaluation was gentle for the first year, but picked up speed in June. A few months later, the currency started to freefall.

On the weekend of September 8-10, the rial lost 9.7% of its value. On October 1 alone, the rial declined 17%. By the next day the black-market exchange rate reached 35,000 rial to the US dollar, marking an 80% decline in the past year.

The massive devaluation is fanning the flames of Iran's burning fiscal situation. International sanctions over Iran's nuclear program have accomplished one desired aim: major inflation. The Iranian government says inflation stands at 25%, but unofficial estimates put it much higher, between 50-70%.

It all translates into far higher prices on staples like food and fuel. Iranians now pay three times as many rial for meat as they did a year ago. Iran's farmers rely on animal feed and vaccines that are imported and therefore priced in US dollars, and they have to pass on the increased costs to consumers.

In the meantime, unemployment is also rising unchecked. Overall unemployment is close to 15%, while youth unemployment is almost 30%.

The Iranian Influence

Soaring food prices, deteriorating employment prospects, and heavy-handed police tactics kicked off a revolution in another Middle Eastern country not long ago. Tunisian vegetable vendor Mohammed Bouazizi set himself on fire in December 2010 to protest precisely those problems; the ensuing riots started his country down a rapid road to revolution. Tunisia's transition turned heads across the Middle East, and the Arab Spring was born.

Iran's ayatollahs are now facing a very similar situation. The rial is dying and hyperinflation is creating real potential for full-fledged economic panic. Continued protests like the one in Tehran's Grand Bazaar would represent a real threat to the ruling regime.

The response from above is easy to predict. Iran's ruling clerics did not hesitate to use force to repress the widespread discontent sparked by President Ahmadinejad's re-election in mid-2009, and used the same riot police in the Bazaar last week to silence dissidence. Bigger protests will almost certainly draw an even more aggressive response.

The regime will also likely offer up a scapegoat. Ahmadinejad is the most likely candidate - he has been clashing with the conservative elite for several years now, and his second and final presidential term ends next summer anyway.

Will a combination of repression and Ahmadinejad's head silence the masses? Maybe, maybe not. When people see their life's savings evaporate - Poof! - in a pile of worthless paper, they get really mad. And really mad people with little to lose is precisely the fuel that feeds revolutionary fires.

However, don't let Western ideals like democracy and the separation of church and state cloud your idea of a reformed Iran. A new regime in Iran would still be Islamist; indeed, the country would almost certainly remain guided first by religion and second by politics. Generations of Iranians have been taught to believe in Shia Islam above all else, with hatred of the United States coming in a close second. Those pillars of Iranian culture would remain.

As such a new Iran could closely resemble the old Iran - but in the meantime, instability could easily spill across the country's borders. Shia populations in other parts of the Middle East could well gain confidence from Iran's uprising and begin uprisings of their own, destabilizing the region's delicate Shia-Sunni balance.

Suddenly, Shia populations in eastern Saudi Arabia, Syria, Lebanon, Iraq, and Bahrain could demand greater recognition, an end to discrimination, maybe even some form of autonomy. The significance of this cannot be understated. The Middle East is a balancing act on many levels, but maintaining peace between Shia and Sunni Muslims is perhaps the most important balance of them all.

Iran, unsteady after a regime change and constrained by international sanctions, would undoubtedly reach out to these Shia populations. Shia connections around the Middle East, long held back by Sunni rulers, would strengthen. A pan-Shia block of allegiances could emerge, replacing the Iran-Syria-Hezbollah partnership with a bigger, stronger group standing against Saudi Arabian - and American - interests in the Persian Gulf.

Truly, a riled-up Shia population connected through a new, Iran-based set of allegiances stretching across the Middle East is a recipe for regional disaster.

Disaster in the Middle East is a recipe for high oil prices - and a “bull market” for the ages.

Whether the drama remains confined to Iran - where a popular revolution puts a new leader in place who blockades the Strait of Hormuz as a show of strength - or spreads to Saudi Arabia, where a marginalized Shia population finally rises up against their Sunni rulers, Iran's currency woes mean instability and infighting in the world's most important oil region.

Welcome to what hyperinflation can do.

Marin Katusa is the chief investment strategist, Energy Division, of Casey Research, publishers of the Casey Energy Speculator and Casey Energy Confidential Alert Service.
This post first appeared at the Casey Daily Dispatch.

* Because as NZIER’s Shamubeel Eaqub observes, “Norman's “quake bond” buying policy is not QE; It's the sort of 'debt monetisation' practised by Mugabe, that will see the poor pay for quake rebuild via inflation.”