Doug Casey: Something Wicked This Way Comes

Interviewed by Louis James, Editor, International Speculator

L: Doug, a couple weeks ago we talked about mass riots spreading beyond the Middle East, and you were right. Yemen, Bahrain, and Libya – hundreds reported dead in Tripoli. But I see on Google News that some very brave individuals have organized protests in Moscow and Beijing. And now we have tens of thousands protesting in Madison, Wisconsin, citing the successful uprising in Egypt. There are counter-protesters in Wisconsin, fears of violence... talk of the governor calling up the National Guard. Is the spirit of revolution in the air?

Doug: On a deep level, there is a common thread running through these events. But, in bankrupt Wisconsin, the pro-union forces trying to hold on to artificially high wages and benefits have nothing in common with the hungry, oppressed, miserable people who took to the streets of Egypt. It's fashionable for all sorts of people with a grievance to call those Egyptians "freedom fighters" and identify themselves with them. I'm a freedom-fighter, you're a rebel, he's a terrorist. The semantics are used to muddy the distinctions, not to clarify.

To a fair degree the Egyptians really are freedom fighters – they actually did oust a tyrant – but they are just going to replace the old boss with a new boss. It's not been a radical revolution – at least not so far. The odds are that the new boss will be every bit as bad as, or worse, than the old boss, regardless of whatever window dressings of reform he uses to gain international acceptance for his regime.

Back in Wisconsin, it's completely disingenuous – actually ridiculous and shameful – for unionized state employees to label themselves freedom fighters. These are the people who most directly slop at the trough at the public's expense. They're minions of the ruling class. They're not trying to overthrow an unjust situation, they're rioting to maintain it.

L: So, what's the deeper, connecting thread?

Doug: Economic hardship. It seems to me that the driving factor behind these protests spreading in the Arab world – and what pushed them from inevitable to imminent – was rising commodity prices, especially food prices. Food prices are also rising rapidly in the U.S. Many fruits and vegetables have doubled, and bread is up 50% over the last year. Cotton has tripled over the last two years. That's going to make clothing more expensive. The difference is that most Americans don't live hand to mouth, not the way most Arabs do. But nonetheless they don't like to see their standard of living drop, and they'll strike out as well. As we just discussed in January, it would be most prudent to prepare for chaotic times ahead.

L: Oppressed Middle Easterners take to the streets out of hunger. Wisconsin union members take to the streets because their entitlements are threatened. Both relate to the rising costs of real things resulting from the global currency crisis, which is part of the larger train-wreck of the old economic world order.

Doug: Yes, and with modern communications, widespread public sentiment can be mobilized with speed never seen before. But you know, it's a bit similar to what happened back in the '60s – although for different reasons. We had simultaneous riots in Europe – mostly in France, but also in Germany and Italy. In Paris, they were tearing up the cobblestone streets to throw rocks at the cops. You had the race riots in Detroit, LA, and Washington, DC, among other U.S. cities, and later, anti-war protests. At exactly the same time, you had the Red Guard and a huge conflagration in China. Three major centers of world civilization erupted in civil unrest at once. But those riots were strictly political. Today's riots are economic, and that's much more serious. Political riots are generally for sport. Economic riots are the real thing.

I've no doubt that with the economic, social, and political forces at work in the world today, we'll see more unrest, lots more. But it's going to be much more violent, and much more dangerous than it was in the '60s, because the world is much less stable.

L: And more countries have nuclear weapons. If more U.S. puppets fall in the Middle East, that's going to be really bad for Israel, which is surrounded and outnumbered by foes who have no interest whatsoever in reaching a peaceful accommodation. If pressed hard enough, Israel could go nuclear, the threat of which has not stopped individuals from shooting rockets into their midst. I know you don't like making predictions, but does your guru-sense tell you that's likely to actually happen soon?

Doug: Nobody knows, of course, but the odds favor new leaders in most of the Arab countries – and most of the Muslim world. Israel is opposed to any change, because they have an accommodation with the old governments. The same is true with the U.S. Israel and the U.S. are like a nasty dog and his bad-tempered master – although I'm not sure which is which. Sometimes the master kicks the dog, sometimes the dog bites the master, but they still work together.

Anyway, now both the U.S. and Israel are going to have to cut new deals with new governments. I suspect the new governments will be less inclined to be U.S. stooges, and more likely to be actively anti-Israel.

Meanwhile, bankrupt state governments in the U.S. could precipitate chaos there, before the balloon goes up elsewhere. We are in uncharted waters, in which anything can happen – and probably will. The key is that most people in the world live on less than $3 a day, most of it goes to food, and food prices are exploding upwards. As is fuel.

L: I remember the terrible events in New Orleans when civil order broke down just a couple years ago. Most Americans seem to be ignoring that embarrassing event, and have long forgotten the Watts riots and Kent State. How do you get such people to consider the facts without sounding like Chicken Little?

Doug: Good question. When the going gets rough, it often turns out that civilization is really just a pretty veneer that lies on top of a fetid cesspool. The fact of the matter is that many – actually most – people suffer from serious psychological aberrations that rise to the surface if you push the right hot buttons. Losing what they have, and going hungry – especially when they see thieves like most politicians and their pals making billions – won't sit well with the masses. It's going to push a lot of hot buttons.

I don't like thinking about rioting and martial law and all of that unpleasantness either; people get hurt, property is destroyed, and so forth. But at this point, a good dose of that looks almost inevitable. What we've seen in Tunisia, Egypt, now Bahrain, and Libya – it's not just a flash in the pan. It's the start of something big.

L: It's a pity to see so much human energy being unleashed, creating powerful forces for change, at a time when it's unlikely that that power will be used for good. So few people have any grasp of basic economics – they have no idea where prosperity comes from. So few people understand that human rights are individual rights and that entitlements are not rights… These people are going to ask for Big Brother to take them in hand, and Big Brother is going to give them what they ask for, good and hard.

Doug: You're quite correct. The logical next step, as we mentioned before, is a new Robespierre – or a whole slew of them. But you know I always try to look at the bright side, and the good news is that a lot of despotic states are going to be overthrown. Others that are not overthrown will be discredited – also very good. This comes at a time when many of these states are on the ragged edge of collapse anyway – their days are numbered, even without this force precipitating their collapse.

Perhaps technology has advanced to the level that people will begin to see they can conduct their lives without the dead hand of the state trying to tell them what to do, and taking most of what they produce for the privilege.

L: Perhaps. The time may not be far off when the very idea of the nation-state itself will be discredited, and human society will evolve to a – hopefully – better form of organization.

Doug: I'd love to think so. I think that as technology continues to advance and liberate the individual, the disappearance of the state is inevitable, even if it's not imminent. But whether things get better after the crash or not, I'm increasingly convinced that what has long been inevitable for the whole world is now becoming imminent. We are in the early stages of a major upheaval. In other words, distortions in the way the world works have been built up to a level where the old order could easily collapse. I'm quite serious when I refer to the coming Greater Depression.

L: Just as we all knew the Soviet Union had to collapse from its internal problems – tyranny and economic stupidity – but weren't sure when. Now, decades of economic mismanagement and bad decision-making in the global arena must eventually be liquidated. But how do you know the bill is coming due?

Doug: Well, timing is always the problem. If you wait long enough, absolutely everything that is possible will happen. I suppose that's why we have time itself – to keep everything from happening at once [chuckles]. But we have to think about what's likely in the course of a single lifetime, so we can benefit from foresight – or be punished for guessing wrongly.

Consider that several other U.S. states are looking at "union-busting" legislation such as Wisconsin's. Unions can no longer pretend to be vehicles to protect the workers; they are really nothing but cartels that reward their members at the expense of everybody else. And, unlike the federal government, the states can't just print money. They have to tax people directly to pay for things. Now they have two choices: raise taxes or default on past promises.

Raising taxes is very hard to do during a depression. People who feel their standard of living is slipping just won't stand for it. Taxes were a major cause of the French Revolution and the American Revolution.

The riots in the '60s weren't about this type of thing – entitlements and taxes – but remember, in the '60s, few states had sales taxes, and where there was one, it was usually only one percent, or two, max. Now, sales taxes regularly run six, seven, eight, even ten percent. In addition, real estate taxes have gone up tremendously, as have state income taxes, of which there were also fewer back then. So these governments are already straining their ability to tax, and they know that if they raise taxes again, it will destroy much of what's left of their economies.