Elite British Spooks Had Sovereign Agency

“If in the years 1941-3, when the Russians were carrying almost the whole burden of the war against Germany, they were dying in substantial numbers because (Britain) denied (them) the war’s most important source of secret information (the “Ultra” intelligence), the actions of the (socialist) Cambridge (double-agents) at that time must appear in a better light. What justification could the British advance for withholding this information – the military radio traffic of the enemy – from their own ally? Only one: that Britain’s best interest was to stand aside and watch Nazi Germany and Soviet Russia slaughter each other to the last man. Nearly forty years later, we have drifted so far to the right that many young people of liberal mind can accept that as a good policy” (N. Ascherson’s 1980 LRB 2(2) review of A. Boyle).

“British Intelligence, in Boyle’s chronicle, remains as weird a community as ever, in spite of all the author’s new information and captures of confidence. Amateurism, class prejudice and what Boyle calls ‘the sad pleasures of sodomy’ composed its peculiar flavour. The circumstances of my own unhappy brush with the service only confirm it. My background was ‘right’, and I was duly recommended as a likely lad by a Cambridge don (Boyle rids us of the myth that Cambridge tutors recruited assiduously for Russia, but does not add that they recruit assiduously for the home side). There followed a lunch at the Reform Club, where this 23-year-old ass received the proposal that he should go to the new Communist state of Betelgeuse in order to write a biography of its ferocious leader. An argument about where Betelgeuse was had to be settled by a visit to the Times Atlas, dated 1910, in the Club library. My real assignment, they said, was to approach leading Betelgeusians and ‘get them round to our point of view’. Uneasy, I objected that I knew nothing of the place or its language. ‘Old D. will put you in the picture,’ they chortled, returning to their port. A few days later, I was summoned to meet D. in his home. After a silent but delicious dinner, D. asked me to sit next to him on the sofa. I supposed that I was at last to be put in the picture, but D. merely grasped me tightly and wordlessly by the penis. I extracted myself and ran away, and after some days of great confusion, wrote to say that perhaps I was not mature enough for this service.

An outfit like that – and these events took place years after the ‘flight of the diplomats’ – deserves everything it gets. I suppose there was a wild brilliance about the Betelgeuse project, which would almost certainly have cost me my head. But what most impresses me, in retrospect, is their sublime confidence that after that lunch and dinner I would still be their loyal man and true” (N. Ascherson 1980).

An analysis of the inegalitarian, totalitarian liberal conditions that create double agents out of elites: The British double agents “all leave one with the odd impression, even Philby in his early years, that they became Soviet agents faute de mieux. What they needed was something else: a British movement of total opposition to the régime which was both respectable and formidable. They needed a divided Establishment, an alternative régime-in-waiting which they could join. Continental republics know this dualism… In Britain, still an ancien régime in this respect, Labour did not offer such an alternative, while the price of CPGB activity would obviously be impotence and ostracism. The spies didn’t see why they should be impotent and ostracised.” (N Ascherson 1980).

The advantage of the US (v. 1930s UK) is that the spy agencies can rely on the dogmatic, even mysticist, sons and daughters of Chamber of Commerce ideologues, and don’t have to risk Cambridge free thinkers.

“The Thirties were a decade of rapid social change and improvement in popular living standards, as well as a time of poverty and misery for many. But Britain remained governed, financed, exploited and largely represented by the upper class…Labour was a party which, as far as the student leftist could see, would deferentially leave the old élite in place. The Cambridge spies wanted something else for Britain, something which now sounds absurd: a socialist revolution which would both smash the patrician hegemony to which the spies were such guilty heirs, and restore British greatness and independence…one could argue that the Cambridge spies betrayed their friends, in this instance, but not necessarily their country.”


As a political sociologist, I am intrigued about Ascherson’s analysis of what liberal totalitarianism and a grand tradition of inegalitarianism created within the elites at the heart of the beast. (Obviously, it wasn’t all that disruptive, though.) It strikes me as a little analogous to the more-consequential class betrayal of the pro-Enlightenment female Swedish nobility in the early 19th century. The ideas lying around…

The CIA, James Jesus & the Lovestone Empire

Jay Lovestone (nee Liebstein) built and ran the Lovestone Empire for the CIA, under the direction of James Jesus Angleton. The Lovestone Empire consisted of anticommunist unions. An anti-Stalinist, Lovestone was groomed by David Dubinsky to direct labour union organization and resources to anti-communist and pro-war causes. Lovestone had started out a socialist before his eventful hard-right move, like so many men of his social background in the 20th c. He insisted that the US could never become socialist; and he influenced the antistatist economic modernizer Bukharin.

James Jesus Angelton was a Latino-Anglo son of a Chamber of Commerce guy who invested in ATMs. Angelton was an anticommunist who worked with the Israelis and Jay Lovestone to kill off communist organization in unions. Angleton’s work ensured the electoral victory of Christian Democrats over communists in Western Europe. Angleton supervised the CIA’s comprehensive domestic covert surveillance project (called Operation CHAOS) to control US citizens. He targeted both Olaf Palme and Pierre Trudeau, amongst so many others. The LRB’s May issue 40(9) reviews a history of Angleton’s work. His is a story of how you get carte blanche, all possible credibility and credit in capitalism.

Angleton was educated in the Ivies, in literature–poetry–and New Criticism. That institutional base was an anticommunist hotbed. But that’s not all. I can’t recommend the “doth protest too much” Thomas Power LRB article, but it does show how the adoption of a literary analysis technique like New Criticism could buoy a career, in spookery. Like today’s Neo-materialism, New Criticism eschewed sociological craft and context as a triangulator for interpretation. The effect was to, for the moment, permit the critic greater authority…until he’d spent institutional credibility. If the same technique were imported by a spook king to the interpretation of the world, it would bestow, for a time, the same mystical institutional authority. At an institutional and social cost.

This is the way with the importation of all anti-scientific textual analysis to analysis of the world. Good career move while you can produce the performance to get away with it, and apres moi, le deluge.

Angleton was preparing the US-Israeli secret police relation. Shin Bet chief Amos Manor described Angleton, one of the US and global capitalism’s leading spooks, as “fanatic about everything”, with a “tendency towards mystification.”

Fanatic mystification: What passes for credible, what is given all credit in this system.



Capitalist Murder

“Behind the self destructive behaviour, the authors say, are economic factors, including rising poverty rates, unemployment, financial insecurity, and corruption. Whereas only 4%of the population of the region had incomes equivalent to $4 (£2.50) a day or less in 1988, that figure had climbed to 32%by 1994. In addition, the transition to a market economy has been accompanied by lower living standards (including poorer diets), a deterioration in social services, and major cutbacks in health spending.” James Ciment 1999


“Though the Whites executed and starved tens of thousands of Reds after the war, they were particularly ruthless with the Women’s Guards. White soldiers raped and mutilated them before shooting them dead. Their bodies were stripped naked or twisted into obscene positions.

A 2016 study by a young historian, Marjo Liukkonen, uncovered evidence revealing that the Whites executed far more women and children in the infamous Hennala concentration camp than previously believed.” –“Finland’s Red Women,” Jacobin

A Century of U.S. Intervention Created the Immigration Crisis.


View story at Medium.com

Dysfunction-function junction

“Hamilton-Paterson sees the destructive impact of the ‘money men’ on industries more clearly. The catastrophic and unnecessary fate of ICI (which broke the hearts of some of my own chemical-engineering relatives) came about as men and women with long shop-floor experience and technical qualifications were pushed out of management by newcomers who claimed to be financial wizards. They weren’t. They played the great corporation for short-term stock-market gains, and they lost.

Hamilton-Paterson adds the example of Network Rail’s bungled electrification of Great Western (its cost rose in two years from £874 million to £2.8 billion). ‘That’s privatisation for you: layers upon layers of managers and accountants who know nothing about railways. The old British Rail alternative was layers upon layers of experienced railwaymen who knew nothing about accountancy but who did know exactly what electrifying a line entailed and simply got on and did it.’ Later in his book, he attacks the notion (‘holy writ’ today) that a college degree in management enrols one in a portable profession in which it hardly matters what a company does.”

Neal Ascherson, “As the toffs began to retreat” LRB 40(22).

If your goal is to play the institution housing an accretion of wealth–the corporation, or the privatized public good/service–for stock-market gains, then it very much doesn’t ever matter if you accomplish any substantive social or environmental goals.

“People talk easily about political ‘consensus’ in the postwar years. Edgerton disagrees. There was no lasting consensus between the parties on the welfare state, he says, and the idea of a ‘Butskellism’ common to Labour and Tory is a myth. Only for the ‘warfare state’ was there a consensus, to keep its secrets and to pay its vast bills. Britain’s hugely profitable arms trade is an enduring by-product of that state, and here Hamilton-Paterson contributes an unsettling thought. ‘It is the arms industry perhaps more than any other that best preserves the inventive standards and traditions of British engineering, research and technical expertise.’”–Ascherson

The How & Why of Privatization Touts

At the Ivies, the students are instructed by only the most high-status, most fail-tastic privatization marketeers (AKA conservative economists) that only the best-funded gentlemen’s networks can float.

How privatization and class warfare is sold to future US leadership: with lies, covering obscene kleptocracy and its further socialized costs.

Note: Larry Summers may have long since lost his royal Harvard throne, but not just because of his sexism (the putative cause) and racist ecological imperialism (There’s that too.), or even just being an evil overlord of the rampant social, economic and environmental mega-destruction that is neoliberalism. Rather, his Harvard departure is likely due to this: Summers decided to use Harvard funds to pay the costs (The US Justice Department fined Shleifer $26.5 million) of Andrei Shleifer’s massive kleptocratic privatization profiteering in post-communist Russia.

Yee-ha! Good ole fancy boys! Creme de la…uh… I’m guessing Summers himself has enjoyed many, many such back-scratching indulgences over the years, and it’s all par for the course for that highly-oiled and polished ruling mafioso. What was that? Did someone mention Goldman Sachs owns the Fed and the US government? You don’t say. Now what were we talking about? Berlusconi?

Harvard University: You will never find a more wretched hive of scum and villainy. We must be cautious.


Varoufakis on the neoliberal era complexity fraud, and its consequences.

The above article has something to say about rationality, that can pertain to the False Consciousness post below.

TBD here: An essay on my experiences on a late 90s National Science Foundation complexity grad student training team, consisting of ecologists and computer programmers, associated with the Santa Fe Institute. In which I engage with Varoufakis’ points, by discussing what I learned about (systems) “complexity,” its mathematical analysis, and its uses.

Virginia, Meet Financial Capital

This Guardian article shows one way (the divorce between compensation and performance) in which financial capital does not function according to conservative economic theory, with its ideologically-convenient ignorance of human reflexivity and power.

Any reporter worth his salt knows that following Goldman Sachs’ trail of hell-ooze is always worth his time. Greg Palast reports on how Goldman Sachs colluded with Greece’s (former) right-wing government to 1) create the image that conservatives can govern a democracy, which they patently cannot, and 2) screw the world economy and the majority of the people in that economy, for their own unchecked aggrandizement.

Palast, who is selling his book Vulture’s Picnic, deserves to be quoted at length on this overview of the conservative-nursemaided primitive accumulation of Greek wealth:

“In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece. Goldman took a huge loss on the trade. Is Goldman that stupid?

Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why?

Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman’s fake loss was the Greek government’s fake gain. Goldman would get repayment of its “loss” from the government at loan-shark rates. The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP. Cool.

Fraudulent but cool.

But flim-flam isn’t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.

When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out.

 Investors went berserk, demanding monster interest rates to lend more money to roll over this debt. Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance?

 Goldman. And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds? That’s Goldman’s specialty.

 In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked up another half a billion dollars on their “net short” scam.

But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed. Blamed and soaked for the cost of it. The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to — get ready for this––$14,000 per family per year.”

December 2011 update:

The rich mouth off, concerning what assholes they are. (Hint: MIGHTY assholes.)

Varoufakis on the Limits of Probability Mathematics, Conservative Orthodox Economics

“In a masterpiece entitled Science and Method, Henri Poincaré had warned back in 1914: ‘Probability is the opposite of certainty; it is thus what we are ignorant of, and consequently it would seem to be what we cannot calculate. . . . Among the phenomena whose causes we are ignorant of, we must distinguish between fortuitous phenomena, about which the calculation of probabilities will give us provisional information, and those that are not fortuitous, about which we can say nothing, so long as we have not determined the laws that govern them.’ In short, no one can possibly claim to know the chances of a financial crash while ignorant of its underlying causes.

How then did the economists convince the world, and the Nobel committee, that they could estimate the probabilities of events that their models assumed away not just as improbable but, in fact, as untheorizable? The answer lies more in the realm of rhetoric and psychology than in economics itself: they relabeled ignorance and marketed it successfully as a form of provisional knowledge. For instance, when unemployment seemed stuck at, say, 5%, and economists had no plausible explanation to offer, they called it “the natural rate of unemployment.” No need to explain it — it was “natural”! Or when they could not explain the deviations of human behavior from their predictions (e.g. in laboratory experiments), they (a) labeled such behavior “out-of-equilibrium strategies” and then (b) assumed that such behavior is random and “explainable” in the manner physicists describe white noise.

This thinly veiled form of intellectual fraud (i.e. the whole of what passes today as modern economic analysis) provided the “scientific” fig leaf behind which Wall Street tried to hide the truth about its “financial innovations.” The basic truth that Poincaré had exposed being willfully ignored, the three decades that led us to the Crash of 2008 coincided with the rise of a Holy Trinity that permeated all economic wisdom: the Efficient Market Hypothesis (EMH), the Rational Expectations Hypothesis (REH), and the so-called Real Business Cycle Theory (RBCT): impressively marketed theories whose mathematical complexity succeeded for too long in hiding their feebleness. Let’s take a glancing look at each one:

EMH: Financial markets contrive to ensure that current prices reveal all the privately known information that there is. In effect, no one can systematically make money by second-guessing the market. Some market players overreact to new information, others underreact. Thus, even when everyone errs, the market gets it “right.”

REH: No one should expect a theory of human action to predict well in the long run if it presupposes that humans systematically misunderstand that very theory. Sounds good, doesn’t it? A bullet between the eyes of patronizing social theorists who believe that they are closer to the truth about your behavior and mine than we are. Ay, there is the rub, for behind the façade of an anti-patronizing hypothesis lies a seriously insidious assumption: when people predict some economic variable (e.g. inflation, wheat prices, the price of some share), their errors are random — untheorizable, unpatterned, uncorrelated.

It only takes a moment’s reflection to see that anyone espousing EMH and REH cannot possibly expect recessions, let alone crises. Why? Because recessions are systematic events. However surprising when they hit, they unfold in a patterned manner, each of its phases being highly correlated with what preceded it. So, how does a believer in EMH-REH respond when her eyes and ears scream to her brain: Recession, Crash, Meltdown? The answer is: by turning to RBCT for a comforting explanation. So, here it is:

RBCT: Taking EMH and REH as its starting point, the theory portrays capitalism like a well-functioning Gaia. Left alone it will remain harmonious and never go into a spasm (like that of 2008). However, it may well be “attacked” by some “exogenous” shock (coming from a meddling government, a wayward Fed, heinous trades unions, Arab oil producers, aliens, etc.) to which it must respond and adapt. Like a benevolent Gaia responding to a large meteor crashing into it, capitalism reacts efficiently to exogenous shocks. It may take a while for the shockwaves to be absorbed, there may be many victims on the way but, nonetheless, the best way of handling the crisis is letting capitalism get on with it, without being subjected to new shocks administered by self-interested government officials and their fellow travelers who pretend to be standing up for the common good.

In a sense, each of the three hypotheses is a different incarnation of a touching faith that markets know best, both at times of tranquility and in periods of crisis. You and I may think that this is just madness, but it is a lot more than that. At the political level it is the rationale behind powerful forces ranging from the Tea Party to the Bundesbank, from the UK coalition government’s self-imposed austerity to the austerity imposed upon the Greek government by the IMF-Eurozone-ECB troika. This dangerous self-delusion is founded on a hidden analytical bond: each tentacle of the EMH-REH-RBCT nexus presupposes that for the price of every different type of financial asset there exists (what statisticians refer to as) a unique sufficient statistic. One that the market converges toward, albeit in a noisy manner. But, as Poincaré knew, it is pure folly to presume that such unique statistics exist without first having established the laws that govern the determination of prices. And since in capitalist societies these laws are radically indeterminate, the very foundation of the EMH-REH-RBCT nexus is rotten to the core.

Anyone who brings a fresh pair of eyes to the EMH-REH-RBCT nexus should arrive very quickly at the firm conclusion that it is a childish theory upon which to found an analysis of capitalism. And yet it condemned a whole generation of economists to thinking of the most complex, disintegrated, precariously balanced period in the history of capitalism, the 1971-2008 period, as the era of an equilibrium-bound Gaia gallantly and successfully working out of its system all externally induced non-economic shocks.”

Varoufakis, Yanis. 2010. “The Econobubble Revisited.” MRZine, October 26.

Varoufakis continues on to describe how this piss-poor “science” was widely marketed because it supported the US’s post-1970 political-economic strategy of expanding budget and trade deficits, and paying for them with capital inflows from the rest of the world (see also Dumenil & Levy).

Luckily for us, Varoufakis is on a roll…

On Oct 23, 2010, Varoufakis gave a great radio interview with Doug Henwood on the current unfolding of the capitalist crisis.

On Oct 17, 2010, Varoufakis published (with a nod to Marx & more recently, Zizek) “First as History, Then as Farce: The Euro Crisis Revisited,” at MRZine.