Join the company of lions rather than assume the lead among foxes.” - Talmud

President Trump’s decision to withdraw from the Paris Agreement is the biggest news of last week. It goes against any scientific or rational judgement, and it doesn’t matter for Trump and his team. Without the USA, it will be difficult to reduce worldwide CO2 emissions enough to avoid a global catastrophe. We’re looking at major disruptions in climate, leading to more poverty, violence and emigration. Due to its proximity to Africa and Asia, Europe is first in line in the coming crisis, since North America is effectively an island whose only land sensitive border is already partially walled.

Meanwhile, corporate attacks on existing legislation worldwide are gradually rolling back half a century of progress. In between the two world wars, the Great Depression had made it clear that capitalism was not able to regulate itself, bring even prosperity or find solutions to its own shortcomings in times of deep crisis. As mainstream parties were unable to provide answers, people then turned to extreme parties who offered new systems and in some cases managed to reverse the downturn, using alternative economic and social policies.

Today, as we are very much in the same situation, we shouldn’t be surprised by the performance of extreme parties. Mainstream parties are perceived as having surrendered their power to outsiders (European Union or international finance) and it will take enormous amounts of work and visible continuous economic growth for them to recover the ground lost to populist parties. At the same time, the latter will continue to be denigrated for their lack of ‘realism’, though like Trump, they don’t care too much about what’s actually happening but what are people feeling. Are we entering ‘democracy 2.0’?

We’ve been long standing skeptics of technologies especially as, in our view, they bring a sizeable number of drawbacks such as superficiality, shortsightedness, and ‘bubble’ effects (from the inability to integrate other points of view to the segmentation of society into increasingly separate minorities). In addition, tech advocates are apparently confused about technologies’ role, promoting them as an alternative to existing forms of social organization without providing any vision for it. Facebook may be used to organize political protests but does NOT provide alternatives to the existing forms of power.

Finally, with the political discourse moving dramatically to the right after the fall of the USSR and the conversion of the PRC to (state led) capitalism, any attempts at providing unorthodox (read: not market oriented) political or economic solutions are being discredited, leaving us unable to think outside the tight box created by economists and corporations. The most obvious examples are socialists parties, who gave up on changing the world for the better and submitted to international finance. Instead, the status quo continues even though everyone knows it can’t last. In this situation, its the rich and powerful that benefit the most.

Science, General Knowledge & Environment

Humans are ushering in the sixth mass extinction of life on Earth, scientists warn – “Mammals, birds and amphibians are currently becoming extinct at rates comparable to the previous five mass extinctions when “cataclysmic forces” – such as massive meteorite strikes and supervolcano explosions – wiped out vast swathes of life, including the dinosaurs.

Around the world, environmental laws are under attack in all sorts of ways – “…essential environmental safeguards are being conveniently downsized, diminished, ignored or swept under the carpet all over the world. Viewed in isolation, each of these actions might be rationalised or defended – a small compromise made in the name of progress, jobs or the economy. But in a natural world threatened with “death by a thousand cuts”, no single wound can be judged in isolation. Without our hard-won environmental protections, we would all already be breathing polluted air, drinking befouled water, and living in a world with much less wildlife.

How Facebook’s tentacles reach further than you think – “What is most striking is the sense of resignation, the impotence of regulation, the lack of options, the public apathy. What an extraordinary situation for an entity that has power over information – there is no greater power really.

History & Geopolitics

Angela Merkel’s blunder, Donald Trump and the end of the west – “It is easy and appropriate to blame President Trump for this state of affairs. But despite her cautious phrasing, Ms Merkel has also behaved irresponsibly — making a statement that threatens to widen a dangerous rift in the Atlantic alliance into a permanent breach.

France’s Macron Gets to Work – “Macron will probably seek to take advantage of the divisions among the unions by trying to reach a deal with moderate federations such as the French Democratic Confederation of Labor and to endure protests by the most combative federations, such as the General Confederation of Labour.

A Murderous History of Korea – “Extermination passed over this land. Who could count what burned with the houses? … When a country is split in two by an artificial border and irreconcilable propaganda is exercised on each side, it’s naive to ask where the war comes from: the border is the war.

Islamic State jihad explodes in Southeast Asia – “By showing their warfare capabilities at Marawi, IS-affiliated groups could also grow in strength, size and influence with new recruits and present an unpredictable security challenge not only to the Philippines but to neighboring countries as well.

Finance & Economics

China’s shadow banking crackdown shakes markets – “Shadow banking expanded by about 20 per cent in 2016 to Rmb64.5tn, following several years of much higher growth, according to rating agency Moody’s. While expansion of the industry plateaued at the end of last year, the first quarter of 2017 witnessed a resurgence in entrusted loans and trust products, two pillar instruments used in shadow banking. In an unexpected move last week, Moody’s cut China’s credit rating for the first time in 25 years, due to economic and financial risks.

Rise of the crypto-currency “smart ponzi” – “A recent study estimates that Ponzi schemes operated through Bitcoin have gathered more than 7 millions USD in the period from September 2013 to September 20143 . We expect that, since the total capitalization of Bitcoin has grown substantially since then4 , also the impact of Ponzi schemes has increased proportionally.

 Picture of the week: Frolicking foxes

About Carlito Riego

"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi