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Dec 1, 2010

Rundle: the GFC, Wikileaks collide ... and the world just shifted

Two massive processes have come into collision -- the second wave of the global financial crisis, breaking strongly in Europe, hitting WikiLeaks' rolling wave of information storms, changing the relationship between state and power.


As the WikiLeaks cablegate (WL-CG) revelations continue to roll out, the mood of defiance grows in Ireland, with calls for “default”, for an immediate election, or for a citizens assembly coming from ever wider quarters. The euro has failed to lift on the market, suggesting that the vicious austerity package, has failed to convince. Down the road in Trafalgar Square, in the first snow of the year, the students are fighting a running battle with the cops, who are trying to kettle them around Nelson’s column. Interpol has issued a warrant for Julian Assange, based on the warrant issued by the Swedish courts on r-pe allegations.

The European Commission is investigating monopoly price fixing practices by Google, showing surprising backbone. The spotlight is on China, after WL-CG revelations that China had expressed the wish that Korea be reunified under Seoul. Now, joining revelations that the Arab world wants a strike on Iran, is confirmation that the US knows of official Saudi funding links to al-Qaeda, and that the US feels that Pakistan is a larger problem than Afghanistan in the propagation of terror.

President Karzai — dubbed inept and credulous in cables — pardoned five heroin traffickers who were caught with more than 250 kilograms of the stuff en route to the streets of the West. The US began moves to charge Assange under the Espionage Act, and the Australian government is dutifully looking for something to charge him with too.

In the House of Commons, the Lib-Dems are in chaos, preparing to abstain from a vote hiking up tuition fees after pledging to oppose it before the election, with talk of defections from the party. Revelations in the WL-CG cables that PMs Brown and Cameron unsuccessfully attempted to make a deal to avoid the extradition of Garry McKinnon, an autistic kid who hacked into unprotected US security networks, and is facing decades in jail under the one-way extradition treaty signed by Blair.

The revelation has dealt another small but visible blow to the special relationship. And the UK “put in place” measures to shield the US during the Chilcot inquiry into the Iraq War. According to WL-CG. And Portugal has announced, in the past 15 minutes, that its banks may fail.

Clearly something is under way, a larger shift than can be explained merely by the individual occurrences, substantial as they are. Two massive processes have come into collision — the second wave of the global financial crisis, breaking strongly in Europe, hitting WikiLeaks’ rolling wave of information storms, changing the relationship between state and power. The transformation of the relationship between four elements — states, nations, information and economy — has been categorical, and even if it recedes in the next few days (which it is unlikely to), it will not retreat back to the status quo.

Something has happened, and it is worth trying to work out what, while it is going on.

Taken at the broadest structural level, one could say this — a series of crucial shifts going back 30 years have now come together in a manner that has pitched the global power system into a potential crisis of legitimacy. In the early 1980s, global financial transactions — hitherto substantially bound within states — began to be extended internationally in real time, due to greater use of information technology as “virtual” markets, and then the only arena in which transactions took place.

The Reagan and Thatcher victories detached economy from state politically, deregulating finance. The transition from the EEC to the EC/EU detached state structures from nation, translating them into a European super-state. The spread of the internet in the late ’80s and ’90s changed the relationship of information to state, making it materially impossible to regulate information flows via old means of censorship and control.

With the global financial economy dictating terms to the superstates in the late ’90s — Glass-Steagall was repealed at the same time as the euro was launched — and using the global net as both its medium, and domain for creation of new assets, the nations, the ethni rallied around increasingly crude expressions of solidarity, increasingly with a religious charge.

The most brutal expression of this was 9/11, and the state responded by trying to regain some of the power it had since given up to information and economy. By now it was too late. The new culture, subjectivity and legitimacy of the cybersphere implicitly undermined the state. WikiLeaks is theorisation and operationalisation of that moment, which is an act of (collective) thought, and a changed material reality.

The autonomous processes of a global economy, operating at the hyperspeed — effectively light speed — of an autonomous global information system, eventually came apart, and the debris rained down on the nations. The Greeks, the Irish, the Portuguese, maintaining a sense of community separated from the state were initially powerless. The states — the EU and the US — had a relationship only to the economy, not to the nation, and promptly bailed out the former at the cost of the latter, stealing their life, to pay off debt.

At this point, with the legitimacy of state and economy at historic lows, the three major blows of WikiLeaks have decisively shifted the power relationship between information on the one hand, and state/economy on the other. From the other end, the nations are rebelling. “Peoples of Europe, rise up” the Greek Communist Party’s slogan hung from the Acropolis chimes with WikiLeaks material and categorical challenge to the very fabric of state power, as expressed in the notion of “inviolable diplomatic communication”.

In Europe, oft dismissed as the old dead world, but really the cutting edge of the world-island, it will only take one crucial challenge from the nations — a citizens challenge to state power in Ireland, for example — to join the two up, in an equally dynamic fashion. Assange’s announcement, in Forbes magazine, that WL may do a Wall Street document dump next effectively closes the circle.

You can feel the change in the air, read it in every report. The more that the fused political-media-administrative elite try to write it off as “entertaining anecdote” while at the same time mobilising state power to destroy the organisation, the more they reveal that something has happened. The old process of leaks — a document here and there — only served to reinforce the idea that the state had an unquestionable right to control information, and that there could be no other way to organise society or create law.

That legitimacy has had a fatal crack put it in. The whole question of who should know what has been put into play. There will be reversals, but we’re used to those. As I may have mentioned, something is happening.


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25 thoughts on “Rundle: the GFC, Wikileaks collide … and the world just shifted

  1. skink

    we’re all doomed!

  2. nicolino

    The alacrity with which the Washington branch office in Canberra pursues Assange will indicate the sensitivity of the issue. The AFP/ASIO plods will be working overtime to pin something on him.We just can’t keep offending the Empire with one of our passport holders can we!

  3. Meski

    He hasn’t leaked anything embarrassing about Australia… Very wise. Good column, too, Guy.

  4. John Boyd

    Surely we grown-ups can do without the moronic use of the suffix ‘-gate’ to refer to some perceived shonkiness. The nature of the offence in this case is not remotely the same as the original case, whihc was not even a suffix.

  5. Peter Bayley

    Haven’t you heard – WikiLeaks has now been (practically) declared a terrorist organisation. Actually, with Wikipedia’s definition of terrorism as “The systematic use of terror as a means of coercion” I think I understand the connection – they’re terrified that this WikiLeaks thingy might become popular.

    I agree we are at an interesting cusp in history – what with the developing nations now hearing a range of opinions, and gradually getting a voice, whether their governments agree or not. I predict a huge push by the Big End to try and grab control of the Internet – something similar to RIAA / DRM arguments will come into play and it will be a bitter and drawn-out fight. The US government is, for all practical purposes, now owned by Corporate America so I would predict initial moves to control the Internet to come from there.

    Now I’m hoping some leakers in countries other than the US have a go at sending WikiLeaks the good oil – of course, they will typically have more on the line in doing so – including their lives.

    In the mean time, I am eagerly look forward to the belated Christmas present that WikiLeaks will be giving some largish Wall St corporation in the New Year

  6. CML

    Are we witnessing the beginning of the ”little people’s” revolution – Mark 2? Especially if Wiki-leaks is going to tell us what really went on in Wall Street during 2007/08. Sort of the second coming of Bastille Day? Or how to get your own back without peeing against the wind!!!
    Can’t wait!

  7. MichaelT

    I like the way Guy has linked the latest wave of the GFC and the anarchist assault on the nation state by Wikileaks and the WWW community.

    At the same time, I don’t think we should underestimate the power of the nation state to strike back via terrorist laws and internal restrcition of information. The US will obviously refrain from sending sensitive diplomatic cables to everyone on the payroll of the whole US govenrment is future.

    The Chinese have rolled back the power of the net quite successfully so far, and other countries may follow suit.

  8. Moving to Paraguay

    It’s a powerful argument, and I’m very grateful that there’s someone like Guy to articulate the bigger picture. So the picture is that in recent times the state became a purely economic venture, detaching itself from the business of articulating any collective identity. And now Wikileaks arises as a way of opening the secret halls of state business to the people, just at the time that the weakness of the economy has de-legitimised the neoliberal state.

    Or is this just a transitional phase of a new style of transnational capitalism, Empire 2.0, that operates independently of the state. Its legitimacy is found in the kind of Wikileaks anarcho-hacker mentality which sits neatly with the contemporary consumer, seeking a world unmediated by specialists, like editors, journalists or professors. From this emerges the über info-corporations of Google, Fox and Apple.

    Rather than abandoning the state, the only solution seems to be strengthening inter-governmental structures, like the UN and Kyoto Protocol, that maintain a sense of global cooperation. With that, it’s just rock’n roll. It’s fun for a while to dance on the wall, but wouldn’t it be better to build a bridge?

  9. Richard Wilson

    Without Wikileaks and the other brave independent journos around the world, the public would know even less than they presently do about what is really going on.

    As for Ireland listen here to Jim Corrs (Corrs pop group) speaking from the heart and pleading with his people to rise up against the global banking cartel that has put his country into penury (lifetime debt serrcvitude in other words) with not so much as a whimper from most of their representatives. Don’t expect any more from our lot by the way.

    If Wikileaks receives the support it deserves the people responsible for this global mess will have to go back into their holes for a while and let the public get on with rebuilding their lives without fearing every cent they have is being stolen from them without their even being aware.
    Anyway here is Jim Corrs:


  10. Tim nash

    Wiki-Leaks.. is nice but it never seems to give you the kinda leak that is a ground breaking suprise.
    Theres corruption in Afganistan.. mm not really a big suprise.
    China wants peace in korea… well why not..I wouldent want a kid with a hand full of nuclear missles and a bad temper on my doorstep either..even if he was a friend back in the day.
    Second wave of gfc….well it was hard to see how shoveling a truck load of money from country to country to save debt laden contries was really going to do anything besides make more problems for everyone.

  11. zut alors

    A very thoughtful piece, Guy, you’re hitting your straps.

    Ironic that Wikileaks can be regarded as a terrorist organisation when they are simply distributing the truth – they haven’t actually confected anything with malice. What’s the old homily?… Truth Will Out.

  12. Richard Wilson

    I urge you to watch the DVD Iron Jawed Angels starring Hilary Swank (2004) which is about the women’s Suffragette movement in the USA and how hard some American women fought for the vote which today is taken for granted but was not avaiulable to women until 1920. NZ women were voting in 1890. It also shows you the lengths to which the state was prepared to go to suppress them, to exert boot-to-the-throat control over them but their resistance held. That was only 90 years ago and the treatment meeted out to non violent female protestors was hair-raising. In some counties people are about to fight agan for much more than the vote – they are fighting for the right of their children not to live in servitude to the international financial cabal after being sold out by their political representatives.

  13. Peter Bayley

    I started adult life as what I thought of as politically somewhat in the middle. In fact I saw that the extreme left and right seem to converge and merge into a very similar “we know best” paternalism. Excuse my obviously-biased viewpoint, but I feel I haven’t changed too much in the intervening years – but I awake to find myself firmly on the left – the corollary being that the world seems to have moved to the right.

    I don’t actually think it has moved – it’s just that a new type of entity has emerged for the first time – an entity which is unavoidably anti-social, totally powerful, influential, self-centered and self-seeking – proclivities which place it firmly on the right and which thus skew the whole political balance.

    Of course, in my paranoid, Greenish way, I’m talking about corporations – those warned about by Eisenhower after WW II. Corporations have their place – especially small ones and I’m a small businessman too – but they should NEVER have the power and political influence they have now gathered unto themselves. They are simplistic, profit-driven entities and should not be confused with structures designed to represent the collective will of human beings.

    I know ever since 1984, it has become a bit of a cliche to fear Big Brother: Orwell thought it would be a Stalinist State – and it was for a time – but Corporations are much more organised and focused and are seeking to dominate all aspects of our lives.

    The WikiLeaks thing, however you stand on it, shows one thing starkly – that the Big End – originally hereditary and land-owning – now commercial, financial and brand-owning – does not want to lose their control of peoples’ access to information – and so is pushing the political buttons necessary to get it stopped.

    A fight is coming.

  14. Richard Wilson

    It’s coming fast. Wikileaks is about to release a major amount of material on the financial sector – one global group in particular so strand clear. According to rpeorts on Max Keiser today the FBI has started rounding up bankers in Connecticut but the client follower media is not reporting it. Once the FBI is involved we are not talking civil actions – we are talking criminal; so there will be a battle between the FBI white hats and black hats some time soon I imagine.

  15. Richard Wilson

    Oh by the way, Wikileaks is on the Stephen Conroy banned internet site list he is planning to reintroduce sometime soon.

  16. MLF

    Nice work, Guy. You too @Peter Bayley.

    I wasn’t totally against the Conroy web filtering, particularly as it related to sites involving child abuse etc. But in what universe can Gov say Wikileaks is RC?

  17. John Marlowe

    No wonder Hillary Clinton is after his scalp, Assange (in Time Magazine yesterday)has called on her to resign if it can be shown she was responsible for ordering U.S. diplomatic figures to engage in espionage in the United Nations.

    Read more: http://www.time.com/time/nation/article/0,8599,2033771,00.html#ixzz16qZUDBq6

    Character Assassination 101 for the CIA to trump up rape accusations. Hollywood could boost its earnings covering this lot.

  18. Rena Zurawel

    So, the American taxpayers spend billions of dollars on homeland security, pornscanners and other spectacular imported gadgets for safe skies, and are unable to keep their documents safe? How does it work?
    Whilst they focus on air passengers’ empty nickers, tons od classified documents are being flashed all around the globe..
    It beats me.

  19. ceking

    Yes, something has happened. Bloody oath it has. World leaders have been instantaneously reduced to mere humans, meanwhile this Assange fellow is becoming more and more ephemeral and other-worldly. Exciting times; and you’re right to say we should try and work out what shift is occurring, while it is occurring.

    But some advice, if I may. This article reads at points like you’re thinking outloud to yourself – a lot of it is kind of intuitive and doesn’t really make sense. It’s hard to get exactly what you mean at a lot of points.

    ‘The states — the EU and the US — had a relationship only to the economy, not to the nation, and promptly bailed out the former at the cost of the latter, stealing their life, to pay off debt.’ The EU is not a state. Stealing their life? What does this mean exactly? Are you really going to make these vast and simple statements without any explanation?

    Online text often doesn’t spell things out – maybe you could argue it shouldn’t need to. But I have to say it detracts from the quality of the article when your reader is alienated from its meaning, when they feel like they are being thrown a list of carelessly tossed in facts and references that are never really tied together.

    ‘The revelation has dealt another small but visible blow to the special relationship.’ What relationship? Between who? Why is it special?

    ‘And the UK “put in place” measures to shield the US during the Chilcot inquiry into the Iraq War. According to WL-CG.’ Okay. Your point being?

    ‘And Portugal has announced, in the past 15 minutes, that its banks may fail.’ Yes big news, but I think paragraphs are meant to generally deal with the same topic.

    Forgive me for my incapacity to see the linkages. I get that you know a lot – and feel free to call me ignorant, but there are lot of unconnected dots in this piece. They may be linked in you mind – and I like what you’re saying, I actually do (I think I do) but it seems like this article would be a whole lot better if you actually orientated your reader within the maelstrom of your thoughts. It’s not enough to wait for them to do it. That’s your job as the writer, no?

  20. Peter Evans

    Something is happening, but you don’t know what it is, do you, Mr Rundle?

    Sorry, couldn’t resist.

    Actually, you’re not doing to badly at self-cyphering the zeitgeist. I reckon Wikileaks is releasing a tiny tiny fraction of what they have, but it’ll all come flooding out if any shit goes down. The only way to stop them is to turn off the tubes. So that’s what we are gunning for?

  21. AR

    Ceking – it may be that you are new to Rundle’s verbal pyrotechnics.The quotes you’ve queried are all coherent, (I consider) accurate and prescient, to a degree rare outside of specialist writing. For a generalist he can, nonetheless, home in on the most relevant particulars. Try parsing his verbiage and note the punctuation, it’s there for a purpose and usually correct, though he churns his stuff out at such a rate that the curse of WP text shifting occasionally strikes.
    I also think that the chooks, social, political and financial are coming home to shit all over the current roost but think that the ancien regime would, as previously, come out on top except for the new factors of resource deficit (not yer akshal scarcity – though that also – more chain breakage) and chaos in relatively few hot spots. Or worse, control by robber baron cartels.
    That oldie but baddie, the ME, sitting on most of the easily accessed Shaitan’s Blood but also silly things like polodium and some erstwhile worthless rare earths & minerals sudenly crucial to modern commubnications and the digital world.
    PeterE – you beat me to the obvious.

  22. joanjett

    Thanks Peter Bayley for the link to that speech by Eisenhower. Reading through it was rather chilling in that so much of what he warned about has come to pass. This for example:
    “Another factor in maintaining balance involves the element of time. As we peer into society’s future, we — you and I, and our government — must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”

    We have become all of that, and more. The mortgaging of the material assets of our grandchildren is interesting in context of the mining tax. Julia Gillard could do worse than quote him when arguing against the powerful interests of Twiggy and Gina et al….

  23. Meski

    @MLF: regarding how Conroy would justify RC: well, if wikileaks are declared a terrorist org, that would do it. (mind you, a lot of ppl will be in deep sh*t at that point for funding a terrorist org)

    However, I really doubt that Conroy has the numbers to get the filter implemented. NBN / Telstra was a close call thru the senate, and most everyone apart from the coalition supported that. Lets see, the Coalition, Xenephon, and the Greens are against the filter. Add up the numbers.

  24. Linda Manning

    Guy’s right – there is a change in the balance of power. The state and the nation has less control and the people are getting more. Assange is a symptom, not the cause. People just don’t trust their governments any longer to do the ‘right’ thing. Good luck to Assange. He has got guts.

  25. Tom McLoughlin

    God bless you Laurie Oakes you fat old b*stard, I love ya.


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