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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.

Guy Rundle — Correspondent-at-large

Guy Rundle


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. 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!

  2. Meski

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

  3. 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.

  4. 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

  5. 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!

  6. 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.

  7. 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?

  8. 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:

  9. 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.