Adam Tooze – An experts’s review of ten years of global economic crisis

Recently (on 14 August) I had the good fortune to follow an interview with the British historian Adam Tooze on Austrian Radio. I was so impressed that I immediately took to reading his book “Crashed. How a Decade of Financial Crises Changed the World” (Allen Lane 2018) ) – and so an important work finally reached me with a two-year delay. These are my comments:

When an author combines an immense range of detailed knowledge with the ability to see things in their context and interdependence, he constantly presents the reader with eureka moments. This is how I would describe the exciting experience of reading the great monograph by Adam Tooze “Crashed. How a Decade of Financial Crises Changed the World”, Allen Lane 2018. Of course, the study of history is inconceivable without value judgments. Natural science may talk about clockworks, chemical compounds or a virus without subjective valuation, but historians cannot deal in this manner with world economy. We should, therefore, right at the beginning take note of the position taken by the historian.

Tooze leaves no doubt that he feels close to the left wing of American politics. The reader is therefore confronted with the full extent of economic and social destruction caused by the 2008 crisis and the subsequent euro crisis. There is no glossing over the fact that, according to Tooze, these crises were even more devastating than the Great Depression of 1929.*1* This is true for the US, *2* but even more so for the rest of the world, especially southern Europe.*3*

The subprime crisis originated in the United States, and in particular in the leading American financial institutions that served the greed of wealthy investors through blatant fraud in both the United States and Europe.*4* The major rating agencies also actively supported fraud through incorrect ratings.*5*

So far the British historian’s observations on the crisis are not new, but they become quite interesting when Tooze analyses its mechanism, namely credit creation by a handful of large investment banks.*6* These institutions, he states, are by no means dependent on the money of savers. As central banks have always done when creating money, they can produce money and credit in exchange for real values (real estate playing a special role in this case).*7* A crisis erupts when the money created either has no counterpart in real assets (in which case the result will be inflation without “sterilisation” of the ensuing surplus) – or when, conversely, existing real assets lose their value (this was the case with the collapse of subprime real estate).*8* In this new and modern type of financial crisis, there is no run on the banks; instead, there is a freeze on internal banking transactions. No bank can be sure anymore that the securities of other banks still have any value. These findings are important because they confirm that the creation of money and credit – whether by central banks or by large private financial institutions – never occurs out of nothing, but in accordance with material values. At the moment when confidence in these values is lost (as was the case with subprime real estate), the modern banking system is thrown off course, just as the classic system is thrown off course by the run of savers on their house banks. After subprime securities had lost all their value, American government bonds remained the last anchor of stability still unchallenged.*9*

The convincing main thesis of Adam Tooze states that we should understand the euro crisis as a mere continuation of its predecessor of 2008, which in turn was brought about by neoliberal deregulation.*10* At this point, the British historian assumes the role of an outspoken critic. While the Americans had taken the right measures to make the American banking system functional again in a surprisingly short time,*11* the Europeans had great pains in doing so.*12* It was only when the ECB led by Mario Draghi took over the American therapy that the danger of the eurozone’s disintegration was finally averted.*13* Prof. Tooze is an expert on Europe and especially Germany, where he studied for quite a time. If he accuses German provincialism and its incorrigible and hegemonic behavior towards the rest of Europe,*14* then that should be taken very seriously.

At this point I feel entitled not to contradict the expert’s account – nobody knows the facts as well as he does – but to make a different assessment that to me seems to be equally compatible with the facts. Tooze sings a hymn to the expertise of the American financial and political elite (that belongs to both major parties and easily switches from the private to the public sector and vice versa as if through a revolving door)*15*. It was precisely this elite, I would like to add, that led the world into the abyss twice. It was its ruthlessness and greed that had produced the crisis of 1929. As another eminent historian, Eric Hobsbawm, explicitly pointed out, the Great Depression constituted the most important cause of Hitler’s rise and the outbreak of the Second World War.*16* And it was again – as proven by Tooze himself – the greed of this elite that made the 2008 crisis possible in both the USA and Europe.*17*

It is therefore somewhat surprising to see the British historian praise the achievement of that very elite that bears responsibility for the disaster in the first place – contrasting it with the inability of Europeans.*18* I think that Franklin D. Roosevelt may rightly be praised for starting the fight against monopoly and growing inequality with his famous New Deal.*19* But what did the American financial-political elite when it defeated the 2008 crisis? It had first of all created the existing monopolies and oligopolies and deepened inequality,*20* but when dealing with the crisis, it did not diminish these evils, but on the contrary further increased them! In other words, it eliminated the symptoms of the crisis but not its causes. Certainly, the financial jugglers who were responsible for the crisis have successfully ensured that there was no collapse or even – as in the 1930s – the rise of a dictator and the outbreak of war. This is a tremendous achievement – economic science has learned the lesson from the Great Depression. The cardinal mistake of deflationary policy was avoided. But the next major crisis can happen at any time, because only the symptoms have been eliminated. Shouldn’t it be the proper task of an elite to eliminate the roots of such crises – oligopolies and growing inequality? Should we call it progress if arsonists become firemen?*21*

At the very least, we should have expected the US elite responsible for the crisis to admit their own mistakes. But until today this did not happen. That’s why Trump the Terrible is to a certain extent right when, on the same day that Joe Biden made his glittering appearance as presidential candidate in his inaugural speech, he chose Biden’s birthplace in Pennsylvania for quite a different speech where he deftly exposed the weak point of his opponent. “Biden pledged to serve the American people every hour of his tenure as president. What did he do for the last half century when your jobs were transferred to Asia?”

Unless the elite acknowledges its mistakes, it does not regain its credibility. This is also true, I believe, of one of its most eminent representatives, the economist and former Clinton Secretary of Labor, Robert Reich, who in his book “The Work of Nations” provided the “scientific” justification for the outsourcing of American industries, but has since become a critic of inequality and monopolies *22* – however, without admitting his part in this development. Reich wanted to transform Americans into “symbol analysts”. He succeeded – the entire financial sector where the big money is made is populated by them, but the average American has lost his once well-paid job to the Chinese.

Tooze seems to be fascinated by the high technical skill of the US financial experts, and he laughs at the provincial stubbornness of the Germans, who still imagined they had to lecture the Americans, even though they have done just about everything wrong – especially when dealing with Greece. *23* It should have been clear to everyone from the start that Greece could not service its debts and that therefore a partial or even complete debt cancellation (restructuring, haircut at the expense of private creditors), as finally demanded by the IMF, was the only right solution from the outset. Instead, Schäuble and Merkel had pedantically insisted on debt repayment, only then Germany was ready to authorize aid funds. But that was absurd from the outset, because the billions in aid money from the IMF and the Eurogroup did not benefit the Greeks but were almost exclusively passed on to creditor banks in Germany and France. The people of Greece were subjected to an ordeal in order to set a warning example to all other potential exit candidates: “Look, this is the price to be paid by anyone who breaks the rules of the eurozone!

The monumental monograph of Adam Tooze demonstrates how closely the financial and economic interdependence of the leading global currency power, the USA, with the rest of the world has already become.*24* In concrete terms, this means that crisis shocks to the leading global power (and indeed to every leading power, not just the USA – I would add) inevitably spill over to the rest of the world. When American securities (the subprime bonds) started to falter, interbank traffic in Europe froze. Subsequently, it was also the FED as lender of last resort, which alone was able to put an end to this petrification by printing dollars. Those who make themselves dependent on the center, whether they like it or not, are also subject to the rules of the center. Tooze has demonstrated this elementary truth for the world’s dependence on the US and its dollar reserve currency. The same dependence, however, applies – and I think this is just as inevitable – to the dependence of the euro zone on Germany, the leading economic power in the region – regardless of whether Germany intends to do so or not.

Tooze’s question of whether Merkel and Schäuble acted correctly at the time when they subjected Greece to such a murderous ordeal remains unanswered. Total debt cancellation, i.e. an official state bankruptcy, as Hans-Werner Sinn, if I remember correctly, demanded early on, would probably have cost far fewer victims. Greece would have had to leave the euro zone for a limited period, its creditworthiness would have been shaken for at least a decade – that fact alone should sufficiently deter all other eurosceptics. But Greece would then rely on its own strength to overcome the crisis and realize that its misfortune was caused by nobody but itself. In any case, this alternative would have spared the people of Greece the additional humiliation of the ordeal imposed on them by the troika of IMF, ECB and the European Commission. I even think that, in this case, the rest of Europe, and Germany in particular, would have cut a much better figure, because they could have voluntarily bestowed a modicum of aid and help on poor Greece. Since Greece was unable to pay its debts anyway and will never repay them (as the IMF recognized early on), debt restructuring or complete debt cancellation, i.e. state bankruptcy, would have been the more honest and probably the much better solution. After all Greece’s economy was far too small to pull the whole of Europe into the maelstrom.

In his analysis of the decade between 2008 and 2018, Adam Tooze speaks exclusively about acute crises – not about those that have been smoldering underground for at least half a century. For this reason, one searches in vain for words like “ecology” or “ecological sustainability” in his 700-page monograph. This is somewhat surprising as the awareness of an impending environmental crisis originated in the United States and that it was an American president too – Jimmy Carter – who had commissioned the major environmental study “Global 2000”. Moreover, it was Vice President Al Gore who saw the destruction of the environment as the greatest and most momentous challenge of our time, and it was President Obama who followed him in this assessment. Why do we find only five incidental references to “climate change” in the otherwise comprehensive book by Adam Tooze?

Unfortunately, Tooze proves to be a realist who faithfully reflects global political and economic reality. During the world financial crisis of 2008 and the euro crisis that followed, the environment was simply forgotten – and the same is true today of our reaction to Covid-19. All we then thought and now think about is how to get the stuttering fossil fuel engine going again – as quickly as possible or even faster than before. In other words, for the biggest crisis of all the elites are by no means prepared. Their motto is: Let everything just be as it was before (including growing inequality and environmental destruction)! I assume that Prof. Adam Tooze would without hesitation subscribe to this truth.

All quotes are taken from the ebook version of “Crashed” with the position indicated:

*1* On a global level, industrial output, stock markets and trade were all falling at least as fast in 2008-2009 as they had in 1929 (3456).

*2*  Across the country, class, not race, was the most important determinant of an American’s life chances, and the big story of his second term as president was rural white working-class despair. It was Appalachia—West Virginia and Kentucky—held back by structural change, educational failure and immobility, that lurched into the headlines (9176). Among white Americans, deaths from /drug/ overdose increased by 297 percent between 2010 and 2014 alone. Unlike in any other developed society, life expectancy among working-class white Americans had been decreasing since the early 2000s. In modern history the only obvious parallel was with Russia in the desperate aftermath of the fall of the Soviet Union (9181)…by 2013 the population of the urban core of Detroit had shrunk to 688,000, of whom 550,000 were African American. They were left behind in a city that was literally falling into ruin, burdened with debts running into the tens of billions of dollars (9067). As the crisis cut a swath across America, 65,000 homes in Detroit were foreclosed. Of those, 36,400 were considered of so little value that they were simply abandoned, joining a total stock of 140,000 blighted properties (9075). While the banks and lenders were bailed out, 9.3 million American families lost their homes to foreclosure, surrendered their home to a lender or were forced to resort to a distress sale (5938). As 2010 began, 3.7 million families were more than ninety days past due on their mortgage payments. Millions more were struggling to make ends meet, one or two months behind on their payments. Over the next twelve months 1.178 million homes would slide into foreclosure, the worst year of the crisis… The contrast in fortunes between Wall Street and Main Street was increasingly intolerable. The big banks had been bailed out. Some of the most unscrupulous bosses might face legal action, but they were not facing personal ruin. They retired to lifestyles of wealth and comfort.46 None had gone to jail… The bonus season in 2009 was better than ever, netting $145 billion for the executives at the top (6385). As 2010 began, 3.7 million families were more than ninety days past due on their mortgage payments. Millions more were struggling to make ends meet, one or two months behind on their payments. Over the next twelve months 1.178 million homes would slide into foreclosure, the worst year of the crisis… The contrast in fortunes between Wall Street and Main Street was increasingly intolerable. The big banks had been bailed out. Some of the most unscrupulous bosses might face legal action, but they were not facing personal ruin. They retired to lifestyles of wealth and comfort.46 None had gone to jail… The bonus season in 2009 was better than ever, netting $145 billion for the executives at the top (6385). The financial crisis of 2008 had revealed how in extremis national economic policy was subordinated to the needs of a cluster of giant transnational banks. Now, in the face of a dismal recovery, the correspondence between economic growth and the progress of a national society was being challenged from the bottom up. Could the national economy any longer be plausibly presented as a project common to all Americans? (9158). Obama insisted, there must be no more evasion, “this increasing inequality is most pronounced in our country …. [S]tatistics show … that our levels of income inequality rank near countries like Jamaica and Argentina” (9170).

*3*  Greece, Portugal, Ireland and Spain were driven into depressions the likes of which had not been seen since the 1930s (6608). In 2008 Greek unemployment had been 8 percent. Four years later it was rising inexorably toward 25 percent. Half of young Greeks were without jobs. In a nation of ten million, a quarter of a million people were fed daily at church-run food banks and soup kitchens (8717). As the housing market collapsed, Spain’s unemployment rate shot up. Of the 6.6 million increase in unemployment in the eurozone between 2007 and 2012, 3.9 million was accounted for by Spain—60 percent of that grim total. As bad as Greece’s situation was, it was small by comparison and accounted for only 12 percent of the increase in eurozone unemployment. Most catastrophic of all was Spain’s youth unemployment rate, which by the summer of 2012 had surged to 55 percent (8769).

*4*  The crisis… was… fully native to Western capitalism /genauer den USA/- a meltdown on Wall Street driven by toxic securitized subprime mortgages that threatened to take Europe down with it (Tooze 2018, 975). The competitive race for profit and market share among the banks… unleashed a regulatory race to the bottom (1821). The idea that social Europe” had deviated in any essential way from the logic of turbocharged financial capitalism” as exemplified by America was an illusion. In fact, Europe’s financial capitalism was even more spectacularly overgrown and it owed a large part of its growth to its deep entanglement in the American boom (2666). …every member of the eurozone was at least three times more overbanked” than the United States (2559).

*5*  … S&P had delivered just one more demonstration of how broken the ratings agencies were. It was their AAA certifications, handed out to hundreds of billions of subprime MBS /mortgage-backed securities/, that had helped to precipitate the crisis in 2008. It was their serial downgrades that were setting the pace of the crisis in the eurozone (8003). The regulators were utterly subservient to the logic of the businesses they were supposed to be regulating (1861). 

*6*  The overwhelming majority of private credit creation is done by a tight-knit corporate oligarchy… At a global level twenty to thirty banks matter. Allowing for nationally significant banks, the number worldwide is perhaps a hundred big financial firms (500).

*7*  Investment banks don’t have deposits. They borrow the money they lend on wholesale markets from other banks or institutional funds (1165). In modern finance, credit is not a fixed sum constrained by the ‘fundamentals’ of the ‘real economy’. It is an elastic quantity, which in an asset price boom can easily become self-expanding on a transnational scale (2436). Real estate is not only the largest single form of wealth, it is also the most important form of collateral for borrowing (998). Almost all human history can be written as the search for and the production of different forms of safe assets (1261). Without valuation the assets could not be used as collateral. Without collateral there was no funding. And if there was no funding all the banks were in trouble, no matter how large their exposure to real estate. In a general liquidity freeze, the equivalent of a giant bank run, no bank was safe (3150).

*8*  By the magic of independent probabilities, the worse the quality of the debt that entered into the tranching and pooling process, the more dramatic the effect. Substantial portions of undocumented, low-rated, high-yield debt emerged as AAA. In any boom, irresponsible, near criminal or outright fraudulent behavior is to be expected (1413). It was a bank run without deposit withdrawals. There had been no deposits. There was nothing to withdraw. For banks to find themselves a trillion dollars short, all that needed to happen was for major providers of funding to withdraw from the money markets (3190).

*9*  On a global scale over the next five years, the United States would be the only source of safe, Treasury-grade assets for investors worldwide. Whatever you might think of the Trump administration, if you needed to park a large volume of funds in safe government debt, there was no alternative to US Treasurys (11511). A huge class of AAA-rated private label securities had shown itself to be far from safe, so the demand for Treasurys was huge (6018).

*10*  It wasn’t the sovereign debt crisis of 2010 that halted Europe’s growth, it was the transatlantic banking crisis of 2008 (3351). America’s securitized mortgage system had been designed from the outset to suck foreign capital into US financial markets and foreign banks had not been slow to see the opportunity (1583). …foreigners owned a large portion of America’s houses. By 2008 roughly a quarter of all securitized mortgages were held by foreign investors (1586). …by far the largest purchasers of US assets, by far the largest foreign lenders to the United States prior to the crisis, were not Asian but European (1673). By the early 1980s both Britain and the United States had abolished all restrictions on capital movements and this was followed in October 1986 by Thatcher’s Big Bang” deregulation (1743). …the competitive race for profit and market share among the banks in turn unleashed a regulatory race to the bottom (1821).

*11*  Never before outside wartime had states intervened on such a scale and with such speed. It was a devastating blow to the complacent belief in the great moderation, a shocking overturning of prevailing laissez-faire ideology (3529).

*12*  In the United States and the UK the central banks were pushing liquidity into the banking system. By contrast, in the eurozone, it was the balance sheets of the banks that absorbed the sovereign debt (6037). … the failure to build new capital would leave the European banks in no position to absorb any further shocks. While the United States began to stabilize, in Europe the banking crisis of 2008 would merge a year later with a new crisis: a panic in the eurozone public debt market. The connecting thread between the crisis of subprime and the crisis of the eurozone was the fragility of Europe’s bank balance sheets (6573). As the Financial Times put it, the failure of the eurozone to restore stability on its own terms meant that by April 2010, the ‘rescue’ of the euro, ‘the ultimate expression of European integration’, depended on outsiders in international institutions and the US administration” (7037). Whereas tiny Latvia had needed only a few billion euros, now the IMF pledged 250 billion. It was by far the largest commitment the IMF had ever made to any program. The $1 trillion pledged to the IMF at the London G20 that was supposed to mark the advent of a new age of global firefighting would be deployed to rescue Europe (7115)

*13*  In retrospect, Draghi’s whatever it takes” speech has come to be seen as the turning point of the eurozone crisis. In the aftermath, markets immediately calmed (8910). ‘Whatever it takes’ was, in fact, a form of surrender. The eurozone was finally giving in to what Anglophone economic commentators had been calling for all along. If only the ECB had moved to the Fed model earlier, as Obama had spelled out at Cannes, the worst of the eurozone crisis might have been avoided. What Draghi now promised was what Geithner, Bernanke and Obama had been preaching to the Europeans since 2010: Do it our way.”… The eurozone was saved by its belated Americanization (8989). Though the ECB did not purchase newly issued government debt, what it did do was to repo sovereign euro bonds.27 As the eurozone deficits ballooned, the ECB operated what was known informally as the “grand bargain.”28 It supplied hundreds of billions of euros in cheap liquidity to Europe’s banks in the form of the socalled Long-Term Refinancing Operation initiated in May 2009.29 The banks then bought sovereign bonds” (6028).

*14*  In the spring of 2009 France and Germany had lectured the UK and the United States about financial stability. A year later they were reduced to calling on the IMF to help not just Greece but the eurozone as a whole (6611). In the space of barely three weeks, the German chancellor managed to tell the press that politicians should be responsible to markets and to tell the pope that politicians should make policy for the people” regardless of those markets (8064).

*15*  The revolving door that feeds government in America regularly rotates between public service and the corporate world (11398). Both the number one and number two positions at the Treasury were to be filled by men—Steve Mnuchin and Jim Donovan—with Goldman Sachs pedigree. Dina Powell, who moved to the influential assistant position at the White House, had formerly headed the bank’s philanthropic efforts. National Economic Council director Gary Cohn was formerly Goldman’s president.

*16* But for it /the Great Slump / there would certainly have been no Hitler”… “Would fascism have become very significant in world history but for the Great Slump? Probably not. Italy alone was not a promising base from which to shake the world…. It was patently the Great Slump which turned Hitler from a phenomenon of the political fringe into the potential, and eventually the actual, master of the country (Hobsbawm (1996), p. 86, 130).

*17*  Political choice, ideology and agency are everywhere across this narrative with highly consequential results, not merely as disturbing factors but as vital reactions to the huge volatility and contingency generated by the malfunctioning of the giant systems” and machines” and apparatuses of financial engineering (11989). The idea that ‘social Europe’ had deviated in any essential way from the logic of turbocharged ‘financial capitalism’ as exemplified by America was an illusion. In fact, Europe’s financial capitalism was even more spectacularly overgrown and it owed a large part of its growth to its deep entanglement in the American boom (2666).

*18*  In the spring of 2010, Schäuble’s scheme was shot down, by friendly fire.23 Chancellor Merkel was no European federalist. She had no desire to reopen the terms of the Lisbon Treaty for which she had fought so hard and which was only just coming into operation (6923). She /Merkel/ was not about to endow Brussels with its own monetary fund. She was far too skeptical of Europe’s capacity for self-discipline (6925). A committee of the EU, the ECB and the IMF would make up the soon to be infamous “troika,” dictating policy to Greece and the other “program countries.” What was ruled out was restructuring. On that Washington sided with the French and the ECB. Existing Greek debt would be paid off with new loans from the troika, whether or not the result was sustainable (6997).

*19* Throughout the Nation, opportunity was limited by monopoly… For too many of us the political equality we once had won was meaningless in the face of economic inequality… A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor – other people’s lives. For too many of us life was no longer free, liberty no longer real… Franklin D. Roosevelt 1932

*20*  Globalization had pushed top incomes up and lower incomes down. Since the 1990s, the impact of these factors had only increased. Imports of cheap manufacturers opened up by NAFTA and Chinese accession to the WTO benefited consumers, but depressed wages and robbed blue-collar Americans of secure manufacturing jobs and the health and retirement benefits that went with them. By 2013, experts close to the American labor movement estimated that the trade deficit with China had cost 3.2 million jobs and the competition of low-wage foreign labor had depressed the wages of the 100 million American workers without college education by $180 billion (9187). Between 1977 and 2014 the share of national income going to the top 1 percent before taxes and benefits had risen by 88.8 percent. After fiscal redistribution their share increased by 81.4 percent. Nor did the tax and welfare state prevent the share of the bottom 50 percent from declining from 25.6 to 19.4 percent (9202).

*21*  The arsonists from Goldman Sachs: On April 16, 2010, the SEC announced that it would be bringing charges against Goldman Sachs for misleading the investors to whom it had sold inferior quality mortgage-backed securities (6402). The revolving door that feeds government in America regularly rotates between public service and the corporate world (11398). The firefighters from Goldman Sachs: In his early days as Treasury secretary, Geithner was quite commonly described as being formerly of Goldman Sachs (6216). In 1993 /Robert/ Rubin had moved from his position at the top of Wall Street, as cochairman at Goldman Sachs, to serve as the first head of the National Economic Council, which Bill Clinton had called into existence as a counterpart to the National Security Council. Two years later Rubin was appointed Treasury secretary (690). Hank Paulson, like Rubin, moved to the Treasury from the CEO job at Goldman Sachs. (948) It was surely more than coincidence that MontiDraghi and Otmar Issing, Merkel’s favorite economic adviser, had all worked for Goldman. (8401) It was Draghi—an American-trained economist; a Goldman Sachs associate; a paid-up member of the global financial community; a “friend of Ben” /Bernanke/; an internationalized, urbane Italian, not a provincial German—who delivered this conclusion to the agonizing story of the eurozone crisis (8992). Both the number one and number two positions at the Treasury were to be filled by men—Steve Mnuchin and Jim Donovan—with Goldman Sachs pedigree. Dina Powell, who moved to the influential assistant position at the White House, had formerly headed the bank’s philanthropic efforts. National Economic Council director Gary Cohn was formerly Goldman’s president (11382).

Harald Schumann had already spoken of “plutocratic nepotism” (Global Countdown, 2008, p. 121).

*22*  What Reich now recognized was that much of this was “insufficient,” if not “beside the point,” because it overlooked a “critically important phenomenon: the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs …. The problem is not the size of government but whom the government is for” (9236)

*23*  If there was any justification for the protracted torture of Greece, it was the fear that an immediate debt restructuring would unleash contagion to other sovereign debtors across the eurozone and destabilize Europe’s banks, thus causing a far wider crisis (7372). Restructuring would have had immediate and devastating implications for the Greek banking system, not to mention broader spillover effects.” This was what was ultimately decisive (7159). …restructuring was an unpopular option with the creditors. As recently as 2007 Greece’s bonds had traded at virtually the same yield as Germany’s. They were widely held. At the end of 2009, of Greece’s 293 billion euros in public debt outstanding, 206 billion were foreign owned, 90 billion were held by European banks and roughly the same amount by pension and insurance funds (6644).

*24*  What drives global trade are not the relationships between national economies but multinational corporations coordinating far-flung value chains (424). … the world economy is not run by medium-sized “Mittelstand” entrepreneurs but by a few thousand massive corporations, with interlocking shareholdings controlled by a tiny group of asset managers (562). In 2008 that flow of dollars grew to such proportions that it rendered any effort to write a separate history of the American and European crises anachronistic and profoundly misleading” (4333). Obama was left to remark: “We now live in a global economy where everything is interconnected, and that means that when you have problems in Europe and in Spain and in Italy and in Greece, those problems wash over into our shores” (8016). Greenspan declared, because “(we) are fortunate that, thanks to globalization, policy decisions in the US have been largely replaced by global market forces. National security aside, it hardly makes any difference who will be the next president. The world is governed by market forces.”… As Fed chair he had made the markets into the ultimate arbiter of American economic policy” (11293).

I would like to add that the book is also rich in information about Asia and Russia, which I could not include in this brief review.

The snow of yesterday is today’s Deluge – Remarks on an amazing book by Daniela Dahn

There are books – and, alas, they make up the vast majority – that one skims over because they offer nothing more than facts that we barely take note of. There are others where each sentence acquires importance because it expresses an attitude, a person’s relationship to the world, and therefore urges the reader to take a stand. I was recently allowed to read one such book, its author is Daniela Dahn. She writes about the injustice that Germany’s Western half has done to the citizens of the East, calling on the West to reflect on its failures. What so much pleases me about this book – even though its theses are anything but pleasant – is its honesty. In times of generalized dishonesty, where arguments mostly serve as weapons in the struggle of parties, this is a refreshing book. Let us listen to the author’s own words.

About the former GDR and the present new federal states

The possibilities of becoming wealthy or making large inheritances were just as limited in the GDR as those of buying great luxury. This was not only a disadvantage. It facilitated social cohesion.

The pedagogy of the GDR was impressive. The Finns made no secret of the fact that it had been the German Democratic Republic from where they had adopted their education system, which had been generally praised after the first Pisa study. I wasn’t surprised by the fact, I had already heard, that developing countries had adopted complete GDR mathematics and physics textbooks because of the good didactics.

Nor was there any lack of female emancipation. How refreshing when Daniela Dahn laughs at the new political correctness of the Me-too movement. We women of the East were much too self-confident to see harassment as a serious problem. Of course, it existed, and even with us most of the bosses were men. But in this case too, West Germans insisted on knowing everything better. The emancipation of women was immediately declared a mere sham. The superior modern family law, which some developing countries had largely adopted, was, like all laws, disposed of without hesitation.

Dahn does not whitewash, but she insists that facts should not be artificially inflated, even if they concern the Stasi. At no time /were/ more than 0.5 percent of the 17 million GDR citizens victims of targeted, operative reporting… On the other hand, I would argue, it is not so much the actual extent of observations that matters, but rather the consequences they had for determined opposition members. In today’s Russia and China, they are mysteriously perishing or simply disappearing. What was it like in the GDR?

Again and again, she rejects the often deliberate distortion of facts. Until the 1980s the genocide of the Jews in the GDR was /as western sources claimed/… a “completely suppressed topic”. So much disinformation leaves one speechless. I perceived it exactly the other way round: The GDR culture had taken up this topic earlier and more often than the Federal Republic, had continuously pursued it over the years, and this to an extent that caused many people to be fed up with it… /a lecture by Marion Neiss/ showed that from 1945 to 1989, the same period in which shameful 85 desecrations took place in the GDR, 1400 attacks on Jewish cemeteries occurred in West Germany… In 1992, a representative Spiegel survey showed that only 4 percent of the inhabitants of the new federal states were anti-Semitic, whereas 16 percent of the inhabitants of the old states were. “East Germans consistently express themselves less anti-Semitic, right-wing extremist and xenophobic than West Germans,” it was said.

Mrs Dahn is speaking plainly, even when she talks about the economic development of the East, which on the whole must be considered a blatant failure. At the beginning of the short Rohwedder era /from August 1990 to April 1991/, the total value of GDR national property was still estimated at between 600 billion and 1 trillion DM. At the end of the Treuhand’s activities, the value of an entire national economy, with its huge, export-strong combines, often equipped with Western technology, with the debt-free land and all state-owned real estate, had been falsified to a value of minus 330 billion DM… Within a very short period of time, 95 percent of the people’s property fell into the hands of Western entrepreneurs in a colonial manner… /and/ in East Germany itself, 80 percent of the leading positions are still occupied by Westerners. Egon Bahr commented bitterly at the time: “Feudal, early medieval ownership structures have been created in East Germany that were overcome even in Africa and the Orient two generations ago… The south of Italy has a current account deficit of almost 13 percent with the north, but the east of Germany has a deficit of at least 45 percent with the west… A full-time employee still earns on average 1000 euros less per month than in the West. And: the population in East Germany today is the same as in 1905. pre-industrial. This is a warning sign… One of the main reasons for this collapse: The Eastern European markets had not broken away, as is always claimed, but had been taken away… Instead of improving the competitiveness of GDR companies…, 80% of East German industry collapsed.

And instead of “creating a high level of employment”, the hasty monetary union led to the loss of four million jobs, while at the same time two million new jobs were created in West Germany… The number of German millionaires doubled to over one million, while in the East the number of unemployed rose from zero to four million with the long-awaited D-Mark…

The author’s conclusion: instead of taking what was good and worth preserving from the GDR’s heritage, the latter was wholesale discarded as worthless and GDR citizens were robbed of all self-respect by West German arrogance – also in intellectual terms: Even when putting all newly founded publishing houses together, only 2.2 per cent of total German book production is now produced in the East German states. Leipzig, for centuries the number one German book city, now ranks 16th behind Göttingen, Saarbrücken and Heidelberg. The memory of GDR culture was thus erased thought for thought. And even harmless witnesses of the past such as street names were systematically erased: In Dresden, almost 100 streets and squares have been renamed, often in favor of the former Saxon nobility, who were obsessed with pomp. The fates of communists tortured to death and executed by the Nazis were rendered nameless.

Federal Republic:

Daniela Dahn is far from speaking with resentment about united Germany, but she takes the liberty of challenging prejudices spread by the state and the Western press. In East Germany not flourishing landscapes emerged, as promised by Chancellor Helmut Kohl, but dying ones and a population of declassified people. That is, why we should not be surprised about the consequences: The quittance for social coldness and political failure is the AfD… The rebellion predicted by Negt has finally erupted in xenophobia, Pegida and AfD. A “new nationalism of the declassed” – that is exactly what has happened… Before right-wing extremism reached the center of society, it came from the center of the state… And: the main responsibility for the rise of right-wing extremism in the East lies with the political class in the West.

Let me add to this lucid analysis that Le Monde Diplomatique takes a very similar view of Trump’s election. In the “Swing States” of the Rust Belt, it was the whites, driven into unemployment by outsourcing (“White Trash”, as they have been derided), who made Trump, the Terrible, president of the United States.

In this context Daniela Dahn also accuses West Germans of a good measure of hypocrisy and false self-righteousness: Without the preliminary work of the lawyer Globke, /so diligently protected and promoted by Konrad Adenauer after the war/, the Holocaust would not have been possible… The first law passed in the Bundestag was the Amnesty Law for NS-perpetrators in 1950!… Two thirds of the 9000 West German judges and prosecutors had already served under Hitler. And the author takes a look at the impact of this state of mind on contemporary politics.

Daniela Dahn on Ukraine and Russia

There is no doubt that Russia’s tricky incorporation of the Crimea into its own territory was a blatant violation of the Budapest Memorandum agreed with Ukraine. This breach of law has dangerously increased the doubts as to how much reliance can be placed on the promises of major powers.

But the Western approach to Ukraine was no less short-sighted – to put it mildly. Instead of allowing the weakened countries /to maintain/ this basis /for further trade with the East/ and making attractive offers from Europe, the West insisted that Kiev had to decide with whom it wanted to cooperate: either progress from the West or despotism from Russia. This fatal compulsion cannot be seen as mere mistake. What prevailed was rather the intention described by US security adviser Zbigniew Brzezinski to tolerate no alliances in Eurasia that call into question the US claim to leadership… The consequences are obvious: The EU is about to make the former Soviet breadbasket its own. This is linked to progressive deindustrialization. Today Ukraine is the poorest country in Europe… There are only seven countries in the world, most of them in Africa, where more of the native soil is controlled by foreigners than in Ukraine.

After the collapse of the Soviet Union, the West has  been at odds with Russia too. Western countries pursued an economic policy, propagated and supported by the World Bank and the International Monetary Fund, under which Russia.. suffered greater economic losses than during the Second World War. During that period, industrial production in the Soviet Union fell by 24 percent, but it fell by almost 60 percent in the ten years after its dissolution.

A stance against political correctness, and for honesty

Before talking about the general conclusions that Daniela Dahn draws from these findings, conclusions which I do not share, I would like to say something about the courage of this woman, who has no qualms about sovereignly disregarding the mainstream of political correctness, for example all that terrible “gendering” degenerating into an orgy of small-mindedness. She sums up small-mindedness and hypocrisy in a single sentence when stating: There is no evidence of a connection between decades of language-degrading lip service and a genuine change in awareness. And: If I have the choice between politically correct and linguistically beautiful, I admit that I choose the beautiful. That is also a female attitude. A redeeming truth, indeed!

On other occasions too, Daniela Dahn votes also for the beautiful and the humane, for example when it comes to Muslim dress codes for women. Since then /after she herself had to dress so in Yemen/ I consider burqa or nikab a specific form of violence against women. This custom, which is neither required by the Koran nor by the Sunna, is for me a criminal offence of bodily injury, if not torture…

She also comments on one of the greatest crimes in recent history, the attack on the World Trade Center in 2001. Contradictions and flaws – for example, the collapse of the third high-rise building, WTC 7, into which no aircraft flew, is not mentioned at all in the official document. The report illustrates that there was never a comprehensive investigation of all circumstances and open questions. Eight times more money has been invested in uncovering the Clinton-Lewinsky sex scandal than in analyzing the day that changed the world… With interest I have taken note of some of the research on the objections against the official final report on September 11 (9/11 Commission Report of 2004) without participating myself. I didn’t have the time, the strength, maybe even the courage.

“Maybe even the courage” – from how many others do we hear such an honest confession?

Why I will not join the party “Die Linke” (The Left) despite Daniela Dahn

I understand the following objections as a contribution to a larger discussion, because honest and upright authors should not be criticized as we may count on their intellectual openness. I read in her book: I have not encountered anything recognizable in view of the blood toll of millions and millions of dead, which the Soviet soldiers paid for the liberation from our fascism.

That would, indeed, be unforgivable if liberation there really was – as maintained by President Putin and by now by Mrs Dahn as well. Recently, Stalin is more and more rehabilitated as a liberator and opponent of fascism, which I think is a crude falsification of history; as a matter of fact Stalin admired Adolf Hitler and until the end did not want to believe that the latter would attack his country. To be sure, the Soviet Union defended itself against the treacherous invasion of the Hitler regime and in the process made much greater sacrifices than Western countries – that is an undeniable historical fact. But it did not liberate its own and others countries from fascism (totalitarianism) but from a brutal aggressor.  After all, Stalin’s regime was just as totalitarian, just as murderous as Hitler’s so-called National Socialism – I think that after Hannah Arendt these facts need no further confirmation. How can a totalitarian regime liberate other states from totalitarianism, i.e. bring them freedom? In fact, Soviet dictatorship was merely extended over the Eastern Bloc. The uprisings in the GDR, in Hungary, Czechoslovakia and Poland and finally the collapse of the communist regime prove that these countries understood liberation and freedom in a completely different way.

This truth seems so evident to me – and the revision of history pursued by the Russian president so obvious – that I do not quite understand when the book continues to say: How much brainwashing did you /Westerners/ actually undergo in order to believe, even today, the fairy tale that the Americans brought you freedom and democracy after the war? It was always all about capitalism first. Democracy found its limits where it did not subordinate itself to the freedom of capital.

No, that’s definitely not true. During the first decades after the war, Americans brought just that to Western Europe: freedom, democracy – yes, and capitalism. Until the 1990s the latter was not perceived as a dirty economic device, but as a synonym for the prosperity that people in the East Bloc longed for just as much as those in the West. For that very reason, there were uprisings in the East, but I am not aware that Western Europe was until quite recently as outraged against America’s hegemony as Eastern people loathed the Russian yoke (since Trump, things could substantially change).

The word “capitalism”, as used by Daniela Dahn and by an ever wider circle of people, represents the evil par excellence. When she says that Americans always thought of capital and its freedom first, she means that they were always driven by greed. But this view disregards historical truth. Since their independence in the 18th century, Americans have been steeped in the conviction that free men perform best when liberated from the paternalism of the state. The vigorous optimism of Americans, so characteristic of them until quite recently, had its origin here – in the trust they placed in the power of responsible individuals (Max Weber had described the religious roots of this attitude).

As we see today, this trust was based on great naivety, because it has led to the fact that in our time half of all global wealth is concentrated in the hands of the world’s richest eight people.*1* But thirty years ago, when it seemed that eternal growth would make the whole world richer and richer, little thought was given to the concentration of wealth. We should therefore ask ourselves why it is only in the last twenty years or so that we have become so sensitive to criticism of the Americans in particular and of capitalism in general? I miss this historical analysis in Daniela Dahn’s book; instead, she turns to a purely ideological assessment. However, in this case too, I must pay Mrs Dahn the compliment of getting straight to the heart of the matter, that is, the question of private property and competition.


Private property and competition are the two pillars of capitalism – what makes it, I would say, at some times the most vigorous force of development and at others a force of destruction. For one must be blind to historical reality when overlooking its wealth-creating dynamism. Under Mao, egalitarianism became an ideological principle and competition was forbidden, as it inevitably leads to inequality. Apparently, people tolerated the straitjacket of imposed egalitarianism quite badly – Mao’s rule turned out to be even bloodier than that of Josef Stalin. When Deng Xiao Ping suddenly gave free reign to competition and private property, it became obvious what people really wanted. All previously oppressed energies were suddenly unleashed. Within just three decades, China became a superpower – almost the superpower. Since then, the Chinese are so much in love with capitalism that they sell it to the world as Chinese-style socialism!

Do we still have to talk about the ban on property in collective farms, decreed in the times of Lenin and Stalin, a ban that led to general sabotage and mismanagement, because nobody bears or wants to bear responsibility for something that does not belong to him? Can anybody still overlook the invigorating results of distributive land reforms, which made the masses responsible owners and beneficiaries of their own achievements?*2* Mrs. Dahn does not want to admit this fact but explains that the profiteering /of western capitalist/ was under the proviso that not only a small clique, but as many people as possible had to be offered more benefits than the communists. In her eyes, this was no more than a tactic to avoid looking worse than the Communists, but this explanation, dear Mrs Dahn, seems to be rather tortuous.

Nevertheless, it is absolutely right that capitalism regularly becomes a force of destruction. For the time being, this is not yet the case in China, because thanks to private property and competition, the masses are doing somewhat better every year – in some parts of the country even much better. In the industrially highly developed countries of the West, however, the opposite has been true for some time now: the masses are doing worse.

The reason seems obvious. If property and competition are left to themselves, then the most intelligent and the most ruthless and of course the owners of capital will become increasingly rich and powerful, i.e. inequality will increase. While in an initial phase privatization and competition can mobilize entire populations, raising wealth and wellfare, as it were, overnight, this process is now turning in the opposite direction as inequality increases and growth declines or even stagnates. Thereafter the already privileged few continue to get even richer, but they now do so at the expense of the majority, who, on the contrary, are getting poorer.*3*

It is not private property and competition per se that are responsible for this transition, but the fact that no state has so far succeeded in controlling both in the public interest so that they exclusively develop their beneficial effects. The big question is how the fundamentally wrong capitalist functional logic of profit maximization through growth compulsion, of privileging the privileged and weakening the weak can be broken. This is, indeed, the crucial question, and it is more difficult than ever before to answer in our new globalized world, where we are all

Caught in the Race of Nations for greater economic (and military) power:

Ms Dahn is realist enough to be aware of the constraints imposed by globalization. She recognizes that locally limited alternative models cannot prevail over the merciless logic of the market. Whether we have a wine-growing cooperative or a /capitalist corporation/.. , the problem is that they all are subject to the brutal logic of competition and the market, which demands that they stand up to others or go under... And: that private shareholders, just because they are smaller and have joined forces with other small ones, can therefore afford to think day and night about the common good, is a leftist illusion.

Yes, that’s perfectly true. But what applies on a small scale to Christian Felber’s Common Welfare Economics and many other initiatives that could make our world more beautiful, also applies to the state as a whole, for example the Federal Republic of Germany. The global race for greater economic (and military) power, which is intensifying from year to year because resources are dwindling, not only concerns the three superpowers but extends to even the smallest states, which all demand their share of the common cake. Under such conditions protecting the weak, just redistribution or giving priority to a meaningful life recede into the background. States are not so much dominated by capitalism, which is a mere method of attaining economic strength, but by the objective which this method is intended to serve, namely the preservation or at least the maintenance of their strength and power. But since capitalism produces different results in emerging states like China and in hardly growing ones like the United States, it is the majority who benefit in the first case and only a minority of the super-rich in the second.

Let us assume that Mrs Dahn is right in saying that common property, as she believes existed in the former GDR, makes for a better society. A more convincing option than real common property has not been revealed to me. In other words, property that does not belong to separate groups, which always pursue their separate interests, but in fact to everyone. If this is really the hoped-for panacea, it should be possible to show that this strengthens the sense of responsibility and improves performance – because in the race of nations, unfortunately, this is precisely what matters. The example of the GDR does not seem to suggest this conclusion. So, I am quite sure that under prevailing conditions no state will adopt the theory let alone the practice of common property lest it be pushed back in the race of nations.

I agree with Mrs. Dahn that we are living in a time of severe crisis, but we will only escape this when this fateful race comes to an end, because as long as it persists we are not masters of our destiny but the victims of external forces.*4*

1) According to a 2016 Oxfam study, only eight privileged people – Bill Gates, Amancio Ortega, Warren Buffett, Carlos Slim Helú, Jeff Bezos, Mark Zuckerberg, Larry Ellison and Michael Bloomberg – currently have the same wealth as 3.6 billion of the poorest people, half of the current human population!

2) Probably the best book on this subject is by Acemoglu and Robinson (2012): Why Nations Fail.New York: Crown Publishers.

3. It is a fact, illuminated by many among them Thomas Piketti, that the majority must pay for a rich minority as soon as the growth rate is below the rate for interest and dividends.

4 Since this article is meant to appreciate Daniela Dahn’s thoughts not to develop my own propositions, my rather superficial reference to what I call the “Race of Nations” may seem quite unsatisfactory to the reader. But I dealt with this topic in detail in my last books (Reflections on Meaning and Purpose in History; Peace and War; and, satirically, Homo In-sapiens).

Logical refutation of Noam Chomsky’s famous trees – the essence of his theory of language

The fascination of Chomsky’s theory of language is due to the fact that it seems to derive linguistic diversity and complexity from a simple starting point. After Chomsky, a whole generation of linguists was busy with drawing all these elusive inverted trees. Let us stick to a simple example:


         NP                                           VP

det               N                     V                     det       N

The               boy                  eats                the       ice cream

The derivation is fascinating because of its apparent proximity to the approach of the natural sciences, where complex events are similarly derived from simple basic elements. No wonder that many praised Noam Chomsky’s approach as a revolution that finally turned the study of language into a science. The tree, with its simple peak of “S” for s(entence), seemed to define the rules that a speaker must obey in order to “generate” a potentially infinite number of grammatically correct sentences in English or any other language (hence the name “Generative Grammar”).

But right at the beginning linguists

should have asked the crucial question, what “S” at the top of the derivation is meant to represent? “S” cannot be an entity void of any content, because nothing can be derived from nothing. It must be something, but what exactly?

Of course, “S” cannot be identical with the formal end product, i.e. the English sound sequence “The boy eats the ice cream”, because then there would be no derivation at all, but the whole thing would amount to a mere tautology. Nor can “S” be a mixture of meaning and form, in the way the English word “boy” represents a phonetic form on the one hand and a carrier of meaning on the other. Then we would end up with partial tautology. The only possible interpretation is that “S” refers to something quite different: a structure of meaning. In the speaker’s brain, the real event is represented in conceptual shape, which in the act of speaking he translates into a structured linguistic form.

But then “S” as a term for s(entence) or formal structure turns out to be a misnomer. We have to replace it with another expression, say “M” as an abbreviation for M(eaning).



         NP                                                       VP

det               N                                 V                     det      N

The               boy                              eats                 the      ice cream

However, once we perform this necessary distinction, it becomes obvious that we must separate the starting point “M” with a line from the following derivatives, because NP and VP represent something different from meaning, namely elements in temporal order. “The boy” proceeds in temporal sequence “eats ice-cream”. Such temporal order is not found in the conceptual structure. A unit of meaning such as “The tree is green” is independent of time. An action such as “The boy eats ice cream” is of course a temporal event like any action, but this has nothing to do with the sequence of words in the English sentence.

And “M”, which we have to substitute for “S”

exibits still one more distinguishing feature. The expression “S” suggests unity and simplicity, which, however, does not exist on the level of meaning. “The tree is green” denotes the modification of a substance by a quality. “The boy eats” or “The boy eats ice cream” refers to the modification of a person (living substance) by an action. The “Logical structure of Meaning” (see my work “Principles of Language”), portrays the most important types of such units of meaning. Each of these can take the place of “M” on the top of the tree.

Since, furthermore, the conceptual analysis of reality begins in the animal kingdom and is subject to evolution in human societies as well, only the basic types are present in all societies, not their more complex forms. In other words, evolution already comes into play at the level of “M”. Hence we must define “M” as elementary types of the “Logical and Informational Structure of Meaning” and understand them as products of evolution.

What about the components N and V of the formal level

below the structure of meaning, which, according to Chomsky, belong to General Grammar, so that we may apply them to languages as different from each other as English and Japanese? Are these terms universal? If we understand verb in the sense that it should denote a formal class in which actions occur, then this statement is certainly correct, because we may be sure to find actions like walking, speaking, striking etc. expressed by words in every natural language. So, we may of course give the name of “verb” to any formal class in any language where they occur. Doing so, we will, however have difficulties with words such as running, speaking, striking, etc., which in English and German formally belong to the class of nouns although they express actions. The conclusion seems evident: it is impossible to define verb or noun in a general (universally valid) way. All we know is that certain language-specific formal criteria make eat, run, hit etc. verbs in English, Japanese or any other language. Again, we have to modify Chomsky’s deceptively simple scheme:



         NPengl                                                  VPengl

detengl           Nengl                            Vengl                 detengl  Nengl

The               boy                              eats                 the      ice cream

                     Running                      tops                             walking

Consider another example to understand this basic correction. In English we may say “Running tops walking”, which we understand in the sense that someone prefers to run rather than just go walking. In many languages this content cannot be expressed in a similar formal way. This means that already on the conceptual level, we are faced with different kinds of analysis. In some language, people must, for example, say, “I like to walk, but I’d rather run.” The agent “I” cannot simply be effaced like in English.

To sum up, Chomsky’s scheme does not in any way describe the generative linguistic capacity of human brains. On the one hand, Chomsky’s “S” is either tautological or has to be replaced by “M”(eaning) – and then becomes much more complex, since “M” consists of different conceptual types (described in the Logical and Informational Structure of Meaning). And on the formal level below the separating line, categories such as V and N are not universal – when used as such, they obscure the existing differences in the formal realization of language instead of explaining it.

That is because the transformation of structures of meaning into structures of sound does not only result in differences of syntax, i.e. in different temporal sequences (like SVO in English, SOV in Japanese), but creates differences in paratax as well, which concern the classification of concepts as formal categories like English verbs, Japanese verbs, etc.

With their deceitful simplicity Chomsky’s trees – the essence of what is new in his linguistic theory – all but obscure our understanding of language. The question why Chomsky created a scheme that so blatantly disregards basic logic, is of interest, but it must here be relegated to a footnote.*1* 

His trees need still one further correction. All the expressions above the dividing line belong to meaning, ie the immaterial conceptual structure, while all expression below belong to the acoustic chain or its representation on a sheet of paper. Now, there is no cogent reason why “eats the ice cream” or “tops walking” should be put in one class named VP rather than “The boy eats” or “running tops”. There is no justification for such classification neither on the formal level nor on the conceptual level (above the dividing line). But there is such a justification (on both levels) for grouping “dirty cloth” or “chanting joyfully” (see footnote one) each in a special class. So, we again modify Chomsky’s tree leaving out NP and VP altogether:



detengl           Nengl                            Vengl                 detengl  Nengl

The               boy                              eats                 the      ice cream

                     Running                      tops                            walking

After this final transformation, Chomsky’s modified and reduced tree corresponds exactly to the general formula I had already used back in the eighties:

M formally realized as F

where M refers to meaning and F to its transformation in symbolic form.

Now lets get back to the present example. It represents a conceptual structure consisting of Agent and Patient and an Action. Its members must be separated by commas as on the conceptual level there is no temporal sequence. According to the specific rules governing English syntax and paratax the conceptual structure is then transformed into the following acoustic chain or sentence (with the arrow signifying formal realization in English):

Ag, Pt, A in English symbolically realized as The boy eats the ice cream

or, if we prefer the shape of a tree:

                                Ag, Pt, A


detengl           Nengl                            Vengl                 detengl  Nengl

The               boy                              eats                 the      ice cream


1 Chomsky inherited his position from his teacher Zellig S. Harris, the founder of distributionalism, who had excluded the semantic dimension. Harris restricted the description of language to the study of recurrent formal elements. Let us consider the following utterance:

Bird-s are chanting joyful-ly Mary wash-es all dirty cloth big cloud-s cover the sky

N                 V                Adv          N             V           Adj        N    Adj    N         V     det  N

NP                             VP                NP                       VP                   NP                VP

                  S                                                        S                                                     S

Supposed the analyzing linguist knows beforehand what elements in the unbroken spoken chainrepresent English nouns, verbs, adjectives, then he may by purely formal analysis dissect this chain into three sentences. Knowing furthermore that he may substitue any noun like for instance cloth with a larger expression like dirty cloth, he may write NP for N. Such a purely formal distributional analysis may, of course, be turned upside down. Then “S” is placed at the top but that doesn’s change its nature: it remains strictly tautological and is still a mere abstraction representing no more and no less than the respective formal chains in English. By a mere sleight of hand Chomsky turned an analytical process – a tautology – into a derivation. The apparent miracle was nothing more than a logical error.

Vivat America! (Nevertheless)

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Hitler, Arendt, Hoffer: Or: The Genius as Proletarian

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Sarrazin reloaded

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Ishiguro – Kehlmann – Houellebecq, a European triad of literary fame

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Huxley’s Brave New World revisited

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