The end-of-the-year special flight has been a highlight for
me for the last eight years since it’s not only a learning and entertaining
experience, but also has served as an inspiration for the forthcoming year.
Obviously, the question had been if, due to Covid-19, the flight would even take
place this year. Tuesday, November 24th was a delightful day. In
that day’s mail the invitation and the ticket for the end-of-year flight was
included. I boarded my flight at the Atlanta, Georgia airport and the
destination was Tbilisi, Georgia. Unlike previous years when I did not know who
the fellow passengers would be, this year (due to Covid-19?) we all knew who
the passengers would be. Homework would have been appropriate, and Thanksgiving
was approaching. Just before boarding, Delacroix whispered that due to the
unfolding circumstances he wanted just to raise some questions and preferred
that this be a discussion mainly among Charlemagne and Warburg given that they
both played such a fundamental role in shaping the future of Europe and the
United States respectively.
Then, the announcement came: “I hope that you read the
transcript from last year’s flight. Should I assume then that you recall the voice
from last year’s landing?”
The arguments started in the boarding area: “Paul Warburg was
that announcement for you?”, Eugene Delacroix stated. “Come on Eugene, I am not
the one who painted The Giaour”, Warburg stated, only to receive another
question from Delacroix. “My dear Paul, the Fed is your baby. Do you recognize
your baby after those 113 years? Is that the kind of elastic money that you
envisioned? After all, you were the only one who dared to even pronounce that a
central bank was needed in the midst of those years that were filled with
panics, political upheaval, rising globalization, new technologies, and a rising
world power. I repeat, do you recognize your baby?”
“My dear Eugene, do you ever wonder that the role of the
visionary founders is not to answer questions, but rather question the pre-determined
answers that others may have?” Warburg argued back.
We all took our seats keeping the proper distances and
wearing our masks. “I have another question,” Delacroix announced, “What is
left after leaders who followed the visionary founders found to be of
questionable competence and who lacked visionary leadership to the point of
ruining the founders’ aspirations? Charlemagne, you were a master of
geopolitical strategies. Do you recognize the Europe that you envisioned?”
“We live in an era of cognitive dualism,” Charlemagne stated,
“According to this, the world can be understood in two incommensurable ways:
the way of objective understanding, and the way of subjective – vested interest
– understanding. Spinoza proposed the same thing when he claimed that the world
is one thing, seen in two distinct ways that he named thought and extension.
Look at China: It covered up the facts about the virus, failed to share crucial
information about it in a timely fashion, and refused to grant the
international community access in order to investigate the origins of the
virus. Then they provided some meaningless assistance and demanded from
countries that received that assistance to praise China! Do you recall how I
treated this kind of behavior? Do you recall what happened to the kingdom of
Lombard? Where is the leadership nowadays that will truly penalize China for
their atrocities, not just those related to the pandemic, but also those that
relate to oppression, and intellectual theft? And by the way, where is the
leadership that will truly shake up Putin and his atrocities? Cozying up to
such assertiveness, bullying, and aggressive behavior betrays not just lack of
historical understanding but also of visionary understanding as to who we are and
who we want to be. It betrays the fact that we are dealing with an identity
crisis.”
“It was not just Spinoza, but also Kant, who argued that the
world can be understood as a web of causal connections laid out in space and
time and subject to universal laws and must also be seen from the perspective
of practical reason”, Delacroix stated.
“And what do all of these philosophical arguments have to do with the need to expand and exercise power for the advancement of a vision that dreams the betterment of the lands involved?”, Charlemagne asked. “Your arguments to me are commensurable since they share the same nomenclature and are embedded in similar conceptual frameworks, however from an empirical standpoint Giaour needs to fight, and someone may need to die in the great game of conquering power and in order for the world to move on to its next chapter. Look I brought with me a copy of Delacroix painting”, Charlemagne proclaimed, showing us all the copy of the famous Delacroix’s painting.
“I remember seeing the original at the Art Institute in
Chicago”, Warburg said. “The Giaour actually is fighting for a cause – the
unjust killing of a girl that he loved, and Hassan had her killed – and in reality,
he is fighting not just Hassan but also his assistant who is trying to cut the
legs of Giaour’s horse.”
“When I first read the famous poem by Lord Byron, I was
moved not just by the contextual surrounding and the Romanticism of Byron, but
also by the implied climax where someone takes decisive action to stop the
irrationality of celebrating wickedness and penalizing innocence”, Delacroix
stated, “The dramatic climax of the poem calls for a decisive battle of what I
believe Charlamagne may call the battle of Lebenswelt.”
“Thank you Eugene”, Charlemagne interjected, and he
continued: “A French contemporary of yours by the name of Pascal Bruckner in
his book titled The Temptation of Innocence elaborates on the culture of
dependency and its damaging effects on the moral fabric of society from
corporate welfare to cry-babies and whining victims. The Europe that I envisioned
and fought for as well as the one envisioned by the likes of Konrad Adenauer,
Jean Monnet, Robert Schuman, and Alcide De Gasperi – among others – doesn’t
resemble the dysfunctional ‘union’ of today’s EU. I am afraid that today’s EU is
an abomination and a testament contrary to what Lebenswelt, a.k.a. Lifeworld,
stands for. If we are to describe what is known as the order of political
evolution, we need a unified contextual framework of interpretation that will
also include the international balance of power, the flow of money and credit,
and in general what is known as verstehen. Under the lenses of verstehen and
Lebenswelt the concept of a geoeconomic and geopolitical determinism is
obsolete, as an emerging reality surfaces, in a similar fashion as a face that
emerges from a canvas or the melody from the sequence of notes.”
“And what is that reality, Charlemagne?” Delacroix inquired.
“Oh, what don’t you ask Warburg about that? After all, he used the soft power
of diplomacy and suasion to sway Nelson Aldrich – one of the most powerful
Senators back then and a strong opponent of establishing a central bank – to
the point of Aldrich himself organized in secret the Jekyll Island endeavor
where the Fed’s plans start taking form and substance”, Charlamagne replied,
only to add: “There is a nonsymmetrical relationship. The order of nature and
consequently of the balance of power does not emerge from Lebenswelt. The
latter presupposes the order of nature and the balance of power, but not vice
versa.”
“Look, the geopolitical developments of World War I left
President Wilson no other option but to accept my resignation from the Fed.
Benjamin Strong tried to navigate the turbulent monetary waters of the latter
part of the 1920s, but his death in 1928 left the Fed without a capable hand at
the wheel. I criticized the Fed a few months later for weak leadership and for
letting stock market speculation become its guiding principle. Moreover, the
record shows that I warned them that that schizophrenic elasticity they applied
resembled nothing but an orgy of unrestrained speculation which will end in an
economic depression if that credit overextension continued”, Warburg reminded
us.
“And what happened of Nelson Aldrich?” Delacroix asked. “Oh,
the truth is that by the time that Woodrow Wilson was elected President in
1912, he had fallen out of favor with the kingmakers of the day. After all, I
may have swayed him to the idea of establishing a central bank, but if it was
not for the diplomacy of Harry Davison at Jekyll Island, our fallout would have
stained the monetary history of the Fed and the US. Aldrich was bitter that it
was Carter Glass version of the central bank legislation that Congress and the
President advanced, rather than his. However, his legacy is still with us. His
daughter Abby Aldrich Rockefeller established the Museum of Modern Art. His
grandson Nelson Aldrich Rockefeller served both as New York governor as well as
VP for the US, while his other grandson, David Aldrich Rockefeller, became the
quintessential banker in the postwar era, as Chairman and CEO of Chase
Manhattan.”
“If I may add, the vision of Paul Warburg was unique. The
Federal Reserve should be viewed in the way that Paul envisioned it. A central
bank which like the old European cathedrals becomes a center of authority and
power as well as a symbol of stability and endurance, signaling – especially
following Bretton Woods – that financial stability is of utmost importance,
without cheapening the actual or perceived capital and asset base of credit’s
elasticity”, Charlemagne added.
“Paul, it is rumored that when you arrived in the US, you
characterized the US banking system as primitive and worse than the one of the
Babylonian Empire. Is that true?”, Delacroix asked.
“My dear friend Eugene, take a look at your painting, The
Giaour. You have forces which in the name of tradition and because of
vested interests, do not allow progress to take place. This is stealing. They
are stealing the future – and what a bright future it was that the US was
enjoying at that time as is today – from the younger generations. The Giaour, like
Charlemagne, has no other option but to fight and fight hard, not just for him
but for the Europe that he was envisioning. By establishing the Carolingian
empire as the continuation of the Merovingian one and by fighting the Lombards,
the Saxons, the Slavs, putting down rebellions like the ones at Acquitaine, and
using diplomacy whenever possible like with the Abbasids, the Pope, and Empress
Irene of the East Roman/Byzantine Empire, he united and ruled over much of the
European land. What was his next move? Currency standardization and some
uniformity in taxation in the 8th century AD, something that the US
had not achieved in the beginning of the 20th century – which was
the cause of the frequent panics and depressions that the US suffered between
the 1870s and the early 1900s – and the EU is still lacking (at least the
taxation part)!”, Warburg stated.
“Dear Paul, I understand your emphasis on the monetary
affairs. Just let me add, that Charlemagne was pivotal for Europe’s Renaissance
in those Middle Ages. He became the patron for the arts and for music, but his
biggest passion was education and literature. He brought literacy and education
all over his empire. If it was not for Charlemagne, the amazing classical Latin
texts we have today wouldn’t exist. No doubt, some of his war practices would
be completely unacceptable by today’s standards, but the reality is that our
lives today would be very different if it was not for Charlemagne and his
decisive leadership who knew not only how wolves and bears behave, but also how
to restrain them in their cages”, Delacroix added.
“Like in the beginning of the 20th century, the
world nowadays faces collective challenges. Pandemics, climate change, external
interference in democratic processes, illiberal elements that undermine
stability and institutions, abuse of human rights, technological challenges
that bring with them structural changes in terms of employment, income, and
skills, all of which are collective issues that require a collective response.
The best approach to these challenges can be found in the well-articulated
NSC-68, the highly classified assessment of the Soviet Union just before the
outbreak of the Korean War. In it we read that the US national interest can be
found in the advancement of the mutual interests we share with our allies and
with those who share our principles and ideals: ‘assure the integrity and
vitality of our free society, which is founded on the dignity and worth of the individual.’
The NSC-68 called for the US to build a healthy international community and a
world environment in which the mutual interests of the allies can flourish. It
captures, like few foreign dogmas, the alliance between national purpose and
international order. Freedom House has documented that the world has become
less free due in large part to illiberal forces of wolves and bears whose
actions are imitated by brainless leaders in other countries. Like in the times
when I drafted my opinion pieces in the New York Times about decisive political
leadership and the need for a central bank, the world today faces rising
challenges that unless are addressed decisively, will lead to disasters.
Placing the health, security, integrity, and prosperity of the free world as
the centerpiece of US strategy is a way of integrating domestic, transnational,
and great power challenges in a way that actually prioritizes policies while
establishing statecraft anchors. We need to tackle corruption and oligarchy,
protect the rule of law, add an inelastic dimension to the almost perfectly
elastic monetary policy, implement disengagement and uncoupling from the wolves
and bears, while strengthening our legal, physical, social, trade, monetary,
and innovation/tech infrastructures”, Paul Warburg added.
“Dear Eugene, let me also add that if it was not for your
use of colors, Impressionism and Post-Impressionist art would not be the same.
The colors in the Giaour become the colors of Liberty that lead the people to a
better tomorrow. Your masterpiece Dante and Virgil in Hell reminds us of
Michelangelo and Peter Paul Rubens”, Charlemagne added.
“Yes, but it was my alliance – if I could use the term – with
Turner, Constable, and Sir Thomas Lawrence that allowed me to acquire the
freedom and suppleness my art needed, as can be seen in The Death of
Sardanapalus which, like Liberty Leading the People or Women of
Algiers in their Apartment, mixes allegory with contemporary realism,
something that is needed to inspire the heart and motivate the spirit to
action”, Delacroix added.
The time had passed without even noticing when our
ever-eavesdropping pilot announced that we will soon be landing in Tbilisi, and
also raised a question of his own: “Hello Mr. Warburg, have you done a DNA test
to see if you are related to Charlemagne? After all we never learned what
happened to his nephews, you know, the sons of his brother who took refuge with
their mother in the kingdom of Lombards before Charlemagne conquered them.”
Geoeconomic and Geopolitical Options in the Day After: A Conversation with Eugene Delacroix, Charlemagne, and Paul Moritz Warburg
Author : John E. Charalambakis
Date : December 29, 2020
The end-of-the-year special flight has been a highlight for me for the last eight years since it’s not only a learning and entertaining experience, but also has served as an inspiration for the forthcoming year. Obviously, the question had been if, due to Covid-19, the flight would even take place this year. Tuesday, November 24th was a delightful day. In that day’s mail the invitation and the ticket for the end-of-year flight was included. I boarded my flight at the Atlanta, Georgia airport and the destination was Tbilisi, Georgia. Unlike previous years when I did not know who the fellow passengers would be, this year (due to Covid-19?) we all knew who the passengers would be. Homework would have been appropriate, and Thanksgiving was approaching. Just before boarding, Delacroix whispered that due to the unfolding circumstances he wanted just to raise some questions and preferred that this be a discussion mainly among Charlemagne and Warburg given that they both played such a fundamental role in shaping the future of Europe and the United States respectively.
Then, the announcement came: “I hope that you read the transcript from last year’s flight. Should I assume then that you recall the voice from last year’s landing?”
The arguments started in the boarding area: “Paul Warburg was that announcement for you?”, Eugene Delacroix stated. “Come on Eugene, I am not the one who painted The Giaour”, Warburg stated, only to receive another question from Delacroix. “My dear Paul, the Fed is your baby. Do you recognize your baby after those 113 years? Is that the kind of elastic money that you envisioned? After all, you were the only one who dared to even pronounce that a central bank was needed in the midst of those years that were filled with panics, political upheaval, rising globalization, new technologies, and a rising world power. I repeat, do you recognize your baby?”
“My dear Eugene, do you ever wonder that the role of the visionary founders is not to answer questions, but rather question the pre-determined answers that others may have?” Warburg argued back.
We all took our seats keeping the proper distances and wearing our masks. “I have another question,” Delacroix announced, “What is left after leaders who followed the visionary founders found to be of questionable competence and who lacked visionary leadership to the point of ruining the founders’ aspirations? Charlemagne, you were a master of geopolitical strategies. Do you recognize the Europe that you envisioned?”
“We live in an era of cognitive dualism,” Charlemagne stated, “According to this, the world can be understood in two incommensurable ways: the way of objective understanding, and the way of subjective – vested interest – understanding. Spinoza proposed the same thing when he claimed that the world is one thing, seen in two distinct ways that he named thought and extension. Look at China: It covered up the facts about the virus, failed to share crucial information about it in a timely fashion, and refused to grant the international community access in order to investigate the origins of the virus. Then they provided some meaningless assistance and demanded from countries that received that assistance to praise China! Do you recall how I treated this kind of behavior? Do you recall what happened to the kingdom of Lombard? Where is the leadership nowadays that will truly penalize China for their atrocities, not just those related to the pandemic, but also those that relate to oppression, and intellectual theft? And by the way, where is the leadership that will truly shake up Putin and his atrocities? Cozying up to such assertiveness, bullying, and aggressive behavior betrays not just lack of historical understanding but also of visionary understanding as to who we are and who we want to be. It betrays the fact that we are dealing with an identity crisis.”
“It was not just Spinoza, but also Kant, who argued that the world can be understood as a web of causal connections laid out in space and time and subject to universal laws and must also be seen from the perspective of practical reason”, Delacroix stated.
“And what do all of these philosophical arguments have to do with the need to expand and exercise power for the advancement of a vision that dreams the betterment of the lands involved?”, Charlemagne asked. “Your arguments to me are commensurable since they share the same nomenclature and are embedded in similar conceptual frameworks, however from an empirical standpoint Giaour needs to fight, and someone may need to die in the great game of conquering power and in order for the world to move on to its next chapter. Look I brought with me a copy of Delacroix painting”, Charlemagne proclaimed, showing us all the copy of the famous Delacroix’s painting.
“I remember seeing the original at the Art Institute in Chicago”, Warburg said. “The Giaour actually is fighting for a cause – the unjust killing of a girl that he loved, and Hassan had her killed – and in reality, he is fighting not just Hassan but also his assistant who is trying to cut the legs of Giaour’s horse.”
“When I first read the famous poem by Lord Byron, I was moved not just by the contextual surrounding and the Romanticism of Byron, but also by the implied climax where someone takes decisive action to stop the irrationality of celebrating wickedness and penalizing innocence”, Delacroix stated, “The dramatic climax of the poem calls for a decisive battle of what I believe Charlamagne may call the battle of Lebenswelt.”
“Thank you Eugene”, Charlemagne interjected, and he continued: “A French contemporary of yours by the name of Pascal Bruckner in his book titled The Temptation of Innocence elaborates on the culture of dependency and its damaging effects on the moral fabric of society from corporate welfare to cry-babies and whining victims. The Europe that I envisioned and fought for as well as the one envisioned by the likes of Konrad Adenauer, Jean Monnet, Robert Schuman, and Alcide De Gasperi – among others – doesn’t resemble the dysfunctional ‘union’ of today’s EU. I am afraid that today’s EU is an abomination and a testament contrary to what Lebenswelt, a.k.a. Lifeworld, stands for. If we are to describe what is known as the order of political evolution, we need a unified contextual framework of interpretation that will also include the international balance of power, the flow of money and credit, and in general what is known as verstehen. Under the lenses of verstehen and Lebenswelt the concept of a geoeconomic and geopolitical determinism is obsolete, as an emerging reality surfaces, in a similar fashion as a face that emerges from a canvas or the melody from the sequence of notes.”
“And what is that reality, Charlemagne?” Delacroix inquired. “Oh, what don’t you ask Warburg about that? After all, he used the soft power of diplomacy and suasion to sway Nelson Aldrich – one of the most powerful Senators back then and a strong opponent of establishing a central bank – to the point of Aldrich himself organized in secret the Jekyll Island endeavor where the Fed’s plans start taking form and substance”, Charlamagne replied, only to add: “There is a nonsymmetrical relationship. The order of nature and consequently of the balance of power does not emerge from Lebenswelt. The latter presupposes the order of nature and the balance of power, but not vice versa.”
“Look, the geopolitical developments of World War I left President Wilson no other option but to accept my resignation from the Fed. Benjamin Strong tried to navigate the turbulent monetary waters of the latter part of the 1920s, but his death in 1928 left the Fed without a capable hand at the wheel. I criticized the Fed a few months later for weak leadership and for letting stock market speculation become its guiding principle. Moreover, the record shows that I warned them that that schizophrenic elasticity they applied resembled nothing but an orgy of unrestrained speculation which will end in an economic depression if that credit overextension continued”, Warburg reminded us.
“And what happened of Nelson Aldrich?” Delacroix asked. “Oh, the truth is that by the time that Woodrow Wilson was elected President in 1912, he had fallen out of favor with the kingmakers of the day. After all, I may have swayed him to the idea of establishing a central bank, but if it was not for the diplomacy of Harry Davison at Jekyll Island, our fallout would have stained the monetary history of the Fed and the US. Aldrich was bitter that it was Carter Glass version of the central bank legislation that Congress and the President advanced, rather than his. However, his legacy is still with us. His daughter Abby Aldrich Rockefeller established the Museum of Modern Art. His grandson Nelson Aldrich Rockefeller served both as New York governor as well as VP for the US, while his other grandson, David Aldrich Rockefeller, became the quintessential banker in the postwar era, as Chairman and CEO of Chase Manhattan.”
“If I may add, the vision of Paul Warburg was unique. The Federal Reserve should be viewed in the way that Paul envisioned it. A central bank which like the old European cathedrals becomes a center of authority and power as well as a symbol of stability and endurance, signaling – especially following Bretton Woods – that financial stability is of utmost importance, without cheapening the actual or perceived capital and asset base of credit’s elasticity”, Charlemagne added.
“Paul, it is rumored that when you arrived in the US, you characterized the US banking system as primitive and worse than the one of the Babylonian Empire. Is that true?”, Delacroix asked.
“My dear friend Eugene, take a look at your painting, The Giaour. You have forces which in the name of tradition and because of vested interests, do not allow progress to take place. This is stealing. They are stealing the future – and what a bright future it was that the US was enjoying at that time as is today – from the younger generations. The Giaour, like Charlemagne, has no other option but to fight and fight hard, not just for him but for the Europe that he was envisioning. By establishing the Carolingian empire as the continuation of the Merovingian one and by fighting the Lombards, the Saxons, the Slavs, putting down rebellions like the ones at Acquitaine, and using diplomacy whenever possible like with the Abbasids, the Pope, and Empress Irene of the East Roman/Byzantine Empire, he united and ruled over much of the European land. What was his next move? Currency standardization and some uniformity in taxation in the 8th century AD, something that the US had not achieved in the beginning of the 20th century – which was the cause of the frequent panics and depressions that the US suffered between the 1870s and the early 1900s – and the EU is still lacking (at least the taxation part)!”, Warburg stated.
“Dear Paul, I understand your emphasis on the monetary affairs. Just let me add, that Charlemagne was pivotal for Europe’s Renaissance in those Middle Ages. He became the patron for the arts and for music, but his biggest passion was education and literature. He brought literacy and education all over his empire. If it was not for Charlemagne, the amazing classical Latin texts we have today wouldn’t exist. No doubt, some of his war practices would be completely unacceptable by today’s standards, but the reality is that our lives today would be very different if it was not for Charlemagne and his decisive leadership who knew not only how wolves and bears behave, but also how to restrain them in their cages”, Delacroix added.
“Like in the beginning of the 20th century, the world nowadays faces collective challenges. Pandemics, climate change, external interference in democratic processes, illiberal elements that undermine stability and institutions, abuse of human rights, technological challenges that bring with them structural changes in terms of employment, income, and skills, all of which are collective issues that require a collective response. The best approach to these challenges can be found in the well-articulated NSC-68, the highly classified assessment of the Soviet Union just before the outbreak of the Korean War. In it we read that the US national interest can be found in the advancement of the mutual interests we share with our allies and with those who share our principles and ideals: ‘assure the integrity and vitality of our free society, which is founded on the dignity and worth of the individual.’ The NSC-68 called for the US to build a healthy international community and a world environment in which the mutual interests of the allies can flourish. It captures, like few foreign dogmas, the alliance between national purpose and international order. Freedom House has documented that the world has become less free due in large part to illiberal forces of wolves and bears whose actions are imitated by brainless leaders in other countries. Like in the times when I drafted my opinion pieces in the New York Times about decisive political leadership and the need for a central bank, the world today faces rising challenges that unless are addressed decisively, will lead to disasters. Placing the health, security, integrity, and prosperity of the free world as the centerpiece of US strategy is a way of integrating domestic, transnational, and great power challenges in a way that actually prioritizes policies while establishing statecraft anchors. We need to tackle corruption and oligarchy, protect the rule of law, add an inelastic dimension to the almost perfectly elastic monetary policy, implement disengagement and uncoupling from the wolves and bears, while strengthening our legal, physical, social, trade, monetary, and innovation/tech infrastructures”, Paul Warburg added.
“Dear Eugene, let me also add that if it was not for your use of colors, Impressionism and Post-Impressionist art would not be the same. The colors in the Giaour become the colors of Liberty that lead the people to a better tomorrow. Your masterpiece Dante and Virgil in Hell reminds us of Michelangelo and Peter Paul Rubens”, Charlemagne added.
“Yes, but it was my alliance – if I could use the term – with Turner, Constable, and Sir Thomas Lawrence that allowed me to acquire the freedom and suppleness my art needed, as can be seen in The Death of Sardanapalus which, like Liberty Leading the People or Women of Algiers in their Apartment, mixes allegory with contemporary realism, something that is needed to inspire the heart and motivate the spirit to action”, Delacroix added.
The time had passed without even noticing when our ever-eavesdropping pilot announced that we will soon be landing in Tbilisi, and also raised a question of his own: “Hello Mr. Warburg, have you done a DNA test to see if you are related to Charlemagne? After all we never learned what happened to his nephews, you know, the sons of his brother who took refuge with their mother in the kingdom of Lombards before Charlemagne conquered them.”
Happy New Year!