The crisis peaking in Britain is of a Caribbean-sea-pirate type: long time no trophies, while lifestyle has to be maintained. Neoliberal policies have undermined the toughest folk on earth, hard-working, prudent, obedient, stiff-upper-lipped red-faced Brits, the people who managed India, burned down the White House and withstood Hitler. Their backbone – Yorkshire miners and Sheffield steel workers – was broken by their Golders Green grocer-at-large, a.k.a. the Iron Lady. She folded down the industries, and turned the Isles into a Tortuga-like pirate paradise, a place for financiers to relax, unwind and plan their raids.

England has become the most godless society in the world. Buses with the logo “There is no God” cruise London. In the Globe theatre, Mysteries are staged, purported to be revivals of Tony Harrison’s 1977 production based on medieval British plays but, in direct opposition to the previous production and to the old original, it is overtly anti-Christian. Instead of the Jewish high priest and his coterie, the evil guys are … Christian priests in full dress. The Holy Virgin is presented as a young coloured tart in a short dress. Not a single voice of protest has sounded in England. But you can be sure that if director Deborah Bruce had put rabbis back into the place of the priests, we’d have never heard the end of it.

England is home to al Fayed and Abramovich and to millions of immigrants imported to service them. The English provided financial services, ran security companies, charged a lot for education. The country went upmarket, and lost its productive base, just as the tulip-adoring Dutch did in 17th century. Now, if they do not rob, they have nothing to live off of. They need to fleece foreigners just to make ends meet.

Now they are being hit by a Crisis of Confidence. Not only do ordinary people feel they have been cheated once too many, but the powerful and rich outsiders share the feeling, which is particularly strong in Russia and other post-Soviet states, in the oil-producing states, in countries with national industries. This feeling has been translated into action:

-        Hugo Chavez has demanded his physical gold back;

-        Vladimir Putin has declared his candidacy for the post of President;

-        Russian Finance Minister Alexei Kudrin, the main proponent of Russian Sovereign Wealth Fund, has been fired.

-        Russia has decided to dramatically increase military spending; this is fallout from the Libya War.

The fate of Qaddafi hovers like worrying Hamlet’s father’s spirit over many presidential and managerial desks. The Libyan leader amassed quite a fortune, some for himself and his family, some for his nation, placed it in various banks, funds and shelters, and it turns out that instead of greenbacks he could have amassed so many beautiful reddish maple leaves with greater satisfaction and safety. With a wave of their hands, the US and its allies froze the assets and later stole them. Some assets were given to arbitrarily chosen Libyans, a.k.a. “Benghazi rebels”, some were used to pay for the dog food that was airlifted to Tripoli to feed people made destitute by the NATO strikes.

This was the biggest robbery of a sovereign state ever, and the biggest robbery of private fortunes as well. And it taught many nasty and greedy people a lesson in Gospel truth: Do not lay up for yourselves treasures on earth, where thieves break in and steal. These people thought that they could find a safe refuge from despotic rulers, rebellious masses and ordinary robbers by placing their wealth in the safekeeping of the Swiss gnomes or some other civilised environment. Now they’ve learned that electronic money in Cayman Islands is no safer than the folded 20-dollar bills under your mattress. What a shock!

Why does this cause a crisis? The corrupt officials and wealthy tycoons of the outer world, that is, outside of the US and Western Europe, are the powerful secret weapon of capitalism. When capitalism was on the verge of collapse, this doomsday weapon was used, the tables were turned upon socialism, and the USSR collapsed. Its wealth was stolen by these men and women, and delivered to the Western banks, to power another twenty years of luxury for bankers.

Since then, the officials and tycoons have functioned like bees, busily collecting the sweet sweat of the ordinary citizens’ brow. They siphon their takings into overseas banks - beehives, thinking it is safe. The West has encouraged them to think this way. They have spread rumours that Putin and Lukashenko have put away billions into Western banks for a rainy day. Their media have told stories of oligarchs who were able to escape to their riches when they fell from grace. Many silly and corrupt officials and greedy businessmen believed it and kept collecting honey.

This honey collection is the best-guarded secret of capitalist superiority. It is based on human weakness. Drug mafias do the same: they produce and sell drugs and extract money to keep in the banks. This works instead of savings, and even better. When economists bewail low rate of savings in the US, they forget to count savings executed via drug cartels. This was one of the reasons of the US ten years stay in Afghanistan: the drugs fuel banking system.

Privatisation is another great tool: the privatised properties feed so many derivatives produced by the bankers. The privatisers need the banks, and to the banks they take their profits. In the post-soviet space, the officials charge their commission in the form of bribes, and these moneys also go to the banks.

Thus, the corrupt officials, businessmen and drug barons perform an important function for the world financial system: the Western bankers did not have to go to remote Russian town or Indian village to squeeze a few roubles or rupees from a worker. The bees bring honey to the beehive.

With the robbery of Libya, even the silliest and most corrupt official in Russia or Kazakhstan has discovered what bees painfully learn, too. When beehives are full of honey, the beekeeper smokes the bees away and collects the product. The bees may have planned to use it for their retirement or for home improvement, but they sadly discover that humans have other plans for their honey. The first wave of Crisis 2008 was the beginning of a smoking-out operation; the Libya campaign is the second stage showing what can be done to crisis-resistant bees.

Given the total information superiority of the Masters of Discourse, such robbery can be justified at any time. Russian wealthy men suspected they couldn’t just salt away a billon and run to Bahamas. I have heard about the men who tried: when they came to collect, they were told that their visa had expired, that they would have to produce proof it was honestly earned, or that it was gone for some good reason.

Two countries catered to the runaways: Britain and Israel. The Jewish billionaires who run to Israel were duly fleeced by the Jewish state. Nevzlin had to contribute half of his wealth to some doubtful Israeli enterprises; Gaydamak was ruined almost to the point of bankruptcy. Gusinsky was run from jail to jail and was ripped off by established Israeli families. Britain provides refuge for the runaway oligarchs and shields them from criminal investigation. It fleeces them well: the fabulous billions of Boris Berezovsky were shrunk down to a few million. But the rest still hoped that they would be allowed to keep some of their illegal gains in the comfort of the West if they abide by Washington’s orders. Now this hope, too, is fading away.

The bees do not deliver honey anymore. There are more ways of getting honey. The Western banks and states promoted their loans and they allowed the recipient politicians to steal the loans, as Perkins has explained. But now this method is less popular, as the odds of successfully stashing stolen goods have gone down considerably. Much hated in the West Vladimir Putin, the past and future president of Russia, paid off all Russia’s debts at first occasion, while another hated “dictator”, Lukashenko, also refused IMF loans.

Then, there are the sovereign wealth funds. The oil-producing countries usually keep a big part of their earnings in the US and the UK. These funds are held hostage to the good behaviour of the producer. Iran lost its funds after embracing an Islamic regime. Some Russians consider it a form of tribute their country pays to their vanquisher in the Cold War. They even connect Breivik’s attack to Norway’s plan to repatriate its SWF, a plan that is anathema to the US.

There is no practical reason for Russia to keep its money invested in US funds for very low interest while Russian industries pay high interest on such borrowed money. And as we know, these funds may be frozen or seized any moment. They can also disappear as a result of imprudent investment as once happened to Swedish and Norwegian pension funds.

For 11 years, Alexei Kudrin was finance minister of the Russian Federation. He was the most vocal and influential proponent of the US-held funds among Russian officials, and he was duly applauded as a prudent and excellent financier. A few days ago he expressed his dissatisfaction with President Medvedev’s plan to increase military spending dramatically. He was sacked right away. This was quite a shock for the man who considered himself a cut above; it was a shock for his supporters.

The Wikileaks cables reveal that Kudrin was considered by the US Embassy the “most transparent and realistic senior GOR interlocutor on economic issues. He has also been the most forward-leaning in seeking economic cooperation with the U.S. and other western countries”. Among Russian officials, some find him "irritating" and accuse him of treason, say the cables. Kudrin supported a soft line in foreign policy and opposed the line represented by Putin’s Munich speech. At the peak of the 2008 crisis, he gave money to the banks and completely stopped government spending for six months.

Incidentally, Kudrin was never charged with huge fraud and theft of so-called Kuwait and Algeria Debts Affairs, though his deputy has spent a few months in jail. This neo-liberal, monetarist, pro-western figure at the key position was lost to the West within a few weeks of the fall of Tripoli. And that bodes ill for the western beneficiaries of the Russian SWF, whether it is repatriated or allowed to wither.

This is the reason for the crisis. Even the bad guys have lost confidence in the system. The collapse of the USSR postponed the crisis that was long overdue. So much wealth was taken out of the dismembered chunk of the USSR! The successor-countries were robbed, and their robbed goods used to subsidise a better life of the West. The bankers and financiers got used to living well while controlling the streams of cash and assets. But they forgot an important rule of beekeepers: leave some honey in the hive, otherwise the bees will not bring more product. They ripped off too much, from too many people, and now the people have lost whatever confidence they had in the system.

[Edited by Ken Freeland; Courtesy shamireaders]

This is the text of the speech on Economics delivered at the Rhodes Forum on October 9, 2011