Posted May 9, 2013 by Martin Armstrong
QUESTION: You are right that economics drives the politics. Is that a dominant factor of the modern economy or has it always been that way?
ANSWER: It has always been that way both before the fall of Rome and afterwards. Take the South Sea Bubble in 1720. The Whigs in England were initially a political faction that evolved into a political party. They opposed the rival Tories from the 1680s to the 1850s. The Whigs were against constitutional monarchism and opposed absolute rule. It was the Whigs who played a central role in the Glorious Revolution of 1688, and were lifelong enemies of the Stuart kings who were Roman Catholic. The Whigs came really to power in 1715. However, in 1721, the economic disaster of the South Sea Bubble in 1720 enabled the Whigs under Sir Robert Walpole to rise to the pinnacle of governmental power. Walpole and his Whig Party were the dominant force in British politics. The power of the Whigs was so great that the Tories would not come to hold power again for about half-century later. The Whigs remained dominant in British politics until King George III came to the throne in 1760 allowing the Tories to return to power bringing an end to the “Whig Supremacy” (1721–60)
It always seems to be a major financial crisis that sets the stage for political change. Therefore, we are likely to see major political chance arriving by 2016. It is economics that will cause it.