The Penalty for Piracy

 In his 1932 essay, "The Modern Midas," Bertrand Russell remarks that the policy of the Western Allies toward defeated Germany, in the aftermath of World World I, was "so absurd that it is difficult to believe that the Governments were composed of grown-up men not in lunatic asylums." 

As he proceeds to lay out, the victorious Allies of the Entente swiftly decided, after the war, that they wanted to impose a ruinous indemnity on the defeated Germans in order to punish them for their role in the war. Thus, they burdened their erstwhile enemy with a monstrous debt that had to somehow be paid. 

The debt was larger by far than any amount that Germany could furnish in the form of gold reserves, however. And so—inevitably—Germany had to pay in the form of goods. 

But no sooner did Germany start to pay in this form, than the Allies realized they had a new problem on their hands, of their own creation. They did not actually want an influx of German goods—because these would displace their own domestic industries. Their own producers suddenly started clamoring for protection from cheap Germany goods. 

Much the same policy insanity is unfolding before our eyes right now in Venezuela. 

The U.S. government first undertook an illegal war of aggression to kidnap the country's sitting president. This was defended—not with the usual sonorous rhetoric of democracy and humanitarianism—but with a crass admission on the part of Trump that he is doing it to steal their oil. 

American business interests clapped their hands at the news with maniac glee. In the two trading days since Trump's invasion so far, the stock market has surged to record highs—with investors cheerleading U.S. energy companies in particular, on the theory that they will profit from Trump's new exercise in robbery and extortion. 

But today, they have suddenly had a rude awakening (or "crude awakening," if you will). Trump announced that some of that promised oil that he is going to extract from the Venezuelan government is already on its way. 

Investors and fossil fuel companies suddenly realized—wait a minute, this is actually terrible for us. Crude oil prices have already been sagging all year. Energy stock valuations—which are mostly tied to oil commodity prices—will probably take a beating from fresh supplies being dumped on the market. 

As the Wall Street Journal's market newsletter puts it this morning: "Oil prices are down again overnight [....] The latest nugget of potentially negative news was President Trump's claim that the country would send America billions of dollars worth of crude."

It's post-WWI Germany all over again. Our klepto-elites were perfectly happy to imagine that they would profit from forcing a supine foreign government to give them free stuff. 

But as soon as that free stuff starts to arrive—they suddenly don't want it. It produces a glut on the market, which will lower the prices they can charge. It's actually terrible for business. 

It's hard to imagine a more richly-deserved punishment than for a country that proposed to profit off of organized thievery and extortion to suddenly experience a market crash, all because we actually miscounted on the effects of introducing so many stolen goods. 

You reap as you sow in this world. Invading a country and then running a protection racket puts a lot of bad karma into the world—and now, we are already facing the effects. 

"There is justice here below," as Thomas Carlyle once wrote; "forget that, thou hast forgotten all."