Bernard Lietaer - The Future of Money - Full Book

violence usually result in a need to focus blame to situations closer to home.

For example, one cannot distinguish whether the campaign slogan 'These immigrants are the cause of your job problems' comes from Pat Buchanan in the US, Zhirinofski in Russia, Gianfredo Fini in Italy, or Jean Marie Le Pen in France. All have recently started a political movement, and already attract between 10 and 20% of the voters.

Finally, as unemployment and violence increases, these more extremist parties can be expected to grow.

On election night 1994 in Italy, the neo-fascist leader Gianfredo Fini was greeted by young people (mostly unemployed) with chants of 'Duce! Duce!' while his party won an unexpected 13.5% of the national votes. Commentators were amazed as to why young people - too young to have known Mussolini or experience nostalgia for his time - somehow spontaneously reinvented the same values and slogans used by their grandparents. It is, in fact, predictable.

As more extremist parties play a bigger role in our political systems, it gets harder and harder to 'hold the centre'. Positions become more polarised across the political spectrum and maintaining a consensus becomes almost impossible. This can be fertile ground for extreme nationalism, all the way to 'ethnic cleansing' such as what happened in Yugoslavia in the 1990s after the IMF imposed economic restructuring, or in Indonesia with killings of various minorities after the collapse of the rupiah in 1998-99. Furthermore, these problems can even spread when populations flee the mayhem to take refuge in neighbouring countries, and create new unemployment problems there.

Imagine what all that does to an investment climate.

Feedback to increased unemployment