The Midas Touch

A friend of mine sent this to me. It is a modern morality play, if the term “modern morals” is not itself a contradiction in terms.

PBS - Gold Futures - Rosia Montana from Lee Wilkins on Vimeo.

It is 54 minutes long. But if you haven't time to watch the film, let me summarize it for you.

Very simply, there is a gold mine in Rosia Montana, a village in Romania. This is not news; there has always been a gold mine Rosia Montana, and one can still explore the tunnels dug by the Romans, from whom Romania is named. Gold is not Rosia Monana's only form of wealth. The mountain also gives silver and copper, but even that is not the end of it. It is a place of stunning beauty, as you may see in the film, but it also has fertile fields, verdant pastures, and rivers brimming with fish. There is no end of the natural wealth and there ought to be no end of natural prosperity and happiness.

But there is not. There is, in fact, poverty. None of this is news. What is new is that a Canadian company wants to mine in Rosia Montana. But “mine” is perhaps not the right word. Rather, they want to destroy the mountain, and in destroying the mountain they must destroy the village. They want to replace the village with a lake of cyanide to reduce a ton of rock to a grain of gold. In only 17 years, it is their plan to reduce the mountain of gold to a heap of slag. This is not to say that the Canadians are being unfair; they are more than willing to pay the villagers. Some have accepted, others are resisting. And they promise to turn the slag into a garden.

Now, it is not my place to tell the villagers what they should do. It is neither my village nor my country, and these are decisions which only the people of Rosia Montana and the government of Romania can make. But whether the villagers decide to stay or go, the decision they make is a sign and symbol of something much wider, and part of something much greater. To be specific, it is part of a great joke about capitalism. But it is a joke that no one seems to get. So here is the punchline: Rosia Montana is a place of great natural wealth, BUT THERE IS NO INCOME (as one of the villagers in the film put it). Now, here is a place that has received every gift that a loving God could bestow on any piece of ground: mountains full of minerals, valleys full of farms, pastures full of animals, rivers full of fish. It is a place that could—and has—supported tens of thousands in peace and prosperity, but under capitalism, it cannot provide work for a thousand. An area that should be prosperous and happy becomes an area of forced idleness. There is wealth, real wealth, but there are no jobs, and people, young people especially—that is, the future—feel they must leave. And if they leave with a few Euros provided by the Canadians, who can blame them?

But still there is the joke. The joke is that while the villagers have real wealth, the Canadians have financial wealth, and under capitalism, the latter is more important than the former. The bits of paper with the € printed on them are heavier than gold; the sterile bankers notes more fecund than fertile fields. We may laugh at the joke; we may even laugh at the Romanians, but we are caught in the same joke. In this country, no less than in Romania, men who make naught but bits of paper (called “financial derivatives”) have brought a great country to its knees. These men contributed not so much as a grain of wheat to the commonwealth, but from our common wealth we have paid them 100's of billions of dollars, and will pay them more still as a reward for their failures. At least the Canadians will pay something for their destruction of the village; we must pay for the rope they will use to hang us, and pay a monopoly price at that.

Under capitalism, the natural order of things is reversed. The money that should serve as a convenience for the trade of real things becomes the master of real things—and real people. The natural connection between wealth and work is broken, and those who hold real wealth got with real work become the servants of those with financial wealth who do no work.

The situation is Rosia Montana is repeated all over the world, wherever there is wealth that can be exploited. The obvious example is oil. Oil also holds the promise of easy money, of wealth without work, but the usual result for a nation rich in oil is neither wealth nor work. Or rather, the wealth is confined to a few, usually foreigners and their local political servants, while the rest have no work and hence no wealth. A bit of a dole is all they can expect. It may be a generous dole, as it used to be in Saudi Arabia; sometimes it is a pittance; more often it is nothing. Only a few places, such as Norway, have treated such wealth as the common property of the nation and attempted to use it to expand the real wealth of the nation, as token against the day when the oil runs out.

Gold comes out of the ground very slowly. That is as it should be. It is a resource for the ages, and not just for one generation, and certainly not for a generation of foreigners. To each generation, the mountain gives a few flakes, so that they might make merry at the end of the day, or bring the wife and children some small gifts. And the children will grow up to bring a gift to their wives. But the Canadians want to compress 2,000 years of mining into 17 years, to take all the wealth of the red mountains in one fell swoop, and leave behind a desert. True, they say they will leave behind a garden, and they may actually mean that. But once all the battles are over, once the gold is gone, there will be little reason to fulfill the promises. Soon after the mine is opened and the mountain begins to shrink, the Canadian director will call the Romanian manager and tell him, “We made €100 million, last year; we need to make €120 this year. Cut the budget.” And the next year they will say 140, and then 200. What budget do you think they will cut?

They made the same promises in Baia Mare, in the North of Romania. But in the year 2000, the cyanide lake broke, and wound its way into the valley and the river Tisza and the Danube, rendering the valley sterile and dangerous and the fish poisoned. It was the biggest environmental disaster in Europe since Chernobyl. They cannot farm or fish the area for 20 years. Some garden. “Ah, but here it will be different. Our lake will never break; we will break the mountain, but it will not break our lake; we are stronger than nature.” Maybe, but the cyanide must go somewhere, some day.

This whole process is called “investment,” which means that nations like Romania with real wealth must go hat in hand to countries with financial wealth. They must beg in Bruxelles for permission to eat their own bread, for the bits of paper without which (apparently) wheat will not grow and fish will not bite. As it is, the farmers and factories cannot compete with the system of organized subsidies and exploitation known as “globalization,” a system meant to suck the life out of poor countries for the benefit of (financially) rich ones. If things proceed as the usually do in these cases, it will be impossible for the government of Romania to resist the pressure to sell the real wealth of Romania for the “investment” wealth of the Canadians. Yet there is something else that may stop the project: the death of a system that demands such projects.

There are people in Romania who are old enough to have witnessed the death of empires; they have see the passing of the kingdom, of the fascists, of the communists, and soon, I am convinced, the passing of the capitalists; that system, like the others, cannot survive its own “success”; the bits of paper aren't real wealth, and the people who have real wealth got with real work will tire of working for others and demand to work for themselves.

It should be a trivial matter to organize the wealth of Romania into a real economic system. It should not be much of problem to make fertile fields prosperous, to make good and useful things for their neighbors, to trade with the other cities of Romania and with the neighboring countries, all of whom need some of what Romania has, just as Romania can use something of their surplus. If bits of paper are all that stand in the way, then such paper can be printed in Bucharest, backed by the real wealth of the nation. It takes only the will to do so. If small nations can realize their own wealth, no one can stop them; if not, they must work for Canadians, for such work as can be found, and there won't be much of it. For the rest, they must go to Spain or Germany; they must enrich another country and forget their own language.

The other joke about such projects is that they are not good investments. They are too capital intensive, and depend on gold staying at or above a certain price. But ten years ago, the price was only $250/oz., and if the current troubles pass without incident, it may be that again, in which case the mine would be unprofitable. But if this really is the passing of an era, the fall of an empire, then the price might go to $5,000/oz. In that case, Romania will need its gold, and whoever rules Romania will will not let it out, whatever promises they have made to the Canadians. The Canadians have no army to enforce their claims, and the rest of Europe will have concerns of its own. The Canadians will lose their investment, just as the people of Rosia Montana lost their village.

I have called capitalism a great joke, but it is also a grand myth, namely the Myth of Midas, he whose touch turned everything to gold. Capitalism also turns all it touches into gold, but a strange gold that, as for the King, can not feed itself, and which turns every beloved thing, everything of real value, into something cold and heartless and still. Nobody knows what will happen, but it would be dangerous to think that what worked yesterday will work in the future. But it is a myth that these things ever worked for places like Romania, and a greater myth to think that Romania needs them to work. She has both the gold and the food to feed herself, and feed on a grand scale.