In October 1935, Italian troops launched a massive onslaught against the forces of Abyssinia, today known as Ethiopia. The Italian fascist regime of Benito Mussolini wanted to establish an ‘African empire’, and acquire ‘great power’ status for Italy in competition with the other imperialist powers. Britain, France, Germany and other countries had already brutally conquered vasts portions of the African continent, and Mussolini was eager to ‘catch up’ with the other imperialist states in this macabre contest. Italy already occupied Italian Somaliland, and launched its invasion of Abyssinia from that territory.

The conquest of Abyssinia was noted for its savagery, with thousands of Ethiopians killed, herded into concentration camps where they died of disease and starvation. Chemical weapons were used in that conflict, drawing heavy criticism from the international community. While the Italian government tried to keep its use of poison gas a secret, groups such as the Red Cross exposed its deployment, which the Mussolini government and his generals authorised.

One of the commanders in this Second Italo-Abyssinian war was General Rudolfo Graziani. He had made a name for himself back in the 1920s, when Italian forces used brutal force to attack and suppress the resistance put up by Libyans in that north African country. The Italians were still unable to completely defeat the Libyan resistance to foreign rule since they attempted to capture that country from the Ottoman Turkish empire in 1911. Graziani was the commander of Italian forces in Libya, and he suppressed popular revolts against Italian rule with indiscriminate bombing and pacification campaigns – what today would be euphemistically called ‘counterinsurgency warfare.’ Graziani was responsible for establishing concentration and labour camps, and he eventually had the leader of the Libyan insurgency, Omar al-Mukhtar, publicly hanged. For his efforts, the Libyans came to call him the Butcher of Fezzan, after the region of Libya devastated by Graziani’s murderous campaign. Having gained experience in subjugating the rebellious populations of Cyrenaica and Tripolitana (today part of Libya), he applied his considerable skills in mass murder to the population of Ethiopia. Ordering the use of poison gas, he claimed that Mussolini would have Ethiopia, with or without the Ethiopians.

The Italian generals laid waste to entire villages, resettling Italian immigrants in the conquered territories, and dispossessing the indigenous population. In Libya and Ethiopia, Graziani used weapons of mass destruction, including the authorisation of an aerial campaign of terror. He deliberately poisoned crucial oases and water supplies, and executed thousands of civilians in a campaign of mass reprisals against the civilian populations.

After having a free hand to commit genocidal crimes in Africa, Italian forces were eventually pushed out of North Africa. Graziani returned to Italy to become the defence minister of the short-lived Republic of Salo, the rump state commanded by Mussolini in northern Italy after the Allies occupied the south of the country in 1943. The Republic of Salo’s main achievement was to act as a puppet force for the Germans, and Graziani, along with the overall German commander Albert Kesselring, used the same terror tactics against the Italian anti-fascist partisans. Forced to surrender in 1945 with the defeat of the Axis powers, Graziani was convicted of war crimes and given a 19-year sentence. He was released after only serving two years, thanks to high-level sympathisers in the post-war Italian government, and he died in 1955.

How does this history tie in with contemporary events? In August this year, a mausoleum and memorial park were opened to honour the memory of Rudolfo Graziani in a village east of Rome. As the BBC reported, the mayor of the town of Affile, Ercole Viri, declared to the gathering of 100 people that the memorial was of national importance. Viri even donated a bust of Graziani for the memorial, which is strongly reminiscent of the fascist style of architecture that dominated Italy during Mussolini’s rule. A representative of the Vatican consecrated the mausoleum, and members of the rightwing People of Freedom (PDL) party, were in attendance with appropriately somber declarations and Italian flags. The PDL is the party of the former premier of Italy, Silvio Berlusconi.

The memorial and accompanying ceremony did indeed attract heavy criticism from various political quarters and historians. A councillor in Affile criticised the memorial, underlining that Graziani was indeed a convicted war criminal and the Butcher of Ethiopia. But this ceremony raises disturbing questions about the rehabilitation of fascist war criminals, at first quite underhanded and confined to the Baltic states, but now occurring more openly in Europe. The political row over the monument, while heartening to see, underscores the need to confront the clandestine restoration of fascist war criminals, and the underlying prejudices this brings to the surface. Under Berlusconi’s premiership, right-wing forces escalated the whitewashing of fascist crimes, and promoted the cult of honouring the war criminals who committed them.

As Europe is going through the worst economic crisis since the Great Depression of the 1930s, the financial aristocracy is utilising the social prejudices and national chauvinism to divert the anger of the working class onto the more vulnerable sections of the population, namely immigrants and refugees. Hate crimes and Islamophobic attacks are rising in America and Europe, dividing working class people and encouraging a political climate of surveillance and mutual suspicion. The Italian ruling class is lining up its own austerity programme, corresponding to the package of socially reactionary attacks on the working class and its living standards currently being applied to Greece, Spain, Portugal and other economically struggling capitalist economies. Deep cuts to wages, living standards, health care and education are already in place in Europe, and will be continued in Italy, all aimed at eliminating the social gains made by working people since the end of World War Two. But there is one industry that is doing well in these economically stressful times – armaments sales. The United States registered world-record armaments sales of 66.3 billion dollars in 2011, according to the Congress Research Service. The main customer of US arms was its dependable client, the royalist dictatorship of Saudi Arabia.

Not only must we remember that the Italian bourgeoisie has consistently camouflaged the crimes of the Italian fascist state, we must also remember that they have had strong enablers. After the end of World War Two, the Italian Communist Party had a massive electoral following, and was poised to win the 1948 elections through the ballot box. Powerful financial forces, namely the US ruling class and its proxies in Europe, mobilised their considerable financial resources to undermine the 1948 Italian elections, running a massive scare campaign that thwarted the democratic aspirations of the Italian people. Politicians were bought off, and the leader of the Christian Democrat Party, Alcide de Gasperi, made several trips to Washington to make sure he knew on which side his bread was buttered. After all, the Cold War was on, and Europe had to made secure for imperialist imperatives.

Those who had been second-tier officials in the fascist government were quietly coopted by the US and its servants, the CIA, into subverting a democratic election with scare-mongering, stereotypes and propagandistic images of the ‘good-old American way of life’ – that is, capitalism. The Italian ruling elite has certainly had powerful benefactors, and the 1948 elections went the way that the Americans wanted. The demands of the Italian population were irrelevant. Hollywood ‘razzmatazz’, in the words of William Blum, was activated in the service of capitalist interests.

Godzilla is a Japanese-originated monster character, whose main features are its incredible bulk, its melange of gorilla-like and reptilian aspects, its gargantuan appetite, and its monumentally destructive capacity. Capable of feats of enormous strength, it can defeat other mega-monsters, emitting radiation similar to that of nuclear fission thus poisoning its environs, and terrorises its enemies while leaving a path of death and destruction in its wake. It is normally represented as a towering, dinosaur-like creature, exhibiting the features of terrestrial vertebrates, and also undulating its gigantic tail similar to a crocodile. Godzilla occupies a similar place in Japanese film culture as King Kong does in Western societies; an oversized monster driven by rapacious appetites, hostility to human society and capable of causing catastrophic destruction.

Godzilla (and King Kong) occupy a niche place in the cultural world, however, there is an equivalent in the modern world. Bankzilla, the enormous, rapacious, socially destructive corporation embodied by the large banks and financial institutions, are raking in super profits while the rest of humanity, the 99 percent, are struggling with declining incomes, reduced job prospects, foreclosures and financial strain. The US Socialist Worker reported that “To this day, Bankzilla continues to terrorize whole communities of homeowners while feasting on massive profits.” As Eric Ruder documented in this article, while the economic crisis hit the global community back in 2008-09, the large financial corporations insulated themselves from the worst of the financial disaster they had created. The cost of the ‘recovery’ would be shifted onto the working people. The rate of foreclosures increased, with tent cities arising in major US cities due to the unprecedented hike in mortgage defaults. But the owners of the Wall Street corporations were not complaining; they still managed to obtain super-profits while enjoying essentials such as a personal, nine-hole golf course. This was on top of the 700 billion dollar Troubled Asset Relief Programme (TARP) passed by the Democrats and Republicans in the US Congress.

What is under-reported is that the massive, taxpayer funded bailout for the ‘too-big-to-fail’ banks has not actually resulted in an economic recovery. If anything, lending by the big banks has actually decreased for the first three months of 2012. The CNN Finance Fortune article cited above elaborates that

“When banks cut their lending, it makes it harder for small businesses to get money to expand. But a drop in lending could also signal a drop in demand for loans, meaning businesses and individual don’t want to borrow because they are worried about the economy.”

A combined amount of 24 billion dollars was cut from lending by J P Morgan Chase, Wells Fargo, Bank of America and Citigroup in the first quarter of 2012. These are not exactly small corner stores, but enormous pillars of the finance-banking sector. The largest drops in lending were recorded in credit card loans (consumer credit) and home equity lines of credit.

The Obama administration, since coming to power in the wake of the November 2008 elections, has acted as a protector and abetter of the financial aristocracy. Not only has the previous criminality of the financial institutions not abated, but more scandals are coming to light. The Libor scandal, which involves rigging the London Interbank Exchange Rate to a level advantageous for the large banking institutions, was exposed only recently even though its antecedents date back four years. A massive case of insider trading, the Libor scandal has exposed the rotting criminality of the capitalist financial architecture.

A bank lends and borrows money – that is understood by everyone. The acts of borrowing and lending are accompanied by interest payments. Borrowing money means that you pay interest on the loan repayment, placing savings in a bank means the saver is paid interest on those savings. How are the interest rates determined? The banking experts, given their expertise and knowledge of the world of finance, set the interest rates based on the confidence that their loans will be repaid. The cumulative knowledge of thousands of banker lenders and borrowers are analysed, supply and demand for money is assessed, and the requisite interest rate is established. Libor, the London Interbank Exchange Rate, is the average rate of interest established by the major banks in England when borrowing from other banks. The Libor serves as a benchmark for mortgages, business loans, personal loans, derivatives, credit default swaps, the interest rate on student loans – in short, it provides a benchmark for trillions of dollars worth of loans and finance.

It turns out that the Libor was being rigged, manipulated by the major financial institutions. Starting with Barclays bank, whose top executives resigned and paid out a fine to American and British regulators, the depth of financial criminality has been steadily coming to light. Barclays chief executives defended themselves by stating that they had done nothing wrong – because everybody was doing the same thing. The Euribor, the Brussels-based counterpart of Libor, is also being investigated for manipulation. As Petrino DiLeo explains in the Socialist Worker:

More than a dozen other banks are also being investigated for similar manipulation, including Bank of America, Citigroup, Royal Bank of Scotland Group and UBS. More fines, lawsuits and resignations may be in the offing. And there’s mounting evidence that government officials and central bankers were in on the scam, too. As the facts continue to come out, “Liborgate” may end up being the mother of all banking scandals.

The magazine Dollars and Sense noted, when the US economy was stumbling towards the largest crisis since the great depression of the 1930s, the US administration rushed to provide bailout money through the TARP mechanism. The large privately-owned banks and financial institutions were deemed ‘too-big-to-fail’. Currently, numerous state municipalities and local government authorities are facing a financial crisis because they invested in interest rate swaps. While normally borrowing on the basis of the floating exchange rate, the municipalities were offered a seemingly advantageous deal by the Wall Street giants – interest rate swaps. State authorities – responsible for public services and public salaries, pegged their floating-rate debt to a fixed interest rate debt agreed to by the banks. The participant with the higher interest rate had to pay the difference to their partner. While a fixed interest rate seemed like a positive development, the interest rate was set by the major banks, which was established by manipulated mechanisms, like Libor.

The municipalities have been saddled with a fixed interest rate repayment, while the floating interest rates declined in the wake of the 2008 financial crisis. The public institutions were now required to pay billions in interest repayments to the large banks, while cutting back public services and employment. These interest rate swaps are a widely used derivative device; mechanisms that were at the heart of the original financial meltdown.

The Libor scandal, growing out of the financial catastrophe of 2008, has its historic origins in an earlier measure implemented by the major imperialist powers – bank deregulation. This was the theory that opening up banks and financial institutions to ‘competition’ would lead to greater choice for the individual consumer, loans with cheaper interest rates, and a healthier economic ‘trickle down’ of wealth. Since the mid-1980s, bank deregulation has lead to the monopolisation of the banking and finance sector by a tiny, financial aristocracy, and a transfer of wealth from the working class, the 99 percent, to the richest one percent. The chaos and financial ruin exemplified by Libor arises from an unregulated system, where actually the largest privately-owned corporations end up setting the rules by themselves. The British Bankers’ Association (BBA), the main privately-controlled banking trade and lobby group, was headed by Marcus Agius. Agius was also one of the chief executives of Barclays, and heavily implicated in the Libor manipulation scandal. Agius has resigned his position, but the incestuous, nepotistic relationship between the BBA and the banking-finance sector continues.

The Guardian newspaper noted that in the 1960s and 1970s, a range of strict regulations, capital and liquidity ratios, and limits on excessive mortgage lending, were applied to the banking sector. Since the mid-1980s, as the capitalist classes around the world went on an offensive, attacking the living standards, the job provisions, health and safety regulations that provided a measure of security for workers, bank regulations were also sacrificed on the altar of the ‘free-market’ dogma. The Libor scandal, while correctly called the ‘crime of the century’, represents more than that.

The financial scandals engulfing the financial elite of Europe and America are an indication that we are living in the era of the ‘anti-1989’. In the wake of the collapse of the former socialist countries of Eastern Europe, the capitalist elites went on a triumphalist frenzy of gloating – the socialist project seemed to have been swept away, and not just the bureaucratically deformed version of it that had obtained prior to 1989 in Eastern Europe. Francis Fukuyama, a professor of political science, enunciated the feeble ‘end-of-history’ thesis, arguing that ‘free-market’ capitalism had proven its superiority over all challenges, and ruling over societies that consented to adopt the capitalist system. Fukuyama took a Hegelian turn and conceived of the capitalist system as the final end-point, the omnipotent state to which we all aspire, much like Hegel in the nineteenth century regarded the monarchist Prussian state.

However, we are now living in the Anti-1989 era. Another nineteenth century thinker, examining the laws of motion of the capitalist system, found that the insoluble contradictions of that system would lead to its inevitable breakdown. Appropriating the same philosophical tools that Hegel used (and Fukuyama alleged borrowed), this thinker elaborated how the capitalist system works, and how it will eventually rot from within. While working class revolution is not on the immediate agenda, the current period is witnessing the re-awakening of the working class as a serious political force. The 1989 consensus that liberal capitalism is the end point of civilisation, has been reduced to ashes.

With the capitalist financial architecture crumbling, the working class, consigned to the role of passive observers in 1989, has re-emerged as a serious political force again. The 99 percent, as expressed by the Occupy Wall Street, the emergence of the Syriza socialist formation in Greece, and the eruption of popular protest throughout the Arab world, indicates that working people can no longer be sidelined by the political and economic system. Across Europe, with the mass protests in Spain, Greece and other countries, the capitalist system is declining starting with its economic periphery in Eastern Europe. Make no mistake, the current economic catastrophe began in the United States and Britain, the countries where neoliberal ‘free-market’ orthodoxy was applied with the strictest attention. Warnings about the dire situation ahead are emanating not just from sources routinely dismissed by the corporate-controlled media as the ‘lunatic fringe’ Left. Heavyweight economic analysts are also weighing in, warning that 2013 will witness further storms and stresses.