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Part 1
Evolution and Revolution of
the Central Banking System
July 21, 2009
Introduction
Humanity is on the verge of entering into the most tumultuous period
in our history.
The prospects of a global depression,
the likes of which have never been seen before; a truly global war,
on a scale never before imagined; and societal collapse, for which
nations of the world are building totalitarian police states to
control populations; are increasing by the day.
The major global trend forecasters are
sounding the alarms on economic depression, war, a return to fascism
and a total reorganization of society.
Through crisis, we are seeing
the reorganization of the global political economy, and the
transformation of capitalism into a totalitarian capitalist world
government. Capitalism has never stayed the same through its
history; it has always changed and will continue to do so. Its
changes are explained and analyzed through political-economic
theory, both mainstream theory and critical.
The changes are undertaken over years,
decades and centuries. The next phase of capitalism is one in which
the world moves to a state-controlled economic system, much like
China, of totalitarian capitalism.
The global political economy itself is being reorganized into a
world government body, consisting of one center of global power
where the socio-political-economic power of the world is centralized
in one institution. This is not a conspiracy theory; it is a
reality. Nor is this a subject confined to the realm of “internet
conspiracy theorists,” but in fact, the concept of world government
originates and evolves throughout the history of capitalism and the
global political economy. Mainstream and critical political-economic
theory has addressed the concept of world government for centuries.
The notion of a world government has such a long history, as the
forces driving the world into such a structure intertwine with the
history of the modern global political economy itself. The purpose
of this report is to examine the history of the global political
economy in taking steps toward forming a world government, in both
theory and practice.
How did we get here and where are we going?
Why Study
Theory?
Within the academic realm of Political Science, specifically the
field of Global Political Economy (GPE), it is essential to
understand the various theoretical perspectives of political economy
so as to understand the actions and directions taken within the
global political economy, and how capitalism has been and continues
to be reorganized and altered.
Theory provides the foundation upon
which actors are understandable and actions are undertaken.
As the political economist Robert Cox
once stated,
“Theory is always for someone and
for some purpose.”
It is important to understand and
analyze the theoretical leanings of those making changes in the
global political economy, in order to understand the changes being
made, specifically the theoretical foundations of a world
government.
As well as this, it is important to
examine critical theory in how it interprets both how and why a
world government is being constructed.
Mercantilism
The history of political economic theory shows a continued
fascination with the concept of constructing such a cosmopolitan or
global community. The earliest forms of western Global Political
Economy theorists lie in the early mercantilist period, and with the
emergence of Liberal theory, following Adam Smith’s Wealth of
Nations, mercantilist writers such as Friedrich List and
Alexander Hamilton wrote critiques of the underlying Liberal
concepts.
List wrote in Political and
Cosmopolitical Economy that Smith dispersed with the idea of a
“national economy” in which nation’s determined economic conditions,
and instead advocated replacing the “national” economy with a
“cosmopolitical or world-wide economy.”
List discusses the perspective of
Jean-Baptiste Say (J.B. Say), a French liberal economist, saying
that Say,
“openly demands that we should
imagine the existence of a universal republic in order to
comprehend the idea of general free trade.”[1]
List states that,
“If, as the prevailing school [of
political-economic thought] requires, we assume a universal
union or confederation of nations as the guarantee for an
everlasting peace, the principle of international free trade
seems to be perfectly justified,” however, this prevailing
thought “assumes the existence of a universal union and a state
of perpetual peace, and deduces therefore the great benefits of
free trade. In this manner it confounds effects with causes.”
List elaborates in explaining that,
“Among the provinces and states
which are already politically united, there exists a state of
perpetual peace; from this political union originates their
commercial union.”
Further, “All examples which history
can show are those in which the political union has led the way,
and the commercial union has followed. Not a single instance can
be adduced in which the latter has taken the lead, and the
former has grown up from it.”[2]
It must be addressed that List is a
mercantilist theorist.
This means that he views the realm of
the political and economic as an interacting realm in which they are
intertwined and merged, however, the political realm remains above
the economic, which is subject to the dictates of the political
element. Liberal theorists believe that the political and economic
realms are separate, and that they should be separated, so that
political elements interact separately and without influence over
the economic realm, which itself acts independently and separately
of the political.
This is the foundation for the ideas of
the “free market” and the oft-quoted Adam Smith phrase, “the
invisible hand of the free market,” which was only mentioned once in
his entire volume of the Wealth of Nations. The ascension of liberal
theorists marked a separation in the academic and theoretical
studies, in which Political Economy was separated as a field, and
saw the emergence of Political Science and Economics as separate
studies.
As political economist Robert Cox stated,
“Theory is always for someone and
for some purpose.”
The purpose of this separation was to
compartmentalize academic thought and separate the realms of
politics and economy, so as to better control both – as the banking
interests, which dominated both the realms of politics and economics
since the late 1600s, continued to view the world in terms of
political-economic theory.
It was a strategy of “divide and
conquer,” in which theory and academia was divided in order to
conquer and control thought on both sides. This separation continues
to this day, as even the field of Political Economy is placed
underneath and subjective to Political Science, whereas it would
make more sense that Political Science and Economics would be under
the umbrella of Political Economy. Again, compartmentalize thought
and then the control of discussion and debate becomes much easier.
What List was arguing in his essay was a critique of the liberal
concept of a cosmopolitical society, in which all nations are united
in a world federation. Naturally, this was not the case in that era,
it was an incorrect and dubious assumption on the part of liberal
theorists. List explained that never before had economic or
commercial interdependence and union led to a political union.
List postulated that history showed that
political union had to precede an economic union. However, List was
writing in the first half of the 19th century, and history has
changed the course of events and Political Economic theory.
I would argue that the major banking
interests, essentially made up of a dynasty of banking families (the
Rothschilds, Warburgs, and later
the Morgans and
Rockefellers, among many others),
decided to chart a different course, in which they would pursue a
strategy in which economic union would be incrementally undertaken
with the aim of constructing a political union to follow in its
footsteps.
Central
Banking
Thus, liberal economic theory came to the forefront, championed by
the global hegemonic power of the day, Great Britain, which was
firmly under the control of the banking dynasties.
In 1694, the Bank of England was formed
as a private central bank, which would issue the currency of the
nation, lending it to the government and industry at interest, which
would be paid back to the Bank of England’s shareholders, made up of
these private banking dynasties.[3] The 16th to the 19th
centuries was the period in which both the nation-state and
capitalism emerged, soon followed by central banking in the late
1600s.
This is when the origins of what was
known as a “world economy” took place. Mercantilist economic theory
dominated this period, in which the economy was secondary and
submissive to the political structure of nations.
Liberal theorists rose in opposition to this. Adam Smith wrote the
Wealth of Nations in 1776, the same year that the American colonies
revolted against the British imperial forces in the country, and
ultimately gained independence from the British Empire.
Among many of the primary motivating
factors for the Revolution were the British military presence in the
American colonies, acting above the law; a heavy imposition of
colonial taxes, particularly on tea and other imports from foreign
nations such as France, in an effort to promote the mercantilist
assumptions that the colony should only survive and trade with the
metropole (imperial hegemony) – which extracts the resources of the
nation in trade for material goods to that nation, creating a
dependence upon the colonial power.
Arguably one of the primary motivations
for the Revolution was the control of currency by a foreign imperial
power, with the ability to control inflation and devaluation,
essentially controlling the entire economic conditions of the colony
from abroad. The Founding Fathers of the United States understood
the necessity of controlling one’s own currency if one was to
preserve sovereignty and independence.
Following Britain’s humiliating defeat, which was aided by the
French who supported the American revolt, European banking interests
suffered a significant blow against their mercantilist expansion.
Capitalism functions in that it
constantly needs to expand and consume more. Central banking
functions in a very similar, although much more dubious manner, in
which it needs to expand its control over industry, nations and
people through the expansion of debt, continually needing to bring
more individuals, nations and industries under debt bondage.
Debt is the source of all power and
wealth for the central banking system – as they do not actually
produce any tradable good, such as industry; nor do they provide any
necessary service, such as government. Interest on debt is the
source of income and authority for the central banking system, and
thus, it needs to continually advance credit and expand debt. Thus,
the loss of the American colonies as a source of expansionary credit
and debt was a massive blow to their entrenched interests.
The European banking interests quickly learned their lesson
regarding not falling under the imperial hubris of believing people
of a given region or nation could never defeat imperial might and
armies. Revolution had become a great threat to the entrenched
capitalist, and particularly, banking interests.
Within a decade of the American Revolutionary War, which ended in
1783, another nation was going down the road of revolutionary zeal,
in part inspired by the American example. However, this nation was
no colony, but rather a mercantilist imperial power, and thus, its
loss would be too great a loss to allow. In 1788, the French
Monarchy was bankrupt, and as tensions grew between the increasingly
desperate people of France and the aristocratic and particularly
monarchic establishment, European bankers decided to pre-empt and
co-opt the revolution.
In 1788, prominent French bankers
refused
“to extend necessary short-term
credit to the government,”[4] and they arranged to
have shipments of grain and food to Paris “delayed” which
triggered the hunger riots of the Parisians.[5]
This sparked the Revolution, in which a
new ruling class emerged, driven by violent oppression and political
and actual terrorism.
However, its violence grew, and with
that, so too did discontentment with the Revolutionary Regime, and
its stability and sustainability was in question. Thus, the bankers
threw their weight behind a general in the Revolutionary Army named
Napoleon, whom they entrusted to restore order. Napoleon then gave
the bankers his support, and in 1800, created the Bank of France,
the privately owned central bank of France, and gave the bankers
authority over the Bank.
The bankers owned its shares, and even
Napoleon himself bought shares in the bank.[6]
The bankers thus sought to control commerce and government and
restore order to their newly acquired and privately owned and
operated empire. However, Napoleon continued with his war policies
beyond the patience of the bankers, which had a negative impact upon
commercial activities,[7] and Napoleon himself was
interfering in the operations of the Bank of France and even
declared that the Bank “belongs more to the Emperor than to the
shareholders.”[8]
With that, the bankers again shifted
their influence, and remained through regime change.[9]
The Rothschilds ascended to the throne of international banking with
the Battle of Waterloo. After having established banking houses in
London, Paris, Frankfurt, Vienna and Naples, they profited off of
all sides in the Napoleonic wars.[10]
The British patriarch, Nathan
Rothschild, was known for being the first with news in London, ahead
of even the monarchy and the Parliament, and so everyone watched his
moves on the stock market during the Battle of Waterloo. Following
the battle, Nathan got the news that the British won over 24 hours
before the government itself had news, and he quietly went into the
London Stock Exchange and sold everything he had, implying to those
watching that the British lost.
A panic selling ensued, in which
everyone sold stock, stock prices crumbled, and the market crashed.
What resulted was that Rothschild then bought up the near-entire
British stock market for pennies on the dollar, as when news arrived
of the British victory at Waterloo, Rothschild’s newly acquired
stocks soared in value, as did his fortune, and his rise as the
pre-eminent economic figure in Britain.[11]
As Goergetown University History professor, Carroll Quigley
wrote in his monumental Tragedy and Hope,
“The merchant bankers of London had
already at hand in 1810-1850 the Stock Exchange, the Bank of
England, and the London money market,” and that, "In time they
brought into their financial network the provincial banking
centers, organized as commercial banks and savings banks, as
well as insurance companies, to form all of these into a single
financial system on an international scale which manipulated the
quantity and flow of money so that they were able to influence,
if not control, governments on one side and industries on the
other."[12]
The period from 1815 to 1914 was known
as the British Imperial Century, in which they adopted the liberal
economic concepts of Adam Smith, and manipulated and distorted them
for their own imperial ambitions.
Mercantilism was still strong in
practice, but rode under the banner of a liberal economic order,
“free markets” and the “invisible hand.”
The “invisible hand” was in fact,
connected to a body made up of government and industry, molding the
“free market” according to its designs, and the body was controlled
by the brain, the central bank, the Bank of England.
Markets were hardly “free” and the hand
was visible to those who could see the rest of the body.
The Liberal
Revolution
It was during this British imperial century that other nations, such
as Germany and the United States, were pursuing mercantilist
economic practices in order to protect their own nations from the
British free-trade imperialism. It was in this context that
mercantilist theorists such as Alexander Hamilton in the
United States, and Friedrich List in Germany were writing in
criticism of liberal economic theory.
Mercantilism was dominant in political-economic theory until the mid
19th century when the ‘liberal revolution’ manifested, largely in
critical opposition to mercantilism.
In liberal economic theory, the economic
realm is autonomous and separate from the political realm, and
functions according to its own logic. Within this theory, politics
and economics, though separate spheres, are still connected, but
remain independent of one another. Whereas mercantilists see the
state as the primary actor in the global political economy, liberals
see the individual (both producer and consumer) as being the major
actor.
Mercantilists see the international arena as inherently conflictual,
justifying their policies of colonialism and empire building in an
international arena in which if one state does not colonize foreign
lands and extract resources, another state will, and thus, will
deprive the state that does not create an empire of resources and
economic growth.
In this sense, mercantilists view the
world in terms of a zero-sum gain, in which the progress of one
state requires the regression of another. Liberal theorists argue
that the international arena, made up of individuals, constitutes a
positive-sum gain, in which all individuals act according to
self-interest, and in doing so, benefit everyone, and foster
cooperation and interdependence.
In this sense, the international arena
is not inherently conflictual, but rather a cooperative and
interdependent sphere in which order and stability is upheld by
international regimes – such as the British liberal imperial order
and the gold standard it instituted.
Where mercantilists view history as an amalgamation of conflicts and
decisions made by states, liberal theorists view history as the sum
of the unintended consequences of actions made by private
individuals and activities. This implies almost an inherently
natural progression of history – that it is not shaped by powerful
forces in any designed or intended way, but is merely a natural
response and reaction to the actions of individuals.
This ties into the liberal concept of
the natural state of a liberal economic order, bringing in the idea
of the “invisible hand of the free market” which will determine
economic activities.
Adam Smith’s notion of the “invisible hand” has been used to
advance the idea that private individuals who seek personal wealth
and gain through self-interest will unintentionally aid the
interests of all of society. However, the “invisible hand” was
mentioned merely once in Smith’s monumental Wealth of Nations,
and was taken out of context.
Smith was discussing how,
“Every individual naturally inclines
to employ his capital in the manner in which it is likely to
afford the greatest support to domestic industry, and to give
revenue and employment to the greatest number of people of his
own country.”
In addition to employing,
“his capital in the support of
domestic industry,” the private individual would “direct that
industry that its produce may be of the greatest value.”
Therefore, the individual,
“neither intends to promote the
public interest, nor knows how much he is promoting it.”
Smith explains that:
"By preferring the support of
domestic to that of foreign industry, he intends only his own
security; and by directing that industry in such a manner as its
produce may be of the greatest value, he intends only his own
gain, and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his
intention."[13]
Smith had conceptualized the “invisible
hand” as the “natural inclination” of an individual to promote
domestic interests, yet the phrase has been manipulated to promote
the concept of a “self regulating market” in which the less
regulation and restrictions there are, the better all society will
be, because industry will naturally benefit all people.
The manipulation of this phrase has
taken the notion of the “invisible hand” away from the actions of
individuals and transferred it to promoting non-regulation of
economic activities. That is a far cry from Smith’s contention.
Smith even stated in the Wealth of Nations that,
“People of the same trade seldom
meet together, even for merriment and diversion, but the
conversation ends in a conspiracy against the public, or in some
contrivance to raise prices. It is impossible indeed to prevent
such meetings, by any law which either could be executed, or
would be consistent with liberty and justice. But though the law
cannot hinder people of the same trade from sometimes assembling
together, it ought to do nothing to facilitate such assemblies;
much less to render them necessary.”[14]
In discussing regulation regarding wages
for workers and resolving equity issues between the employers, or
“masters” and the labour class of “workers,” Smith explained that,
“Whenever the legislature attempts
to regulate the differences between masters and their workmen,
its counselors are always the masters. When the regulation,
therefore, is in favor of the workmen, it is always just and
equitable; but it is sometimes otherwise when in favor of the
masters.”
Further, “When masters combine
together in order to reduce the wages of their workmen, they
commonly enter into a private bond or agreement, not to give
more than a certain wage under a certain penalty. Were the
workmen to enter into a contrary combination of the same kind,
not to accept a certain wage under a certain penalty [such as a
union], the law would punish them very severely; and if it dealt
impartially, it would treat the masters in the same manner.”[15]
These quotes by Adam Smith tend to fly
in the face of the common perceptions and usage of Smith’s ideas,
proving that liberal economy in practice is a far cry from the
intent of its original theorist.
In the 1870s, the notion of a “liberal economic order” was
challenged as the major European empires undertook an incredible
extension of their imperial presence across the globe, itself a
mercantilist practice – the idea of obtaining colonies in order to
extract its resources, create a captive market for the imperial
nations manufactured goods, and deprive its economic competitors of
access to that market.
Between 1878 and 1913, European empires
extended their control over much of the world, specifically with the
Scramble for Africa, in which all of Africa, save Ethiopia, was
colonized by European powers.
This “new imperialism,” as it was known, proliferated throughout
Europe following the rapid expansion of banking throughout the
continent, and the pre-eminence of international financiers over
governments.[16] The growth of the continent-wide banking
networks “fed the growth of colonial empires” as it stimulated a
system in which “creating debt that then had to be serviced by the
purchase of more infrastructure,” and expansion of territory.[17]
This led European nations to undertake a
massive imperial effort across much of the globe, to find and
control foreign markets and expand their capital.
The Emergence
of Marxism
In the 19th century, the rise of critical IPE
(International/Global Political Economy) theories emerged in
opposition to the growing dominance of Liberal IPE.
The most profound of these criticisms
arose from Karl Marx. Marxism, as Marx’s critical theory came to be
known, put an extensive focus on the relations of classes within
society, as the class that owns the means of production is the
central and most powerful class, subverting the other classes to a
submissive position.
Marxists also view capitalism as being
inherently exploitative. Within this theory, the political and
economic realms are not seen as separate spheres of action, but are
seen as intertwined and internally related. Within this theory, the
purpose of the state is not to serve the interests of the broader
population that inhabits it, but to secure, maintain and advance the
interests of the capitalist class.
Marxist theorists also put emphasis on
the nature of war and conflict as being intrinsically related to the
expansionary nature of capitalism, which is one of the primary roles
of states in advancing the interests of the capitalist ruling class.
Marx defines what he perceives as capitalism: a system which is
governed by capital, which is money that has been invested in order
to generate more money; production, which is dominant within
capitalist society, is designed for sale, not use – in that, it
moves beyond subsistence and into what we refer to today as
materialism and consumption; labour is commodified, thus people,
through their labour, themselves become a tradable commodity;
exchange occurs with money; ownership of the means of production is
in the hands of the capitalist class; and competition between
various capitalist forces is the logic of interaction.
Marx places a large focus on the circuit of capital, in how money
transforms into capital.
Money (M), is invested in purchasing a
Commodity (C), and then into Labour Power (LP) and the Mean of
Production (MP), which make up the Production circuit (P), which
produces a new Commodity (C1), which is then sold, creating
expanding money (M1), or earned profits.
Capital, thus, is money that is invested
into production.
Marx postulates that the inherent
exploitative nature of capitalism is most apparent in the Production
circuit, specifically with Labour Power.
Diverging From
Marx
However, with the exploration and understanding of the central
banking system, some of the circuit of capital must be called into
question. Central banking functions not on “investment” of capital,
but on the expansion and creation of money and debt, which is lent
at interest, thus serving as the source of income for the central
banking system.
This cannot be called productive
capital, for its purpose and intent is not to produce a new
commodity, there is no labour power or means of production involved,
and new money is not produced from the sale of such a new commodity,
but rather profit is extracted from interest on the original money.
This, for the sake of argument, can be
called the Circuit of Debt:
M --> L --> I --> M1 --> LID -->
DB
M = Money
L = Loan
I = Interest
M1 = New Money
LID = new money Loaned to debtor to pay Interest on Debt
DB = debtor falls into Debt Bondage; owned by creditor
Through the Marxist perspective of
exploitation, there is no labour to exploit within the Circuit of
Debt, so where does exploitation come into play?
Exploitation comes into the process in
that the debt (or loan) issued, is designed to exploit whoever the
debtor is, be it an individual, a nation, or a corporation. Within
this paradigm, class structure, although playing a significant part
of the process of overall exploitation and exercise of power within
the capitalist system is not the only, or arguably, even primary
target of control and oppression within capitalism, as we know it.
The target is the individual, the nation, and industry to the
submission of the predatory nature of the central banking system.
The central banking system has, from its inception, acted in ways
which monopolize industry (thus negating Adam Smith’s concept of a
“free market” and “competition”); militarize nations (financing wars
and conquest, imperialism); merging the interests of both the
economic and political realms into a holistic ruling class (modeled
upon the dual nature of a central bank itself – holding the
authority and power of a government body, but representing the
interests and submitting to the ownership of private individuals).
Thus, the ruling class itself is a
social construct which this tiny elite formed, hardly capable of the
numbers to be termed a class, especially since class is most often
defined in national terms, whereas this elite is international in
nature.
The central bank of a nation finances monopoly industry and imperial
states, both of which are created out of debt bondage to the central
bank. Both the commercial/industrial elites and political elites
merge their interests – the state will pursue imperial policies that
have the effect of benefiting industry, while industry will support
the building of a strong, powerful state (and provide a cozy job for
the political elite upon leaving the public sector).
This makes up the ruling class of a
nation, the capitalists, or owners of the means of production,
merging with the political rulers of the nation. One does not
represent or overpower the other, but rather, both serve the
interests and are owned through interest, by a tiny international
elite.
One must ask: What would capitalism look like if it were not for the
advent of the central banking system?
Accumulation
by Dispossession
In discussing Marxist theory, I am not advocating a total support of
its theoretical discussion and perspective.
However, it is vital to address, as
historically and presently, it has served as a very powerful source
of criticism against the capitalist system and its importance cannot
be underestimated. Having said that, it is also important to address
in that it does, as a theory, identify many accurate and important
aspects of how the capitalist system functions. For that reason,
many of the critiques have been and are currently prescient and
justified.
In Marxist theory, the nature of accumulation plays a very important
part, in that it holds a dual character. One is known as
accumulation as expanded reproduction, which is concerned with
commodity markets and production (the circuit of capital), where
money is made through the labour process. The other nature of
accumulation is accumulation by dispossession, which is usually
framed in terms of relations between capitalist and non-capitalist
modes of production.
This is accumulation derived from
dispossessing someone of something.
The Atlantic slave trade was an example
of accumulation by dispossession, as Africans were dispossessed of
their lives and freedom. Colonialism is another example, where
resources are extracted, dispossessing the nation of its own
resources.
Perhaps it would be helpful to expand upon Marx’s ideas of
accumulation by dispossession in regards to the central banking
system. Central banking, not falling into the circuit of capital,
and thus, accumulation as expanded reproduction, better represents
an example of accumulation by dispossession.
Money is given in loans at interest, to
which the debtor is never meant to fully repay, and is dispossessed
of its freedom and wealth through interest payments and debt
bondage. Debt is just another word for slavery, therefore, the
central banking system itself, functions through a system of
accumulation by dispossession.
However, conventional understanding of accumulation by dispossession
describes it as an interaction between capitalist and non-capitalist
modes of production, where the capitalist mode will dispossess the
non-capitalist mode of production. Central banking, however, is the
pinnacle of the capitalist system, and ultimately, the primary
source and avenue of its power, so it can hardly be said to be an
interaction between capitalist and non-capitalist modes, as it is an
interaction between central banks and ALL modes of production which
need money – including the entirety of the capitalist system.
Thus, industry/commerce,
governments/nations, and individuals/people, are dispossessed of
their freedom through debt bondage. This cannot simply be predicated
in terms of class warfare or class-centric theory, but rather, an
assault against all individuals, individuality, and freedom, in any
and all forms. It is within this context that class structures are
created, so as to play off one against the other – to
compartmentalize people into classes, and thus, better control and
manipulate the masses. It is a strategy of dividing and conquering
people.
Class, including the upper capitalist
class, is constructed in an effort to conform thought within each
class, and thus direct collective action of that class accordingly.
The freethinking individual is the target in all cases.
Individuality is to be removed from
commerce, government, and society as a whole.
The Communist
Manifesto
In the Communist Manifesto, published in 1848, Marx proclaims
in the opening subtitle that,
“The history of all society hitherto
is the history of class struggles.”
However, if class itself is a construct
of powerful individuals, albeit throughout human history, can it not
be argued instead that the history of all society is the history of
the struggle of the individual against collectivity and control?
Class itself is a collective grouping
designed to control a mass of people, whether it is upper class or
lower class. Individuals are stifled within all classes, and thus,
the history of class struggles itself, is a history of the struggle
between the free thinking individual and the collective form of
control.
Within the Communist Manifesto, Marx (and Engels)
outlined an initial program for an “advanced” nation to undertake in
order to create a Communist system, with ten major points.
-
Abolition of property in land
and application of all rents of land to public purposes
-
A heavy progressive or graduated
income tax
-
Abolition of all right of
inheritance
-
Confiscation of the property of
all emigrants and rebels
-
Centralization of credit in the
hands of the state, by means of a national bank with state
capital and an exclusive monopoly
-
Centralization of the means of
communication and transport in the hands of the state
-
Extension of factories and
instruments of production owned by the state – the bringing
into cultivation of waste lands, and the improvement of the
soil generally in accordance with a common plan
-
Equal liability of all to labour
– Establishment of industrial armies, especially for
agriculture
-
Combination of agriculture with
manufacturing industries – gradual abolition of the
distinction between town and country by a more equable
distribution of the population over the country
-
Free education for all children
in public schools – Abolition of children’s factory labour
in its present form [and] Combination of education with
industrial production.[18]
Of particular importance is number 5, in
which a central bank is advocated.
If nations have the ability to create
and issue a currency through a Treasury department or even on a more
regional or local level, why centralize and monopolize creation of a
currency to a central bank?
It should be noted that the
recommendation was to have it centralized “in the hands of the
state,” however, central banks are today, still widely perceived as
being within the purview of governmental authority, while acting and
functioning totally outside of it and above it. Imposing a tax on
one’s income (2), also seems to promote the commodification of
labour, in that instead of industry exploiting one’s labour and
extracting a profit from it, that becomes the job of the state. All
property would be owned by the state (1), and virtually the entire
economy is subject to the control of the state.
Even education, while free, is directed
by the state. With the “Confiscation of the property of all
emigrants and rebels,” what room is there for dissenting thought in
such a society? Dissent would not be encouraged within the “free
education” system. In fact, conformity would be enshrined. Is this
not a form of “accumulation by dispossession” in which the
individual is dispossessed of free thought and action and submitted
to the will of and restricted thinking allowed by the state?
Within this paradigm the state
accumulates power and authority by dispossessing people of
individuality in thought and expression.
The Communist Manifesto ends with the declaration of, “Workers of
all countries, Unite!” This, in and of itself, promotes class
divisions within society, placing focus on the need for an
international mobilization of the global working class to rise up
against the capitalist class. Marx outlines that any successful
workers’ revolution must be international.[19]
Thus, this promotes the cosmopolitical
notion of an international community, at least in initial terms of a
transnational class system. Essentially, Marx argues that as
capitalism expands, what we will later term “Globalizes,” so too
must the working class of the world “globalize” and
“internationalize.” In a sense, this makes Marx, himself, an early
globalist theorist, in promoting the concept of an international
class uprising against the capitalist class.
Ultimately, would this not simply
replace the tyranny of one class for the tyranny of another? Throw
out the capitalists and bring in the communists! Substituting one
form of oppression for another is hardly a change in the right
direction. In both systems, the individual suffers and free thought
is stifled.
Though much Marxist criticism is extremely pointed in analyzing the
functions and structure of the capitalist system, such theory
itself, even though critical, must be critically examined.
Retaking
America
The history of the United States from its founding through the 19th
century to the early 20th century, was marked by a continual
political battle revolving around the creation of a central bank of
the United States.
Mercantilists such as Alexander
Hamilton, who was the first Treasury Secretary, were in favor of
such a bank, and his advice won over George Washington, much to the
dismay of Thomas Jefferson, who was a strong opponent to central
banking.
However,
“[Alexander] Hamilton, believing
that government must ally itself with the richest elements of
society to make itself strong, proposed to Congress a series of
laws, which it enacted, expressing this philosophy,” and that,
“A Bank of the United States was set up as a partnership between
the government and certain banking interests,”[20]
which lasted until the charter expired in 1811.
Again, during the tenure of Andrew
Jackson (1829-1837), the primary political struggle was with the
entrenched financial interests both domestic and from abroad (namely
Western Europe), on the issue of creating a central bank of the US.
Andrew Jackson stood in firm
opposition to such a bank, saying that,
“the bank threatened the emerging
order, hoarding too much economic power in too few hands,” and
referred to it as “The Monster.”[21]
Congress passed the bill allowing for
the creation of a Second Bank of the United States, however, Andrew
Jackson vetoed the bill, much to the dismay of the banking
interests.
It was in the later half of the 1800s that,
“European financiers were in favor
of an American Civil War that would return the United States to
its colonial status, they admitted privately that they were not
necessarily interested in preserving slavery,” as it had become
unprofitable.[22]
The Civil War was not based upon the
liberation of slaves, it was, as Howard Zinn described it, a
clash “of elites,” with the northern elite wanting,
“economic expansion – free land,
free labor, a free market, a high protective tariff for
manufacturers, [and] a bank of the United States. [Whereas] The
slave interests opposed all that.”[23]
The Civil War, which lasted from 1861
until 1865, resulted in hundreds of thousands of deaths, during
which,
“Congress also set up a national
bank, putting the government into partnership with the banking
interests, guaranteeing their profits.”[24]
As Lincoln himself stated:
The money powers prey on the nation
in times of peace and conspire against it in times of adversity.
The banking powers are more despotic than monarchy, more
insolent than autocracy, more selfish than bureaucracy. They
denounce as public enemies all who question their methods or
throw light upon their crimes.
I have two great enemies, the Southern Army in front of me, and
the bankers in the rear. Of the two, the one at my rear is my
greatest foe. As a most undesirable consequence of the war,
corporations have been enthroned, and an era of corruption in
high places will follow. The money power will endeavor to
prolong its reign by working upon the prejudices of the people
until the wealth is aggregated in the hands of a few, and the
Republic is destroyed.[25]
Throughout much of the 1800s and into
the 1900s, the United States suffered several economic crises, one
of the most significant of which was the Great Depression of 1873.
As Howard Zinn explained:
The crisis was built into a system
which was chaotic in its nature, in which only the very rich
were secure. It was a system of periodic crises – 1837, 1857,
1873 (and later: 1893, 1907, 1919, 1929) – that wiped out small
businesses and brought cold, hunger, and death to working people
while the fortunes of the Astors, Vanderbilts, Rockefellers,
Morgans, kept growing through war and peace, crisis and
recovery. During the 1873 crisis, Carnegie was capturing the
steel market, Rockefeller was wiping out his competitors in oil.[26]
Massive industrial consolidation by a
few oligarchic elites was the rule of the day, as J.P. Morgan
expanded total control over railroad and banking interests, and
John D. Rockefeller took control of the oil market, and expanded
into banking.
Zinn explained that,
“The imperial leader of the new
oligarchy was the House of Morgan. In its operations it was ably
assisted by the First National Bank of New York (directed by
George F. Baker) and the National City Bank of New York
(presided over by James Stillman, agent of the Rockefeller
interests). Among them, these three men and their financial
associates occupied 341 directorships in 112 corporations. The
total resources of these corporations in 1912 was
$22,245,000,000, more than the assessed value of all property in
the twenty-two states and territories west of the Mississippi
River.”[27]
These banking interests, particularly
those of Morgan, were very much allied with European banking
interests.
On the European side, specifically in
Britain, the elite were largely involved in the Scramble for Africa
at this time. Infamous among them was Cecil Rhodes, who made
his fortune in the diamond and gold mining in Africa, as,
“With financial support from Lord
Rothschild and Alfred Beit, he was able to monopolize the
diamond mines of South Africa as De Beers Consolidated Mines and
to build up a great gold mining enterprise as Consolidated Gold
Fields.”[28]
Interestingly,
“Rhodes could not have won his
near-monopoly over South African diamond production without the
assistance of his friends in the City of London: in particular,
the Rothschild bank, at that time the biggest concentration of
financial capital in the world.”[29]
As historian Niall Ferguson
explained,
“It is usually assumed that Rhodes
owned De Beers, but this was not the case. Nathaniel de
Rothschild was a bigger shareholder than Rhodes himself; indeed,
by 1899 the Rothschilds’ stake was twice that of Rhodes.”[30]
Cecil Rhodes was also known for his
radical views regarding America, particularly in that he would “talk
with total seriousness of ‘the ultimate recovery of the United
States of America as an integral part of the British Empire’.”[31]
Rhodes saw himself not simply as a money
maker, but primarily as an “empire builder.” As historian Carroll
Quigley explained, in 1891, three British elites met with the intent
to create a secret society.
The three men were Cecil Rhodes,
William T. Stead, a prominent journalist of the day, and
Reginald Baliol Brett, a,
“friend and confidant of Queen
Victoria, and later to be the most influential adviser of King
Edward VII and King George V.”
Within this secret society,
“real power was to be exercised by
the leader, and a ‘Junta of Three.’ The leader was to be Rhodes,
and the Junta was to be Stead, Brett, and Alfred Milner.”[32]
In 1901, Rhodes chose Milner as his
successor within the society, of which the purpose was,
“The extension of British rule
throughout the world, the perfecting of a system of emigration
from the United Kingdom and of colonization by British subjects
of all lands wherein the means of livelihood are attainable by
energy, labour, and enterprise... [with] the ultimate recovery
of the United States of America as an integral part of a British
Empire, the consolidation of the whole Empire, the inauguration
of a system of Colonial Representation in the Imperial
Parliament which may tend to weld together the disjointed
members of the Empire, and finally the foundation of so great a
power as to hereafter render wars impossible and promote the
best interests of humanity.”[33]
Essentially, it outlined a British-led
cosmopolitical world order, one global system of governance under
British hegemony. Among key players within this group were the
Rothschilds and other banking interests.[34]
In the early 20th century, European and American banking interests
achieved what they had desired for over a century within America,
the creation of a privately owned central bank. It was created
through collaboration of American and European bankers, primarily
the Morgans, Rockefellers, Kuhn, Loebs and Warburgs.[35]
After the 1907 banking panic in the US,
instigated by JP Morgan, pressure was placed upon the American
political establishment to create a “stable” banking system.
In 1910, a secret meeting of financiers
was held on Jekyll Island, where they planned for the,
“creation of a National Reserve
Association with fifteen major regions, controlled by a board of
commercial bankers but empowered by the federal government to
act like a central bank – creating money and lending reserves to
private banks.”[36]
President Woodrow Wilson followed
the plan almost exactly as outlined by the Wall Street financiers,
and added to it the creation of a Federal Reserve Board in
Washington, which the President would appoint.[37]
The
Federal Reserve, or Fed,
“raised its own revenue, drafted its
own operating budget and submitted neither to Congress,” while
“the seven governors shared power with the presidents of the
twelve Reserve Banks, each serving the private banks in its
region,” and “the commercial banks held stock shares in each of
the twelve Federal Reserve Banks.”[38]
The retaking of the United States by
international banking interests was achieved with barely a whimper
of opposition. Where the British Empire failed in taking the United
States militarily, international bankers succeeded covertly through
the banking system.
The Federal Reserve also had the effect
of cementing an alliance between New York and London bankers.[39]
Notes
[1] George T. Crane, Abla Amawi, The
Theoretical evolution of international political economy. Oxford
University Press US, 1997: pages 48-49
[2] George T. Crane, Abla Amawi, The Theoretical evolution of
international political economy. Oxford University Press US,
1997: pages 50-51
[3] John Kenneth Galbraith, Money: Whence it Came, Where it Went
(Boston: Houghton Mifflin Company, 1975), 31
[4] Donald Kagan, et. al., The Western Heritage. Volume C: Since
1789: Ninth edition: (Pearson Prentice Hall: 2007), 596
[5] Curtis B. Dall, F.D.R. : My Exploited Father-in-Law.
(Institute for Historical Review: 1982), 172
[6] Carroll Quigley, Tragedy and Hope: A History of the World in
Our Time (New York: Macmillan Company, 1966), 515 Robert Elgie
and Helen Thompson, ed., The Politics of Central Banks (New
York: Routledge, 1998), 97-98
[7] Carroll Quigley, Tragedy and Hope: A History of the World in
Our Time (New York: Macmillan Company, 1966), 516
[8] Robert Elgie and Helen Thompson, ed., The Politics of
Central Banks (New York: Routledge, 1998), 98-99
[9] Carroll Quigley, Tragedy and Hope: A History of the World in
Our Time (New York: Macmillan Company, 1966), 516
[10] Sylvia Nasar, Masters of the Universe. The New York Times:
January 23, 2000:
http://query.nytimes.com/gst/fullpage.html?res=9C04E3D6123AF930A15752C0A9669C8B63
BBC News. The Family That Bankrolled Europe. BBC News: July 9,
1999 http://news.bbc.co.uk/1/hi/uk/389053.stm
[11] New Scientist. Waterloo Windfall. New Scientist Magazine:
Issue 2091, July 19, 1997
http://www.newscientist.com/article/mg15520913.300-waterloo-windfall.html
BBC News. The Making of a Dynasty: The Rothschilds. BBC News:
January 28, 1998 http://news.bbc.co.uk/2/hi/uk_news/50997.stm
[12] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time (New York: Macmillan Company, 1966), 51
[13] Adam Smith, The Wealth of Nations. U. of Chicago Edition,
1976: Vol. IV, ch. 2: 477
[14] Adam Smith, An inquiry into the nature and causes of the
wealth of nations. Regnery Gateway, 1998: page 152
[15] Adam Smith, An inquiry into the nature and causes of the
wealth of nations. Regnery Gateway, 1998: pages 166-167
[16] Patricia Goldstone, Aaronsohn's Maps: The Untold Story of
the Man who Might Have Created Peace in the Middle East.
(Harcourt Trade, 2007), 29-30
[17] Patricia Goldstone, Aaronsohn's Maps: The Untold Story of
the Man who Might Have Created Peace in the Middle East.
(Harcourt Trade, 2007), 31
[18] Karl Marx, Friedrich Engels, Philip Gasper (ed.), The
Communist manifesto: a road map to history's most important
political document. Haymarket Books, 2005: pages 70-71
[19] Karl Marx, Friedrich Engels, Philip Gasper (ed.), The
Communist manifesto: a road map to history's most important
political document. Haymarket Books, 2005: page 67
[20] Howard Zinn, A People’s History of the United States.
Harper Perennial: New York, 2003: page 101
[21] Michael Waldman, My Fellow Americans: The Most Important
Speeches of America's Presidents, from George Washington to
George W. Bush. Longman Publishing Group: 2004: page 25
[22] Dr. Ellen Brown, Today We're All Irish: Debt Serfdom Comes
to America. Global Research: March 15, 2008: http://www.globalresearch.ca/index.php?context=viewArticle&code=BRO20080315&articleId=8349
[23] Howard Zinn, A People’s History of the United States.
Harper Perennial: New York, 2003: page 189
[24] Howard Zinn, A People’s History of the United States.
Harper Perennial: New York, 2003: page 238
[25] Steve Bachman, Unheralded Warnings from the Founding
Fathers to You. Gather: June 19, 2007: http://www.gather.com/viewArticle.jsp?articleId=281474977031677
[26] Howard Zinn, A People’s History of the United States.
Harper Perennial: New York, 2003: page 242
[27] Howard Zinn, A People’s History of the United States.
Harper Perennial: New York, 2003: page 323
[28] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time (New York: The Macmillan Company, 1966), 130
[29] Niall Ferguson, Empire: The Rise and Demise of the British
World Order and the Lessons for Global Power (New York: Basic
Books, 2004), 186
[30] Niall Ferguson, Empire: The Rise and Demise of the British
World Order and the Lessons for Global Power (New York: Basic
Books, 2004), 186-187
[31] Niall Ferguson, Empire: The Rise and Demise of the British
World Order and the Lessons for Global Power (New York: Basic
Books, 2004), 190
[32] Carroll Quigley, The Anglo-American Establishment. GSG &
Associates, 1981: page 3
[33] Carroll Quigley, The Anglo-American Establishment. GSG &
Associates, 1981: page 33
[34] Carroll Quigley, The Anglo-American Establishment. GSG &
Associates, 1981: page 34
[35] Murray N. Rothbard, Wall Street, Banks, and American
Foreign Policy. World Market Perspective: 1984: http://www.lewrockwell.com/rothbard/rothbard66.html
[36] William Greider, Secrets of the Temple: How the Federal
Reserve Runs the Country. (New York: Simon and Schuster, 1987),
276
[37] William Greider, Secrets of the Temple: How the Federal
Reserve Runs the Country. (New York: Simon and Schuster, 1987),
277
[38] William Greider, Secrets of the Temple: How the Federal
Reserve Runs the Country. (New York: Simon and Schuster, 1987),
50
[39] William Engdahl, A Century of War: Anglo-American Oil
Politics and the New World Order. (London: Pluto Press, 2004),
51
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