On 2 November 2008, the New York Times Magazine headlined “Questions for James K. Galbraith: The Populist,” which was an “Interview by Deborah Solomon” of the prominent liberal economist and son of John Kenneth Galbraith. She asked him, “There are at least 15,000 professional economists in this country, and you’re saying only two or three of them foresaw the mortgage crisis” which had brought on the second Great Depression?

He answered: “Ten or twelve would be closer than two or three.”

She very appropriately followed up immediately with “What does this say about the field of economics, which claims to be a science?”

He didn’t answer by straight-out saying that economics isn’t any more of a science than physics was before Galileo, or than biology was before Darwin. He didn’t proceed to explain that the very idea of a Nobel Prize in Economics was based upon a lie which alleged that economics was the first field to become scientific within all of the “social sciences,” when, in fact, there weren’t yet any social sciences, none yet at all. But he came close to admitting these things, when he said: “It’s an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless.” His term “useless” was a euphemism for false. His term “blot” was a euphemism for “nullification.”

On 9 January 2009, economist Jeff Madrick headlined at The Daily Beast, “How the Entire Economics Profession Failed,” and he opened:

At the annual meeting of American Economists, most everyone refused to admit their failures to prepare or warn about the second worst crisis of the century.

I could find no shame in the halls of the San Francisco Hilton, the location at the annual meeting of American economists. Mainstream economists from major universities dominate the meetings, and some of them are the anointed cream of the crop, including former Clinton, Bush and even Reagan advisers.

There was no session on the schedule about how the vast majority of economists should deal with their failure to anticipate or even seriously warn about the possibility that the second worst economic crisis of the last hundred years was imminent.

I heard no calls to reform educational curricula because of a crisis so threatening and surprising that it undermines, at least if the academicians were honest, the key assumptions of the economic theory currently being taught. …

I found no one fundamentally changing his or her mind about the value of economics, economists, or their work.”

He observed a scandalous profession of quacks who are satisfied to remain quacks. The public possesses faith in them because it possesses faith in the “invisible hand” of God, and everyone is taught to believe in that from the crib. In no way is it science.

In a science, when facts prove that the theory is false, the theory gets replaced, it’s no longer taught. In a scholarly field, however, that’s not so — proven-false theory continues being taught. In economics, the proven-false theory continued being taught, and still continues today to be taught. This demonstrates that economics is still a religion or some other type of philosophy, not yet any sort of science.

Mankind is still coming out of the Dark Ages. The Bible is still being viewed as history, not as myth (which it is), not as some sort of religious or even political propaganda. It makes a difference — a huge difference: the difference between truth and falsehood.

The Dutch economist Dirk J. Bezemer, at Groningen University, posted on 16 June 2009 a soon-classic paper, “‘No One Saw This Coming’: Understanding Financial Crisis Through Accounting Models,” in which he surveyed the work of 12 economists who did see it (the economic collapse of 2008) coming; and he found there that they had all used accounting or “Flow of Funds” models, instead of the standard microeconomic theory. (In other words: they accounted for, instead of ignored, debts.) From 2005 through 2007, these accounting-based economists had published specific and accurate predictions of what would happen: Dean Baker, Wynne Godley, Fred Harrison, Michael Hudson, Eric Janszen, Stephen (“Steve”) Keen, Jakob B. Madsen, Jens K. Sorensen, Kurt Richebaecher, Nouriel Roubini, Peter Schiff, and Robert Shiller.

He should have added several others. Paul Krugman, wrote a NYT column on 12 August 2005 headlined “Safe as Houses” and he said “Houses aren’t safe at all” and that they would likely decline in price. On 25 August 2006, he bannered “Housing Gets Ugly” and concluded “It’s hard to see how we can avoid a serious slowdown.” Bezemer should also have included Merrill Lynch’s Chief North American Economist, David A. Rosenberg, whose The Market Economist article “Rosie’s Housing Call August 2004” on 6 August 2004 already concluded, “The housing sector has entered a ‘bubble’ phase,” and who presented a series of graphs showing it. Bezemer should also have included Satyajit Das, about whom TheStreet had headlined on 21 September 21 2007, “The Credit Crisis Could Be Just Beginning.” He should certainly have included Ann Pettifor, whose 2003 The Real World Economic Outlook, and her masterpiece the 2006 The Coming First World Debt Crisis, predicted exactly what happened and why. Her next book, the 2009 The Production of Money: How to Break the Power of Bankers, was almost a masterpiece, but it failed to present any alternative to the existing microeconomic theory — as if microeconomic theory isn’t a necessary part of economic theory. Another great economist he should have mentioned was Charles Hugh Smith, who had been accurately predicting since at least 2005 the sequence of events that culminated in the 2008 collapse. And Bezemer should especially have listed the BIS’s chief economist, William White, regarding whom Germany’s Spiegel headlined on 8 July 2009, “Global Banking Economist Warned of Coming Crisis.” (It is about but doesn’t mention nor link to https://www.bis.org/publ/work147.pdf.) White had been at war against the policies of America’s Fed chief Alan Greenspan ever since 1998, and especially since 2003, but the world’s aristocrats muzzled White’s view and promoted Greenspan’s instead. (The economics profession have always been propagandists for the super-rich.) Bezemer should also have listed Charles R. Morris, who in 2007 told his publisher Peter Osnos that the crash would start in Summer 2008, which was basically correct. Moreover, James K. Galbraith had written for years saying that a demand-led depression would result, such as in his American Prospect “How the Economists Got It Wrong,” 30 November 2002; and “Bankers Versus Base,” 15 April 2004, and culminating finally in his 2008 The Predator State, which blamed the aristocracy in the strongest possible terms for the maelstrom to come. Bezemer should also have listed Barry Ritholtz, who, in his “Recession Predictor,” on 18 August 2005, noted the optimistic view of establishment economists and then said, “I disagree … due to Psychology of consumers.” He noted “consumer debt, not as a percentage of GDP, but relative to net asset wealth,” and also declining “median personal income,” as pointing toward a crash from this mounting debt-overload. Then, on 31 May 2006, he headlined “Recent Housing Data: Charts & Analysis,” and opened: “It has long been our view that Real Estate is the prime driver of this economy, and its eventual cooling will be a major crimp in GDP, durable goods, and consumer spending.” Bezemer should also have listed both Paul Kasriel and Asha Bangalore at Northern Trust. Kasriel headlined on 22 May 2007, “US Economy May Wake Up Without Consumers’ Prodding?” and said it wouldn’t happen – and consumers were too much in debt. Then on 8 August 2007, he bannered: “US Economic Growth in Domestic Final Demand,” and said that “the housing recession is … spreading to other parts of the economy.” On 25 May 2006, Bangalore headlined “Housing Market Is Cooling Down, No Doubts About It.” and that was one of two Asha Bangalore articles which were central to Ritholtz’s 31 May 2006 article showing that all of the main indicators pointed to a plunge in house-prices that had started in March 2005; so, by May 2006, it was already clear from the relevant data, that a huge economic crash was comning soon. Another whom Bezemer should have listed was L. Randall Wray, whose 2005 Levy Economics Institute article, “The Ownership Society: Social Security Is Only the Beginning” asserted that it was being published “at the peak of what appears to be a real estate bubble.” Bezemer should also have listed Paul B. Farrell, columnist at marketwatch.com, who saw practically all the correct signs, in his 26 June 2005 “Global Megabubble? You Decide. Real Estate Is Only Tip of Iceberg; or Is It?”; and his 17 July 2005 “Best Strategies to Beat the Megabubble: Real Estate Bubble Could Trigger Global Economic Meltdown”; and his 9 January 2006 “Meltdown in 2006? Cast Your Vote”; and 15 May 2006 “Party Time (Until Real Estate Collapses)”; and his 21 August 2006 “Tipping Point Pops Bubble, Triggers Bear: Ten Warnings the Economy, Markets Have Pushed into Danger Zone”; and his 30 July 2007 “You Pick: Which of 20 Tipping Points Ignites Long Bear Market?” Farrell’s commentaries also highlighted the same reform-recommendations that most of the others did, such as Baker, Keen, Pettifor, Galbraith, Ritholtz, and Wray; such as break up the mega-banks, and stiffen regulation of financial institutions. However, the vast majority of academically respected economists disagreed with all of this and were wildly wrong in their predictions, and in their analyses. The Nobel Committee should have withdrawn their previous awards in economics to still-practicing economists (except to Krugman who did win a Nobel) and re-assigned them to these 25 economists, who showed that they had really deserved it.

And there was another: economicpredictions.org tracked four economists who predicted correctly the 2008 crash: Dean Baker, Nouriel Roubini, Peter Schiff, and Med Jones, the latter of whom had actually the best overall record regarding the predictions that were tracked there.

And still others should also be on the list: for example, Joe Weisenthal at Business Insider headlined on 21 November 2012, “The Genius Who Invented Economics Blogging Reveals How He Got Everything Right And What’s Coming Next” and he interviewed Bill McBride, who had started his calculated riskblog in January 2005. So I looked in the archives there at December 2005, and noticed December 28th, “Looking Forward: 2006 Top Economic Stories.” He started there with four trends that he expected everyone to think of, and then listed another five that weren’t so easy, including “Housing Slowdown. In my opinion, the Housing Bubble was the top economic story of 2005, but I expect the slowdown to be a form of Chinese water torture. Sales for both existing and new homes will probably fall next year from the records set in 2005. And median prices will probably increase slightly, with declines in the more ‘heated markets.’” McBride also had predicted that the economic rebound would start in 2009, and he was now, in 2012, predicting a strong 2013. Probably Joe Weisenthal was right in calling McBride a “Genius.”

And also, Mike Whitney at InformationClearinghouse.info and other sites, headlined on 20 November 2006, “Housing Bubble Smack-Down,” and he nailed the credit-boom and Fed easy-money policy as the cause of the housing bubble and the source of an imminent crash.

Furthermore, Ian Welsh headlined on 28 November 2007, “Looking Forward At the Consequences of This Bubble Bursting,” and listed 10 features of the crash to come, of which 7 actually happened.

In addition, Gail Tverberg, an actuary, headlined on 9 January 2008 “Peak Oil and the Financial Markets: A Forecast for 2008,” and provided the most detailed of all the prescient descriptions of the collapse that would happen that year.

Furthermore, Gary Shilling’s January 2007 Insight newsletter listed “12 investment themes” which described perfectly what subsequently happened, starting with “The housing bubble has burst.”

And the individual investing blogger Jesse Colombo started noticing the housing bubble even as early as 6 September 2004, blogging at his stock-market-crash.net “The Housing Bubble” and documenting that it would happen (“Here is the evidence that we are in a massive housing bubble:”) and what the economic impact was going to be. Then on 7 February 2006 he headlined “The Coming Crash!” and said “Based on today’s overvalued housing prices, a 20 percent crash is certainly in the cards.”

Also: Stephanie Pomboy of MacroMavens issued an analysis and appropriate graphs on 7 December 2007, headlined “When Animals Attack” and predicting imminently a huge economic crash.

In alphabetical order, they are: Dean Baker, Asha Bangalore, Jesse Colombo, Satyajit Das, Paul B. Farrell, James K. Galbraith, Wynne Godley, Fred Harrison, Michael Hudson, Eric Janszen, Med Jones, Paul Kasriel, Steve Keen, Paul Krugman, Jakob B. Madsen, Bill McBride, Charles R. Morris, Ann Pettifor, Stehanie Pomboy, Kurt Richebaeker, Barry Ritholtz, David A. Rosenberg, Nouriel Roubini, Peter Schiff, Robert Shiller, Gary Shilling, Charles Hugh Smith, Jens K. Sorensen, Gail Tverberg, Ian Welsh, William White, Mike Whitney, L. Randall Wray.

Thus, at least 33 economists were contenders as having been worth their salt as economic professionals. One can say that only 33 economists predicted the 2008 collapse, or that only 33 economists predicted accurately or reasonably accurately the collapse. However, some of those 33 were’t actually professional economists. So, some of the world’s 33 best economists aren’t even professional economists, as accepted in that rotten profession.

So, the few honest and open-eyed economists (these 33, at least) tried to warn the world. Did the economics profession honor them for their having foretold the 2008 collapse? Did President Barack Obama hire them, and fire the incompetents he had previously hired for his Council of Economic Advisers? Did the Nobel Committee acknowledge that it had given Nobel Economics Prizes to the wrong people, including people such as the conservative Milton Friedman whose works were instrumental in causing the 2008 crash? Also complicit in causing the 2008 crash was the multiple-award-winning liberal economist Lawrence Summers, who largely agreed with Friedman but was nonetheless called a liberal. Evidently, the world was too corrupt for any of these 33 to reach such heights of power or of authority. Like Galbraith had said at the close of his 2002 “How the Economists Got It Wrong“: “Being right doesn’t count for much in this club.” If anything, being right means being excluded from such posts. In an authentically scientific field, the performance of one’s predictions (their accuracy) is the chief (if not SOLE) determinant of one’s reputation and honor amongst the profession, but that’s actually not the way things yet are in any of the social “sciences,” including economics; they’re all just witch-doctory, not yet real science. The fraudulence of these fields is just ghastly. In fact, as Steve Keen scandalously noted in Chapter 7 of his 2001 Debunking Economics: “As this book shows, economics [theory] is replete with logical inconsistencies.” In any science, illogic is the surest sign of non-science, but it is common and accepted in the social ‘sciences’, including economics. The economics profession itself is garbage, a bad joke, instead of any science at all.

These 33 were actually only candidates for being scientific economists, but I have found the predictions of some of them to have been very wrong on some subsequent matters of economic performance. For example, the best-known of the 33, Paul Krugman, is a “military Keynesian” — a liberal neoconservative (and military Keynesianism is empirically VERY discredited: false worldwide, and false even in the country that champions it, the U.S.) — and he is unfavorable toward the poor, and favorable toward the rich; so, he is acceptable to the Establishment.) Perhaps a few of these 33 economists (perhaps half of whom aren’t even members of the economics profession) ARE scientific (in their underlying economic beliefs — their operating economic theory) if a scientific economics means that it’s based upon a scientific theory of economics — a theory that is derived not from any opinions but only from the relevant empirical data. Although virtually all of the 33 are basically some sort of Keynesian, even that (Keynes’s theory) isn’t a full-fledged theory of economics (it has many vagaries, and it has no microeconomics). The economics profession is still a field of philosophy, instead of a field of science.

The last chapter of my America’s Empire of Evil presents what I believe to be the first-ever scientific theory of economics, a theory that replaces all of microeconomic theory (including a micro that’s integrated with its macro) and is consistent with Keynes in macroeconomic theory; and all of which theory is derived and documented from only the relevant empirical economic data — NOT from anyone’s opinions. The economics profession think that replacing existing economic theory isn’t necessary after the crash of 2008, but I think it clearly IS necessary (because — as that chapter of my book shows — all of the relevant empirical economic data CONTRADICT the existing economic theory, ESPECIALLY the existing microeconomic theory).

This content originally appeared on Dissident Voice and was authored by Eric Zuesse.

President Trump has repeatedly expressed his admiration for Republican President William McKinley, highlighting his use of tariffs as a model for economic policy. But critics say Trump’s tariffs, which are intended to protect U.S. interests, have instead fueled a stock market nosedive, provoked tit-for-tat tariffs from key partners, risk a broader trade withdrawal, and could increase the federal debt by reducing GDP and tax income.

The federal debt has reached $36.2 trillion, the annual interest on it is $1.2 trillion, and the projected 2025 budget deficit is $1.9 trillion – meaning $1.9 trillion will be added to the debt this year. It’s an unsustainable debt bubble doomed to pop on its present trajectory.

The goal of Elon Musk’s DOGE (Department of Government Efficiency) is to reduce the deficit by reducing budget expenditures. But Musk now acknowledges that the DOGE team’s efforts will probably cut expenses by only $1 trillion, not the $2 trillion originally projected. That will leave a nearly $1 trillion deficit that will have to be covered by more borrowing, and the debt tsunami will continue to grow.

Rather than modeling the economy on McKinley, President Trump might do well to model it on our first Republican president, Abraham Lincoln, whose debt-free Greenbacks saved the country from a crippling war debt to British-backed bankers, and whose policies laid the foundation for national economic resilience in the coming decades. Just “printing the money” can be and has been done sustainably, by directing the new funds into generating new GDP; and there are compelling historical examples of that approach. In fact, it may be our only way out of the debt crisis. But first a look at the tariff issue.

Trump Channels McKinley

Trump said at a 2024 campaign event, “In the 1890s, our country was probably the wealthiest it ever was because it was a system of tariffs.” And in his second inaugural address on January 20, 2025, he said, “The great President William McKinley made our country very rich through tariffs and through talent.”

That may have been true for certain industries, but it did not actually hold for the broader population. The Tariff Act of 1890, commonly called the McKinley Tariff because it was framed by then Representative William McKinley, raised the average duty on imports to almost 50%. The increase was designed to protect domestic industries and workers from foreign competition, but the 1890s were marked by severe economic instability.

The Panic of 1893 plunged the U.S. into a depression lasting until 1897. Unemployment soared to 18.4% in 1894, with over 15,000 businesses failing and 74 railroads going bankrupt. The stock market crashed, losing nearly 40% of its value between 1893 and 1894. Far from being the wealthiest era, this period saw widespread hardship that tariffs not only failed to prevent but exacerbated.

Farmers and factory workers were hit particularly hard. The McKinley Tariff raised the cost of imported goods, squeezing rural and working-class budgets. Farmers faced a deflationary spiral as crop prices plummeted. Real wages for industrial workers stagnated or declined, with purchasing power eroded from high tariffs inflating the prices of consumer goods.

In the 1860s, President Lincoln issued debt-free money in the form of unbacked U.S. Notes or “Greenbacks;” but new issues of Greenbacks were discontinued in the 1870s, and gold was made the sole backing of currency. The resulting economic distress fueled the Greenback movement, which sought a return to the “lawful money” issued by President Lincoln. The Greenbacks were considered lawful because they were issued directly by the government as provided in the Constitution, rather than by private banks.

The Greenback Party faded, but its policies were adopted by the Populist Party and were pursued by a grassroots movement called “Coxey’s Army.” It staged the first-ever march on Washington in 1894, seeking a return to the Greenback solution. The march was considered the plot line for the 1900 classic American children’s story, The Wizard of Oz, with the scarecrow as the farmers, the tin man as the factory workers, the lion as William Jennings Bryan, and Dorothy as populist leader Mary Ellen Lease. Like the powerless Wizard, then-President Grover Cleveland turned the marchers away at the gate. (For a fuller history, see my book, The Web of Debt.)

As with McKinley’s tariffs, President Trump’s tariffs are said by critics to be backfiring, contributing to a dramatic stock market drop and prompting retaliatory tariffs and trade withdrawals from other countries. Economists warn of broader fallout. According to a New York Times analysis on March 9, tariffs and retaliation could slash U.S. GDP growth by a full percentage point in 2025, and households are potentially facing an extra $1,000 annually in costs due to tariff-driven inflation. Internationally, the tariffs have triggered withdrawals and realignments. Reuters highlighted on March 10 that the U.S. stock market had lost $4 trillion in value as recession fears grew, and the S&P 500 lost $1.7 trillion just on April 3.

The Lincoln Alternative

Rather than alienating our trading partners and stressing investors and consumers, Trump could take a page from Abraham Lincoln’s playbook. Lincoln wasn’t opposed to tariffs. Campaigning for the Illinois state legislature in 1832, he said, “My politics are short and sweet, like the old woman’s dance. I am in favor of a National Bank, I am in favor of the Internal improvement system, and a high protective tariff. These are my sentiments and political principles.” The tariffs were intended to protect the country’s fledgling industries from foreign competition, but they needed a national bank to provide the credit necessary to flourish.

President Washington set the model with the First U.S. Bank, which was essentially a national infrastructure and development bank. According to Treasury Secretary Hamilton’s Reports to Congress — the First and Second Reports on Public Credit, the Report on Manufacturing, and the Report on a National Bank — the Bank’s primary purposes were to manage the government’s Revolutionary War debt by turning it into a productive asset, using debt-for-equity swaps to provide capitalization; to issue a uniform national currency; and to provide credit for infrastructure and manufacturing, spurring economic development at a time when capital was scarce.

The Second U.S. Bank followed that model. But President Andrew Jackson declared war on the Bank, and its charter expired in 1836. During the ensuing “Free Banking Era” (roughly 1837 to 1863), the country was left without a national currency or a national bank. Individual banks chartered by states could issue their own banknotes, usually redeemable in precious metals held in reserve by the issuing bank. It was a chaotic system, with the value of the notes varying according to the distance of the customer from the bank. Distance mattered in case the bank ran out of precious metals in a bank run, a common occurrence.

Lincoln didn’t get his national bank, but he did sign the National Banking Acts of 1863 and 1864, which stabilized the chaotic money supply with a single currency backed by precious metals and federal securities; and he avoided trapping the country into a crippling debt at exorbitant interest rates by issuing debt-free Greenbacks to fund the Civil War. With this financing, Lincoln’s government not only won the war but funded major infrastructure and development, including completing the transcontinental railroad that connected the country from coast to coast.

Greenbacks constituted 40% of the national currency in the 1860s. Today, increasing the money supply by 40% would mean adding about $8.8 trillion. Yet this massive money-printing during the Civil War did not lead to hyperinflation. Greenbacks suffered a drop in value as against gold, but according to Milton Friedman and Anna Schwarz in A Monetary History of the United States, 1867-1960, this was not due to printing money. Rather, it was caused by trade imbalances with foreign trading partners on the gold standard. And price inflation abated after the war.

Today’s Treasury Could Follow Lincoln’s Model

The most direct way for the present Treasury to solve its debt problem is to follow our first Republican president and issue currency directly. One possibility is to issue trillion dollar coins. The Constitution provides, “Congress shall have the power to coin money and regulate the value thereof.” That approach and its constitutionality is detailed here. President Lincoln solved his debt crisis with paper U.S. Notes or Greenbacks, a move that was upheld by the Supreme Court.

Economists will cry that money printing on a major scale will result in hyperinflation, devaluing the currency and driving up consumer prices. But that did not occur with the Fed’s QE following the 2008-10 Global Financial Crisis, and the inflation objection can be overcome if the new money is used specifically for expenditures on infrastructure and new goods and services. When supply and demand remain in balance, prices remain stable, and the currency can retain its value.

To economists, “inflation” means an inflated money supply; but “too much money” drives up prices only when “chasing too few goods.” The price of eggs recently doubled, but it wasn’t because the number of customers demanding eggs suddenly doubled. It was because the supply of eggs was radically reduced by the culling of over 20 million egg-laying chickens due to the bird flu scare. The obvious solution is to increase the chicken population. Increase supply to meet demand.

Some Historical and Contemporary Examples

China transformed itself from one of the poorest countries in the world to global superpower in only four decades. Where did it get the money? Mainly, it just issued the yuan, as shown in my last article here. The chart in that article from Trading Economics is now behind a paywall, so here I will use the dates and figures that are still publicly visible on their web page. Citing the People’s Bank of China, it states,  “Money Supply M2 in China averaged 93486.82 CNY Billion from 1996 until 2025, reaching an all time high of 320526.31 CNY Billion in February of 2025 and a record low of 5840.10 CNY Billion in January of 1996.” 320526.31 divided by 5840.10 = 54.88, which can be rounded to a factor of 55 or 5500%.

At the same time, the U.S. money supply increased by only 600% ($3647.9 in Jan. 1996 to $21,671 in Feb. 2025). The U.S. money supply is increased by bank lending, so 600% can be considered an average increase from that source over 29 years. That leaves a 4900% increase in the Chinese money supply from “money printing,” through mechanisms explained in my last article. Despite this dramatic increase in “demand,” price inflation remained relatively stable and was actually lower overall than in the U.S. The new money created new GDP, which shot up along with the money supply.

In the U.S. from 1930 to 1945, the money supply approximately doubled to finance economic recovery and the war effort. Consumer prices swung from deflation during the Depression to inflation during World War II, but the overall average remained low. The new money was largely injected through loans from the Reconstruction Finance Corporation, a federal agency that took on the role of an infrastructure bank. The debt to GDP ratio in 1946 reached a high of 121% — as high as in recent years — but it dropped down to a very manageable 31% by 1974, not because the debt was paid down but because GDP increased from the money poured into manufacturing and infrastructure in the 1930s and ‘40s.

Germany began the 1930s literally bankrupt. New money was injected in the form of a labor-backed currency (“Mefo bills”) issued by the government, directed specifically to manufacturing and infrastructure. MEFO bills allowed billions in military and public-works funding, but inflation did not increase.

Contrary Examples

What about the hyperinflation of Weimar Germany in the 1920s, or the Zimbabwe hyperinflation of 2007-09? According to Prof. Michael Hudson, who has studied this issue extensively, “Every hyperinflation in history stems from the foreign exchange markets. It stems from governments trying to throw enough of their currency on the market to pay their foreign debts.” The new money did not go into creating new goods and services. It was used to pay foreign debts in a currency over which the country had no control. This left the domestic currency vulnerable to rampant short selling by speculators, resulting in serious devaluation and hyperinflation.

Commentators often point to the 2020 COVID-19 payments to consumers — the stimulus checks under the CARES Act and subsequent relief packages — as the culprit driving up prices in the following years. The assumption is that demand outstripped supply purely because people had more cash to spend. Personal disposable income did spike by about 10% in 2020; but in a properly functioning economy, higher demand spurs production. That did not happen in the COVID-19 years because supply could not respond.

Nearly 100,000 small businesses were closed permanently due to COVID-19 by mid-2021. Meanwhile, global supply chains were clogged. The Los Angeles and Long Beach ports saw container ship wait times jump from days to weeks, while production was crippled by factory shutdowns in Asia along with labor shortages. A 2024 Brookings analysis concluded that “COVID-19 inflation was a supply shock.” Again the remedy is to increase supply along with demand (money).

How to Ensure that New Money Is Channeled into New GDP

The economic miracles of China, Germany and the U.S. following the Civil War and Great Depression demonstrate that governments can at least double the money supply—sometimes multiplying it manyfold, as in China — without spiking consumer prices, provided new money fuels infrastructure and production to match money supply growth with GDP growth.

In China, this is enabled by a sprawling network of over 2,000 publicly-owned banks, in addition to the three federal policy banks including China Development Bank (CDB). The Big Four national banks are predominantly owned by the central government, through entities that sell shares to private investors but retain government control, while thousands of city and rural banks are controlled by local governments at the county level. These institutions channel credit into local projects, amplifying economic output.

At the national level, China’s three giant policy banks funnel credit into the federal government’s long-range plans for infrastructure and development. This multi-year focus has been called a major advantage of Chinese “command capitalism” over Western “stakeholder capitalism,” in which private companies are required to focus on short-term profits for their stakeholders. However, the United States could form a publicly-owned national infrastructure bank like the CDB with long-range capabilities, on the model of Hamilton’s First U.S. Bank and Roosevelt’s Reconstruction Finance Corporation. The latter was not actually a depository bank but was a federal agency formed by President Hoover, expanded by Roosevelt’s government into a massive credit-generating machine for infrastructure and manufacturing.

HR 4052, titled “The National Infrastructure Bank Act of 2023,” is currently before Congress and has 47 co-sponsors. Like Roosevelt’s Reconstruction Finance Corporation, the bank is designed to be a source of off-budget financing, without adding new costs to the federal budget. For more information, see https://www.nibcoalition.com/.

At the local level, state-owned infrastructure banks could do something similar. Currently our only state-owned bank is the Bank of North Dakota, but it is a very successful model that  not only funds state infrastructure and development but generates income for the state and acts as a “mini-Fed” for local banks. For more information, see the Public Banking Institute website.

The U.S. could also issue money directly, as Lincoln did in the 1860s with Greenbacks, and the German government did in the 1930s with Mefo bills, among other examples. The German government avoided speculative exploitation of the funds by issuing Mefo bills as payment for specific industrial output. The British did something similar in the Middle Ages with tally sticks issued as payment for goods and services, a system that lasted over 600 years. Keeping federal payments honest and transparent is possible today with modern IT technology, one of the assigned tasks of the DOGE IT team.The possibilities were framed in an editorial directed against Lincoln’s debt-free Greenbacks, attributed to the 1865 London Times (though not now to be found in its archives):

If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.

Without trade wars or kinetic wars, President Trump is in a position to achieve the vision for which President Lincoln might have taken a bullet, through the time-tested expedients of publicly-issued money and publicly-owned banks.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

Very recently I read a scholarly article in which the author attempted to summarize the history of US policy in Africa, dating from when the Kingdom of Morocco was the first government to recognize the newly formed confederation of North American states that had won their independence from Great Britain. The author supplied a diplomatic history which culminated in the regime’s focus on the risks of “terrorism” in Africa as a key element of its foreign policy. Nowhere in the article—and this is no exception—was the concept of terrorism defined or elaborated. Apparently there was no need to identify or even to investigate the content of a “terrorism” or “counter-terrorism” policy.

In previous reflections I have attempted to clarify the political language used to manage and confuse both the ordinary person and those who for whatever reason have devoted professional efforts to understand the course of events since the end of what Eric Hobsbawm called the “long 19th century”. Economist Michael Hudson has argued that until the outbreak of the Great War (World War I) the world—at least the industrialised part—had in fact been moving toward socialism. Anglo-American scholarship has traditionally mocked this observation attributed most notably to Karl Marx. However such a denial of historical facts only served to justify the wars initiated by the British and American Empires to prevent this development. Professor Hudson argued that there were competing forms of socialism. Marx was a partisan for a particular tendency. However, Marx had every reason to believe that some form of socialism was inevitable. The successful October Revolution in Russia and the failed November revolution in Germany were not aberrations. On the contrary the two world wars and subsequent long war after 1945 were concerted efforts by the meanwhile merged Anglo-American Empire to resist and ultimately defeat socialism—except in China.

The summary argument below is based on the assumption that the 20th century and its extension into the 21st century has been shaped by the Anglo-American war against any form of socialism, especially to the extent based upon popular democratic political culture. The principal obstacle to understanding this long war lies in a failure to properly comprehend the underlying philosophy of governance in the Anglo-American Empire and its idiosyncratic use of the term “democracy”. The US, due largely to its settler-colonial history, but also to the culturally diverse immigrant pool that would compose its population, has been the site of considerable conflict over the terms of “democracy” to the extent that immigrants from non-English-speaking countries also brought their own political and social culture with them. Hence, much of US political warfare has been the concerted effort by the Anglo-American elite to impose that idiosyncratic democracy model on ethnic communities with different social and political traditions. The imposition of a highly concentrated mass media propaganda apparatus and industrial management structure was facilitated by the absence of any surviving indigenous socio-political culture or entrenched population. Thus, it is hardly surprising that numerous foreign observers of US society were struck by the extreme conformism among the country’s inhabitants, something quite unfamiliar to visitors from the European continent or other parts of the world.

Anglo-American political theory, going back at least as far as the so-called Glorious Revolution, defined democracy, not as a principle of popular political rule but as a model for the governance of joint stock companies. The franchise was not only explicitly restricted to property ownership. The scope of the franchise extended to the appointment of officers and servants and the allocation of profits generated by business operations. Following the example of the Dutch East India Company (VOC), the British East India Company became the model of the corporate state, where even the monarch was reduced to the role of shareholder. The “democracy” and democratic procedures formulated for directing the business of the chartered companies were never intended for determining, let alone implementing, policies for the general welfare. The general welfare, although occasionally the subject of English and Scottish theories, was effectively limited to the privileges and immunities of shareholders, individually or collectively. The origin of parties in this system was not the organised interest of citizens but of economic actors, i.e. adventurers (investors), landowners, and merchants. The fact that Anglo-American political theory has been extrapolated to include citizens, i.e. nominally independent commercial actors, does not mean that the underlying qualification for the franchise has been altered.

Here it is important to note that the joint stock company is an exclusive not an inclusive entity. The substance of political struggle throughout the 19th and 20th centuries can also be understood as efforts to either reduce the entry barrier to shareholding or expand the scope of business interest to include elements of the general welfare. The so-called progressive movement was essentially an effort to subject social or general welfare interests to the principles of scientific management. Management principles that evolved in the concentration of industry were adapted to discipline populist demands. Professional specialisation in political, social and economic functions created experts in the fields to which citizen interests were allocated. Just as Frederick Taylor used time-motion studies to turn skilled work into discrete operations that could be performed by unskilled workers, the progressive movement and emerging social sciences turned complex social and economic interests into simplified business operations that could be performed without the need for educated, informed and interested deliberation. Politics was established as a management discipline within the dominant ideology of corporatism, the underlying theory of joint stock company governance.

Fast forward to the post-colonial, liberation struggle epoch following the failed attempt to destroy the Soviet Union and prevent the emergence of New China: After the consensus-building diplomacy among the great powers of Europe and North America, culminating in the Berlin Conference, the allocation of overseas territories, mainly but not exclusively Africa, was inscribed in international law. When in 1918, the German Empire, Austria-Hungary, and the Ottoman Empire were subjugated militarily, their respective overseas territories or domains were allocated to the victors. In some cases they were absorbed into the winning empires properly and in other cases they were distributed after negotiations to the victors as so-called “mandates”. After WWII the remaining mandates were converted into so-called Trusteeships, reflecting the change in language between the League of Nations and its successor the United Nations. The mandate was a legal concept introduced to conceal the spoils system by which the losers of the Great War were punished by depriving them of their colonial possessions under the pretext of self-determination, whereby the victors’ colonies were not offered such benefits. The survival of the Soviet Union despite all attempts to destroy it since its foundation, left the Western powers, now led by the United States of America, with the unpleasant task of supporting the independence of former colonies while keeping the deep economic control over them that had made them so profitable for their owners. The USSR, which since the consolidation of the October Revolution had renounced imperial aspirations or legacy, became a vocal and occasionally material supporter of the rights to national self-determination which had first been proposed by the insincere US government presided over by Thomas Woodrow Wilson. Whether Wilson actually believed his famous 14 points or simply promoted them as beneficial for US interests can never be known for sure. The man who “kept the US out of war (in Europe)” to win election and then proceeded to approve US war mobilization efforts may be accused of insincerity or impotence (or both). The details are something for archivists and apologists to sort.

One of the less directly advertised outcomes of the Great War was the consolidation of financial capital protected mainly in the City of London, New York City and the Swiss Confederation. The establishment of the Federal Reserve System in 1913 extended the private control of national economies exercised through the Bank of England in the British Empire to the once independent North American federation. Carroll Quigley, in his posthumously published The Anglo-American Establishment, describes the Cecil Rhodes Round Table project for reasserting the British Empire by integrating the United States. What later became known as the Milner group, after Rhodes protégé Alfred Milner, concentrated doctrinal control over the British media, through All Souls and Baliol and the Rhodes Scholarships over British academia, and through the Chatham House consortium (Royal Institute of International Affairs and Council on Foreign Relations) over the formulation of imperial policy. According to Quigley, this doctrinal control was imposed on what passes for journalism and historical scholarship. Thus in combination with its friends in North America, Herbert Hoover comes to mind, what counts as knowledge about the British Empire (and since 1945 the Anglo-American Empire) has been subject to the control and manipulation by a complex cadre structure extending through universities, publishers, research institutions and so-called “think tanks”. While this invisible ministry of truth, as George Orwell called it, has not been able to suppress all dissenting interpretations of the past three centuries of Anglo-American dominance, it has been able to force much of the dissent to the margins. This is done by a) denying access to regular teaching and research posts with the authority they confer; b) strict control of access to archives and official records much of which are held in secured private vaults like those of the Hoover Institution at Stanford University; c) exclusion from the reputable press and publishing entities who propagate the authorized history and interpretations; d) rewarding ideological compliance with all the preferment and largesse at the Empire’s disposal; e) the creation and promotion of innumerable institutions with real and simulated scholarly expertise to flood public space with the authorized version(s). Of course, there are less pleasant means available but despite the proliferation of alternative and social media these are sufficient to impose an enormous burden on anyone trying to present facts or interpretations inconsistent with the preservation of the Empire and the devotion it fosters.

Quigley admits that he actually agreed with the objectives of the Establishment he described. As a sympathetic reporter he was more concerned about the potential failures than betraying any secrets that might impede the progress of the world he ardently supported. That is probably one reason why he discusses the problems created by the Rhodes testaments in their various versions, aggravated by the fact that Cecil Rhodes had no heirs to the fortune he had amassed through his British South Africa Company and other entities. Quigley gives little attention to Lord Rothschild, Rhodes’s friend and executor. In fact, the Rothschild interests are barely mentioned. Although the two branches of the infamous financial barony are notorious for the extent of their involvement in international affairs (business and political), discussion of their familial or business interests in the affairs of nations has been consistently trivialized if mentioned at all. In the era when the Habsburg dynasty ruled an “empire upon which the sun never set”—predating British claims to that distinction—no serious historian would ignore the matrimonial arrangements made to extend that control. Yet since the French Revolution, the only attention to dynastic profligacy has been given to the House of Saxe-Coburg/ Battenberg/ Windsor, in short the dispersion of the family of which Britain’s Victoria became “grandmother”. Monarchy, especially the British, is inseparable from pageantry. The display of opulence or even its conspicuous avoidance serves a critical function in maintaining the respect for the power behind it. Although apparently trivial, the fact that the recently deceased and longest reigning British monarch, Elizabeth Windsor, was casually called “the queen” even by people who were not imperial/ commonwealth subjects or citizens demonstrates how an archaic form of personal rule can be popularized even among ostensible republicans. In other words, what is displayed officially should never be treated as accidental. At the same time what is conspicuously absent from public view should not be considered careless omission.

All that said, what does this tell us about the definition of the term “terrorism”? Meanwhile there is an enormous body of literature on the subject. The subject has been treated as a species of crime, as an instrument of political action, as a moral issue, and as a field of behavioural control, e.g. policing, prevention, protection, care for victims etc. Terrorism has been defined sociologically, psychologically and politically. It has been treated as a policing problem and a military threat. An industry has been established and thrives on the products of “counter-terrorism”, “anti-terrorism”, and security. Innumerable institutions have been founded and funded to handle the problem. In my youth the term “terrorism” was used to categorize violent crime or threatened violence by persons or organizations that were not entitled to use violence, usually against—at least it was claimed—unarmed, innocent or defenceless civilians. The most notorious “terrorist” act of my youth resulted in the death of an Israeli Olympic squad during the Munich Olympics. According to the story at the time, a group called “Black September” seized the Israeli Olympic team in Munich as a means of calling attention to the policies of the Israeli government in Palestine. The immediate result of this action was the deployment of a special weapons and tactics team, what became Grenzschutzgruppe Neun (GSG 9) to rescue the hostages whereby all hostages and Black September members were killed. The second result was the first regular and systematic searches of international airline traffic, initially applied to all flights to Israeli destinations.

Of course the actions of the National Liberation Front in Vietnam were also called “terrorism,” but due to the fact that the US was waging a massive war in the then Republic of Vietnam (the scale of which only became apparent after Richard Nixon’s forced resignation) and that all these acts occurred in Vietnam, they were merely local matters for those in Vietnam. Terrorism in the western peninsula of Eurasia was mainly of interest to NATO bases and the political establishment that had been created by the US after 1945. Bombings and kidnapping in Italy or kidnapping and assassination in Germany were designated as terrorism but still treated as local matters. No later than the late 1990s it was revealed that much if not all of that European terrorism was organized by the Gladio network created by the Anglo-American intelligence services at the end of WWII. The term that emerged was the “strategy of tension” whereby covert NATO forces intended to purge what remained of the Left from European politics by associating it with supposed “left-wing terrorism”. The immediate effect of this covert action campaign, aside from the selective death and destruction caused, was the adoption of internal security legislation and proliferation of special police powers throughout the West European Union/ EEC/ EU. Those powers and legislation have only been increased and radicalized with time.

The ideological premise of the “strategy of tension” was that the Soviet Union and its communist allies was funding and arming groups of dissidents (mainly youth) in order to foment revolution and overthrow the “basic democratic order” in the West. In some cases these terrorists were supposed to be Maoists or even Trotskyists. These distinctions added to public confusion and permitted the actual sponsors to manipulate competing groups. As operatives have occasionally admitted, the funding of a Maoist group of “ultra-leftists” was a powerful strategy for dividing mainstream socialist and communist parties, thus diluting their electoral impact in countries like France and Italy where they enjoyed substantial support.

With the demise and annexation of the German Democratic Republic and subsequent collapse of the Soviet Union with the entire Eastern European infrastructure it had created, terrorism could no longer be presented as the work of the “Evil Empire” headquartered in Moscow. The only useful terrorist venue remaining was in Palestine where the terrorist regime that established the Israeli State had been waging war against the remainder of the indigenous inhabitants (their “Indians”) at least since 1948. The expansion of the occupation to part of Egypt and parts of the other states reluctantly carved by the French and British out of their Sykes-Picot mandates had elevated the armed resistance to international terrorism. Despite United Nations resolutions adopted with the license given to European and Ottoman terrorists to found an independent state by the name of Israel, recognizing the inherent rights of the indigenous inhabitants as at least equal to those of the invading immigrants, the Israeli terrorist forces were regularized as a national army while the indigenous self-defence was relegated to the status of terrorists. The expansion of territorial control—i.e. conquest and imposition of vassalage—in neighbouring countries created the conditions de facto whereby the indigenous resistance became “international terrorism”. Countries that explicitly supported what would become the Palestine Liberation Organization in compliance with the UN resolutions licensing the establishment of Israel and the inherent rights of Palestine’s historic inhabitants were denounced by the former mandatory powers, under aegis of the Anglo-American Empire, as sponsors of “international terrorism”. While the term terrorism continued to be used in US-led counter-insurgency operations throughout Southeast Asia and Latin America, the focus of attention became the Middle East. Terrorism was popularized as a kind of generic trait of “Arabs”, itself a term of distortion applied now to all people in the Middle East who are not European Jews or their descendants living under the state of Israel.

In 1997, William Kristol and Robert Kagan, founded the Project for the New American Century (PNAC). In this context, such notions as “a new Pearl Harbor” began to circulate in what are called neo-conservative political circles. The “new” American Century refers to the appellation attributed to Henry Luce, that the 20th century, especially in the wake of World War II, was the American century. Kristol, Kagan and their like argued that with the elimination of the Soviet Union as the archenemy the world had essentially been made free for US supremacy. However, such supremacy would be challenged. They asserted that just as “Pearl Harbor” brought Americans together behind strong leadership to wage an international war for American values, it would take extreme stimulus to move the American people from their inherent lethargy and turn them into a force capable of assuring US supremacy around the world. This stood in stark contrast to the idea held widely beyond American shores that the end of the Soviet Union and hence the end of the so-called Cold War would bring the long-desired “peace dividend”. Kristol, Kagan and those who supported them were worried—just as their fathers had been in 1945—that peace would break out. Members of the permanent foreign policy establishment, like George Kennan, and the arms industry, like the DuPont family, were seriously concerned that the enormous profits and power accrued waging covert war against the Soviet Union and counter-insurgency everywhere else would stop once the public on both sides of the Atlantic recognized that there was no more enemy. In fact, the principal occupation of the policy elite in the Anglo-American Empire as it emerged in 1913 has been the threat of peace. Once one understands the implications of that principle then it is no longer a mystery that the longest continuing war since 1945 is the United Nations invasion of the Korean peninsula in 1951.

Just as Carroll Quigley pays almost no attention to the interest the Rothschild dynasty could have in the Round Table project, almost no attention is given to the role of the Rockefeller dynasty—acting mainly, but not exclusively, through the Rockefeller Foundation—in the establishment of the United Nations. However, a sober recognition of the function of so-called philanthropy (the corporate successor to papal or royal patronage and preferment) ought to induce more critical attention to dynastic power. The League of Nations is inconceivable without the establishment of the Federal Reserve System with its merger of Rockefeller and Rothschild interests. The shift from Geneva to New York was an acknowledgement of where industrial and military power lay. The invisible pseudo-neutrality of the imperial-based League was replaced by the unabashed display of US power, managed by its paramount dynasty. While it is true that the Du Pont dynasty is the senior “noble house” in North America it lacked the international scope that the Standard Oil magnates had acquired when dividing the world of petroleum with their British counterparts. The October Revolution and the failure to destroy the Soviet Union by 1943 meant that Standard Oil was simply the more powerful of the two energy kingdoms. Naturally it can only be speculation but it is reasonable to assume that the Anglo-American financial oligarchy consummated in 1913 and baptised in 1918 was ready to wed in 1945.

The preeminence of the financial oligarchy, not just in the latter half of the 20th century, but for the entirety of the 20th century, must be understood in order to grasp what terrorism really means today. Political-economist Michael Hudson has argued—in support of Karl Marx but based on historical analysis—that in fact everyone in the industrialized economies saw socialism as inevitable by the end of the 19th century. Marx was not utopian. Nor did the 1918 German revolutionaries, murdered at the behest of their Social Democratic and aristocratic enemies, err in the judgement that the collapse of the Hohenzollern monarchy was the signal for socialism in the German Reich. It took enormous violent effort to prevent socialism from becoming the dominant political-economic form in the West. That effort began with the Great War, later World War I, which despite propaganda at the time and since was a class war intended to destroy working class movements throughout Europe and impose the new world financial order on what had been an agricultural and industrial economic system. A lot of popular debate, stimulated by attacks on China, focusses on the deindustrialization of the major Western economies. This is attributed to free trade agreements and expanding offshore manufacturing promoted by the policies introduced under Ronald Reagan and Margaret Thatcher. While it is true that the end of the war against Vietnam and the artificial oil crisis nominally caused by the 1973 oil boycott were inducements for major manufacturers to look for cheaper labour, this was opportunity not novelty. The end of World War II would have returned the US to massive unemployment had the destruction of competing industrial base not been so thorough, leaving US cartels with seemingly infinite markets for excess production. By 1973 this was no longer the case. European manufacturing, especially in Germany had recovered and was demonstrably more competitive than anything the US had to offer. Thus, the oil boycott purged the SME sector and—because of the secret agreements between the US and the main Arab producers to only bill oil in US dollars—allowed the US to continue to increase its financial stranglehold on much of the world economy that now needed USD liquidity to buy fuel and feed stock. The official media practically equated the results of this covert deal-making with “economic terrorism” by Arab states taking advantage of their nominal sovereignty over much of the world’s known oil reserves in an attempt to impose a solution to the expansion of the Israeli state in the region.

The confluence of interests that led to the so-called Oil Crisis can be grasped by anyone who has read John Blair’s book The Control of Oil (1976), based on his work as a researcher for the US Congress investigating transnational corporations. The original report upon which Blair based his book exposed the intricate workings of the “Seven Sisters”, the world oil cartel, but was suppressed by order of President Eisenhower since its publication would possibly impair national security. Specifically the report showed how the oil cartel, led by Standard Oil (Esso), controlled the world supply of oil—and not the Arab potentates most of whom had been installed through the efforts of those very oil companies. Naturally the Eisenhower administration did not want to expose a key element of its international economic power. More importantly, as the 1973 fixing of oil prices to US dollars demonstrated, the control of oil was integral to the power of the Anglo-American financial oligarchy. Although the Bretton Woods institutions, World Bank and IMF, were initially designed so that the US dollar would replace sterling and subordinate the franc, the oil coup in 1973 gave the regime virtually unlimited power to bankrupt its collective bete noir, the newly independent countries of the fallen empires.

Jamaican prime minister at the time, Michael Manley, made the point clear. When the Bretton Woods accords were signed, Jamaica as well as practically all the newly independent countries were part of either the sterling or franc system. They had no national currencies. Needless to say they were not represented in the negotiations. Until 1973 they imported or exported based on fixed exchange rates for their own currencies. With the Oil Crisis (coup) all these countries had to buy US dollars at exchange rates that could only drive their economies into debt spirals. Meanwhile the US Treasury could issue as many dollars as it needed to buy whatever it desired. Its banks, as owners of the World Bank and IMF, could dictate terms to any country without its own oil reserves and refining capacity. As Cuba learned, US refiners would not process alternative oil supplies from the Soviet Union, forcing it to nationalize plants built and operated by US multinationals. The capacity to manipulate both energy markets and currency markets was lodged in the two biggest banking and oil cartels, those of the Rockefeller and Rothschild families. The story of the international debt crisis is to extensive and complex to elaborate here. Yet it is crucial to recognize that energy and finance are two sides of the same institutional power. There is no financial power without control over energy and no energy policy without brute financial power.

The familial or dynastic element in this analysis will strike many as excessively personal and others as insufficiently dialectical. However, even if men do not make history as they choose, history is nonetheless made by men. Men make history through organized action and through the capacity to shape the perceptions upon which others base their action. Men create institutions and they shape them, even if no one man ever completely controls even the institutions he creates. As I pointed out at the start of this appreciation, there are methods for investigating or at least describing how history is made or how power is exercised. Yet, many of these methods are incomplete or even insincerely applied. Political science and history offer explanations, but these are actually fairly low order descriptions of group behaviour or the results attributed to such actions. The terms of reference are simply too restricted. In the case of the Anglo-American Empire, Quigley argued that these restrictions are not accidental or incidental to some scholarly process which, were it refined, would give better results. Instead, Anglo-American historiography and hence its political science are skewed by those upon whose patronage they ultimately depend. This patronage has long ceased to be merely the gentlemen’s agreements made at All Souls or White’s. It did not take a century, but more than a hundred years have lapsed in which generations of cadre have spread throughout the imperial system. There is a plenitude of institutions whose staff and members may never have heard of let alone seen a Rockefeller or a Rothschild. The last thing that would occur to them is that they are domestic servants or courtiers in some great aristocratic household. However, they were born and raised in a culture which sustains the ideas, values and practices of those who engendered these dynasties. That is what distinguished institutions do. It is their primary function. Oxford, Cambridge, Harvard and Yale do have the capacity to educate but their foremost role is to indoctrinate, to instil loyalty first to the alma mater but also the culture for which she stands. While the fashions may change, the petty morality be modified, the essence which made these institutions possible and continues to sustain them is spiritual, in the Hegelian sense (cultural in Peckham’s sense). Hence it is from the capacity for cultural continuity along with the capability of undermining or destroying competing cultures that any serious analysis must accept as a foundation to extended power.

It must be added here that the focus on the Rockefeller or Rothschild dynasties is historically accidental. They did not invent the financial system they currently dominate. The central elements of the modern financial system were internationalized by the papal-rabbinical regime in Rome. Meanwhile, these instruments have been digitalized. However the root of them all is the complex of indulgences, auricular confession, Inquisition and crusades. There is really nothing available to the IMF or Goldman Sachs that was not in the purview of Innocent III when waging the Fourth Crusade.

Finance and energy are governed by two rarely stated but cardinal rules: “other people’s money” and “other people’s oil”. Since whatever is called money in any society is ultimately arbitrary, there is no natural limit to the supply. Financial power derives from controlling other people’s money. The Standard Oil trust was established not by owning the oil supplies but by controlling the transport, refining, sale and distribution of oil and oil products. The Anglo-American “central bank” cartel does not create money—that is solely the prerogative of the State. It creates debt for which the State farms taxes and other charges or provides enforcement. This is plain from the statutes establishing the Federal Reserve, the charter of the Bank of England and the agreements by which the Bank of International Settlements, World Bank, International Monetary Fund and their subsidiaries were formed as international entities beyond the reach of sovereign states or their citizens.

Terrorism is not really what masked men do when they try to kidnap someone or seize something to extort a favourable political decision. It is not something Arabs, Muslims or communists do to achieve their aims. Terrorism is not a phenomenon against which one can be protected like locking one’s car or home or wearing safety belts. There is no armour or surveillance that can prevent or interrupt terrorism. Airport controls or entry controls at other public spaces cannot prevent terrorism or limit any damage attributed to it. Neither the amount of fluids carried in hand luggage, nor the prohibition of cutlery or small arms can have any impact on terrorism. Moreover, none of the foregoing are relevant to terrorism at all—in the way has been consistently and deceptively defined for decades.

In order to understand terrorism and its relationship to the innumerable activities supposedly conducted or promoted to counter terrorism, one has to have a proper understanding of the overall cultural system in which this term is applied. It is necessary to examine what behaviour corresponds to terrorism, not the term is used to label. In other words one has to move from the explicit to the implicit or the stated to the unstated. Watch what is done. Do not be distracted by what is said. The overall cultural system is financial. That means that the instructions for performance at the highest explanatory level are governed by what can be called the imperatives of cash flow. Cash flow describes the movement of money, energy, primary commodities, and people (who for all intents and purposes are just another commodity).

In the process of transforming the agricultural – industrial society back into a system of rents (or to use the papal-rabbinical terminology, the trade in grace), an model of allocating economic surplus was replaced with a model for managing scarcity. This model, sometimes attributed to Alfred Marshall but in fact developed by his successors, has been called marginalism. Coincidentally the economic theories upon which marginalism is based were articulated and popularized about the same time chattel slavery was being abolished, at least formally. One can speculate whether a restored theory of economic scarcity just happened to become popular once bonded labour was withdrawn from the market and newly freed labour could demand some of the surplus it had been forced to generate. It is not necessary to prove that the economists of the day devised theories to diminish any demands by freed slaves. If one accepts the premise that an emerging financial oligarchy funding and guiding the direction of teaching and research raises the questions that scholars and scientists ought to answer—as is clearly the case today—then no explicit instruction was needed to shape the overall agenda. At the same time as the political economy of surplus allocation was being realigned to reflect planned scarcity, free labour and other popular movements were being guided by what became known as progressivism in North America and Fabianism in Britain. There many of the proponents were more explicit that professional or expert solutions were needed for systemic problems (disorder) to prevent popular movements from asserting themselves in such a way as to threaten the oligarchy materially. Again the trail of philanthropy can be found. Without disparaging actual improvements in the daily lives of millions, the purpose of philanthropy is not to end the plunder and exploitation which enriches the donor but to selectively dilute resistance to the donor’s plunder and exploitation. Philanthropy is like the fluid a parasite injects into its host to conceal extraction or make it less painful. Progressivism evolved from the same cultural swamp as Frederick Taylor’s scientific management. By analysing the complaints among populists, the pwog administrator performs the equivalent of a time-motion study on the movement under study. Like Frederick Taylor who saw this dissection as a means of replacing skilled workers with interchangeable employees performing subroutines that could be easily taught and learned, the pwog or Fabian sought to identify the elements of discontent which could be corrected by employing professional staff and permanent bureaucrats who were able to perform the needed tasks but immune to the political or social concerns from which they arose.

Parallel to these organizational developments the chartered/ public accounting profession was launched. The financial oligarchy was able to prevent legislation which would oblige public companies (joint stock corporations) to submit their books to government regulators for inspection. Based, among other things, on assertions of intellectual and trade property rights vis a vis competitors but also the State, the legislatures adopted laws which permitted companies to hire their own inspectors whose certificates would be accepted in lieu of government inspection or public disclosure. The employees of these accounting companies would be examined and certified by boards of their peers. Only accountants so credentialed by their peers would be permitted to issue certificates for the accuracy and completeness of corporate financial records. Thus corporate financial records could remain secret and the public demand for disclosure diverted. Certified accountants and lawyers together would protect the public interest in fair dealing vicariously.

For this system to function in an environment dominated by huge, international trusts, internal corporate structures had to change too. Slowly major manufacturing enterprises managed by engineers or men with experience in their respective fields were to be subordinated to the new financial management ideology. The certified accountant gave birth to the controller. The controller or financial controlling department had two basic tasks. One was to translate all the manufacturing management data into accounting figures that could then be rendered in company reports, either to shareholders or regulatory/ tax authorities. The other task was to police material production processes using accounting and measurement criteria. That is to say the physical operations had to be reduced to measurable cash flows. The pinnacle of controlling was articulated in what became known as systems theory. From this controlling function all manner of operations were translated and integrated to produce reporting routines. Reporting, the regular production of measurement data and its application to internal corporate management, expanded wherever there was some movement from which value accumulation or loss could be expected. The bigger the corporation and more diverse the operations, e.g. in the trusts and conglomerates, the more powerful the controlling/ reporting function became. Economic concentration, which has not ceased since the end of the 19^th century, has made central controlling, reporting and planning indispensable. The central controlling and reporting departments do not add value or increase the effectiveness of any manufacturing or other enterprise operation. They provide the means for regulating the extraction of value from the enterprise both upstream in terms of reporting and downstream by dictating which activities are to be preferred or abandoned (because of their impact on key performance indicators). The controlling department is not interested in the end customer, the employee, the supplier of inputs or any other material quality relevant for actual business operation. It is a surveillance instrument. Its mere presence in the form of reporting requirements and planning targets imposes limits on all those doing real work, buying or selling, or anything else entrepreneurial. The demand to reduce everything to some numerical value shapes the corporate environment internally and at all the interfaces between corporation and other actors and entities.

To say that this controlling ideology is a metaphor for observable institutional behaviour beyond the factory gate is too little. The introduction of analogue computing machines in the 1940s found immediate application in state operations. An IBM subsidiary supplied state of the art computing machines to partially automate the administration of forced labour camps in Germany under the NSDAP regime. The creators of the Phoenix Program in the CIA developed—in collaboration with renowned academic institutions—the Phoenix Information System. This computer system reduced the digested interrogation and police surveillance data collected by units of the Republic of Vietnam on behalf of the CIA to numerical input to generate “kill lists” for the US counter-insurgency campaign against the National Liberation Front in Vietnam. One former CIA officer later called it “computerized mass murder”. Recent reporting from occupied Palestine told of a system called “Lavender” that supplies Israeli forces with similar “kill lists”. The controlling systems have been developed and deployed without interruption.

As horrifying as the use of computer technology for planned assassination or mass murder is, that is only the most spectacular and infamous application. The underlying controlling ideology is far more insidious. Controversy, albeit superficial, about the dangers of artificial intelligence (AI) beyond the industrial applications already common focus on the error rate or the capacity of someone, presumably decent and law-abiding, to control the AI systems and prevent their abuse or defective performance. They only rarely address the ideology embedded in the technology and its social-political genealogy, i.e. its cultural historical content. In a recent interview I was asked if AI, with its military-policing history, could not be converted to benign civilian uses? My reply was simple. Why should any society be spending extraordinary amounts for military technology to convert to civilian use? Would it not make more sense to invest in civilian uses from the very beginning? This economic aspect was so obvious to me that I cannot understand why it is so rarely asked—except as Joan Roelofs has shown, so much of the economy has been literally bought to support military over civilian purposes in return for token support of residual community needs. It is therefore tempting to ask if there really is any meaningful civilian sector in today’s economy or society?

The Anglo-American Empire in its conversion (or reversion) to a quasi-feudal formation ruled by a financial oligarchy adopted or restored systems for policing, regulating, expanding or restricting the flows of money and energy as well as people and primary commodities. The highest order principle in this organization (and hence explanation) is the numerical control of data flows. In the system of domination and enrichment (capital accumulation) these data flows can be distinguished as cash, energy, “contraband”, primary commodities or raw materials, and human populations. In the first two decades of the 21st century, the overall objective of the financial oligarchy or the output of the system it has created can be represented as the rearrangement of human populations such that they are removed from areas where the underlying resources are deemed more valuable than any labour that could be extracted by the inhabitants. These populations are being transferred to the spaces where populations are declining or actively being reduced. This population transfer policy is global and it is organized and conducted by a combination of actors including intergovernmental private-public partnerships (a euphemism for fascist organizations). At the same time resource flows are increasing, e.g., plundering of oil and grain from states under attack and subject to deliberate deportation efforts. One of the ancient professionals using this business model is George Soros, who by his own public admission already enriched himself at the age of 14 with the help of Nazi occupiers of his native Hungary. Another class of professionals use the World Health Organization and related agencies. They follow the Bill Gates version for neutralizing the recalcitrant and profiting through the entire value chain. Those are simply the most notorious. They are creatures of the financial oligarchy and its controlling system. As has been said often enough even Soros or Gates will die, like David Rockefeller finally did. However the proclamation “the king is dead, long live the king” does not apply solely to crowned monarchs. A culture’s resilience, even as a pathology or parasitical form, is reflected in the survival of the system even after the demise of its bodily representatives.

So having said what terrorism is not as well as recounting in summary form a lot of 20th century history, something ought to be said about what terrorism is, besides a much abused and confusing word. When the Project for the New American Century “anticipated” the “new Pearl Harbor” as the bonding moment for another century of US (Anglo-American) supremacy, to the extent that they were honest and not just true believers, they would have understood that they were calling for a state sponsored act that could be manipulated in order to impose a war that no ordinary person otherwise would have demanded—certainly not in the great and insular United States of America. Here is not the place to elaborate the means by which the demolition of the NY World Trade Center towers on 11 September 2001 was executed. The crucial point is that this event was branded as the “new Pearl Harbor” and led to the declaration of the Global War on Terror and the adoption of the USA Patriot Act.

A “war on terror” reflects language dating back to the presidency of Lyndon Johnson who while presiding over the war against Vietnam also led the launch of a “war against poverty”. This would be followed by “the war on drugs.” This habit of applying war as an instrument of social policy has been called “Wilsonian”. Thomas Woodrow Wilson, kept the US briefly out of the Great War only to turn it into the “war to end war”. American presidents would also advertise “war for democracy”. The real fact, however, has been that the financial oligarchy that seized power in 1913 transformed the US into a war economy and a war society. It was both financialized and militarized at the same time. The Great War—to end war—also gave birth to what is now the largest psychological warfare industry on the planet, comprising Hollywood and Madison Avenue, plus the “Beltway”. The Valstead Act (prohibition of alcoholic beverages) was the first step in the creation of what can now be called the pharmaceutical-military-industrial complex. The 20th century marked the transformation of the United States from a continental empire into the most heavily armed, full spectrum belligerent on the planet. In other words, every aspect of American life was defined by warfare in one form or another. This is reflected in the vernacular as well as the astronomical sums expended officially (the unofficial or concealed budget is immeasurable) for national defence.

What is the Global War on Terror, if it is more than a slogan like so many in American politics? I believe the answer can be found by returning to the cultural historical context—to the conditions under which the financial oligarchy seized power and maintains it. The project for the new American century is undoubtedly a program for permanent war. Yet that is restating the obvious. What is not so obvious, but bears closer scrutiny, are the beneficiaries of permanent war. For much of the twentieth century, the financial oligarchy could be and was identified with the dynasties responsible for its inception, specifically the Rockefeller and Rothschild families, their relatives and retainers. Today the public faces of the financial oligarchy are the CEOs of a small group of hedge funds, BlackRock being the most notorious among them. The hedge fund is the modern manifestation of the financial framework created by the papal-rabbinical monarchy in Rome—it is the modern market-maker in sin, grace and salvation. The hedge fund and its precursors in the evolution of the financial oligarchy rely on the accounting-controlling ideology originally applied within corporations but as the corporation and the State merged was extended to the management of the State itself. Just as the controlling department became the central policing, surveillance and regulatory element of the corporation, its equivalent has become the organizational heart of the State. The corporation is managed using surveillance and reporting the results of which are distilled into key performance indicators and many other measurements. The corporate state is not only a merger of interests, whereby the corporation excludes any previous claims against the State by citizens, it is also a merger of methods and instruments. These methods and instruments are applied to control the flows of cash, energy, contraband, raw materials and crucially people. While cash, energy, contraband and raw materials have historical economic measures that can be easily applied within the controlling framework. People, especially those who are neither bonded labour nor serfs, require intermediary methods and instruments in order to translate them into accounting values. When travel was relatively rare and largely restricted to upper classes, there was little need for mass surveillance. Even the great immigration waves of until the early 1920s were one-time policing actions, except for dissident deportations and race removals on the Pacific coast. Both the relative improvement of living standards in North America and post-war Europe added to the human traffic but not significantly.

The most significant challenges for population control began during the Central American counter-insurgency waged under Ronald Reagan. Eliminating about 20% of the population of El Salvador, by death or migration, was considered sufficient to suppress any nationalist movements that could threaten US domination. As long as the Soviet Union existed immigration/ migration in Western Europe was largely confined to movements from former colonies to the urban conurbations of the colonizers. The defeat of the Soviet Union and with it the expected potential to redesign the planet in the interests of the Anglo-American Empire (financial oligarchy) called for an entirely different scale of management. That was what the Project for the New American Century was actually proposing. That new management system is terrorism. Terrorism is not the advertised acts of politically or economically dissident individuals or groups. Those advertised acts are epiphenomena within what should properly be called the “terrorism system” or “terrorism resource management system”. When the US government—in the widest sense of that term—declared the Global War on Terror they were announcing the introduction of a global surveillance and accounting system intended to manage human flows worldwide. Just as Taylorism once had to be imposed by force in factories, terrorism has been imposed as a management tool wherever humans congregate, labour or are in transit. The arbitrary inspection and “security” measures, whether at airports or other nodes of human movement, are accounting instruments. They are dictated by the controlling department of the corporate state for operational management as well as reporting. Unarmed, ordinary travellers are monitored just as are those whose task it is to transport contraband or deploy to armed propaganda and terror action against targeted populations. The so-called “terrorists”, whether branded as Al Qaeda or ISIS, like their precursors in Phoenix and Gladio are system products and instruments for managing population flows. In some places, like Syria, they are also deployed for the management of resource plundering or demolition of civilian infrastructure, both of which are in turn parts of the cash flow model by which hedge funds operate. In order to understand the elusive meaning of the language around terrorism, a cultural historical concept is needed not merely a trivial political one. The political concept of terrorism is a marketing/ branding idea with no substantive explanatory utility. Just as so much political science is written about politics but not about power, the literature on terrorism describes supposed terrorists and imagined terrorist organizations but does not identify the terrorism system within the financial oligarchical culture that dominates the West in the early 21st century. By expanding the concept of terrorism to include, literally, the full spectrum of domination, the relevance of global psychological and financial warfare campaigns like the Covid-19 war and the Global Climate Change war to a culture of total financial control can be imagined and understood without losing the explanatory power for examining the nature of corporate state violence.

This content originally appeared on Dissident Voice and was authored by T.P. Wilkinson.

by T.P. Wilkinson

His detailed description was rational and cautious, yet it raised a specter which was clearly alarming. Weinstein described the conditions and the character of two camps that he saw. One fit the description of a classic refugee camp. It was visibly managed by a number of NGOs as well as US government agencies. The other appeared to be full of Chinese. He was able to talk to numerous migrants in the first camp but was unable to enter the one which appeared to be Chinese.

The “Chinese” camp seemed to be full of military age young men who when addressed outside the camp were reluctant to talk.

After discussing the discrepancies, Carlson asked if he had any explanation. Weinstein was exceptionally cautious and only uttered hypotheses. However, the direction implied the possibility that China was sending men to the US behind the migrant screen.

Then Weinstein shifted to the possible relation between a Chinese contingent and Covid with the mRNA injections that the US government (along with nearly all Western governments) forced on much of the population. Although Weinstein was very explicit that his hypotheses were not facts and that he did not know if there was any relationship to verify, the discussion proceeded to cover possible motives and objectives of both policies supported by the US regime.

The speculation is provocative and not to be easily dismissed. Nonetheless, it also revealed how little many people seem to understand about how covert operations can work. Michael Yon can be recognized as a special operations professional. While popular imagination continues to portray these men as mere super soldiers, the reality is that Special Forces are the armed cadres of the CIA and other covert action (state terrorism) agencies. A quick look at Yon’s website shows him as a super-soldier or soldier of fortune who has been a dedicated operator in all the CIA managed wars of the past three decades. That alone ought to raise suspicions about his coverage and why he was so interested to show a biologist and popular podcaster the frontier of what are undoubtedly covert operations. Weinstein was taken into Yon’s confidence much like the journalist character in John Wayne’s notorious The Green Berets film, promoting the war against Vietnam.

Allowing that Weinstein reported what he honestly saw, the question remains whether he saw what he was supposed to see. That returns us to the question “why Chinese?” The ensuing discussion raised legitimate questions about connections between US immigration policy and the Covid War. However before considering them it is necessary to return to the first camp. Weinstein named several organisations supporting the migrant camp. He identified USG agencies and the UN agency IOM. What he either did not know or did not recognise is that the International Organization for Migration is run by the US national security bureaucrat Amy Pope.¹There is general confusion about how the UN and its specialized agencies are run. The WHO is essentially an arm of the Gates Foundation and the international pharmaceuticals (pharmaments) cartel. It would not be unreasonable to suppose Ms Pope assures that the IOM complies with the policies set by those who rule the US. Weinstein’s conclusion is that such policies as those articulated by the Biden administration reflect corruption on a global scale. However that does not answer the question who benefits from those policies and how?

To return to the compulsory mass injection, especially of the military and other health and safety services, Weinstein and Carlson both expressed their bewilderment and shock that the compulsion was so rigorous in what might be called the public services sector. Then more speculation returned to COVID and mRNA injections and what these were doing to people in the US. Consensus prevailed that this was biological weaponry deployed. While there is no reason to doubt that assertion, the next step was to repeat the half truth that China was the source of the raw material both for the pathogen and for the injections since the latter were based on the former. Neither Weinstein nor Carlson could recall that the actual origin was Eco-Health Alliance, a cutout for US bioweapons development and Ralph Baric at UNC-Chapel Hill, the principal investigator commissioned for the DoD gain of function (weapons) development. Weinstein is probably not savvy enough to understand how cut-outs work or the details of false flag operations. Carlson probably does know but rarely if ever discusses such details. The accuracy of the media depictions of COVID in China were accepted as debunked. Yet the sources of that “information” were not examined. Thus, Chinese authorship was implied.

While discussing the implications of the migration crisis + “Chinese”, the hypothesis was aired that both the managed “uncontrolled” migration and the covid/mRNA weapons aimed to weaken the US from within. This might serve the Belt and Road Initiative (BRI) by mass infiltration of potentially militarized immigrants who would then create the conditions most favorable to alleged Chinese expansionism. This it was suggested might be due to China having essentially bought the US government. This hypothesis has been peppered by regular reports of bribes paid to inter alia the Biden family by Chinese interests.

Striking in the discussion is the absence of two considerations: a) the complex of US anti-China war propaganda which naturally compromises any reporting about China in the West as a whole and b) the interests of the Western oligarchy in redesigning the West as a neo-feudal regime. Leave that eyesore, the CIA-founded WEF, aside for a moment. There are purely national phenomena which provide a far more efficient explanation.

As a matter of record Mr Gates is now the largest private owner of farm land in the US. There is no indication that he has stopped buying. Since the 2008 mortgage crisis, the hedge funds like Black Rock have become the largest owners of rental property (residential and commercial). This feat was accomplished by the massive derivatives fraud that forced millions of mortgagees to forfeit their real property. The economic devastation continued this process. Sane economists, of which Michael Hudson is one of the few, have charted this conversion of home ownership to rental tenancy and its acceleration. The Anglo-American finance oligarchy is aggressively pursuing through the banking, tax and monetary system an unparalleled expropriation of rank and file Americans.

During the mass incarceration, I wrote several times that COVID was political-economic warfare using biological agents and financial terror. My argument, then and now, was that this is atomic grade social engineering. In the worst case — for the oligarchy — this neutralization of the country’s majority was a clearing of the decks for open world war. Masses who might, under pressure of extermination — especially in the military and armed citizenry — actually rebel and mutiny leading to an October scenario. However, there is another scenario compatible with the history of North American conquest. In the 19th century, the tiny oligarchy was incapable of fulfilling its manifest destiny by stealing the whole continent. So bonded labor and massive immigration were used to take and hold everything between the Allegheny and the Pacific. Poor immigrants were granted the freedom to fight and die in battle against the indigenous population. Afterwards the land won was handed to railroads, finance, miners and ranchers. Successive economic crises bankrupted smallholders regularly. They abandoned their homes and moved westward. “Indians” and Chinese-bonded labor kept those settlers busy while the usual suspects seized all the land and loot, selling it back to successive suckers. Forced displacement was fundamental to the business model that “won the West”. Even to this day, the oligarchy represented in Washington understates the use of biological agents to eradicate the indigenous peoples. Few 19th century immigrants admit how they were used to enrich East Coast elites. Perhaps that is the policy followed today, the one at home which bears examination. The immigrants are driven by plane and on foot from the South. Meanwhile, mRNA injections provided the same comfort as smallpox-treated blankets.

ENDNOTE

It is after all just a hypothesis, but with tradition.

This content originally appeared on Dissident Voice and was authored by T.P. Wilkinson.

On or about 6 June 2024 will be the 80th anniversary of what Western schoolbooks and Hollywood propaganda films tell us was the decisive blow against the NSDAP regime in the German Reich. The continuing war through Ukraine is beyond irony. Meanwhile, the expected continuation of slaughter in Palestine will surely enhance the cynicism on those hallowed beaches.

However, the purpose of D-Day, the better late than never concession to the Soviet Union of a “second front” against Germany, has always been presented as evidence of the West’s magnificent contributions to defeating Germany for the second time in the 20th century. Subsequent Anglo-American occupation of first the rump Federal Republic and then the annexed Democratic Republic have assured that the Anglo-American history of the Second World War prevails in the culture of the vanquished. Even today to challenge that history in any public fashion can bring dire consequences.

Critical historians have repeatedly called attention to discrepancies in the official history as well as the on-going revisionism with its denials.[1] While even the suggestion that this official history may be inaccurate or incomplete can incriminate the critic as a so-called “holocaust denier”, attempts by the Russian Federation to punish the glorification of the fascist era have been opposed with scorn by those who ostensibly fought on the same side. The revisionary process reiterates or elaborates the view that the Soviet Union and the NS regime in Germany were essentially the same. The implication is that the Red Army defence of what was still the Soviet Union against German invasion was a crime while the collaboration of ultra-right wing Western Ukrainians with the German invasion—including formation of dedicated Waffen SS divisions like the Galizia—were heroic acts of national self-defence.[2] No later than 2014 this implication has been adopted as canonical history in the West, at least at governmental level. The bureaucratic authoritarian bodies of the European Union have fostered this process with attempts to equate the Soviet Union with the NS regime or at least to attribute the war to the acts or omissions of the Soviet leadership under Joseph Stalin.

However if blatant distortions directed at the defunct Soviet Union and its successor, the Russian Federation, are relatively well known and openly controversial, there are numerous matters regarding the Second World War which still deserve some scrutiny. Such scrutiny is not merely of academic relevance. The Second World War—along with its precursor the Great War—is the great sacramental myth upon which the Anglo-American Empire relies for its legitimacy, even among those who are either reluctant or embarrassed to accept it. Then as now a central issue is the concept of “war guilt”. It may be argued that this moral or religious concept derives from that most formative of eras in Western history—the Crusades. The Latin papacy, both for political and financial reasons, established the Christian doctrine of war for salvation of souls. The political reasons were obvious. Expanding the Latin empire required more than mendicant preachers it needed “boots on the ground”. Rome’s coup against Constantinople could only be sustained by military means. Moreover the control over the trade routes that passed through Asia Minor required armed occupation. Hence, the relatively under-populated peasant provinces had to be reaped for able bodies. Preaching the Crusades—recruiting foot soldiers and raising money—was complementary to the papal derivatives market aka the trade in relics and indulgences. For all the cant about Islam and its holy wars, the Latin papacy established salvation through organized mass murder as a firm institution in Western culture, a curse with us even today. A salvation model needs sin and guilt from which one is to be saved in the first place. Hence it was probably a natural development that empires built on the exploitation of the salvation model of militarism would need a moral template by which to judge their victories and defeats. If the Great War was the culmination of Western imperial competition then it is hardly surprising that morality would reach a critical mass, leading to the infamous “war guilt” provisions of the Versailles treaties.

Wherein could the “war guilt” actually be found? The diplomatic record, some of which has actually made its way into history books, shows that the French acted covertly to undermine German efforts to negotiate with the members of what became the Entente. The Wilhelmstrasse had successfully persuaded the Russian Empire to withdraw its general mobilization order and negotiate differences with Germany.[3] Thus, the Schlieffen Plan for the invasion of France via neutral Belgium became an imperative for the German high command. The French government would have been forced to negotiate to avoid a war with an industrially and militarily superior German Reich. Even if this French subterfuge is conceded, German militarism is claimed as unimpeachable evidence for German war guilt. A disingenuous Australian historian reasserted the naïve claim that the war was no one’s fault but the result of “sleepwalking” in Europe’s foreign offices. This attempt to sidestep the “war guilt” issue is self-serving. Rather than openly confronting the chain of culpability and the exculpatory evidence in favour of the German Reich, the “sleepwalkers” thesis removes the culpability issue from the table under the pretext of dismissing the “war guilt” question entirely.[4] This question of war guilt cannot be properly addressed without first considering the fundamental change that occurred between the “long 19th century” and the “short 2oth century”.

Political economist Michael Hudson summarized the “long 19th century” in a very different way than its most noted proponent, British historian Eric Hobsbawm. While Professor Hobsbawm describes the “long 19th century” as the evolution of liberal-enlightenment (somewhat democratic) values, Professor Hudson also following Marx describes it as the evolution of industrial capitalism toward socialism.[5] By that Professor Hudson described the direction of classical economics (also identified with the Enlightenment) as the struggle to eliminate the rentier or landlord class and its parasitic role in society.[6] Industrial adventurers would take capital and organize it in new ways together with labour to modernize society and provide goods and services appropriate to that modernization. Part of the surplus value would accrue to entrepreneurs but those resources which were natural, like land, water, air, minerals etc. would be developed as state monopolies so that the forces of production would drive society rather than the forces of extraction. This socialisation was in fact occurring despite the most vicious resistance by the landlord class and its ally the Church. According to Hudson, 1914 did not end liberal democracy but the drive toward socialism necessary for any kind of democracy, whether liberal or mass-based.

The Great War was not accidentally a war against Germany. It was a war launched against an increasingly efficient social-economic model that was out-producing the leading manufacturing country of the day and moreover delivering a higher quality of life to its citizens. This war started however before 1914 through economic and cultural war against both the German Empire and Austria-Hungary. German militarism was fed by the successful efforts by those who controlled British and French finance to obstruct the Berlin-Baghdad Railway. Not unlike measures presently taken to impede the Belt and Road Initiative, every effort was taken to block a land route from Central Europe to East Asia that would bypass the British merchant marine and Anglo-French ownership of Suez—with all that control implied for international trade.[7] In 1914, like in 2024, free trade and freedom of navigation were reserved to the Anglo-American Empire and no one else. Absent realistic commercial or diplomatic channels to establish Germany’s access to the world economy, the intensification of military preparation could have been no surprise. However objectionable armed force is, Germany’s application of it was neither unique nor without justification. Guilt, termed liability in civil law, not only presumes intent but also the capacity to act otherwise. The doctrine of force majeure or acts of God rebuts liability for acts performed under conditions the actor could neither foresee nor prevent. Hence official historians, as dedicated attorneys for the Establishment, must conceal or obscure evidence that an adversary was compelled to act or was denied any alternative to the act condemned.

The Second World War was a continuation of the British Empire—meanwhile all but formally amalgamated with the American Empire—to assure British domination of world trade and Britain’s exceptional status among nations. Rightly those summoned to Versailles to submit to further economic and social strangulation were to suffer the wrath of nationalists at home. Then as now, nationalists are evil if they are not one’s own. In the aftermath of this until then greatest known gratuitous mass slaughter of youth and manhood, the efforts to restrain competition and obstruct economic development led to the overthrow of the Romanov dynasty in the impoverished peasant empire of Russia. The Communist Party under Vladimir Lenin began a massive socio-economic transformation. This revolution was necessarily built upon the wholly inadequate and failed tsarist infrastructure and bureaucracy; a fact Lenin admitted would be a major obstacle to the country’s modernization. However this revolution threatened the permanent debtor status, which the Romanov’s century-long pawning of Russia’s wealth and economic capacity had created. Thus there was every incentive for the same bankers and cartels to support the counter-revolution with the help of the US, Great Britain, the Czech Legion and Japan. The withdrawal from the Great War had aggravated the Anglo-French front. To prevent the default on the battlefield and in debt service, the international community (the banking community that is) induced the US to intervene on the side of the British and French just enough to save impending bad debts and to prevent a negotiated peace among equals.

Economic warfare against Germany continued under the various extortion treaties designed for the public imagination to “punish Germany” for its war guilt. Thus an attempt to overthrow the servile Weimar regime was defeated by Allied support to the German military and the assassination of critical leaders. Not only were Karl Liebknecht and Rosa Luxemburg murdered by forces friendly to the Allies. Officially, Walter Rathenau, son of the family that ran Germany’s AEG electricity group, was assassinated by a right-wing anti-Semite. Most probably he was murdered for his negotiation of the Rapallo agreement between Germany and the Soviet Union by which the former would supply industrial equipment in return for raw materials.[8] Even the circumstances of Rathenau’s murder bear an uncanny resemblance to another conspiracy, the assassination of the Austrian Archduke Franz-Ferdinand in Sarajevo.[9] The more one examines story of economic warfare, assassination and ethno-nationalist conspiracy, the more obvious it becomes that the Open Society Foundations, NED and Otpor merely modernized established British covert foreign policy toolbox. Historians, or those who pretend to this function, as well as journalists have long been key performers in the mass deception that perpetuates “good war” mythology and its dramatic climax, war guilt.

However prior to the Great War, “war guilt” was not an essential part of the law of nations. In fact, one of the consequences of the treaties signed in Westphalia ending the first Thirty Years’ War was to de-moralize it. By recognizing the authority of rulers to define the religious regime of their respective states, a significant step was taken away from the salvation model of warfare. By the 19th century this could be captured in the dictum attributed to Carl von Clauswitz that “war is the continuation of policy with other means”. The realpolitik expounded in his classic Vom Kriege (1832) was a general’s assessment of the professional soldier’s role in his country’s public life. While it is understandable that a professional army officer would write about the relevance of armed combat in statecraft, this is not the same as preferring it to diplomacy or negotiated problem-solving. By withdrawing the religious or moralizing component war itself, von Clausewitz did not legitimate war as an amoral endeavour. Instead he placed the responsibility for morals and ethics on those who make state policy and hence decide whether it is to be pursued by force of arms. Thus the soldier is a servant of a moral or political order and not the one to define it. Any question of guilt or innocence has to be answered in the policy and those who make it not in the army per se.

On 27 August 1928, in Paris, the representatives of the high contracting parties, including the United States of America, the United Kingdom (and its dominions), France, Germany, Italy, Japan, Poland, Czechoslovakia, Belgium and Ireland, signed the General Treaty for Renunciation of War as an Instrument of National Policy, aka the Kellogg-Briand Pact. This much-ridiculed treaty, still an element of international law in force, ratified by the US and hence integrated into its national law, was remarkably simple.

Its main text comprised only two articles.

“Article I

The high contracting parties solemnly declare in the names of their respective peoples that they condemn recourse to war for the solution of international controversies and renounce it as an instrument of national policy in their relations with one another.

Article II

The high contracting parties agree that the settlement or solution of all disputes or conflicts of whatever nature or of whatever origin they may be, which may arise among them, shall never be sought except by pacific means.”

This treaty was signed, adopted, and ratified independent of other inter-governmental institutions such as the then extant League of Nations. Hence it became international law independent of any inter-governmental or supranational body. Its provisions were absorbed by the United Nations Charter but not superseded by it. By 1929 all the countries that were later to constitute the belligerents during the Second World War had ratified the treaty.

The Kellogg-Briand Pact transcended the realpolitik with which von Clausewitz and a century of militarism had been associated. Von Clausewitz removed the morality from the profession of arms and submitted it to the authority of the State rather than the generals. The 1928 treaty renounced that particular continuation of policy and created an obligation to negotiate and apply peaceful measures. It is unnecessary to demonstrate the ineffectiveness of the treaty in preventing war. Even when the treaty was signed and ratified contemporaries saw it is empty idealism. There were neither enforcement nor penalty provisions. However such objections lead to the absurdities of the current UN system by which the dominant founding member arrogates the sole right to punish “breaches of the peace” by waging war against those accused. It did not take long for this to occur. The US abused not only its veto power but also every other diplomatic and economic measure to obtain Security Council approval of its 1951 invasion of the Korean peninsula.

However, before such blatant bullying and deceit were applied to protect the US coup d’etat in Seoul and plans for “rollback” in China, there was an even more insidious deceit. The “good war” has meanwhile been shown to be far less good than Hollywood or schoolbooks have told us for the past eighty years. The unambiguous battle by the “good” against the “evil”, while necessary to preserve the crusading spirit of the Anglo-American Empire, is full of inconsistencies beginning with the funding of the NSDAP paramilitary forces needed to suppress political opposition before the elections in which Hitler’s party established a minority government with the help of the Latin pontiff. The formal abolition of the Zentrum ordered by Pope Pius XI eliminated the largest party in the German Reichstag and the only formal obstacle to Hitler’s appointment as chancellor. This detail is often omitted to support the erroneous assertion that the Germans elected Hitler. Once the government had been formed and the Enabling Act adopted to eliminate constitutional limitations on the government’s power, there was no shortage of support from American and British cartels. Well before the orders for Operation Barbarossa were given, Hitler’s government and rearmed military was being used as a cut-out for Britain’s war against the Spanish Republic. The minutes of Hitler’s meeting with Franco in Hendaye indicate that Franco appreciated Britain’s role in his victory while Hitler did not.

Carroll Quigley credibly argued that there was no “appeasement” on the part of Neville Chamberlain in Munich. Quite the contrary, Chamberlain in his capacity as a member of the so-called Round Table group, was intent on delaying any confrontation with the German Empire that would direct its attentions to the West. Moreover the strategic negotiations that led to the absorption of the Sudetenland, the occupation of Czechoslovakia and the annexation of Austria were generally accepted as legitimate remedies to the wholesale territorial seizures resulting from Germany’s defeat in 1918. There can be no doubt that negotiating the amalgamation of German-speaking territories from the defunct Austro-Hungarian Empire was entirely consistent with the stated policy of the famous Wilsonian “Fourteen Points”. These principles had until Munich never been applied to Germany or Germans. The subsequent portrayal of the Munich accords as surrender to an insatiable German dictator obscures Britain’s constant duplicity. At the same time it was conceding the legitimacy of German demands it was secretly encouraging the Czechs and Poles to oppose them, promising diplomatic and military support which never came. These features along the road to world war, while perhaps unfamiliar, are sufficiently incriminating to debunk British claims to innocence. Nonetheless claims to Germany’s “evil” role persist.

After years of suppression, testimony is emerging that supports the accusations that Franklin Roosevelt at least could have known that the Empire of Japan had planned and was undertaking an attack on America’s Hawaiian colony. Although Roosevelt was accused of deceit at the time of the attack, the story of the surprise and unprovoked Japanese aggression has remained the cornerstone of US history, not only of the Second World War but also for all its subsequent wars. Pearl Harbor itself became a metonym for fiendish surprise by which any adversary of the US is denounced as evil—and popularly accepted as such. Despite the suspicions harboured for decades, official history has maintained the ex post facto argument that even if the POTUS had known about the pending attack on the Pearl Harbor naval station, the evil of the Anti-Comintern Pact regimes, usually known as the Axis, is self-evident.[10] Feigning surprise was “a good lie” for “a good war”. However that is doubly dishonest. First of all, the horrors of the Second World War were only acknowledged in their magnitude after the Axis had been defeated. Defenders of the “so what” thesis must attribute clairvoyance to the POTUS not merely good intentions.

The “good lie” for the “good war” defence relies on two assumptions: one, the Anglo-American Empire was innocent of the cause of the war and two, it was genuinely surprised by the attacks that led to its participation in the hostilities. If the Anglo-American Empire was culpable in the start of the war, the element of surprise attack is deemed mitigating. In other words, the culpability accepted only extends to the part in real conflicts and controversies, not to the aggressive acts committed by Germany and Japan.

There is a technical issue, in itself minor, but if given due weight may also rebut the claims to innocence in causing the war. Here the much-maligned Kellogg-Briand Pact is quite relevant. The terms of the General Treaty oblige the parties to resolve problems by peaceful means and to renounce war. By alleging that one or more of the Axis powers committed surprise attacks the argument is made that it was the Germany or Japan which had breached its obligations under the treaty by failing to pursue negotiations in lieu of using armed force.

Here the actions of the Soviet Union take an entirely different colour than the one in which they are commonly depicted. The Treaty of Non-Aggression between Germany and the Union of Soviet Socialist Republics, the Molotov-Ribbentrop Pact, has been denounced by the official histories and by many who considered themselves members of the Left, or even a communist party. This treaty has been almost universally condemned in the West. The Establishment points to it as proof for its “Hitler equals Stalin” equation. The Left beyond the orthodox Communist Party followers of the time, saw it as Stalin willing to appease Hitler at the expense of the international workers’ struggle against fascism—however defined. Yet US Ambassador Joseph Davies (from 1936-1938) was quite clear when he said that the Soviet government pursued negotiations with Germany while France and Britain were essentially arming Hitler to attack the Soviet Union.[11] Davies, who had no reason to defend either Stalin or the CPSU, was assessing the diplomatic cesspool of British and French foreign policy.

Meanwhile in the Pacific, where the US had expanded its empire in 1901 to include practically every island that was neither French nor British between San Francisco and Manila, the US consistently supported Japanese expansion into the Asian mainland. For his contributions to this feat Theodore Roosevelt was even awarded a Nobel Peace Prize—proof that the award had been debased long before it was given to Henry Kissinger. Later US Secretary of State Dean Acheson would even admit that one of his principal assignments in Foggy Bottom prior to 7 December 1941 was to direct economic warfare against Japan. The US within the context of its established geopolitical doctrine of Manifest Destiny, under the pretext of the Open Door, was determined to succeed all European powers as the dominant imperial force in East Asia.[12]  The United States was pursuing a covert policy, which could have no other effect than to provoke hostilities with Japan. The US supported the transfer of German settlements in China to the Japanese Empire at the end of the Great War. This further eased Japanese conquest of Manchuria, a logical move after the US had brokered Japanese annexation of Korea.

The second phase of the Chinese Revolution had pitted the right wing of the Kuomintang (KMT) against its enforced partners the Chinese Communist Party. Chiang Kai-shek clearly understood that he had the backing of the US against the Communist Party in the same way that the British backed Franco. Japanese invasion was barely opposed because Chiang saw the Japanese not unlike Hitler’s Legion Condor. Superior Japanese military force would help him to crush the Communists and reach an agreement with Japan for the benefit of his own party. Both Mao and Chiang were aware of this role that the US and Japan were playing in China’s internal revolution. US foreign policy and even war plans throughout the 19th century anticipated the possibility of war with the British Empire, its only natural enemy. Nonetheless, British tradition and education has long been the source of American foreign policy, diplomacy and duplicity. The New England elite, whether from Business or the Ivy League colleges, barely concealed their admiration for the British model of indirect rule and duplicitous, espionage-laden diplomacy. Using Japan as a wedge with which to dominate China risked the emergence of Japan’s own capabilities and interests. The Second World War would determine which country’s power would define the Asia-Pacific half of the world, for a while at least.

Already on the eve of the attack on Pearl Harbor there was at least one general officer on MacArthur’s staff who attempted to raise the alarm of a coming Japanese attack only to find that this was no surprise. Moreover, he apparently concluded that there was foreknowledge of which he was not privy. After the war, including three years in a Japanese POW camp, Edward P. King, Jr. wrote a memoir no one would publish in which he related his experience leading up to the attack. In Day of Deceit[13], Robert Stinnet documents what others have claimed but been unable to make heard.

The circumstances before, during and after the attack were so irregular they even deviated from the routines of peacetime naval duty. Leaving aside the suspicious circumstantial evidence that no efforts were made to prepare or execute adequate defence of the naval station, the key to the surprise myth relies on a technical issue which when discussed is minimized or obscured. The British and Hollywood have paraded the story of their cryptographic coup against the German Reich so that everyone has probably heard of Turing and ENIGMA. Less trumpeted is the fact that US Navy signals intelligence and the ONI had successfully broken Japanese ciphers and thus the US was able to monitor most of the imperial fleet’s cable traffic. Even today we only know a fraction of the capacity of signals intelligence work since “national security” would be jeopardized were the extent of surveillance actually known. One need only ask Mr Snowden or consider the fate of Mr Assange to recognize how little we actually know about the cryptographic work of the Anglo-American Empire and its government agencies and privatized surveillance system.

However, it is worth considering that both Germany and Japan were heavily exposed in what they apparently believed were coded communications. Since as has already been shown the Anglo-American Empire had targeted Germany and Japan long before the outbreak of hostilities they had worked very hard to incite, it is not far-fetched to imagine that the deciphering of Japanese and German communications was an on-going operation before 1939 or 1941. If the Anglo-American Empire was in full possession of meaningful, decrypted communications of its two primary adversaries, then it was also in a position to face those potential belligerents with diplomatic arguments for resolving the disputes at hand. Germany and Japan were both led by governments well aware of their relative weaknesses and material deficiencies in the event of war. They also knew that protracted war would exhaust their resources while their adversaries could rely on sources of supply practically immune from attack. There is no reason to believe that confronted with the exposure of their intentions and preparations they would not have launched attacks that could not be surprises.

This leads to the question that remains relevant today. If the Anglo-American Empire was not surprised by attacks but merely feigned surprise then they knowingly provoked a massive world war that not only could have been averted by negotiation but which they were obliged by international law to avert. By inciting Germany and Japan to wage war against them and concealing the knowledge that would have forced all parties to aver armed conflict, they actively inhibited negotiations before the outbreak of hostilities. Unlike the Soviet Union which demonstrably negotiated to the very end, not only with the regime in Berlin but with Berlin’s sponsors and promoters in the Anglo-American Empire, the Anglo-American Empire was in grave breach of its treaty obligations. As more honest historians and journalists have come to argue, the International Military Tribunal—only convened because the Soviet Union insisted on trials—should have included the British Empire and the United States of America in the dock, unindicted co-conspirators, for the breach of the peace and crimes against humanity they wilfully incited, in addition to those they perpetrated on their own account. Instead the crimes of “breach of the peace” derived from the Kellogg-Briand Pact were perverted, one might even say “encrypted” such that they continue to disguise the violations of the substance and the spirit of that noble act of modern diplomacy.

ENDNOTES:

[1] Among others Howard Zinn, A People’s History of the United States (1990), Jacques Pauwels, The Myth of the Good War and The Great Class War, reviewed by this author “’Romanticism and War’: Contextualizing a Theory of Interpretation”, Dissident Voice (15 September 2015). Although Zinn debunks much of the official World War 2 history in the US he completely omits – like many others- the Yalta agreements and the background they set for the Soviet Union in the post-war order. This is no doubt in part because Harry Truman repudiated the Yalta accords at the Potsdam Conference, a time when most people had no idea what had been agreed.

[2] Such was the “heroism” that the remainder of the Galizia division was packed from Italian POW camps and sent to Britain en masse at the end of the war from whence they spread throughout the Empire it seems.

[3] Metonyms for the various governments and foreign ministries: Wilhelmstrasse (Berlin), Quai d’Orsay (Paris), Foggy Bottom (Washington), Whitehall (London)

[4] See “Peculiar Admission in Award Winning Book” Dissident Voice (21 July 2014)

[5] Eric Hobsbawm, The Age of Extremes: The Short 20th Century 1914-1991 (1994)

[6] For articles, interviews, and bibliography of Professor Hudson’s political economic analyses see www.michael-hudson.com

[7] Summarized in F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order (2012)

[8] This story is told in Time Forward!, (Vremya, vperyod!), Valentin Kataev (1932) in English (1995)

[9] Markus Osterriede, Welt im Umbruch: Nationalitätenfrage, Ordnungspläne und Rudolf Steiners Haltung im Ersten Weltkrieg (2014)

[10] The term “axis” for the Anti-Comintern Pact, initially concluded between Germany and Italy and later including Japan, actually conceals the purpose of the Axis, one in which the Allies with the exception of the Soviet Union were entirely agreed. The Axis powers were explicitly agreed to combat the supposed expansion of the Soviet Union by means of the Communist International (Comintern).

[11] An important element of the treaty was the restoration of territory to each country that the Entente had allocated to the new Polish republic. Claims that this was conquest ignore the way in which the Entente imposed border and territorial realignments on Germany and the Russia (which was in the midst of civil war during most of the negotiations).

[12] For a thorough discussion of US imperial policy in the Asia-Pacific region see Bruce Cumings, Dominion from Sea to Sea: Pacific Ascendancy and American Power (2010)

[13] Robert B. Stinnet, Day of Deceit The Truth About FDR and Pearl Harbor (2001)

This content originally appeared on Dissident Voice and was authored by T.P. Wilkinson.

Footnotes can have the formal function of lending an otherwise weak or absent authority to a text full of unsubstantiated or anecdotal assertions. They can also permit the shift of reader attention from a story to the underlying or derivative aspects of that story. They can also instigate a dialogue with the text by showing the reader how to expose the covert reading of the shadow text.

The role of ordinary crime in disciplining political prisoners was described in some detail in the hundreds of pages Solzhenitsyn devoted to his topic, what he called the archipelago of incarceration throughout the Soviet Union to which political prisoners under Soviet Union law could be sent. The form he chose was the literary version of the “docudrama“. Meanwhile less partisan authors and scholars have disputed the number of prisons and the actual number of prisoners suggested or claimed in Solzhenitsyn’s book. However, this does not invalidate one of his central observations, namely, the function of organized crime in the operation of an oppressive regime. To be clear about this, no matter what system creates and maintains prisons, prisons are instruments of oppression. Any discussion about theories of penitentiary organisation, correctional practice, punishment cannot erase this fundamental fact. Moreover any society that lacks oppressive/ repressive capacity cannot maintain stable commerce and social interaction. Therefore the question is not whether a society has oppressive or repressive instruments but what does any given society value and therefore support or repress in order to maintain such values?

No later than what I have claimed in an earlier essay is the shift from surplus appropriation to scarcity management in economic theory, modern political economy has been taught through mass education as a new religion— a secular form of the grace and sin regime established by the Latin and Reformed clerical elite in the reorganisation of sparsely settled sedentary populations in the Western peninsula of Eurasia into fodder for nomadic barbarians who would extend their empire over two-thirds of the Earth’s surface. Until the political-economic apologists were faced with the abolition of slavery and the ascendency of an industrial proletariat, theory focused on how to allocate stolen wealth among the elite estates. With the abolition of slavery (around 1886), the principal occupation of political-economists and the school known now as Social Darwinism was to explain how to prevent the newly freed and the proletariat from claiming their share of the wealth their labour had generated over half a millennia. The explanation they developed was the theory of marginal utility and the redirection of economic management to administering newly discovered “scarcity.”

Introduction of scarcity as the underlying condition of political economy — perversely at times when capitalist crises of overproduction were recurrent — was a sleight of hand. Fast forward to the end of the War against the Soviet Union and Communism: in the US a Canadian Stanford (amazingly) economist named Lorie Tarshis published a textbook, The Elements of Economics (1947) An Introduction to the Theory of Price and Employment, that was recognized as the first textbook in the US based on the theories of Maynard Keynes. This book was quickly banned after a vicious letter-writing campaign led in part by archconservative and reputed CIA asset, William F. Buckley. When I say “banned”, I mean banned. In more than twenty years it has been impossible for me to find even second-hand editions of this book. It is available only in a very difficult to use e-book version in Internet Archive. That is the condition more than fifty years after it was first published. In its place was the Economics: An Introductory Analysis (1948) by Paul Samuelson. It is to the best of my knowledge the only introductory economics textbook in use in the English-speaking world.

Why is that important? What has that to do with Solzhenitsyn and organized crime in prisons, one might ask? Tarshis was far from being a communist as was insinuated at the time. Maynard Keynes was a liberal eugenics adherent and no friend of the working class or poor. However, Tarshis following Keynes included a very important chapter: on administered pricing and monopoly/ oligopoly. Samuelson’s contract as theoretical “hit man” was to expunge this critical element of political economy from the study and teaching of economics. He was also— thanks to the enormous academic-criminal enterprise of which many in his family have been a part, e.g. Lawrence Summers— able to reap accolades long before that ostensible bête noir of liberals, Milton Friedman, earned his fame as economic terrorist (especially as leading theorist of Chile’s economic destruction after 1973).

What is administered pricing? According to the fairy tale still propagated by the Samuelson catechism, all prices are derived from scarcity equations settled in the market by a tendency of supply and demand to reach equilibrium. The deceit— not unlike that propagated by climate hysteriacs- is that there is such a thing as “equilibrium,” never mind economic equilibrium. Tarshis distinguished quite clearly between real economies of scarcity or surplus and oligarchic/ monopolistic economies. For Samuelson et al. oligarchy and monopoly are merely “imperfect competition”. This is akin to calling something ugly, less beautiful.

According to the so-called “neo-classical synthesis”, only the horrible socialists try to set prices and make economic decisions according to plans. In the “free market” these decisions are the result of mathematical divination derived from the laws of economic nature.  However, administered pricing, like administered energy policy, constitutes planning by invisible, publicly unaccountable actors in the private sector using such key performance indicators as return on investment (ROI) or simply how much profit can be obtained at any given price. Since vertically integrated cartels can manipulate input/ factor prices, also with the help of rigged taxation and accounting rules, the question is not at what price will a certain demand level be satisfied but at what price a certain rate of profit can be obtained. This is why such strategies as cross-subsidization or transfer pricing mechanisms can be used to obtain profits despite obvious price inflexibility at the end of the chain— the consumer. To the extent that this is discussed at all in Samuelson and his derivatives it is a pure aberration or distortion. Political power exercised to benefit these actors is concealed by the euphemism “externalities.”

How can a sane person say “distortion” when describing the impact of beneficial ownership of a media market where only five enterprises dominate the industry worldwide? When five oligarchical entities operate under such a regime that were there real, enforceable anti-trust law would be forbidden. Only ignorance or mendacity can call it an exception. It must be treated as the rule. That is point. Assuming that every single graduate that has passed through the Samuelson indoctrination continues either in academic or commercial economics, then we are talking about millions of people whose fundamental education ignores a central fact and operating principle of economics since the beginning of the 20th century. The anecdotal evidence of global ignorance/ mendacity ought to be sufficient to convince any sober thinking person that what we are told about the economy and the society it constitutes is at least twenty per cent nonsense. (I am being generous here.) The damage is actually much worse since the discipline is thus so detached from reality and bound by pseudo-scientific mathematical models that we cannot even begin to imagine another way of organizing resources. (Economist Michael Hudson has worked very hard to do this by returning to the original critical forms of political economic theory: Professor Hudson, who learned economics working in Business and not the Academy, also makes very clear that all modern economies are “planned,” Gosplan was responsible for the Soviet economy, while Wall Street—a closely held private financial cartel—plans the Western economy. See among others Hudson’s Superimperialism)

What does all this have to do with policing?

Since the declaration of the COVID-19 war in 2020 numerous business districts throughout the United States and other Western metropolises have experienced bizarre mass attacks mainly on the retail sector. These attacks often followed or were contemporaneous with mass demonstrations apparently organized and/ or supported by offshore NGOs like Black Lives Matter and Antifascist Action or groups demonstrably trained by the successor to OTPOR. The attacks included looting, vandalism, arson, and assault and battery. Millions of US dollars in property damage were recorded. Many businesses closed their doors or were forced to create expensive security barriers to customers. During this period policing was conspicuous by its absence.

Before continuing the term “offshore” should be explained. The construction of astro-turf organizations requires funding. Organizations are needed to obtain and pay for facilities used whenever masses of people are brought together for any purpose. A daylong event of any sort, especially in countries like the US with a low density of public conveniences, needs provision for basic things like toilets and drinking water. These are key logistical elements of any sustained mass activity and they cost money. A friend of mine from Leipzig who grew up there during the GDR era remarked often about the Monday demonstrations there: who paid for all the toilet facilities during those demonstrations? There was a US TV sitcom, All in the Family (a variant of the 1965-75 British satire Till Death Us Do Part) that was initially quite scandalous not only because of fluid bigoted language but also because the protagonist explicitly talked about and went to the toilet in prime time television. Perhaps American culture is so sanitized that no one can even imagine the necessity of a toilet in public life. Offshore NGOs are these conduits for cash and organizational resources whose actual beneficial owners are screened from public view. The National Endowment for Democracy directs funds for such entities beyond US borders. Other government agencies facilitate these cash and resource flows in the West.

Nevertheless it did not take long to find that massive amounts of money were funnelled to bank accounts of these AstroTurf agents, announced for use as bail bond, etc. At the same time banks on both sides of the great northern border were seizing donations for Canadian truckers protesting government policies. The spokespersons for these demonstrations claimed that they were being held to protest against police brutality and racism, ostensibly in official conduct and economic behaviour. These demonstrations received vast mass media and social media coverage. They were praised by public authorities at state and federal level and in rare instances also by local government officials. During these summers of discontent, much of the population was subject to house arrest; curfews and public assembly restrictions ordered in violation of all principles of due process under US law. In fact, demonstrations attempted to protest the violations of constitutional rights to free speech, due process and freedom of assembly were strictly suppressed by police at all levels while these peculiar demonstrations against police brutality and racism were unobstructed. It became clear that many demonstrators at these events had been bussed in from other locations around the country. Hence local residents were an insignificant part of the action.

As argued in an earlier article, there is an ideology and a strategy at work here. The religious component is a missionary strategy based on and organized through a “purity” cult. However, the social transformation or re-engineering which is the long-term plan has a serious economic component, too. That economic component is rooted in the theories of eugenics and marginal utility or marginalism. Both of these theories arise with a fundamental ideological change that matured in the Manhattan Project.

Prior to 1942, the prevailing – by that I mean also in popular culture—model of humans and nature was mechanical. Nature was a machine and humans, including their cerebral –corporeal interfaces, were mechanical. The culmination of this human model can be found in Frederick Taylor’s time-motion studies, explained in his Principles of Scientific Management (1911). There was a critique of this model among the Romantics but this minority was itself marginalized in favour of the apparently modern “systems” theories. Romantic criticism of the emerging industrial society was complex and contradictory since, unlike the Enlightenment, Romanticism was not a concept of social coherence but an attempt to deal with the inherent incoherence of society and human personality. In any event by 1942, the Romantic approaches to humanism were thoroughly marginalized (to use this metaphor again) in favour of systems theory together with an analogue and then digital-calculation model human nature. When the first artificial intelligence (AI) claims were being asserted at US research universities, one of the leading developers of the underlying programming, Joseph Weizenbaum, denounced the cause in Computer Power and Human Reason (1976). In a talk he gave in the late-1990s in his native Germany, he reiterated that the so-called Information Society was fraudulent. Compulsive computation, as he called it, not only erroneously equated data with information. It also substituted calculation for judgment.

Thus it also followed that the mathematical, compulsive model of the world prevented the judgment that would have condemned the Manhattan Project as the quest for the world’s most nihilistic weapons. Today the computer model of man, the “hackable animal”, whose every act is described and defined on the basis of mathematical modelling, includes the negation of judgment (and of values). Instead this mathematical model of man, merely an aerobic program medium with disposable parts, forms the basis for re-engineering of a society that will be “sustainable and robust”. However, there is a grand deception in this language developed through the appropriation of opposition language in the 1970s and its propagation as reconstituted liberation product—political-economic Velveeta. If the economy is driven by calculation of utility and economic man is governed by this rule, then he—yes, he—must by nature be a calculator and governed by the “laws” of mathematics. From this follows the anti-humanism of Norbert Weiner (Cybernetics, 1948) and Yuval Noah Harari. It is crucial to recall that atomic weaponry and genetic engineering were developed contemporaneously and have continued parallel to this day as elements of a unified weapons suite.

The so-called UN Sustainable Development Goals (SDGs) ought to be judged first of all by their source. The source of all international policy from the United Nations and its agencies was and remains the executive suite of the world’s largest multinational corporations and the governments they own. The flowery language aside—and one must see it for what it is, marketing (propaganda)—this is the agenda of institutions that have all been sworn to the worldview for which the Manhattan Project stands—atomic domination or annihilation of humanity. From this standpoint the human computer and the digital economy are a continuous fabric with the ARPA Net, now called the Internet, which was designed as sustainable communications in the wake of the two atomic strikes the then US Strategic Air Command had planned to destroy the USSR. That is the immoral foundation of this still proprietary technology that billions have been persuaded is the public sphere and governed by liberal freedoms like speech and assembly.

While there have been legal and commercial challenges to create some kind of public sphere out of this technological space—something akin to squatting and the doctrine of adverse possession—we have seen that the real owners of the Internet regularly assert their ownership, either through state agencies or corporate entities. We have yet to establish a doctrine that the electrical and communications grids upon which the theory of Internet liberty is premised can actually be articulated, let alone aggressively defended. Instead we are debating as to why private owners and their state agents do not respect archaic and naïve ideas about human liberty. Is this the fallacy of misplaced concreteness?

There is no enforceable legal regime because there is also no comprehensive economic regime that includes the human as someone more than a computer or machine with legs. There is no biological or moral regime because the argument has been accepted that humans are not animals like the rest of life on the planet and hence no more enemies of Nature than rabbits, fish, birds or fruit trees. Instead the psychopaths of compulsive calculation swoop around the planet to gather, catalogue, patent, digitalize and synthesize everything that could enable their sustainability. Those who fanatically argue for population reduction never appear on the assisted-suicide rosters. Could it be that they don’t mean a reduction of all the population?

Seemingly parallel—but actually at deniable arm’s length—the CIA sponsored World Economic Forum has not only taken the mantle sewn with SDGs, it has also turned them into the loincloth for the not yet unsustainable to wear called “Diversity – Inclusion – Equity”—DIE, for short. (Their marketing departments certainly advised a different order of wording to avoid the obvious connotation.) The principal sponsors of this exclusive club and cutout for the “sustainable class” coincides with those whose wealth derives from the exact opposite of those terms, if one understands them naively. In fact, the WEF and the wholly owned United Nations apparatus are all beneficiaries of the atomic extortion system created by the Manhattan Project. What D-I-E means is literally what Stanley Kubrick so effectively depicted in Doctor Strangelove. It is the world depicted in Soylent Green. It includes the Invasion of the Body Snatchers and Outbreak. This Hollywood propaganda product has been called “predictive”. It is part of creating the psychological conditions for re-engineering.

So amid the Woke Crusade, the legally protected vandalism of vast majorities by “pure” fanatics, two phenomena have emerged to coincide with the worldwide counter-insurgency by force of arms (aka the War on Terror and now the war against Russia). These have been a) mass migration from the countries that the Anglo-American Empire and its vassals have been plundering and pillaging since 1975 almost without meaningful opposition at home or abroad and b) abject failure of even the most rudimentary public safety and policing mechanisms to function.

The rampages since 2020 mainly in the US and the mass illegal migration, in the US and EU but also in countries unfortunate enough to border the imperial plunder and pillage operations everywhere except perhaps Russia and China, are destroying the economic order in which the vast majority of people live their lives. Officially this disruption is a struggle for social justice. However, justice is not a natural condition but one created within definable social contexts. Precisely these contexts, until now, defined by nation-state legal and moral regimes, are under universal attack. The assailants are not secret. The attack on definable social contexts in which local communities can establish and maintain social justice is being organized and conducted at the strategic level by those who own the United Nations and compose the World Economic Forum. The sustainable development goals they pursue are those which clearly permit them to sustain their position and power amidst the destruction of every other social structure that could in any way deviate from the digital-computational vision of life (let us not call it humanity) they have been raised to promote and impose.

It is clear testimony to the effectiveness of the psychological weapons used that while so much has been scrubbed from the Internet (or blocked by available search engines), one can still find a notorious 60-Minutes interview in which George Schwartz (Soros) unabashedly admits that since the age of 14 (!) he has unrepentantly participated in the deportation of people (also to slavery or death) in order to profit from confiscation of their goods and property. This man has been able to promote himself as a philanthropist while enriching himself for some 79 years by the same methods. His Open Society foundations, in addition to acting as conduits for other government agencies, have served as cadre schools and organizational support to thousands whose business model is the destruction of the citizen framework that has historically guaranteed social justice or any kind of organized cultural and economic life—for power and profit. He is demonstrably one of the major funders of the AstroTurf NGOs that wage the war for “purity” (DIE) throughout the world. Mr Soros is just the most prominent and unabashed of the atomic war elite. The dissolution of the legal and social context for communities, historical nations or states, is being pursued to create a world of statelessness in which no institutions are available to protect human beings, especially from those who are like Soros.

The removal of policing, whether of borders or city streets, is elemental to this policy. The destruction of the SME sector, one of the COVID-19 objectives, was accelerated by the armed propaganda tactics of the offshore AstroTurf NGOs. There is a complex of weaponry deployed and the US itself has finally become the target of the strategy its owners have pursued for decades in every corner of the empire. Mass migration will flood the labour market in a country already deindustrialised. It will replace furloughed and mRNA poisoned workers and their families with raw muscle from abroad. At the same time the US will be subjected to unique tactics.

While the EU comprises populations long accustomed to national registration, social management and lack of lethal force among the citizens, the US is a society with a notoriously well-armed population. Moreover its most traditional elements include police, fire brigades, and military veterans indoctrinated with even more patriotism than the average person outside the US can imagine. This poses a threat—mirrored in the regime’s fanatical attempts to prevent Donald Trump from standing in the next POTUS election. The ruling oligarchy has surely been asking itself, especially after growing barracks unrest following the forced mRNA injections, whether its uniformed security forces are sufficiently loyal. Therefore it is very likely that among these “military-aged” illegal immigrant males there are cohorts of trained paramilitary infiltrated into the country, like in Libya or Syria. All this can lead to a major reorganization of the economy based on new forms of forced labour and political repression. Without the SME sector the US population becomes even more dependent upon the oligarchs that own corporations like Amazon. At the same time the barriers between licit and illicit economy are being dissolved/ demolished. When ordinary business has to pay protection only armies will be able to do business.

The digital war, launched against humans and nature in 1945 with the obliteration of two Japanese cities, opened a new era, the era of global nihilism whose lingua franca is mathematics and whose form of reality is the mathematical model in which humans are mere computational factors. There are cultures on this planet still that resist this compulsive computation and its practice of natural and human degradation. They cannot be reduced to digits or some factor or marginal utility. They are not enemies of Nature but integral elements of Nature. It is necessary to remember that. Those who bombard us with lies about sustainability are only the descendants of the Strangeloves, the Tellers, von Neumanns, Oppenheimers and the psychopathic misanthropes who paid them for creating the means by which they may sustain themselves (they believe) at the expense of annihilating the rest of us. The Sustainable Development Goals and DIE are the immoral basis by which sustainable atomic, biological and chemical war can be waged against Nature and its human members.

This content originally appeared on Dissident Voice and was authored by T.P. Wilkinson.

Footnotes can have the formal function of lending an otherwise weak or absent authority to a text full of unsubstantiated or anecdotal assertions. They can also permit the shift of reader attention from a story to the underlying or derivative aspects of that story. They can also instigate a dialogue with the text by showing the reader how to expose the covert reading of the shadow text.

The role of ordinary crime in disciplining political prisoners was described in some detail in the hundreds of pages Solzhenitsyn devoted to his topic, what he called the archipelago of incarceration throughout the Soviet Union to which political prisoners under Soviet Union law could be sent. The form he chose was the literary version of the “docudrama“. Meanwhile less partisan authors and scholars have disputed the number of prisons and the actual number of prisoners suggested or claimed in Solzhenitsyn’s book. However, this does not invalidate one of his central observations, namely, the function of organized crime in the operation of an oppressive regime. To be clear about this, no matter what system creates and maintains prisons, prisons are instruments of oppression. Any discussion about theories of penitentiary organisation, correctional practice, punishment cannot erase this fundamental fact. Moreover any society that lacks oppressive/ repressive capacity cannot maintain stable commerce and social interaction. Therefore the question is not whether a society has oppressive or repressive instruments but what does any given society value and therefore support or repress in order to maintain such values?

No later than what I have claimed in an earlier essay is the shift from surplus appropriation to scarcity management in economic theory, modern political economy has been taught through mass education as a new religion— a secular form of the grace and sin regime established by the Latin and Reformed clerical elite in the reorganisation of sparsely settled sedentary populations in the Western peninsula of Eurasia into fodder for nomadic barbarians who would extend their empire over two-thirds of the Earth’s surface. Until the political-economic apologists were faced with the abolition of slavery and the ascendency of an industrial proletariat, theory focused on how to allocate stolen wealth among the elite estates. With the abolition of slavery (around 1886), the principal occupation of political-economists and the school known now as Social Darwinism was to explain how to prevent the newly freed and the proletariat from claiming their share of the wealth their labour had generated over half a millennia. The explanation they developed was the theory of marginal utility and the redirection of economic management to administering newly discovered “scarcity.”

Introduction of scarcity as the underlying condition of political economy — perversely at times when capitalist crises of overproduction were recurrent — was a sleight of hand. Fast forward to the end of the War against the Soviet Union and Communism: in the US a Canadian Stanford (amazingly) economist named Lorie Tarshis published a textbook, The Elements of Economics (1947) An Introduction to the Theory of Price and Employment, that was recognized as the first textbook in the US based on the theories of Maynard Keynes. This book was quickly banned after a vicious letter-writing campaign led in part by archconservative and reputed CIA asset, William F. Buckley. When I say “banned”, I mean banned. In more than twenty years it has been impossible for me to find even second-hand editions of this book. It is available only in a very difficult to use e-book version in Internet Archive. That is the condition more than fifty years after it was first published. In its place was the Economics: An Introductory Analysis (1948) by Paul Samuelson. It is to the best of my knowledge the only introductory economics textbook in use in the English-speaking world.

Why is that important? What has that to do with Solzhenitsyn and organized crime in prisons, one might ask? Tarshis was far from being a communist as was insinuated at the time. Maynard Keynes was a liberal eugenics adherent and no friend of the working class or poor. However, Tarshis following Keynes included a very important chapter: on administered pricing and monopoly/ oligopoly. Samuelson’s contract as theoretical “hit man” was to expunge this critical element of political economy from the study and teaching of economics. He was also— thanks to the enormous academic-criminal enterprise of which many in his family have been a part, e.g. Lawrence Summers— able to reap accolades long before that ostensible bête noir of liberals, Milton Friedman, earned his fame as economic terrorist (especially as leading theorist of Chile’s economic destruction after 1973).

What is administered pricing? According to the fairy tale still propagated by the Samuelson catechism, all prices are derived from scarcity equations settled in the market by a tendency of supply and demand to reach equilibrium. The deceit— not unlike that propagated by climate hysteriacs- is that there is such a thing as “equilibrium,” never mind economic equilibrium. Tarshis distinguished quite clearly between real economies of scarcity or surplus and oligarchic/ monopolistic economies. For Samuelson et al. oligarchy and monopoly are merely “imperfect competition”. This is akin to calling something ugly, less beautiful.

According to the so-called “neo-classical synthesis”, only the horrible socialists try to set prices and make economic decisions according to plans. In the “free market” these decisions are the result of mathematical divination derived from the laws of economic nature.  However, administered pricing, like administered energy policy, constitutes planning by invisible, publicly unaccountable actors in the private sector using such key performance indicators as return on investment (ROI) or simply how much profit can be obtained at any given price. Since vertically integrated cartels can manipulate input/ factor prices, also with the help of rigged taxation and accounting rules, the question is not at what price will a certain demand level be satisfied but at what price a certain rate of profit can be obtained. This is why such strategies as cross-subsidization or transfer pricing mechanisms can be used to obtain profits despite obvious price inflexibility at the end of the chain— the consumer. To the extent that this is discussed at all in Samuelson and his derivatives it is a pure aberration or distortion. Political power exercised to benefit these actors is concealed by the euphemism “externalities.”

How can a sane person say “distortion” when describing the impact of beneficial ownership of a media market where only five enterprises dominate the industry worldwide? When five oligarchical entities operate under such a regime that were there real, enforceable anti-trust law would be forbidden. Only ignorance or mendacity can call it an exception. It must be treated as the rule. That is point. Assuming that every single graduate that has passed through the Samuelson indoctrination continues either in academic or commercial economics, then we are talking about millions of people whose fundamental education ignores a central fact and operating principle of economics since the beginning of the 20th century. The anecdotal evidence of global ignorance/ mendacity ought to be sufficient to convince any sober thinking person that what we are told about the economy and the society it constitutes is at least twenty per cent nonsense. (I am being generous here.) The damage is actually much worse since the discipline is thus so detached from reality and bound by pseudo-scientific mathematical models that we cannot even begin to imagine another way of organizing resources. (Economist Michael Hudson has worked very hard to do this by returning to the original critical forms of political economic theory: Professor Hudson, who learned economics working in Business and not the Academy, also makes very clear that all modern economies are “planned,” Gosplan was responsible for the Soviet economy, while Wall Street—a closely held private financial cartel—plans the Western economy. See among others Hudson’s Superimperialism)

What does all this have to do with policing?

Since the declaration of the COVID-19 war in 2020 numerous business districts throughout the United States and other Western metropolises have experienced bizarre mass attacks mainly on the retail sector. These attacks often followed or were contemporaneous with mass demonstrations apparently organized and/ or supported by offshore NGOs like Black Lives Matter and Antifascist Action or groups demonstrably trained by the successor to OTPOR. The attacks included looting, vandalism, arson, and assault and battery. Millions of US dollars in property damage were recorded. Many businesses closed their doors or were forced to create expensive security barriers to customers. During this period policing was conspicuous by its absence.

Before continuing the term “offshore” should be explained. The construction of astro-turf organizations requires funding. Organizations are needed to obtain and pay for facilities used whenever masses of people are brought together for any purpose. A daylong event of any sort, especially in countries like the US with a low density of public conveniences, needs provision for basic things like toilets and drinking water. These are key logistical elements of any sustained mass activity and they cost money. A friend of mine from Leipzig who grew up there during the GDR era remarked often about the Monday demonstrations there: who paid for all the toilet facilities during those demonstrations? There was a US TV sitcom, All in the Family (a variant of the 1965-75 British satire Till Death Us Do Part) that was initially quite scandalous not only because of fluid bigoted language but also because the protagonist explicitly talked about and went to the toilet in prime time television. Perhaps American culture is so sanitized that no one can even imagine the necessity of a toilet in public life. Offshore NGOs are these conduits for cash and organizational resources whose actual beneficial owners are screened from public view. The National Endowment for Democracy directs funds for such entities beyond US borders. Other government agencies facilitate these cash and resource flows in the West.

Nevertheless it did not take long to find that massive amounts of money were funnelled to bank accounts of these AstroTurf agents, announced for use as bail bond, etc. At the same time banks on both sides of the great northern border were seizing donations for Canadian truckers protesting government policies. The spokespersons for these demonstrations claimed that they were being held to protest against police brutality and racism, ostensibly in official conduct and economic behaviour. These demonstrations received vast mass media and social media coverage. They were praised by public authorities at state and federal level and in rare instances also by local government officials. During these summers of discontent, much of the population was subject to house arrest; curfews and public assembly restrictions ordered in violation of all principles of due process under US law. In fact, demonstrations attempted to protest the violations of constitutional rights to free speech, due process and freedom of assembly were strictly suppressed by police at all levels while these peculiar demonstrations against police brutality and racism were unobstructed. It became clear that many demonstrators at these events had been bussed in from other locations around the country. Hence local residents were an insignificant part of the action.

As argued in an earlier article, there is an ideology and a strategy at work here. The religious component is a missionary strategy based on and organized through a “purity” cult. However, the social transformation or re-engineering which is the long-term plan has a serious economic component, too. That economic component is rooted in the theories of eugenics and marginal utility or marginalism. Both of these theories arise with a fundamental ideological change that matured in the Manhattan Project.

Prior to 1942, the prevailing – by that I mean also in popular culture—model of humans and nature was mechanical. Nature was a machine and humans, including their cerebral –corporeal interfaces, were mechanical. The culmination of this human model can be found in Frederick Taylor’s time-motion studies, explained in his Principles of Scientific Management (1911). There was a critique of this model among the Romantics but this minority was itself marginalized in favour of the apparently modern “systems” theories. Romantic criticism of the emerging industrial society was complex and contradictory since, unlike the Enlightenment, Romanticism was not a concept of social coherence but an attempt to deal with the inherent incoherence of society and human personality. In any event by 1942, the Romantic approaches to humanism were thoroughly marginalized (to use this metaphor again) in favour of systems theory together with an analogue and then digital-calculation model human nature. When the first artificial intelligence (AI) claims were being asserted at US research universities, one of the leading developers of the underlying programming, Joseph Weizenbaum, denounced the cause in Computer Power and Human Reason (1976). In a talk he gave in the late-1990s in his native Germany, he reiterated that the so-called Information Society was fraudulent. Compulsive computation, as he called it, not only erroneously equated data with information. It also substituted calculation for judgment.

Thus it also followed that the mathematical, compulsive model of the world prevented the judgment that would have condemned the Manhattan Project as the quest for the world’s most nihilistic weapons. Today the computer model of man, the “hackable animal”, whose every act is described and defined on the basis of mathematical modelling, includes the negation of judgment (and of values). Instead this mathematical model of man, merely an aerobic program medium with disposable parts, forms the basis for re-engineering of a society that will be “sustainable and robust”. However, there is a grand deception in this language developed through the appropriation of opposition language in the 1970s and its propagation as reconstituted liberation product—political-economic Velveeta. If the economy is driven by calculation of utility and economic man is governed by this rule, then he—yes, he—must by nature be a calculator and governed by the “laws” of mathematics. From this follows the anti-humanism of Norbert Weiner (Cybernetics, 1948) and Yuval Noah Harari. It is crucial to recall that atomic weaponry and genetic engineering were developed contemporaneously and have continued parallel to this day as elements of a unified weapons suite.

The so-called UN Sustainable Development Goals (SDGs) ought to be judged first of all by their source. The source of all international policy from the United Nations and its agencies was and remains the executive suite of the world’s largest multinational corporations and the governments they own. The flowery language aside—and one must see it for what it is, marketing (propaganda)—this is the agenda of institutions that have all been sworn to the worldview for which the Manhattan Project stands—atomic domination or annihilation of humanity. From this standpoint the human computer and the digital economy are a continuous fabric with the ARPA Net, now called the Internet, which was designed as sustainable communications in the wake of the two atomic strikes the then US Strategic Air Command had planned to destroy the USSR. That is the immoral foundation of this still proprietary technology that billions have been persuaded is the public sphere and governed by liberal freedoms like speech and assembly.

While there have been legal and commercial challenges to create some kind of public sphere out of this technological space—something akin to squatting and the doctrine of adverse possession—we have seen that the real owners of the Internet regularly assert their ownership, either through state agencies or corporate entities. We have yet to establish a doctrine that the electrical and communications grids upon which the theory of Internet liberty is premised can actually be articulated, let alone aggressively defended. Instead we are debating as to why private owners and their state agents do not respect archaic and naïve ideas about human liberty. Is this the fallacy of misplaced concreteness?

There is no enforceable legal regime because there is also no comprehensive economic regime that includes the human as someone more than a computer or machine with legs. There is no biological or moral regime because the argument has been accepted that humans are not animals like the rest of life on the planet and hence no more enemies of Nature than rabbits, fish, birds or fruit trees. Instead the psychopaths of compulsive calculation swoop around the planet to gather, catalogue, patent, digitalize and synthesize everything that could enable their sustainability. Those who fanatically argue for population reduction never appear on the assisted-suicide rosters. Could it be that they don’t mean a reduction of all the population?

Seemingly parallel—but actually at deniable arm’s length—the CIA sponsored World Economic Forum has not only taken the mantle sewn with SDGs, it has also turned them into the loincloth for the not yet unsustainable to wear called “Diversity – Inclusion – Equity”—DIE, for short. (Their marketing departments certainly advised a different order of wording to avoid the obvious connotation.) The principal sponsors of this exclusive club and cutout for the “sustainable class” coincides with those whose wealth derives from the exact opposite of those terms, if one understands them naively. In fact, the WEF and the wholly owned United Nations apparatus are all beneficiaries of the atomic extortion system created by the Manhattan Project. What D-I-E means is literally what Stanley Kubrick so effectively depicted in Doctor Strangelove. It is the world depicted in Soylent Green. It includes the Invasion of the Body Snatchers and Outbreak. This Hollywood propaganda product has been called “predictive”. It is part of creating the psychological conditions for re-engineering.

So amid the Woke Crusade, the legally protected vandalism of vast majorities by “pure” fanatics, two phenomena have emerged to coincide with the worldwide counter-insurgency by force of arms (aka the War on Terror and now the war against Russia). These have been a) mass migration from the countries that the Anglo-American Empire and its vassals have been plundering and pillaging since 1975 almost without meaningful opposition at home or abroad and b) abject failure of even the most rudimentary public safety and policing mechanisms to function.

The rampages since 2020 mainly in the US and the mass illegal migration, in the US and EU but also in countries unfortunate enough to border the imperial plunder and pillage operations everywhere except perhaps Russia and China, are destroying the economic order in which the vast majority of people live their lives. Officially this disruption is a struggle for social justice. However, justice is not a natural condition but one created within definable social contexts. Precisely these contexts, until now, defined by nation-state legal and moral regimes, are under universal attack. The assailants are not secret. The attack on definable social contexts in which local communities can establish and maintain social justice is being organized and conducted at the strategic level by those who own the United Nations and compose the World Economic Forum. The sustainable development goals they pursue are those which clearly permit them to sustain their position and power amidst the destruction of every other social structure that could in any way deviate from the digital-computational vision of life (let us not call it humanity) they have been raised to promote and impose.

It is clear testimony to the effectiveness of the psychological weapons used that while so much has been scrubbed from the Internet (or blocked by available search engines), one can still find a notorious 60-Minutes interview in which George Schwartz (Soros) unabashedly admits that since the age of 14 (!) he has unrepentantly participated in the deportation of people (also to slavery or death) in order to profit from confiscation of their goods and property. This man has been able to promote himself as a philanthropist while enriching himself for some 79 years by the same methods. His Open Society foundations, in addition to acting as conduits for other government agencies, have served as cadre schools and organizational support to thousands whose business model is the destruction of the citizen framework that has historically guaranteed social justice or any kind of organized cultural and economic life—for power and profit. He is demonstrably one of the major funders of the AstroTurf NGOs that wage the war for “purity” (DIE) throughout the world. Mr Soros is just the most prominent and unabashed of the atomic war elite. The dissolution of the legal and social context for communities, historical nations or states, is being pursued to create a world of statelessness in which no institutions are available to protect human beings, especially from those who are like Soros.

The removal of policing, whether of borders or city streets, is elemental to this policy. The destruction of the SME sector, one of the COVID-19 objectives, was accelerated by the armed propaganda tactics of the offshore AstroTurf NGOs. There is a complex of weaponry deployed and the US itself has finally become the target of the strategy its owners have pursued for decades in every corner of the empire. Mass migration will flood the labour market in a country already deindustrialised. It will replace furloughed and mRNA poisoned workers and their families with raw muscle from abroad. At the same time the US will be subjected to unique tactics.

While the EU comprises populations long accustomed to national registration, social management and lack of lethal force among the citizens, the US is a society with a notoriously well-armed population. Moreover its most traditional elements include police, fire brigades, and military veterans indoctrinated with even more patriotism than the average person outside the US can imagine. This poses a threat—mirrored in the regime’s fanatical attempts to prevent Donald Trump from standing in the next POTUS election. The ruling oligarchy has surely been asking itself, especially after growing barracks unrest following the forced mRNA injections, whether its uniformed security forces are sufficiently loyal. Therefore it is very likely that among these “military-aged” illegal immigrant males there are cohorts of trained paramilitary infiltrated into the country, like in Libya or Syria. All this can lead to a major reorganization of the economy based on new forms of forced labour and political repression. Without the SME sector the US population becomes even more dependent upon the oligarchs that own corporations like Amazon. At the same time the barriers between licit and illicit economy are being dissolved/ demolished. When ordinary business has to pay protection only armies will be able to do business.

The digital war, launched against humans and nature in 1945 with the obliteration of two Japanese cities, opened a new era, the era of global nihilism whose lingua franca is mathematics and whose form of reality is the mathematical model in which humans are mere computational factors. There are cultures on this planet still that resist this compulsive computation and its practice of natural and human degradation. They cannot be reduced to digits or some factor or marginal utility. They are not enemies of Nature but integral elements of Nature. It is necessary to remember that. Those who bombard us with lies about sustainability are only the descendants of the Strangeloves, the Tellers, von Neumanns, Oppenheimers and the psychopathic misanthropes who paid them for creating the means by which they may sustain themselves (they believe) at the expense of annihilating the rest of us. The Sustainable Development Goals and DIE are the immoral basis by which sustainable atomic, biological and chemical war can be waged against Nature and its human members.

This content originally appeared on Dissident Voice and was authored by T.P. Wilkinson.

Mirroring meticulous Chinese attention to protocol, they met at Villa 5 of the Diaoyutai State Guesthouse – exactly where Kissinger first met in person with Zhou Enlai in 1971, preparing Nixon’s 1972 visit to China. The Mr. Kissinger Goes to Beijing saga was an “unofficial”, individual attempt to try to mend increasingly fractious Sino-American relations. He was not representing the current American administration.

There’s the rub. Everyone involved in geopolitics is aware of the legendary Kissinger formulation: To be the US’s enemy is dangerous, to be the US’s friend is fatal. History abounds in examples, from Japan and South Korea to Germany, France and Ukraine.   As quite a few Chinese scholars privately argued, if reason is to be upheld, and “respecting the wisdom of this 100-years-old diplomat”, Xi and the Politburo should maintain the China-US relation as it is: “icy”.

After all, they reason, being the US’s enemy is dangerous but manageable for a Sovereign Civilizational State like China. So Beijing should keep “the honorable and less perilous status” of being a US enemy.

The World Through Washington’s Eyes

What’s really going on in the back rooms of the current American administration was not reflected by Kissinger’s high-profile peace initiative, but by an extremely combative Edward Luttwak. Luttwak, 80, may not be as visibly influential as Kissinger, but as a behind-the-scenes strategist he’s been advising the Pentagon across the spectrum for over five decades. His book on Byzantine Empire strategy, for instance, heavily drawing on top Italian and British sources, is a classic.

Luttwak, a master of deception, reveals precious nuggets in terms of contextualizing current Washington moves. That starts with his assertion that the US – represented by the Biden combo – is itching to do a deal with Russia.

That explains why CIA head William Burns, actually a capable diplomat, called his counterpart, SVR head Sergey Naryshkin (Russian Foreign Intelligence) to sort of straighten things up “because you have something else to worry about which is more unlimited”. What’s “unlimited”, depicted by Luttwak in a Spenglerian sweep, is Xi Jinping’s drive to “get ready for war”. And if there’s a war, Luttwak claims that “of course” China would lose. That dovetails with the supreme delusion of Straussian neocon psychos across the Beltway.

Luttwak seems not to have understood China’s drive for food self-sufficiency: he qualifies it as a threat. Same for Xi using a “very dangerous” concept, the “rejuvenation of the Chinese people”: that’s “Mussolini stuff”, says Luttwak. “There has to be a war to rejuvenate China”.

The “rejuvenation” concept – actually better translated as “revival” – has been resonating in China circles at least since the overthrow of the Qing dynasty in 1911. It was not coined by Xi. Chinese scholars point out that if you see US troops arriving in Taiwan as “advisors”, you would probably make preparations to fight too.

But Luttwak is on a mission: “This is not America, Europe, Ukraine, Russia. This is about ‘the sole dictator’. There is no China. There is only Xi Jinping,” he insisted. And Luttwak confirms the EU’s Josep “Garden vs. Jungle” Borrell and European Commission dominatrix Ursula von der Leyen fully support his vision. Luttwak, in just a few words, actually gives away the whole game: “The Russian Federation, as it is, is not strong enough to contain China as much as we would wish”. Hence the turn around by the Biden combo to “freeze” the conflict in the Donbass and change the subject. After all, “if that [China] is the threat, you don’t want Russia to fall apart,” Luttwak reasons.

So much for Kissingerian “diplomacy.”

Let’s Declare a “Moral Victory” and Run Away

On Russia, the Kissinger vs. Luttwak confrontation reveals crucial cracks as the Empire faces an existential conflict it never did in the recent past. The gradual, massive U-turn is already in progress – or at least the semblance of a U turn. US mainstream media will be entirely behind the U turn. And the naïve masses will follow. Luttwak is already voicing their deepest agenda: the real war is on China, and China “will lose”

At least some non-neocon players around the Biden combo – like Burns – seem to have understood the Empire’s massive strategic blunder of publicly committing to a Forever War, hybrid and otherwise, against Russia on behalf of Kiev. This would mean, in principle, that Washington can’t just walk away like it did in Vietnam and Afghanistan. Yet Hegemons do enjoy the privilege to walk away: after all they exercise sovereignty, not their vassals. European vassals will be left to rot. Imagine those Baltic chihuahuas declaring war on Russia-China all by themselves.

The off-ramp confirmed by Luttwak implies Washington declaring some sort of “moral victory” in Ukraine – which is already controlled by BlackRock anyway – and then moving the guns towards China.

Yet even that won’t be a cakewalk, because China and the about-to-expand BRICS+ are already attacking the Empire at its foundation: dollar hegemony. Without it, the US itself will have to fund the war on China. Chinese scholars, off the record, and exercising their millennia-old analytical sweep, observe this may be the last blunder the Empire ever made in its short history.

As one of them summarized it, “the empire has blundered itself to an existential war and, therefore, the last war of the empire. When the end comes, the empire will lie as usual and declare victory, but everyone else will know the truth, especially the vassals.”

And that brings us to former national security adviser Zbigniew “Grand Chessboard” Brzezinski’s 180-degree turn shortly before he died, aligning him today with Kissinger, not Luttwak. “The Grand Chessboard”, published in 1997, before the 9/11 era, argued that the US should rule over any peer competitor rising in Eurasia. Brzezinski did not live to see the living incarnation of his ultimate nightmare: a Russia-China strategic partnership. But already seven years ago – two years after Maidan in Kiev – at least he understood it was imperative to realign the global power architecture”

Destroying the “Rules-Based International Order”

The crucial difference today, compared to seven years ago, is that the US is incapable, per Brzezinski, to “take the lead in realigning the global power architecture in such a way that the violence (…) can be contained without destroying the global order.” It’s the Russia-China strategic partnership that is taking the lead – followed by the Global Majority – to contain and ultimately destroy the hegemonic “rules-based international order”.

As the indispensable Michael Hudson has summarized it, the ultimate question at this incandescent juncture is whether economic gains and efficiency will determine world trade, patterns and investment, or whether the post-industrial US/NATO economies will choose to end up looking like the rapidly depopulating and de-industrializing post-Soviet Ukraine and Baltic states or England.”

So is the wet dream of a war on China going to change these geopolitical and geoeconomics imperatives? Give us a -Thucydides – break. The real war is already on – but certainly not one identified by Kissinger, Brzezinski and much less Luttwak and assorted US neocons.

Michael Hudson, once again, summarized it: when it comes to the economy, the US and EU “strategic error of self-isolation from the rest of the world is so massive, so total, that its effects are the equivalent of a world war.”

This content originally appeared on Dissident Voice and was authored by Pepe Escobar.

A small financial transactions tax could correct a number of maladies in our economic system, from the federal debt crisis to the widening wealth divide to the rampant financialization of the economy, while eliminating taxes on income and sales.

The debt ceiling crisis has again brought into focus the perennial gap between what the government spends and what it accumulates in taxes, and the virtual impossibility of closing that gap by increasing taxes or negotiating cuts in the budget.

In a 2023 book titled A Tale of Two Economies: A New Financial Operating System for the American Economy, Wall Street veteran Scott Smith shows that we would need to tax everyone at a rate of 40%, without deductions, to balance the budgets of our federal and local governments – an obvious nonstarter. The problem, he argues, is that we are taxing the wrong things – income and physical sales. In fact, we have two economies – the material economy in which goods and services are bought and sold, and the monetary economy involving the trading of financial assets (stocks, bonds, currencies, etc.) – basically “money making money” without producing new goods or services.

Drawing on data from the Bank for International Settlements and the Federal Reserve, Smith shows that the monetary economy is hundreds of times larger than the physical economy. The budget gap could be closed by imposing a tax of a mere 0.1% on financial transactions, while eliminating not just income taxes but every other tax we pay today. For a financial transactions tax (FTT) of 0.25%, we could fund benefits we cannot afford today that would stimulate growth in the real economy, including not just infrastructure and development but free college, a universal basic income, and free healthcare for all. Smith contends we could even pay off the national debt in ten years or less with a 0.25% FTT.

A radical change in the tax structure may seem unlikely any time soon, due to the inertia of Congress and the overweening power of the financial industry. But as economist Michael Hudson and other commentators observe, the U.S. has reached its limits to growth without some sort of debt write down. Federal interest expense as a percent of tax revenues spiked to 32.9% in the first quarter of 2023, and it will spike further as old securities at lower interest rates mature and are replaced with new ones at much higher interest. A financial reset is not only necessary but may be imminent. Promising proposals like Smith’s can lead the way to a much-needed shift from serving “capital” to serving productivity and the broader public interest.

A Look at the Numbers

The material economy is roughly measured by the annual Gross Domestic Product (GDP), which for the U.S. had reached $25.6 trillion by the third quarter of 2022. (Michael Hudson observes that even GDP, as currently measured, is largely composed of non-productive financial services.) GDP is defined by spending, which depends on income. Collectively, Americans earned $21 trillion in 2021. The monetary economy is defined as the total amount of money that changes hands each year. Smith draws his figures from data that the Federal Reserve publishes annually in the Bank for International Settlements’ Red Book. The Red Book is not all-inclusive; it leaves out such payments as commodity trading, various options, crypto currency trades, and exchange-traded funds. But even its partial accounting shows $7.6 quadrillion in payments – more than 350 times our national collective income. Smith includes this chart:

Smith comments:

Most of these payments have little to do with what we regard as the real economy— the purchase of goods and services and the supply chain. Our GDP represents less than 0.33% of the payments in our economy. Once we see the big picture, the solution is obvious. We should tax payments instead of our income.

He calculates that U.S. spending by federal, state and local governments will total around $8.5 trillion in 2023. Dividing $7,625 trillion in payments by $8.5 trillion in government spending comes to a little more than 0.001, or a tenth of a percent (0.1%). Taxing payments at 0.1% could thus eliminate every tax we pay today, including social security (FICA) taxes, sales taxes, property taxes, capital gains taxes, estate taxes, gift taxes, excise taxes and customs taxes. With a 0.25% FTT, “If you have a net worth of $20 million or less, you would come out ahead. And if you make $500 million per year, you will finally be paying your fair share of taxes – $1.25 million!”

Bridging the Wealth Gap

The financial transaction tax is not a new concept. The oldest tax still in existence was a stamp duty at the London Stock Exchange initiated in 1694. The tax was payable by the buyer of shares for the official stamp on the legal document needed to formalize the purchase. Many other countries have imposed FTTs, including the U.S. — some successfully and some not. In January 2021, U.S. Rep. Peter DeFazio reintroduced The Wall Street Tax Act, which was accompanied in March 2021 by a Senate bill introduced by Sen. Brian Schatz. According to a press release on the Schatz bill, the tax “would create a 0.1% tax on each sale of stocks, bonds, and derivatives, which will discourage unproductive trading and redirect investment toward more productive areas of the economy. The new tax would apply to the fair market value of equities and bonds, and the payment flows under derivatives contracts. Initial public offerings and short-term debt would be exempted.” Schatz stated:

During the pandemic, Wall Street has cashed in on high-risk trades that add no real value to our economy and leave working families behind. We need to curb this dangerous trading to reduce volatility in the markets and encourage investment that can actually help our economy grow. By raising the price of financial transactions, we can make our financial system work better while bringing in billions in new revenue that we can reinvest in our workers and our communities.

Scott Smith concurs, noting that millions of people were forced into poverty during the first two years of the pandemic. In the same two years, the 10 richest men in the world doubled their fortunes and a new billionaire was minted every 26 hours. Much of this disparity was fueled by fiscal and monetary policy aimed at relieving the effects of the pandemic and of the 2008-09 banking crisis. Smith writes:

Our burgeoning monetary economy has fueled the rise of securitization, private equity, hedge funds, the foreign exchange market, commodity trading, cryptocurrency, digital assets, and investments in China. Quantitative easing further fanned these flames, driving up the price of financial assets. All such assets are monetary equivalents, and, thus, inflating the price of such assets balloons the money supply.

What many lauded as a robust economy was really monetary inflation. This makes it more difficult for the next generation to start life. Monetary inflation moves a select few out of the middle class, making them newly rich, while relegating many more to being poorer.

… The trading of financial assets in the monetary economy represents the majority of the payments in the economy, eclipsing payments related to wages or the purchase of goods or services. Thus, it would be wealthy individuals and institutions, such as hedge funds, that would shoulder most of the burden of a payment tax.

Predictably, the Wall Street Tax Act has gotten pushback and has not gotten far. But Smith says his proposal is different. It is not adding a tax but is replacing existing taxes – with something that is actually better for most taxpayers. He has asked a number of hedge fund managers, day traders, private equity fund managers, and venture capital managers if a quarter-point tax would impact their businesses. They have shrugged it off as not significant, and have said that they would certainly prefer a payments tax to income taxes.

Responding to the Critics: The Sweden Debacle

Among failed FTT attempts, one often cited by critics was undertaken in Sweden in the 1980s. As reported by the Securities Industry and Financial Markets Association (SIFMA):

There were negative capital markets impacts seen in the great migration of trading volumes across multiple products to London, equity index returns fell, volatility increased and the interest rate options markets essentially disappeared.

But as argued by James Li in a podcast titled “The Truth About a Financial Transaction Tax“:

Sweden’s tax policy … had an obvious, massive loophole, which is that Swedish traders could migrate to the London Stock Exchange to avoid the tax — which they did, until it was eventually abolished. On the other hand, the UK’s financial transaction tax has been much more successful. In 1694, King William III levied a stamp duty on all paper transactions, and a version of that levy still exists today, taxing many stock trades at 0.5 percent. Unlike the defunct Swedish tax, it applies to trades of shares of any UK company, regardless of where traders are based.

Again, Smith argues that the challenges met by other transaction tax proposals have arisen because they were being proposed as an additional tax. A payment tax in lieu of personal and corporate income taxes takes on a whole different character. He argues that big firms, rather than moving offshore to avoid a payments tax, would move to the U.S., since the tax rate in other nations would be much higher. Without a corporate or income tax, the U.S. would be the most favored tax haven in the world.

He adds that an exit tax could be a good idea: any money leaving the U.S. could be taxed at a 5% rate. That would discourage people from wiring money to an offshore exchange. But incoming money would not be taxed, encouraging foreign money to come to the U.S. to stay long-term, where it would be taxed less than elsewhere.

The Alleged Threat to Retirees

James Li’s favorite myth about a financial transactions tax is that it would be devastating for Main Street investors. He cites a report from the Modern Markets Initiative on the effects of the tax on savings and retirement security. A Business Wire headline on the report warns, “Latest Data from Modern Markets Initiative Shows the Financial Transaction Tax Would Threaten the Retirement Savings of Millions of Americans.” Among other claims is that a financial transactions tax would cost “$45,000 to $65,000 in FTT over the lifetime of a 401(k) account, or the equivalent of delaying the average individual’s retirement by approximately two years.” How that calculation was made is not included in the article, which refers the reader to the report. Li looked it up, and says on his podcast that it was highly misleading:

[T]he study stated that under this type of tax, for every $100,000 of assets in a 401(k) plan, the saver would owe $281 dollars in FTT taxes in a given year; and then over a 40-year time horizon paying in at $281 a year at 7% annual growth – the average for pension funds – that this would yield a total value of $64,232 after 40 years.

… [What they were] actually saying is, “If you put $100,000 a year into your 401(k), you would be paying approximately $281 in taxes for that $100,000; and if you had instead invested that money every year in a fund with 7% interest, that amount would add up to about $64,000 after 40 years.”

… I don’t know about you, but I can’t put $100,000 in my 401(k) plan every year. Very few people can. A more accurate estimate on how this would actually impact the average retirement savings is to look at the median income, which is around $52,000 a year, with an estimated $5,000 contribution into a 401(k) annually, which is around 10% of your gross pay based on commonly accepted financial planning advice. So the average person would only pay about $13 in FTT taxes in a given year.

These people are extremely tricky and their logic is also extremely flawed, because we pay taxes all the time. It’s like saying, “Oh, if I didn’t have to pay an income tax, I would be able to put all that money away and be up like a million bucks when I retire.”

Similar arguments are made concerning potential losses from FTTs to pension funds and the stock market. SIFMA contends, “What’s bad for the capital markets is bad for the economy,” stating “The capital markets fund 65% of economic activity in the U.S.” Perhaps, but the money paid for shares of stock traded in the stock market does not go to the corporations issuing the stock. It goes to the previous shareholders. Only the sale of IPOs – initial public offerings – generates money for the corporation, and this money is typically exempted from FTTs. Trades after that are simply gambling, hoping to sell at a higher price to the “greater fool.”

Killing the Parasite That Is Killing the Host

In the 2015 book Killing the Host – How Financial Parasites and Debt Destroy the Global Economy, Michael Hudson calls “finance capitalism” a parasite that is consuming the fruits of “industrial capitalism” – the goods and services traded in what Smith calls the material economy. Pam Martens writes in a review of Hudson’s book that this “blood-sucking financial leech [is] affixed to your body, your retirement plan, and your economic future.”

But it is not actually the pension funds that are doing most of the financialized trades or that would get taxed on those trades. It is their asset managers – including BlackRock and Vanguard, both of which lost money overall in 2022. If the asset managers can’t make money in the financialized economy, perhaps it would be better for the pension funds to move to more productive investments – from “finance capitalism” to “industrial capitalism.”

Publicly-owned banks mandated to serve the public interest would be good options if we had them. As the economy falters, the public banking movement is picking up steam, part of a much-needed shift towards an economy that puts the public interest above private profits.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

This content originally appeared on CounterPunch.org and was authored by stclair.

Ahead of a public hearing scheduled for Tuesday evening regarding Holtec International's plan to discharge 1 million gallons of wastewater from the former Indian Point Energy Center in Buchanan, New York, more than 100 organizations wrote to Gov. Kathy Hochul this week demanding she take action to stop the plan for good.

Led by the Stop Holtec Coalition, 138 groups including Food & Water Watch, Hudson Riverkeeper, and Beyond Nuclear called on the Democratic governor to support the passage of state Senate Bill 5181 and Assembly Bill 5338, both of which would prohibit the dumping of "any radiological agent into the waters of the state."

Food & Water Watch New York tweeted last week that it is "time for Gov. Hochul to choose a side" regarding radioactive waste dumping.

"We are deeply concerned about the impacts on the health and safety of local residents, the river's ecosystem, and local economies," wrote the groups. "The Hudson Valley region is densely populated and also serves as a recreational area for millions from New York City and across the state. We call on you to use your authority as governor to ensure the necessary state and federal agencies take action to halt the dumping of toxic waste into our waterways including the Hudson River."

The letter was sent less than two weeks after Holtec announced it would delay its plan to begin the discharge, which had previously been set to begin in May with the dumping of 45,000 gallons of wastewater from pools that were used to cool spent nuclear reactor fuel rods before Indian Point was shuttered in 2021 after decades of local activism.

The company initiated a "voluntary pause" on the plan this month to give it time to better explain the discharge process to local community members—about 100,000 of whom use the Hudson as a primary drinking water source.

With groups including Physicians for Social Responsibility (PSR) warning in recent months that the treated wastewater could contain the isotope tritium—which can cause cancer, miscarriage, and other adverse health effects—many local leaders and residents say they don't need Holtec to further explain the plan to know that they oppose it.

"To best ensure public health and safety, Holtec should be required use the precautionary principle and keep radioactive fuel pool water contained on site—and not release it out into the environment, where it can bioaccumulate in the aquatic ecosystem and put swimmers and paddlers and others at risk of exposure," saidManna Jo Greene, environmental action director for Hudson River Sloop Clearwater. "When passed, Gov. Holchul should urgently sign the [S.B. 5181] and the Indian Point Decommissioning Oversight Board should do everything in its power to ensure the best possible alternative is implemented."

Advocates have said Holtec should keep the wastewater in tanks at the site of the decommissioned plant until a safe disposal method can be found.

The signatories of the letter sent to Hochul noted that 21 municipalities have recently passed resolutions officially opposing the discharge plan, and nearly half a million people have signed a petition to stop Holtec.

"Holtec's ploy is ludicrously dangerous—and it's on Gov. Hochul to stop the dump," said Wenonah Hauter, executive director of Food & Water Watch. "Years after activists successfully halted the nuclear threat in the Hudson Valley, we are called to arms yet again to defend precious water resources from industry's expediency. Gov. Hochul must listen to the people, and do everything in her power to keep radioactive waste out of our water."

This content originally appeared on Common Dreams and was authored by Julia Conley.

Ahead of a public hearing scheduled for Tuesday evening regarding Holtec International's plan to discharge 1 million gallons of wastewater from the former Indian Point Energy Center in Buchanan, New York, more than 100 organizations wrote to Gov. Kathy Hochul this week demanding she take action to stop the plan for good.

Led by the Stop Holtec Coalition, 138 groups including Food & Water Watch, Hudson Riverkeeper, and Beyond Nuclear called on the Democratic governor to support the passage of state Senate Bill 5181 and Assembly Bill 5338, both of which would prohibit the dumping of "any radiological agent into the waters of the state."

Food & Water Watch New York tweeted last week that it is "time for Gov. Hochul to choose a side" regarding radioactive waste dumping.

"We are deeply concerned about the impacts on the health and safety of local residents, the river's ecosystem, and local economies," wrote the groups. "The Hudson Valley region is densely populated and also serves as a recreational area for millions from New York City and across the state. We call on you to use your authority as governor to ensure the necessary state and federal agencies take action to halt the dumping of toxic waste into our waterways including the Hudson River."

The letter was sent less than two weeks after Holtec announced it would delay its plan to begin the discharge, which had previously been set to begin in May with the dumping of 45,000 gallons of wastewater from pools that were used to cool spent nuclear reactor fuel rods before Indian Point was shuttered in 2021 after decades of local activism.

The company initiated a "voluntary pause" on the plan this month to give it time to better explain the discharge process to local community members—about 100,000 of whom use the Hudson as a primary drinking water source.

With groups including Physicians for Social Responsibility (PSR) warning in recent months that the treated wastewater could contain the isotope tritium—which can cause cancer, miscarriage, and other adverse health effects—many local leaders and residents say they don't need Holtec to further explain the plan to know that they oppose it.

"To best ensure public health and safety, Holtec should be required use the precautionary principle and keep radioactive fuel pool water contained on site—and not release it out into the environment, where it can bioaccumulate in the aquatic ecosystem and put swimmers and paddlers and others at risk of exposure," saidManna Jo Greene, environmental action director for Hudson River Sloop Clearwater. "When passed, Gov. Holchul should urgently sign the [S.B. 5181] and the Indian Point Decommissioning Oversight Board should do everything in its power to ensure the best possible alternative is implemented."

Advocates have said Holtec should keep the wastewater in tanks at the site of the decommissioned plant until a safe disposal method can be found.

The signatories of the letter sent to Hochul noted that 21 municipalities have recently passed resolutions officially opposing the discharge plan, and nearly half a million people have signed a petition to stop Holtec.

"Holtec's ploy is ludicrously dangerous—and it's on Gov. Hochul to stop the dump," said Wenonah Hauter, executive director of Food & Water Watch. "Years after activists successfully halted the nuclear threat in the Hudson Valley, we are called to arms yet again to defend precious water resources from industry's expediency. Gov. Hochul must listen to the people, and do everything in her power to keep radioactive waste out of our water."

This content originally appeared on Common Dreams and was authored by Julia Conley.

Clean water and public health advocates in New York's Hudson Valley applauded Thursday as the energy technology company Holtec International announced it will not move ahead with plans to dump wastewater next month from the former Indian Point Nuclear Power Plant, following intense pressure from local communities and state lawmakers.

The company had initially planned to complete its first discharge of wastewater from pools that were used to cool spent nuclear reactor fuel rods late this summer, but recently announced that in May it would discharge 45,000 gallons of the water into the Hudson River, which at least 100,000 people rely on for their drinking water.

The company ultimately plans to release one million gallons of wastewater into the river.

Holtec International said it was taking a "voluntary pause" in the plan to better explain the process of decommissioning the plant, which was shut down in 2021, to the local community and elected officials.

Local clean water group Riverkeeper expressed appreciation that Holtec "heard the concerns of public" and said advocates will continue pushing for an alternative to releasing the wastewater into the Hudson.

\u201c@Riverkeeper appreciates that Holtec heard the concerns of public. We are hopeful that state, federal & local partners can find a workable solution for the spent pool wastewater that avoids discharges to the Hudson. TY @SenSchumer @SenGillibrand @SenatorHarckham @AMDanaLevenberg\u201d

— Tracy M Brown (@Tracy M Brown) 1681428598

Riverkeeper and Physicians for Social Responsibility (PSR) are among the groups that have raised concerns about the presence in the wastewater of the isotope tritium, which can be carcinogenic and is harmful to pregnant women and developing fetuses. Advocates have called on Holtec to store the water in tanks on the Indian Point site until a safe alternative disposal method can be found.

"There has been no prior disclosure of what pollutants or radioactive contaminants are in the wastewater or any public education on the environmental safety and public health risks associated with any potential discharges from the site," said local public health experts in a statement in January as PSR held the first of several public forums about the risks associated with Holtec's discharge plan.

The proposal has sparked outcry from local, state, and federal officials in New York in recent weeks. In March, state Sen. Pete Harckham (D-40) proposed legislation to ban any release of radioactive waste into the Hudson.

"I welcome Holtec postponing the planned release of radioactive wastewater into the Hudson River," said Harckham on Thursday.

\u201cI welcome Holtec postponing the planned release of radioactive wastewater into the Hudson River. This was the right decision to make: all the stakeholders deserve an opportunity to continue our dialogue with the company as it seeks a solution to stored waste at @Indian_Point.\u201d

— Senator Pete Harckham (@Senator Pete Harckham) 1681423582

State Assemblymember Dana Levenberg (D-95) expressed relief that Holtec's plan has been postponed for the time being and said she is as "committed as ever to ensuring that the needs of my constituents are respected throughout this process."

"My constituents are already overburdened with the negative environmental externalities left behind by industrial infrastructure, and we should not be treated like pawns in this process," said Levenberg earlier this month. "What we need is a partner who will work with us to facilitate a safe and just decommissioning of this plant, in a way that respects the surrounding communities. The people of my district have made it clear that this conversation should not be one-sided; Holtec should not be the only participant driving the schedule. What is efficient for Holtec may not be what is in the best interest of our communities and our natural resources."

U.S. Senate Majority Leader Chuck Schumer (D-N.Y.), who joined Sen. Kirsten Gillibrand (D-N.Y.) in writing to the Nuclear Regulatory Commission about Holtec's plan on April 6, said he was "relieved that Holtec has heeded our call and will put a stop to its hastily hatched plan to dump radioactive wastewater into the Hudson."

The state's Indian Point Decommissioning Oversight Board is scheduled to hold an online meeting regarding the wastewater on April 25, where community members and officials will be able to comment on the issue.

This content originally appeared on Common Dreams and was authored by Julia Conley.

An outline of the measure was provided by Minister of state for defence Baroness Annabel Goldie’s written answer to a question posed by Lord Hylton: “Alongside our granting of a squadron of Challenger 2 main battle tanks to Ukraine, we will be providing ammunition including armour piercing rounds which contain depleted uranium. Such rounds are highly effective in defeating modern tanks and armoured vehicles.”

The response from the Kremlin was swift. “If all this happens,” warned Russian President Vladimir Putin, “Russia will have to respond accordingly, given that the West collectively is already beginning to use weapons with a nuclear component.” Defence Minister Sergei Shoigu also foresaw “nuclear collision”.

The statement from Vyacheslav Volodin, the speaker of the Russian lower house, shifted the focus from potential nuclear catastrophe to the field of medical consequences, reminding his fellow members that the use of such ammunition by the US in former Yugoslavia and Iraq had led to “radioactive contamination and a sharp rise in oncological cases.”

News networks were left trying to convey a picture to the public, much of it skimpy on the perilous consequences arising from using such munitions. The BBC’s characteristic language of understatement notes that such uranium, stripped of much of its radioactive content, “makes weapons more powerful, but it is feared those weapons could be a threat to people in areas where they are used.”

Sky News had its own benign interpretation of the dangers, suggesting that DU, in emitting alpha particles, did not “have enough energy to go through skin, so exposure to the outside of the body is not considered a serious hazard.” An admission as to the dangers had to follow. “It can be a serious health hazard, however, if it is swallowed or inhaled.”

The US Department of Veterans Affairs outlines a few points on the matter in greater detail. “When a projectile made with DU penetrates a vehicle, small particles of DU can be formed and breathed in or swallowed by service members in the struck vehicle. Small DU fragments can also scatter and become embedded in muscle and soft tissue.”

Since their use in the Gulf War (1991), the Kosovo War (1999), the Iraq War (2003) and Afghanistan, the curriculum vitae of such weapons has become increasingly blotchy. The use of such shells has been contentious to the point of being criminal, said to be carcinogenic and a cause of birth defects. A study examining a civilian population sample from Eastern Afghanistan, published in 2005, revealed that “contamination in Afghanistan with a source consistent with natural uranium has resulted in total concentrations up to 100 times higher than the normal range for various geographic and environmental areas throughout the world.”

Subsequent field research, notably in Iraq, has found instances of serious birth defects, including congenital heart disease, paralysis, missing limbs and neurological problems. While some of these outcomes can be attributable to other activities of the US military and its allies, the role of DU looms large.

The nature of such weaponry is also indiscriminate. As a law firm representing US war veterans acknowledges, those involved in campaigns, notably in Iraq, “may have been exposed to depleted uranium as a result of being in a vehicle that was hit by a projectile, being exposed to burning depleted uranium, or salvaging the wreckage of a vehicle that was hit by a depleted uranium projectile.”

The Department of Veterans Affairs has also admitted that DU is a “potential health hazard if it enters the body, such as through embedded fragments, contaminated wounds, and inhalation or ingestion.” It prefers, however, to treat each claim for disability that might have been the result of DU poisoning “on a case-by-case basis.”

The claimed lack of unequivocal evidence linking such projectiles to adverse effects on the environment and humans has been a consistent theme in investigations – and a boon for militaries using them. A committee of review established by the International Criminal Tribunal for the Former Yugoslavia that covered, among other things, the use of these shells by NATO forces in the Kosovo campaign, proved less than satisfactory.

In recommending that no investigation be commenced regarding the bombing campaign – hardly a surprise – the members had to concede that NATO’s responses to any queries were “couched in general terms and failed to address specific incidents.” The Committee also found no consensus on whether the “use of such projectiles violate general principles of the law applicable to use of weapons in armed conflict.”

The UN Sub-Commission on Human Rights proved more forthright on the issue, claiming in a resolution that DU are weapons with indiscriminate effects and should therefore be prohibited under international humanitarian law. The UN General Assembly’s latest resolution on the matter, however, suggested a distinct lack of backbone, noting that “studies conducted so far by relevant international organizations have not provided a detailed enough account of the magnitude of the potential long-term effects on human beings and the environment of the use of armaments and ammunitions containing depleted uranium.”

Little wonder, given such a muddled frame of mind, that the use of DU projectiles has persisted with some relish, despite an avalanche of studies warning of their dangers. Nature abhors a vacuum and fills it accordingly with the mean and ghastly. In November 2015, 5000 rounds of DU ammunition were used in an air raid on oil trucks used by Islamic State forces despite assurances from the US military that it had stopped using such weapons. As to whether it will supply Kyiv with this hazardous product remains unclear – the Pentagon is proving reticent on the subject.

The Campaign for Nuclear Disarmament has attacked the UK’s decision. Its General Secretary, Kate Hudson, outlined her concerns in a statement: “CND has repeatedly called for the UK government to place an immediate moratorium on the use of depleted uranium weapons and to fund long-term studies into their health and environmental impacts.”

Short of a clear treaty on the subject, preferably one with teeth, this is much wishful thinking. The Ukrainian forces, however, should give the whole matter a second thought: the effects of such weapons will not distinguish between the users, the targets, and the civilians. In the long run, it will also prove unsparing to the environment, which promises to be richly contaminated by the toxicity of such lingering munitions.

This content originally appeared on Dissident Voice and was authored by Binoy Kampmark.

What the authorities did over the weekend was absolutely profound. They guaranteed the deposits, all of them, at Silicon Valley Bank. What that really means … is that they have guaranteed the entire deposit base of the U.S. financial system. The entire deposit base. Why? Because you can’t guarantee all the deposits in Silicon Valley Bank and then the next day say to the depositors, say, at First Republic, sorry, yours aren’t guaranteed. Of course they are.

… So this is a breathtaking step which effectively nationalizes or federalizes the deposit base of the U.S. financial system.

The deposit base of the financial system has not actually been nationalized, but Congress is considering modifications to the FDIC insurance limit. Meanwhile, one state that does not face those problems is North Dakota, where its state-owned bank acts as a “mini-Fed” for the state. But first, a closer look at the issues.

Bail In, Bail Out, or “Socialism for the Rich”?

On Friday, March 10, Silicon Valley Bank (SVB) was put into receivership by the Federal Deposit Insurance Corporation (FDIC). The FDIC announced that deposits over the $250,000 insurance limit would get an advance dividend within the next week, and would receive a receivership certificate for the rest of the funds. Most of the depositors were venture-backed startups that needed to keep large deposits in the bank to meet payroll and pay suppliers, and over 95% of the deposits were uninsured and at risk of being lost. It was basically a “bail in” of the uninsured deposits, which would be recoverable only if funds were available after the bank’s assets had been sold.

But that arrangement lasted only two days. On March 12, Signature Bank was put into receivership; and the FDIC, Treasury and Federal Reserve jointly announced that all of the deposits at the two banks, not just those under the insurance limit, would be available for withdrawal on demand.

At a Senate Finance Committee hearing on March 16, Treasury Secretary Janet Yellen said that the guarantee would not apply to all deposits at all banks. Rather, the determination would be made on a case-by-case basis.

In a Bloomberg News interview on March 16, former FDIC Chair Sheila Bair criticized that decision. She observed that the two banks getting special treatment were not “systemically important,” and that the cost of the expanded guarantee was to be covered by a special assessment against all insured banks, including the small community banks that provide essential credit to local businesses. She argued that if guarantees were going to be given over the $250,000 limit, they should apply to deposits everywhere.

Meanwhile, on March 12, the Federal Reserve announced that it had set up a special purpose vehicle of the sort arranged for COVID relief in March 2020, called the Bank Term Funding Program (BTFP). Like the COVID special purpose vehicles, it would be backstopped with $25 billion from the Exchange Stabilization Fund (ESF), a fund set up in 1934 to stabilize the exchange value of the dollar. The BTFP was to be available to any bank needing it, and many banks obviously did. Over $300 billion in short-term loans were withdrawn from the Fed’s various facilities just in the week after SVB’s collapse.

This money is not, however, the sort of “free lunch” provided to troubled banks in the last financial crisis. The money is to be advanced as a loan for up to a year, at a hefty interest rate as of March 22 of 4.88%. According to a Federal Reserve press release, advances will be made to “eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.”

“Valued at par” means that banks can hold their long-term federal securities to maturity while acquiring ready cash against them to meet withdrawals, without having to “mark to market” and sell at a loss.

The Systemic Flaw

So what caused this crisis, and what can be done to remedy it?

In the midst of the 2008 economic crisis, former Fed Chair Alan Greenspan conceded that there was a flaw in his perception of the financial operating system. For 40 years, he had believed that banks could “self regulate” responsibly, a presumption that had proven to be flawed.

In the case of SVB, however, the bank was not engaged in the sort of risky lending seen in the subprime crisis, and increased “stress testing” wouldn’t have saved it. It had put its deposits largely in federal securities, purported to be the safest assets available – so safe that they carry a “zero risk weighting” requiring no extra capital buffer. What went wrong was that they were long-term bonds at low interest. When rates shot up, the market value of the bonds dropped, since buyers prefer newer bonds paying higher interest. Bonds that could be sold were sold at a loss, and some marked “hold to maturity” could not be sold at all. As a result, SVB lacked the liquidity to meet the sudden unexpected demand for withdrawals.

The flaw to which SVB and many other “troubled” banks have fallen victim is the age-old systemic problem of “borrowing short to lend long.” For centuries, banks have borrowed the money of depositors who expect to have it available on demand, and have invested it in long-term assets that cannot be immediately liquidated. The system works well so long as the depositors don’t panic and rush to pull their money out all at once. But when they do, if the problem is systemic, not just single banks but the whole banking system can collapse.

We used to see this flaw dramatized every December, when TV networks ran the 1946 Christmas classic It’s a Wonderful Life. When the Bailey Brothers Building and Loan suffered a bank run, George Bailey (Jimmy Stewart) had to explain to the panicked depositors that their money had been lent to their neighbors. He was on the verge of suicide, when a guardian angel showed him how critical he and his bank had been to the community; and the neighbors pitched in and rescued the bank.

Even closer to the situation today was the crisis of the savings and loan associations (S&Ls) of the 1980s, after the Federal Reserve raised interest rates dramatically to kill inflation. Most of the assets of the S&Ls were long-term fixed-rate mortgages. As rates rose, they had to pay more to attract deposits; but the amount they earned on their fixed-rate mortgages didn’t change. Losses mounted, but the S&L insurance fund, the FSLIC, lacked sufficient money to reimburse all the depositors at failed S&Ls; so the regulators turned a blind eye and allowed them to keep operating as “zombies.” The matter was finally resolved with legislation in 1989 that placed S&L insurance under the FDIC and established the Resolution Trust Corporation to resolve the remaining troubled S&Ls. The ultimate cost to the taxpayers was estimated to be as high as $124 billion.

As with George Bailey’s savings and loan, the flaw was not “fractional reserve” lending. The S&Ls pooled the money of their customers and lent only what they had. The systemic flaw was and still is that to make long-term loans, banks must borrow “other people’s money,” which is expected to be available on demand. Today the banks’ liquidity options include not just their own depositors but other banks’ depositors in the fed funds market, and pension funds and other institutional creditors lending in the repo market. But they all expect their money to be available on demand; and if the bank has lent it out in long-term loans, the bank can be caught short shuffling reserves around trying to meet that demand.

The Failed Banks Were Not Nationalized, But Maybe They Should Have Been

One option that was debated in the 2008-09 crisis was actual nationalization.  As Prof. Michael Hudson wrote in February 2009:

Real nationalization occurs when governments act in the public interest to take over private property. … Nationalizing the banks along these lines would mean that the government would supply the nation’s credit needs. The Treasury would become the source of new money, replacing commercial bank credit. Presumably this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today’s commercial bank lending policies.

Gar Alperovitz, professor emeritus at the University of Maryland, also weighed in on the issue. In a 2012 New York Times article titled “Wall Street Is Too Big to Regulate,” he noted that the five biggest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs—had amassed assets amounting to more than half the nation’s GDP. He wrote:

With high-paid lobbyists contesting every proposed regulation, it is increasingly clear that big banks can never be effectively controlled as private businesses. If an enterprise (or five of them) is so large and so concentrated that competition and regulation are impossible, the most market-friendly step is to nationalize its functions …

Nationalization isn’t as difficult as it sounds. We tend to forget that we … essentially nationalized the American International Group, one of the largest insurance companies in the world, and the government still owns roughly 60 percent of its stock.

Another example was Continental Illinois, the largest bank bankruptcy and the seventh-largest bank in the country when it failed in 1984. The FDIC wiped out existing shareholders, infused capital, took over bad assets, replaced senior management, and owned the bank for about a decade, running it as a commercial enterprise, selling it in 1994.

What constituted a radical departure from capitalist principles in the last financial crisis was not “nationalization” but an unprecedented wave of bank bailouts, sometimes called “welfare for the rich.” The taxpayers bore the losses while the culpable management not only escaped civil and criminal penalties but made off with record bonuses. Banks backed by an army of lobbyists succeeded in getting laws changed so that what was formerly criminal behavior became legal. Instead of nationalization, we got TARP, the Troubled Asset Relief Program, in which toxic assets were purchased from financial institutions by the Treasury.  Faced with the inequity of that solution, many economists recommended nationalization instead. Willem Buiter, chief economist of Citigroup and formerly a member of the Bank of England’s Monetary Policy Committee, wrote in the Financial Times in September 2009:

Is the reality of the modern, transactions-oriented model of financial capitalism indeed that large private firms make enormous private profits when the going is good and get bailed out and taken into temporary public ownership when the going gets bad, with the taxpayer taking the risk and the losses?

If so, then why not keep these activities in permanent public ownership? There is a long-standing argument that there is no real case for private ownership of deposit-taking banking institutions, because these cannot exist safely without a deposit guarantee and/or lender of last resort facilities that are ultimately underwritten by the taxpayer. 

. . . Once the state underwrites the deposits or makes alternative funding available as lender of last resort, deposit-based banking is a license to print money. [Emphasis added.]

Those are all good arguments, but Congress is not likely to nationalize the whole banking system any time soon.

What About Nationalizing the Liquidity Pool?

Without going to those lengths, what could be made a public utility is the banks’ liquidity pool. Banks could borrow directly from the deep pocket of the central bank, the “lender of last resort” (or from the Treasury if it were re-engineered so that it could issue money as credit without taxing or going into debt). Banks would still need to make “prudent” loans – loans to borrowers who had demonstrated an ability to pay the money back – since if they suffered substantial defaults, they would not be able to balance their books and could be put into bankruptcy. They would still charge interest to cover their costs, and they would still compete for borrowers by keeping their interest rates low, maintaining the principles of “market capitalism” operating now. Customer deposits could be sequestered separately from loans, e.g. at government-backed postal banks. In fact, sequestering customer funds is what brokerages (such as Schwab and Fidelity) do now. Rather than the bank gambling with your money, you gamble with it yourself. But that, of course, can be risky too!

In any case sequestering deposits is not likely to happen either. What is being sought is what Roger Altman predicted – FDIC insurance coverage of the entire deposit base. In a March 17 letter first reported by Bloomberg News, the Midsize Bank Coalition of America called on regulators “immediately … to reinstate full deposit insurance coverage for depositors,” for two years. That was done in 2008, the letter noted, “and was one of the most effective tools used in the great financial crisis and it needs to be brought back immediately. Importantly, as happened previously, this increase in insurance should be paid for directly by the banks themselves by simply increasing the deposit insurance assessment on banks who choose to participate in this increased insurance coverage.”

The concern for midsize banks is that depositors have been fleeing to giant “too big to fail” banks, perceiving them to be safer. But as Cornell Prof. Robert Hockett observes, midsize banks lend to the midsize businesses that are the backbone of the productive economy. He has drafted legislation to provide for universal deposit insurance, discussed in Forbes. However, it’s an uphill battle. Even Sheila Bair, who is clearly sympathetic to the plight of local banks, has reservations on full coverage. As reported on MSN.com:

FDIC Chairwoman Sheila Bair said Tuesday that Congress should consider temporarily providing guarantees for deposits in transaction accounts used by employers to pay their workers — a move that some Democrats are considering.

But Bair said it would be an “overreaction” to insure all bank deposits.

“Unlimited insurance would be very expensive to do. It would be assessed on the banking system, backstopped by taxpayers, and would primarily help very, very wealthy people,” Bair said on Washington Post Live.

Small community banks — defined as banks with $10 billion or less in assets — have spoken out against paying more to cover the failure of larger banks such as SVB.

The Public Bank Option

Meanwhile, one midsize bank that has escaped this furor is the Bank of North Dakota. With assets in 2021 of $10.3 billion and a return on investment of 15%, the BND is owned by the state, which self-insures it. There is no fear of bank runs, because the state’s revenues compose the vast majority of its deposits, and they must be deposited in the BND by law.

The state’s local banks are also protected by the BND, which is forbidden to compete with them. Instead, it partners with them, helping with liquidity and capitalization. The BND has been called a “mini-Fed” for the state and its banks. That helps explain why North Dakota has more local banks per capita than any other state, at a time when other states have been losing banks to big bank mergers, causing the number of U.S. banks to shrink radically.

UK Prof. Richard Werner recently published a briefing memo supporting the case for a public bank. It was prepared for the state of Tennessee, which is considering a sovereign state bank on the North Dakota model, but the arguments apply to all states. Benefits discussed include dividends, higher state-level tax revenues, greater job creation, greater local autonomy and resilience to shocks, more options for funding public sector borrowing and state pension funds, and protection of financial transaction freedom and privacy.

Small and local is good, but even small regional banks need to pool their resources for maximum efficiency and security. A state-owned bank on the model of the Bank of North Dakota can provide low interest loans, liquidity, and financial sovereignty, keeping financial resources in the state directed to public purposes, all while turning a profit for the state.

This article was first posted on ScheerPost.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

What the authorities did over the weekend was absolutely profound. They guaranteed the deposits, all of them, at Silicon Valley Bank. What that really means … is that they have guaranteed the entire deposit base of the U.S. financial system. The entire deposit base. Why? Because you can’t guarantee all the deposits in Silicon Valley Bank and then the next day say to the depositors, say, at First Republic, sorry, yours aren’t guaranteed. Of course they are.

… So this is a breathtaking step which effectively nationalizes or federalizes the deposit base of the U.S. financial system.

The deposit base of the financial system has not actually been nationalized, but Congress is considering modifications to the FDIC insurance limit. Meanwhile, one state that does not face those problems is North Dakota, where its state-owned bank acts as a “mini-Fed” for the state. But first, a closer look at the issues.

Bail In, Bail Out, or “Socialism for the Rich”?

On Friday, March 10, Silicon Valley Bank (SVB) was put into receivership by the Federal Deposit Insurance Corporation (FDIC). The FDIC announced that deposits over the $250,000 insurance limit would get an advance dividend within the next week, and would receive a receivership certificate for the rest of the funds. Most of the depositors were venture-backed startups that needed to keep large deposits in the bank to meet payroll and pay suppliers, and over 95% of the deposits were uninsured and at risk of being lost. It was basically a “bail in” of the uninsured deposits, which would be recoverable only if funds were available after the bank’s assets had been sold.

But that arrangement lasted only two days. On March 12, Signature Bank was put into receivership; and the FDIC, Treasury and Federal Reserve jointly announced that all of the deposits at the two banks, not just those under the insurance limit, would be available for withdrawal on demand.

At a Senate Finance Committee hearing on March 16, Treasury Secretary Janet Yellen said that the guarantee would not apply to all deposits at all banks. Rather, the determination would be made on a case-by-case basis.

In a Bloomberg News interview on March 16, former FDIC Chair Sheila Bair criticized that decision. She observed that the two banks getting special treatment were not “systemically important,” and that the cost of the expanded guarantee was to be covered by a special assessment against all insured banks, including the small community banks that provide essential credit to local businesses. She argued that if guarantees were going to be given over the $250,000 limit, they should apply to deposits everywhere.

Meanwhile, on March 12, the Federal Reserve announced that it had set up a special purpose vehicle of the sort arranged for COVID relief in March 2020, called the Bank Term Funding Program (BTFP). Like the COVID special purpose vehicles, it would be backstopped with $25 billion from the Exchange Stabilization Fund (ESF), a fund set up in 1934 to stabilize the exchange value of the dollar. The BTFP was to be available to any bank needing it, and many banks obviously did. Over $300 billion in short-term loans were withdrawn from the Fed’s various facilities just in the week after SVB’s collapse.

This money is not, however, the sort of “free lunch” provided to troubled banks in the last financial crisis. The money is to be advanced as a loan for up to a year, at a hefty interest rate as of March 22 of 4.88%. According to a Federal Reserve press release, advances will be made to “eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.”

“Valued at par” means that banks can hold their long-term federal securities to maturity while acquiring ready cash against them to meet withdrawals, without having to “mark to market” and sell at a loss.

The Systemic Flaw

So what caused this crisis, and what can be done to remedy it?

In the midst of the 2008 economic crisis, former Fed Chair Alan Greenspan conceded that there was a flaw in his perception of the financial operating system. For 40 years, he had believed that banks could “self regulate” responsibly, a presumption that had proven to be flawed.

In the case of SVB, however, the bank was not engaged in the sort of risky lending seen in the subprime crisis, and increased “stress testing” wouldn’t have saved it. It had put its deposits largely in federal securities, purported to be the safest assets available – so safe that they carry a “zero risk weighting” requiring no extra capital buffer. What went wrong was that they were long-term bonds at low interest. When rates shot up, the market value of the bonds dropped, since buyers prefer newer bonds paying higher interest. Bonds that could be sold were sold at a loss, and some marked “hold to maturity” could not be sold at all. As a result, SVB lacked the liquidity to meet the sudden unexpected demand for withdrawals.

The flaw to which SVB and many other “troubled” banks have fallen victim is the age-old systemic problem of “borrowing short to lend long.” For centuries, banks have borrowed the money of depositors who expect to have it available on demand, and have invested it in long-term assets that cannot be immediately liquidated. The system works well so long as the depositors don’t panic and rush to pull their money out all at once. But when they do, if the problem is systemic, not just single banks but the whole banking system can collapse.

We used to see this flaw dramatized every December, when TV networks ran the 1946 Christmas classic It’s a Wonderful Life. When the Bailey Brothers Building and Loan suffered a bank run, George Bailey (Jimmy Stewart) had to explain to the panicked depositors that their money had been lent to their neighbors. He was on the verge of suicide, when a guardian angel showed him how critical he and his bank had been to the community; and the neighbors pitched in and rescued the bank.

Even closer to the situation today was the crisis of the savings and loan associations (S&Ls) of the 1980s, after the Federal Reserve raised interest rates dramatically to kill inflation. Most of the assets of the S&Ls were long-term fixed-rate mortgages. As rates rose, they had to pay more to attract deposits; but the amount they earned on their fixed-rate mortgages didn’t change. Losses mounted, but the S&L insurance fund, the FSLIC, lacked sufficient money to reimburse all the depositors at failed S&Ls; so the regulators turned a blind eye and allowed them to keep operating as “zombies.” The matter was finally resolved with legislation in 1989 that placed S&L insurance under the FDIC and established the Resolution Trust Corporation to resolve the remaining troubled S&Ls. The ultimate cost to the taxpayers was estimated to be as high as $124 billion.

As with George Bailey’s savings and loan, the flaw was not “fractional reserve” lending. The S&Ls pooled the money of their customers and lent only what they had. The systemic flaw was and still is that to make long-term loans, banks must borrow “other people’s money,” which is expected to be available on demand. Today the banks’ liquidity options include not just their own depositors but other banks’ depositors in the fed funds market, and pension funds and other institutional creditors lending in the repo market. But they all expect their money to be available on demand; and if the bank has lent it out in long-term loans, the bank can be caught short shuffling reserves around trying to meet that demand.

The Failed Banks Were Not Nationalized, But Maybe They Should Have Been

One option that was debated in the 2008-09 crisis was actual nationalization.  As Prof. Michael Hudson wrote in February 2009:

Real nationalization occurs when governments act in the public interest to take over private property. … Nationalizing the banks along these lines would mean that the government would supply the nation’s credit needs. The Treasury would become the source of new money, replacing commercial bank credit. Presumably this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today’s commercial bank lending policies.

Gar Alperovitz, professor emeritus at the University of Maryland, also weighed in on the issue. In a 2012 New York Times article titled “Wall Street Is Too Big to Regulate,” he noted that the five biggest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs—had amassed assets amounting to more than half the nation’s GDP. He wrote:

With high-paid lobbyists contesting every proposed regulation, it is increasingly clear that big banks can never be effectively controlled as private businesses. If an enterprise (or five of them) is so large and so concentrated that competition and regulation are impossible, the most market-friendly step is to nationalize its functions …

Nationalization isn’t as difficult as it sounds. We tend to forget that we … essentially nationalized the American International Group, one of the largest insurance companies in the world, and the government still owns roughly 60 percent of its stock.

Another example was Continental Illinois, the largest bank bankruptcy and the seventh-largest bank in the country when it failed in 1984. The FDIC wiped out existing shareholders, infused capital, took over bad assets, replaced senior management, and owned the bank for about a decade, running it as a commercial enterprise, selling it in 1994.

What constituted a radical departure from capitalist principles in the last financial crisis was not “nationalization” but an unprecedented wave of bank bailouts, sometimes called “welfare for the rich.” The taxpayers bore the losses while the culpable management not only escaped civil and criminal penalties but made off with record bonuses. Banks backed by an army of lobbyists succeeded in getting laws changed so that what was formerly criminal behavior became legal. Instead of nationalization, we got TARP, the Troubled Asset Relief Program, in which toxic assets were purchased from financial institutions by the Treasury.  Faced with the inequity of that solution, many economists recommended nationalization instead. Willem Buiter, chief economist of Citigroup and formerly a member of the Bank of England’s Monetary Policy Committee, wrote in the Financial Times in September 2009:

Is the reality of the modern, transactions-oriented model of financial capitalism indeed that large private firms make enormous private profits when the going is good and get bailed out and taken into temporary public ownership when the going gets bad, with the taxpayer taking the risk and the losses?

If so, then why not keep these activities in permanent public ownership? There is a long-standing argument that there is no real case for private ownership of deposit-taking banking institutions, because these cannot exist safely without a deposit guarantee and/or lender of last resort facilities that are ultimately underwritten by the taxpayer.

… Once the state underwrites the deposits or makes alternative funding available as lender of last resort, deposit-based banking is a license to print money.

Those are all good arguments, but Congress is not likely to nationalize the whole banking system any time soon.

What About Nationalizing the Liquidity Pool?

Without going to those lengths, what could be made a public utility is the banks’ liquidity pool. Banks could borrow directly from the deep pocket of the central bank, the “lender of last resort” (or from the Treasury if it were re-engineered so that it could issue money as credit without taxing or going into debt). Banks would still need to make “prudent” loans – loans to borrowers who had demonstrated an ability to pay the money back – since if they suffered substantial defaults, they would not be able to balance their books and could be put into bankruptcy. They would still charge interest to cover their costs, and they would still compete for borrowers by keeping their interest rates low, maintaining the principles of “market capitalism” operating now. Customer deposits could be sequestered separately from loans, e.g. at government-backed postal banks. In fact, sequestering customer funds is what brokerages (such as Schwab and Fidelity) do now. Rather than the bank gambling with your money, you gamble with it yourself. But that, of course, can be risky too!

In any case sequestering deposits is not likely to happen either. What is being sought is what Roger Altman predicted – FDIC insurance coverage of the entire deposit base. In a March 17 letter first reported by Bloomberg News, the Midsize Bank Coalition of America called on regulators “immediately … to reinstate full deposit insurance coverage for depositors,” for two years. That was done in 2008, the letter noted, “and was one of the most effective tools used in the great financial crisis and it needs to be brought back immediately. Importantly, as happened previously, this increase in insurance should be paid for directly by the banks themselves by simply increasing the deposit insurance assessment on banks who choose to participate in this increased insurance coverage.”

The concern for midsize banks is that depositors have been fleeing to giant “too big to fail” banks, perceiving them to be safer. But as Cornell Prof. Robert Hockett observes, midsize banks lend to the midsize businesses that are the backbone of the productive economy. He has drafted legislation to provide for universal deposit insurance, discussed in Forbes. However, it’s an uphill battle. Even Sheila Bair, who is clearly sympathetic to the plight of local banks, has reservations on full coverage. As reported on MSN.com:

FDIC Chairwoman Sheila Bair said Tuesday that Congress should consider temporarily providing guarantees for deposits in transaction accounts used by employers to pay their workers — a move that some Democrats are considering.

But Bair said it would be an “overreaction” to insure all bank deposits.

“Unlimited insurance would be very expensive to do. It would be assessed on the banking system, backstopped by taxpayers, and would primarily help very, very wealthy people,” Bair said on Washington Post Live.

Small community banks — defined as banks with $10 billion or less in assets — have spoken out against paying more to cover the failure of larger banks such as SVB.

The Public Bank Option

Meanwhile, one midsize bank that has escaped this furor is the Bank of North Dakota. With assets in 2021 of $10.3 billion and a return on investment of 15%, the BND is owned by the state, which self-insures it. There is no fear of bank runs, because the state’s revenues compose the vast majority of its deposits, and they must be deposited in the BND by law.

The state’s local banks are also protected by the BND, which is forbidden to compete with them. Instead, it partners with them, helping with liquidity and capitalization. The BND has been called a “mini-Fed” for the state and its banks. That helps explain why North Dakota has more local banks per capita than any other state, at a time when other states have been losing banks to big bank mergers, causing the number of U.S. banks to shrink radically.

UK Prof. Richard Werner recently published a briefing memo supporting the case for a public bank. It was prepared for the state of Tennessee, which is considering a sovereign state bank on the North Dakota model, but the arguments apply to all states. Benefits discussed include dividends, higher state-level tax revenues, greater job creation, greater local autonomy and resilience to shocks, more options for funding public sector borrowing and state pension funds, and protection of financial transaction freedom and privacy.

Small and local is good, but even small regional banks need to pool their resources for maximum efficiency and security. A state-owned bank on the model of the Bank of North Dakota can provide low interest loans, liquidity, and financial sovereignty, keeping financial resources in the state directed to public purposes, all while turning a profit for the state.

This article was first posted on ScheerPost.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

Two years after the closing of Indian Point Energy Center, a nuclear power plant in Buchanan, New York, public health experts and campaigners are warning that an energy technology company's plan to discharge one million gallons of wastewater from the plant's fuel-cooling pools into the Hudson River could harm at least 100,000 people who rely on the river for their drinking water.

Physicians for Social Responsibility (PSR) is among the groups sounding the alarm about radioactive contaminants, including the radioactive isotope tritium, which could be present in the treated water that Holtec International plans to release into the Hudson.

Spent fuel pools at the plant, which was decommissioned after decades of advocacy by anti-nuclear campaigners, have cooled radioactive fuel for more than 45 years, and health experts from PSR and other groups warned on Thursday at the first of several public forums that Holtec has not been transparent about the risks associated with the wastewater discharge plan.

"There has been no prior disclosure of what pollutants or radioactive contaminants are in the wastewater or any public education on the environmental safety and public health risks associated with any potential discharges from the site," said the groups in a statement.

The Hudson River is the primary drinking water source for seven cities and towns including Poughkeepsie, Rhinebeck, and Hyde Park, as well as the backup water source for other communities along the river.

"Since the Hudson is a tidal river, radioactive wastewater can affect communities all the way up to Poughkeepsie and down to Manhattan, Staten Island, and New Jersey," said Nancy S. Vann, president of the Safe Energy Rights Group, last year.

Dr. Helen Caldicott, president of PSR, was among the experts who spoke at the forum on Thursday and warned that tritium poses risks for adults, children, and developing fetuses.

"It's highly carcinogenic, of course, it enters the fetus," she said at the meeting. "There's no way to remove tritium from the water."

Tritium has also been the subject of concern in Japan as officials prepare to release wastewater from the decommissioned Fukushima Daiichi nuclear power plant into the Pacific Ocean, with fishing communities and South Korean officials warning of potential harm to marine life.

Holtec International that told local outlet News 12 that during the 12-15 year process of decommissioning the plant, the discharge of the wastewater will be regulated by the U.S. Environmental Protection Agency and the U.S. Nuclear Regulatory Commission and will result in the presence of substances that "are typically indistinguishable from the natural radioactivity present in the environment."

Caldicott dismissed the company's claims.

"Physicists talk convincingly about 'permissible doses' of radiation," she said in a statement. "They consistently ignore internal emitters—radioactive elements from nuclear power plants that are ingested or inhaled into the body, giving very high doses to small volumes of cells. They focus instead on external radiation from sources outside the body."

"Doctors know that there is no such thing as a safe dose of radiation, and that harmful impacts are cumulative," Caldicott added. "Children are ten to twenty times more vulnerable to the deleterious effects of radiation than adults and little girls twice that of boys."

Also speaking at the forum on Thursday was Diane Turco, director of the grassroots group Cape Downwinders in Cape Cod, Massachusetts, where Holtec is also planning to discharge wastewater from Pilgrim Nuclear Power Station, another decommissioned facility.

"From California to Massachusetts to New York to Michigan to New Mexico, Indigenous and civil society groups are connecting in our efforts," said Turco. "Holtec has no right to dump radioactive wastewater into our waterways or radioactive waste into our communities."

The experts also raised concerns about the demolition activities taking place at Indian Point without efforts to mitigate the spread of radioactive dust and other airborne contaminants, even as Buchanan-Verplanck Elementary School stands less than 4,000 feet from the site and lacks air, water, and soil monitoring.

"Although a school air monitoring study has been under consideration, a Request for Proposal for an air monitoring program was only recently issued," said the experts. "Still, hundreds of students were allowed to return to the school this past September. Parents still lack critical information regarding emergency planning and preparedness, monitoring, and protections."

They noted that in 2019, a middle school in Piketon, Ohio was forced to close due to radioactive contamination from demolition projects at a nuclear enrichment facility less than two miles away.

"Independent expert analysis regarding potential health and environmental impacts from these exposures is imperative," said the experts.

Another public forum will be held at nearby Cortlandt Town Hall on February 3, according toNews 12.

This content originally appeared on Common Dreams and was authored by Julia Conley.

Janine Jackson interviewed FlyersRights‘ Paul Hudson about the airline meltdown for the January 6, 2023, episode of CounterSpin. This is a lightly edited transcript.

(NBC News, 12/29/22)

Janine Jackson: You will likely have seen the images, if you weren’t in them yourself: thousands of people stranded in airports, baggage lost, plans foiled. Is this how it has to be? And if not, well, what exactly is in the way?

Paul Hudson is president of FlyersRights, a nonprofit group organizing the consumer rights of airline passengers. He joins us now by phone. Welcome to CounterSpin, Paul Hudson.

Paul Hudson: Thank you for having me.

JJ: Reasonable folks understand acts of nature, unfair and brutal as they can be, but what were the non-weather-related conditions or circumstances that contributed importantly to the air travel breakdowns that we all saw in late December?

PH: Air travel has been deteriorating for a long time, really, in the last 20 years especially. So we were in a situation, especially coming out of the pandemic, where I would now analogize it to say, we’re in rough air.

We had terrible conditions over the summer with delays. We had awful situations during the pandemic, with flyers not being given refunds when their flights were canceled.

And now, in the most recent situation with Southwest, we have the equivalent of a crash landing. Their software system no doubt broke down, but it’s been in bad shape for many years, and their personnel were simply inadequate to handle the schedule that they have set up.

So there’s a lot of reforms that need to be done, some short-term and some longer-term, and hopefully this will be a wake-up call that allows the system to get back to where it should be, and where it really was in, say, the 1980s, or prior to that.

JJ: It’s not really a reduction, as maybe some folks have seen in media, it’s not a reduction to “finger-pointing,” or to “he said, she said,” to try to trace causes and to call for accountability.

There were systemic issues and problems that employees and their representatives were on the record, right, as pointing to, as being concerned about.

PH: Yes. And these things were ignored. I mean, this is not the first time an airline or Southwest has had computer breakdowns. Delta had some, a number of others had some. The systems are not nearly as robust as they need to be. They need to be failsafe.

If you look at other systems that, like the internet, like the phone system, even like your electrical grid system, if one part of it goes down, it doesn’t crash the system. You have backups, and you get what’s called graceful degradation.

AP (1/4/23)

But in the airline business, they have underinvested in a lot of these things. And as a result, we get these brownouts. And the cost of it, the inconvenience of it, is dumped on the public.

JJ: Associated Press offered an explainer, which, right there in the name, it’s supposed to tell folks, you’re not inside this system, you don’t understand the ins and outs of this system, but here’s what you need to know.

And in that explainer, AP said, “What happened?” And their answer was:

Airlines were prohibited from furloughing employees as a condition of receiving $54 billion in federal pandemic aid from taxpayers. But that didn’t stop them from encouraging tens of thousands of workers to quit or take long-term leaves of absence after the pandemic torpedoed travel in 2020.

I’m a little confused by that. I’m sort of getting “no one wants to work,” I’m sort of getting “airlines couldn’t keep people in jobs.” I just—as an explainer of what happened, I’m a little confused by that.

Paul Hudson: “Airlines, unfortunately, are only incidentally in the transportation business. They’re primarily…in the business of making money.”

PH: Well, the intention of the PPP programs and some other bailouts of the airlines, which altogether involved about $90 billion, the intention was that you would keep the staff on the payroll so they would be ready when pandemic ended to restore traffic, and they wouldn’t have to go from a cold start.

But the airlines, unfortunately, are only incidentally in the transportation business. They’re primarily, especially their executives, in the business of making money. If that meant reducing their payroll through other means that got around the intention of the law—and there was no real oversight by the federal government on money—that’s what they did.

And they continued to pay, in some cases, dividends. They paid large bonuses to CEOs and top executives. Some of them also did stock buybacks to keep their stock price up while their profits, of course, were dwindling to nothing.

JJ: Let me just take you on maybe a side trip there, because when I looked at airline meltdown, everything, 100% of the stories, were about Southwest. And I wonder if you see any danger in making this conversation, and making conversations about how to come out of it, only about Southwest Airlines per se.

Is there a reason to expand the conversation beyond that, as though they were outliers or rogues?

PH: Definitely there is. The other airlines have all had lesser brownouts and crashes, not only their computer systems, but their lack of personnel coming out of the pandemic.

The reforms that we’ve been promoting pretty much have been ignored by DoT, which is the only regulator of the airline industry. And as a result, things have gotten worse and worse.

For example, you would think there would be some requirement to have a certain level of backup or reserve capacity, for personnel as well as equipment. But there is none. There is no requirement, and some airlines actually have negative reserves. So even on their best day, they cancel 1 or 2 percent of their fights. It’s profitable to do that.

Another example is that there is no requirement that they maintain any level of customer service. Each airline sets their own goals about that, but there’s no enforcement. And they just say, “Well, I’m sorry.” They don’t answer your phones. They don’t have the personnel to do it.

And the area that’s most crucial, which is pilots; we have a shortage of pilots. Pretty much everyone agrees with that, except perhaps the pilot union that wants to leverage the situation says there is no shortage. But the airlines are simply not recruiting the pilots they need, and haven’t done so for years, especially for regional airlines. They don’t pay them nearly enough.

And the proposals that FlyersRights made, going back to June of this year, about 17 of them, have pretty much been ignored by DoT, at least until recently.

JJ: Let me ask you to talk about journalism. When we see structural or infrastructural problems that you’re pointing to of this order, news media coverage can be unfortunately predictable, really, in terms of, just to put it crudely: There’s going to be a wave of disaster, human-interest, “what the heck is happening” stories, and then a smaller wave of, “well, who’s to blame for this” stories. And then later, maybe a ripple of “serious people” analysis. And that often says, “Golly, everybody’s upset, but there’s really nothing to blame here. There’s nothing to point to.”

And then we rinse and repeat, and we act surprised the next time there’s a crisis. I wonder, what did you make—good, bad or indifferent—of media’s reporting on the airline meltdown?

PH: Well, it was somewhat predictable. I think, though, that the fact that air travel affects such a wide proportion of the population, and the media are, frankly, doing a lot of air travel in many cases—personally, it has affected them. So there was a wider coverage than I would have expected.

I was interviewed on CNBC for six-and-a-half minutes. And, as you know, in national television….

JJ: That’s a lot.

PH: You’re lucky to get one or two minutes. That’s huge.

JJ: So that’s very helpful.

We’re coming out of an era where the White House was issuing sort of comic book rules like, well, for every new regulation, you have to eliminate two. And regulation is evil, and that’s the way we’re meant to understand it. The bar is pretty low.

But I don’t know, listeners may remember, this country had moments when we could talk about consumer rights, not maybe as robust and expansive as some of us would want. But it wasn’t a joke. It wasn’t a “snowflake issue” to want companies to make products that were safe and nontoxic, and that had consumers—human beings—in mind.

What do you say about the moment to reinvigorate that consumer perspective?

PH: I hope it’s going to come back to some degree. We issued a Bill of Rights for airline passengers back in 2014 and ’13. And we visited 150 congressional offices over the next two or three years. Now, there’s 535 members of Congress; we could not find one member who would introduce any substantial legislation, even drop a bill in.

And so we’re in a total desert situation now. And if you don’t have a member of Congress that wants to make, not just this, but other consumer issues important, and will not introduce legislation, you’re just not going to get anywhere.

The agencies that are the regulators, they are political at the top. And whether and however they’re controlled by the Democrat or Republican administration, our experience has been, over the last 30 years, that they’re actually controlled by the industry. And the industry pretty much has veto power over any consumer regulation.

JJ: It’s what we call being captured.

Do you have any final thoughts for journalists, many of whom might be starting out new, and think they can cover what they want to cover and let the chips fall where they may? What would you encourage journalists to look at or to ignore or to think about, or any thoughts for media?

PH: I would say if I was a journalist starting out, or even not starting out, experienced, in an issue like air transportation, you have to look at all the different sides, not just go with the propaganda or the sound bites from any interest groups, because every group you speak to comes with their own agenda.

But even so, there are many facts that can be distilled from these things. And it’s not impossible to come up with reasonable policies and come up with a reasonably accurate story in many situations.

JJ: We’ve been speaking with Paul Hudson. He’s president of FlyersRights. They’re online at FlyersRights.org. Paul Hudson, thank you so much for joining us this week on CounterSpin.

PH: Thank you so much.

The post ‘The [Airline] Industry Pretty Much Has Veto Power Over Any Consumer Regulation’ appeared first on FAIR.

This content originally appeared on FAIR and was authored by Janine Jackson.

(NBC News, 12/29/22)

This week on CounterSpin: Media criticism is, at its heart, consumer advocacy. There’s an unarticulated underpinning to elite media conversation that goes: As a citizen you may have rights, but as a consumer, you don’t have anything called a “right”; the market is an arrangement—the best possible arrangement—but still, you can only hope you’re on the right side of it where it’s profitable to serve you. And if it isn’t, well, too bad. It’s a kind of caveat emptor, devil-take-the-hindmost situation, which would be bad enough if corporate media didn’t present it as though it were unproblematic, and as if we’d all agreed to it! Paul Hudson is president of the consumer group Flyers Rights. He’ll talk about what you did not, in fact, sign up for, in terms of air travel.

(Center for Gender and Refugee Studies)

Also on the show: Enacted under Trump, Title 42 instructed officials to turn away asylum seekers at US borders in purported protection of the country’s “public health” in the face of Covid-19. Officialspeak currently has it that Covid is over, so far as public regulations go…. Oh except for that exception about denying  hearings to people fleeing violence and persecution in their home country. The Supreme Court has just furthered this injustice with a ruling that, according to one account, “does not overrule the lower court’s decision that Title 42 is illegal; it merely leaves the measure in place while the legal challenges play out in court.” We’ll hear from Melissa Crow, director of litigation at the Center for Gender and Refugee Studies.

The post Paul Hudson on Airline Meltdown, Melissa Crow on Asylum Policy appeared first on FAIR.

This content originally appeared on FAIR and was authored by Fairness & Accuracy In Reporting.

Orientation

The golden age of left-wing economists

In part because the 1960s was still a period of capitalist abundance, there were few socialists in Yankeedom who pointed to the economic contradictions of capitalism as a motivator for the coming revolution. “Western Marxists” ignored the economy, imagining capitalism could go on forever. As first anarcho-communist and then as Situationists, the group I was in never talked about any economic laws that would drive the economy into a crisis. But a couple of my comrades, one from France, had been closely studying a book by Lyn Marcus (later his public name became Lyndon LaRouche) called Dialectical Economics. Here was a wake-up call for all of us to get back to economics, especially since by the late 1970s the days of economic abundance were over.

Throughout the next thirty years, good economic Marxists like Richard Wolff, David Harvey, Robert Brenner and John Bellamy Foster have carried the torch for political economy. However, it was not until The Great Recession of 2008 and the Occupy movement in 2011-2012 really brought economic crisis into the foreground of life in Mordor. Since then, more Marxist economists have emerged such as Michael Perelman, Michael Roberts, and Anwar Shaikh. They have all added depth and scope. Non-Marxist economics such as Michael Hudson, Steve Keen and Jack Rasmus have made acidic analyses of finance capital. The great value in all these economists is that they speak in natural language, not mathematical language. This makes it easier for the Yankee population to understand them.

Varieties of capitalist crises theory and their rivals

In his book The Long Depression Michael Roberts asks four key questions from which he derives eight possible answers about the nature of economic turmoil or even whether there is a crisis at all.

• Is capitalism subject to economic crisis?

Within the camp which says no, a second question is answered.

1b) Do periodic fluctuations need fixing?

If the answer is “yes” you are a Keynesian like Paul Krugman. If the answer is “no” you are a libertarian like Milton Friedman. For the libertarians capitalism only goes through “business cycles”.

Within the camp that says “yes”, that capitalism is subject to crisis, a second question is asked:

• Is the kernel of the crisis found in production?

If the answer is “no” you are an underconsumptionist like Marxists David Harvey or Rosa Luxemburg.

If the answer is “yes” about the kernel of the crisis found in production, there is another question:

2b) Are crises more than struggle over wages and profit shares?

If no, you are a profit-squeeze supporter. Economics associated with this are Baron and Sweezy and Richard Wolff.

If the answer to the kernel of the crisis is found in production is “yes”, a further question should be:

3a) Are crises integral to the accumulation crisis?

If the answer is “yes” you follow Marx’s argument about the tendency of the rate of profit to fall. This is advocated by Michael Roberts, Anwar Shaikh and Robert Brenner.

If the answer to the question is crisis integral to the accumulation process is “no” then a further question is asked.

4a) Does extra-consumption come from outside the system?

If the answer is “yes” you are a follower of Rosa Luxemburg or David Harvey and claim that capitalism has limited resources and needs imperialism to survive.

If the answer is “no” to the question then there is second question.

4b) Does extra consumption come from state intervention?

If the answer is “yes” you are a post Keynesian such as Steve Keen.

If the answer is “no” you are a Malthusian.

In this article I will be drawing from David Harvey’s book The Seventeen Contradictions and the End of Capitalism. I picked this book, not because I agree with Harvey’s theory of crisis, but because he lays out the contradictions so exhaustively. I am not a political economist by training but I have studied hard to understand him. What is most important for my readers to understand is that there are a great number of reasons that capitalism is in very, very, very serious trouble.

What is a contradiction?

Harvey says a contradiction is when two seemingly opposing forces are simultaneously present within a particular situation, an entity, a process or an event. A contradiction can be produced either by innovations, disasters or slow decline.

Contradiction 1 Exchange-value is More Important than Use Value Though Use-Value Matters More in Real Life

The use value of a house is contained in the cost of its production. This includes all the materials that went into building the house as well as the cost of labor to complete the house. The use value of the house is its protection from bad weather conditions, prowlers, a place of comfort, privacy and social reproduction, including sex and taking care of children. The use value of a commodity is relatively stable.

But the exchange value of housing is not fixed. It is interdependent on surrounding houses. Property values can go down on my house if my neighbors’ houses are not kept up, even if my house has been kept up. On the other hand, a house that is not kept up can sell for a high price if it is located in a gentrifying neighborhood. Harvey points out that there have been property market crashes in 1928, 1973, 1987 and 2008. The contradiction is that use-values are captive to exchange values and this constantly destabilizes the economy. Harvey says exchange value is always in the driver’s seat.

Contradiction 2 Money is Valued Above the Social Value of Labor

Harvey identifies four constructive functions that money provides:

• It is the means or medium of circulation. Before money, with barter exchange was dependent on both parties having goods the other wanted. Money overcomes the incongruity in immediacy of goods and services that limits direct barter.
• It provides a single measuring rod for economic values of all commodities.
• It provides a way to store value.
• It delays the need to buy a commodity immediately.

But there is a gap between money and the labor that ultimately produces it. Money hides the social labor that went into its material form. The problem is that money, which is supposed to be used to measure value, itself become a kind of commodity— that is money capital. Its use value is that it can be used to produce more value profit or surplus value. Its exchange value is, for example, an interest payment.

Commodity money such as gold and silver are rooted in tangible commodities with definite physical qualities like:

• It is relatively scarce.
• The supply is relatively inelastic so they maintain their relative value against all other commodities over time.
• These metals do not oxidant and deteriorate.
• The physical properties are known and their qualities can be assayed accurately so their measure can easily be figured out.

The problem is these commodity moneys are awkward to use on a daily basis of coin tokens. Bits of paper and then electronic moneys became much more practical in the exchange of goods. They are good at storing value but not so good in circulating commodities.

The problem is also the desire for finance capital as a means of social power becomes an end in itself. This distorts the concrete relation of the money that would be required simply to facilitate exchange. It also throws a monkey wrench into the supposed rationality of capitalist markets. Harvey writes that one of the most dangerous contradictions of capital is that of compounding growth so that with the abandonment of the metallic base, money could be printed infinitely by whoever was authorized to do so. This is exactly what is happening now with the Fed freely printing money without any foundation in gold or any real social wealth. Money out-of-control from material products is what leads to financial depression.

Contradiction 3 Private Property and the State Often have Conflicting Interests

Keeping refugees and immigrants out vs the need for cheap labor

The kind of rationality the state typically imposes is illustrated by its urban and regional planning practices.The job of the nation-state is to protect their borders from unwanted refugees or immigrants. On the other hand, capitalists need migrants to work under-the-table for dirt cheap wages. Capitalists indirectly fight with the state over the status of migrant workers.

Capitalists vs the matriarchal state

Secondly, the state can be divided into its matriarchal and patriarchal functions. Matriarchal functions include unemployment insurance, pensions, welfare, road construction and repair. The patriarchal state functions include the military, the police and prisons. Capitalists are against the matriarchal functions of the state because they cut into profits. However, capitalists are more than willing to invest in the police to protect them, prisons to house the unemployed or the military to take the natural resources of other countries.

Patriotism vs global trade

Even within the patriarchal state there are contradictions. On one hand the military is very patriotic and expect that people will buy Yankee cars. Harvey says the state is interested in the accumulation of wealth and power on a territorial basis. On the other hand, capitalists will seek to make a profit anywhere in the world and will import foreign cars and many other goods. As many of you know, capitalist oil businesses were making profits from Germany during the Nazi era and the Yankee state had to force them to leave.

Neocon war of all against all vs liberal laissez-faire trade policies

Lastly, the patriarchal state often opposes capitalists in its international ambitions. For example, neocon foreign policy war mongers like Victoria Nuland wants war with Russia and China. Liberal capitalists on the other hand, want to trade with China. Capital is not the only agent involved in the pursuit of technological advantages in civil society. The state apparatus looks for superior weaponry, surveillance and other methods for policing the population.

Contradiction 4 Capitalists Acting in Their Own Short-term Self-interest Undermine the Conditions of Their Own Reproduction

If the use value of a product and the price of the commodity were the same, there would be no room for capitalist profit. One the one hand, the common wealth created by social labor comes in a great variety of use values from the most basic knives and forks, to the food we eat, to the cars we drive. to the houses we live in and the clothes we wear. The capitalist private appropriation of common wealth along with the expropriation of social labor is legally sanction under normal conditions of trade. But there is a dark unseen and illegal side of the market which Harvey includes such as robbery, thievery, swindling, corruption, usury, predation, violence which goes unaccounted for. In addition, there is market cornering, price fixing and Ponzi schemes. All these activities weaken the socio-production process. Harvey writes:

It is stupid to seek to understand the world of capital without engaging with the drug cartels, traffickers in arms and the various mafias and other criminal forms of organization that play such a significant role in world trade. (53)

All this swindling and double-dealing is labor expended in counter-production which weakens the amount of energy left for production. This production includes the amount of wages paid and products consumed by workers to get to the next day.

Contradiction 5 The Class Struggle Over the Proportion of Wages given to Workers as Part of the Working Day

Harvey states that one of the most outstanding aspects of the capitalist system is that it does not appear to rely on cheating. For Marxists, labor has two aspects. On one hand, labor as human species is activity which distinguishes us from the rest of the animals and produces all real social wealth. One the other hand, there is labor power which is a commodity the capitalist rents for roughly half the working day. This “fairness” of the wage rests on the assumption that laborers have an individualized private property right over the labor they are capable of furnishing. But in reality, workers have a social property right over their labor because the cooperative social labor of all the workers in factories and offices produces all the wealth.

The commodification of labor power is the only way to solve a seemingly intractable contradiction within the circulation of capital. This contradiction is that in a fully functioning capitalist system, where coercion, cheating and robbery are supposedly ruled out, the exchanges should be based on the principle of equality – we exchange use values of products with each other and the value of those use values should be roughly the same. For all capitalists to realize a positive profit requires the existence of more value at the end of the day than there was at the beginning means an expansion of total output of social labor. Without that expansion there can be no capital. Zero growth defines a condition of crisis for capital. Here there is no room for profit. So where does the profit come from? As Harvey says, there must exist a commodity that has the capacity to create more value than it has itself. That commodity is labor power.  And this is what capital relies upon for its own reproduction. It’s the exploitation of the extra five or six hours of the workers’ pay that is pocketed by capitalists. In reaction to workers joining in unions for higher wages and better working conditions capitalists will:

• lock workers out or close the businesses completely:
• refuse to invest or reinvest in workers or infrastructure;
• deliberately create unemployment and create an industrial reserve army; and
• move jobs to peripheral world countries for their cheap land or labor.

So there is a long-term, relentless struggle between capitalists and labor over the proportion of wages given to workers on a given day.

Capitalist contradictions about education

Another part of this conflict is over education. On one hand, capitalists want to keep workers as uneducated as possible so that they find out as little of the workings of capitalism as possible. But on the other hand, capitalists must make workers more creative in order to fix problems on the job. The problem for capitalists is they can’t control how the workers may use their creativity on the job to undermine capitalism one way or another.

Contradiction 6 The Contradiction Between Fixed and Circulating Capital

Capital investment takes three forms: as an investment in fixed capital – machinery, plants, land and investment and an investment in variable capital which is labor power. Labor power is remunerated afterproduction has occurred, whereas the means of production are usually paid for prior to production (fixed capital). But capital also invents the circulation of commodities. When the commodity is sold, then capital becomes liquid again. In the circulation of commodities, the speed of its circulation is also important. If one capitalist can circulate their commodities faster than another they have a certain competitive advantage. So they attempt to accelerate the turnover time of capital.

Limitations of making a profit on fixed capital

However, there are limits to the speed of circulation. To paraphrase Harvey, if I want to make steel, the iron ore and coal are still buried in the ground and it takes a lot of time to dig them out. There are not enough workers close by who are willing to sell their labor power. I need to build a blast furnace and that takes time. There are physical barriers to reducing this turn-around time to zero. Workers, furthermore, are not automatons. They may lay down their tools or slow down their labor process. (73-74)

Once the steel is finished it has to be sold. The commodity can sit on the market for some time before the buyer shows up.  The capitalist has a vested interest in securing and accelerating the turnover time of consumption. One of the ways is to produce steel that rusts so fast it needs rapid replacement: planned obsolescence (73-74)

These problems center on the category of long-term investments in fixed capital.

In order for capital to circulate freely in space and time, physical infrastructures and built environments must be created that are fixed in space – anchored on the land in the form of roads, railways, communication towers and fiber-optics plants, airports and harbors, factory buildings offices, houses, schools, hospitals.  More mobile forms of fixed capital are ships, trucks, planes and railway engines. (75)

Capital in danger of social sclerosis

The part which is moveable capital cannot be replaced during the item’s lifetime without loss of value. As time goes by the sheer mass of this long-lived and often physically immobile capital for both production and consumption increaserelative to capital that is continuously flowing. Whole sites are abandoned and wasted as in the rust belts of Mordor. On one hand, in order for capital to circulate freely in space and time, physical infrastructures and built environments must be created that are fixed in space. Yet capital has to periodically break out of the constraints imposed by the world it has constructed. As Harvey says, it is always in mortal danger of becoming sclerotic. Why?

Capital is forever in danger of becoming more sclerotic over time because of the increasing amount of fixed capital required. Fixed and circulating capital are in contradiction with each other but neither can exist without the other. The flow of that part of capital that facilitates circulation has to be slowed down. But the value of immobile fixed capital (like the container port terminal) can be realized only through its use. It is generally much slower.

From physical goods to spectacles

One solution for capitalists is to sell events rather than physical commodities. Harvey says there is a huge difference between, for example, the live transmission of a World Cup football match and lugging around bottled water, steel girders, furniture or perishable items like soft fruit, hot pork pies, milk and bread. Commodities are variably mobile depending upon their qualities and transportability. Production, with some exceptions, like transportation itself is the least mobile form of capital. It is usually locked down in place for a time. In shipbuilding it is considerable.

Contradiction 7 The Contradictory Nature of Low Wages vs Capitalist Realization

The goal of capitalism is to sell as many products as it can at the cheapest possible price. But in the process of making a profit the capitalist must:

• exploit labor power (surplus value) so it can raise the price of a commodity;
• realize the sale of the product in the market – which is far from easy

The problem for capitalists is that if wages are kept low the aggregate demand of laborers won’t be enough to buy the products off the shelf. So if the cost of social reproducing of the laborers is being forced back into the household, then those laborers will be less likely to buy goods and services off the market. Lack of aggregate effective demand creates a serious barrier to the continuity of capital accumulation. Working class consumer power is a significant component of that effective demand. Yet if the capitalist insists on paying minimum wage how can the workers buy the products?

Between 1945 and the mid-1970s, the problem for capitalist was in the production of enough surplus valuebecause of unions were strong and wages high. When unions became weaker, wages dropped beginning in the 1970s. Then the problem for capitalists was was not in the achievement of extracting surplus value but in cultivating conditions for its realization since workers had less money to buy commodities. This is why in the early 1970s capitalists began issuing credit cards to workers in order for capitalist profits to be realized.

Contradiction 8 Contradiction and Alienation of Labor

Harvey says there is an important distinction between the technical and social division of labor. By technical he means a separate task within a complex series of operations, that anyone can do. By social he means the specialized task that only a person with adequate training or social standing can do, like a doctor, or an architect. In the technological division labor, the unity of mental and manual aspects of laboring was broken.

The meaning of the term “alienation” has psychological and sociological components. As a passive psychological term, it means to become isolated from connection to others whether at work or in leisure. As an active psychological state, it means being angry and hostile or feeling oppressed, deprived or disposed of. The person acts out that anger, lashing out without any clear definition. Teenage rebellion movies of years ago, The Wild One or Rebel Without a Cause, are examples.

As beautifully laid out by Bertell Ollman, sociologically alienation means the worker is estranged from his or her product of labor as well as the process of work. He/she is also alienated from other workers, from nature and from their own creativity. As Marx said it is only outside of work that the worker has the possibility to achieve any personal fulfillment. Uneven geographical development in the divisions of labor and the parallel increase in social inequality in life choices, are exacerbating that sense of alienation. This creates a danger for capitalists in the form of labor unions, strikes, labor parties and agitation for socialism. On one hand, the accumulation of capital requires squeezing the life out of the worker. On the other hand, this repression creates militancy on the part of workers.

Contradiction 9 Automation Might Shrink the Ratio of Necessity and Freedom vs Automation as the Driver od Unemployment

One of the mythological stories told by capitalists is that technological innovation would lead to more leisure time for workers. Well, since about 1970 in Yankeedom, we have seen an increase in the amount of full-time work from 40 hours to at least 50 hours per week. This is because capitalist motivation is not to create more leisure for workers, but to replace workers, especially militant workers, with machines.

On the other hand, automation and artificial intelligence now provide us with abundant means to achieve the Marxian dream of freedom beyond the realm of necessity. In other words, the population could have more leisure time to use their creativity for new inventions, new arts and new sciences. Full advantage could be taken of automation and artificial intelligence. But for the capitalists the more time that has been released from production, the more imperative it has become (for the capitalist) for the workers to absorb their leisure time in consumption. It has no room for authentically free time which neither produces nor consumes commercial wealth.

Contradiction 10 Technological Innovation vs Monopoly Capitalism

From competition to monopoly

According to Harvey, the development of technology first became a focus for capitalists in the second half of the 19^thcentury with the rise of the machine tool industry. Harnessing energy like the steam engine was applied to multiple industries. The classic Marxist argument is that through capitalist competition, the productive forces (technology) increase and outdistance the capitalist capacity to use this productive power. This overabundance of products creates the conditions for socialism. But what Marx didn’t anticipate is that capital demonstrates a trend towards monopoly rather than competition. This is a less favorable environment for innovation.

Wealth of Nations is the founding myth of liberal economic theory. Capital is imagined as constructed by a plethora of molecular and competitive collisions of individual capitalists moving freely and searching for profitable opportunities within a chaotic sea of economic activity. But in fact by the end of the 19^th century, corporations has overwhelmed Adam Smith’s competitive invisible hand. All this is news to market fundamentalist economists. Right-wing market libertarians present monopolies as an exception to the rule, rather than the predominant way of life under capitalism. Google, Microsoft, Facebook, Amazon, Walmart and Apple are all examples of oligarchies tending towards monopolies. The tendencies in many sectors of the economy – pharmaceuticals, oil, airlines, agribusiness, banking software, media and social media – suggest strong tendencies towards oligopoly, if not monopoly. In fact, says Harvey, most capitalists, if given the choice prefer to be monopolists rather than competitors

Lenin saw capital moving into a new phase of monopoly power associated with imperialism at the turn of the 20^th century when the big industrial cartels combined with finance capital to dominate the leading national economies. This view re-emerged in the 1960’s with Paul Baran and Paul Sweezy’s book Monopoly Capitalism. The crisis of the 1970s – stagflation and inflation – was widely interpreted by Marxists as a typical crisis of monopoly capital.

Why monopolies put the brakes on innovation

Capitalism today limits the rate of technological innovation because:

• The organization of cooperation and divisions of labor must be made in ways to maximize efficiency, profitability and accumulation. This means that innovations that will not be very profitable, such as long-lasting technologies, will be repressed.
• The capitalist needs to facilitate the acceleration of capital circulation in all its phases, along with the need to annihilate space through time. What I mean is increasing speed of transport and communication reduces the friction and barrier of geographical distance. This requires minimizing capitalist occupation of space.
• Capitalist must shorten the turnover time by shortening the lifetime of consumer products (planned obsolesce).
• Capitalist can shorten the lifetime of products’ shift from the production of things that last to the production of spectacles which are ephemeral and contain faster turn-around time.
• Capitalists technologies of knowledge are used to identify consumer preferences.
• The speeding up and turnover time by the use of the technologies of finance. Beginning with invention checks and credit cards, the goal is faster turn-around time. The rise of cyber moneys, like bitcoin, is just the beginning of an inexorable descent of the monetary system into chaos.
• Capitalists must not only speed up the realization and consumption process, but they must develop technologies that speed up the workers. This includes time motion studies, the Hawthorn experiments, and surveillance. This attempted control encompasses not only physical efficiency but also the rise of robotization. As Harvey writes, robots do not complain, answer back, sue, get sick, go slow, lose concentration, go on strike, demand more wages, want tea breaks or refuse to show up.

All this means is that that the because the capitalist must speed up the production and consumption process, it is far from the ideal conditions of innovation. Scientific innovators are in no hurry and want their products to last. The contradiction is that capitalists want scientific innovation to create ever new processes and products. Yet in their efforts to shorten the turnover time of products, they undermine the innovative processes themselves. They will not be able to innovate at the pace that would develop the productive forces and would stagnate and shrink the rate of profit.

Contradiction 11   Globalization of Capital: Promises and Perils

The division of labor within capitalism is now taking place at a world-wide scale. Harvey writes that what is now in place is radically different from anything that existed prior to 1850.

There are three sectional classifications of the division of labor between:

• primary – agriculture, forestry, fishing and mining;
• secondary – industry and manufacturing; and
• tertiary – services, finance, insurance and real estate sectors.

On one hand a world market in grains can forestall a local crop failure. At its best all capitalist countries have the technology to support each other during famines, extreme weather, floods, earthquakes and droughts. The fact that capitalist countries limit these interventions to countries that are their allies does not limit their potential to serve the whole world.

One the other hand, as Harvey points out today the clothing factories in Bangladesh, the electronics factories of southern China, the maquiladora factories strung along the Mexican border or the chemical complexes in Indonesia are all interdependent.  Small disruptions in a supply chain can have very large consequences. A strike in a key car parts factory in one region of the world can bring the whole production system to a halt everywhere. Supply chain blockages thanks to Covid result in delays in both the process of production and the delays on the product.

Contradiction 12 Uneven Geographical Developments: Super-Concentrations of Production  and Wastelands

The capitalist division of labor has reached a world scale and this results in uneven pockets of production with high concentration of work in some areas and wastelands in other areas. Time is money for capitalism. Traversing space takes both time and money. As much as possible the near elimination of transport costs and times is a factor in location decision making. This permits capitalists to explore different profit opportunities in widely disparate places.

Harvey writes that what arises is “agglomeration” economies where many different capitals cluster together. For example, car parts and tire industries locate close to car plants. Different firms and industries can share facilities and access labor skills, information and infrastructures. However other regions may become wastelands increasingly bereft of activities. They get caught in a downward spiral of depression and decay. The result is uneven regional concentrations of wealth, power and influence.  Affections and loyalties to particular places and cultural forms are destroyed and treated as anachronisms. Large blotches of the world become wastelands where nothing is grown and people can no longer live.

Capital never has to address its systemic failings because it moves them around geographically. Since myopic capitalists treat these wastelands as “externalities” the problem grows worse. The heads of nation-states are enslaved to capitalists and are in no position to address the geographical mess capitalists have created. There are, however, limits to continuous centralization through agglomeration. It results in overcrowding and rising pollution. In addition, labor may become better organized in its struggles against exploitation because of its regional concentration.

Contradiction 13 Finance Capital vs the Physical Economy

There are two ways in which capitalist crises might be produced:

1) chronic inequalities produce imbalances between production and realization; and

2) financialization of profit means capitalists will not invest in their own infrastructure.

In the case of financialization, what makes the current phase special is the phenomenal acceleration in the speed of circulation of finance capital and the reduction in financial transaction costs. If all capitalists seek to live off finance, insurance and real estate interests and are just speculating in asset value or living off capital gains the gap between finance capital and the real physical economy grows.

The problem of compound interest

Harvey points out that – Michael Hudson in the Bubble and Beyond is one of the only political economists who takes the issue of compound growth seriously. He says that most people do not understand very well the mathematics of compound interest.

Nor do they understand the phenomenon of compounding growth and the potential dangers it can pose. Harvey writes that compound interest curve rises very slowly for quite a while and then starts to accelerate and by the end the curve becomes a singularity as it sails off into infinity. Harvey goes into much more detail on pages 223-228 of his book.

There is one form that capital takes which permits accumulation without limit and that is the financial form. Today finance capital is now unchained from any physical limitations. In Mordor today the Fed issues fiat moneys that can be created without limit. Adding a few zeros to the quantity of money in the circulation is no problem for them. The danger is that the result will be a crisis of inflation. The contradiction is in disparities between accumulation process that is necessarily exponential and the conditions that might limit the capacity of exponential growth. These conditions are the requirements to invest in the physical aspects of the economy such as buildings, harnessing of energy and infrastructure.

Fictious capital instruments

Besides the printing of fiat money another financial instrument in the purchase of assets includes debt claims. Harvey writes an asset is simply a capitalized property title. This was paralleled by the creation of wholly new assets markets within the financial system itself such as currency futures, credit default swaps, and CDOs.

This was fictitious capital feeding off and generating even more fictitious capital.

Harvey writes there is a labyrinth of countervailing claims that were almost impossible to value except by way of some mix of future expectation, beliefs and outright crazy short-term betting in unregulated markets with no prospect of any long-term payoff.

Contradiction 14 Capital’s Relation to Nature

Liberal environmental politics has preferred to ignore entirely the fact that it is capitalism that produced the current ecological crisis. Harvey writes that they nibble away at issues on the periphery of the capitalist system while they never reach the core of the system that is producing the problem. “Deep ecologists” wrongly call Marxism “Promethean” which has a disregard for nature and claims that only human history matters. But John Bellamy Foster has dedicated the better part of his life arguing for the belief that Marx was ecologically sensitive and had a concept of capitalism as creating a “metabolic” rift with nature.

In addition, by training David Harvey is a geographer and has written books on a Marxist criticism of what capitalism has done to the natural world. The change in climate and the frequency of severe weather events is increasing.  Catastrophic local events can be readily accommodated by capital since a predatory disaster capitalism is ready to go. But pollution problems do not get solved, only moved around in uneven benefits and losses. The capitalist system is not prepared for the slow, cancerous degradations. Harvey says that whereas the problems of in past were typically localized, they have now become more regionalized such as acid deposition, low level of ozone concentration, stratospheric ozone holes, habitat destruction, species extinction and loss of biodiversity.

Conclusion

Harvey points out that this one-at-a-time presentation of capitalist contradictions does not address that all these contradictions are feeding into each other forming an organic whole. Do capitalists understand these contradictions? For the most part, no. Most are enthralled with market fundamentalist theories. A minority have read Marx. But even so, their short-term material interests as capitalists blocks them from understanding the full ramifications of their system. So capitalists as a class do not understand their system. They blithely roll along accumulating finance capital and pay no attention to the fourteen fractures I’ve identified. What problems occur are dismissed as “business cycles”. As the fractures deepen we can count on capitalists to ramp up  their ideology and distract us with more extreme forms entertainment, including football games, escapist movies and increasing violence in movies coupled with special effects.

This content originally appeared on Dissident Voice and was authored by Bruce Lerro.

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