As I start Part IV of this series on neoliberalism, it seems appropriate we return full circle, to Part I especially — ‘Kulturkampf, and the birth of the Uniparty.’ Kulturkampf, the great (on going) cultural PsyOp, is too unwieldy a topic for the moment, but let me begin by restating the essential idea of Part I: the Uniparty is a direct consequence of neoliberalism.
The world is always in flux however, and both the Uniparty and Neoliberalism are/where just phases in a transformation of the system (and our society) to something very different. It may well be that the optimistic 100 year experiment that is Modern Democracy has finally run its course. We will know for sure in a few short years; by 2030 at the latest, if I were to hazard a guess.
At a screening of the documentary The People vs. David and Collet Stephan last month, I was reminded of a recent quote by Robert F. Kennedy:
‘While communism is the control of business by government, fascism is the control of government by business.’
Oddly, with the rise of Stakeholder Capitalism and Public-Private Partnerships (P3s), we seem to be experiencing both at the same time; thanks to the World Economic Forum's mandate to implement these ideas. The merging of state and corporate power, is more generally seen as the defining characteristic of fascism, alongside the preservation of property rights (for favoured individuals and classes). But the power dynamic today appears to be racing in both directions at the same time; as in the EU (the One-world government/One-world currency testing ground) where the characteristics of communism are more evident; hence the term Communo-Fascism.
Just as the population as a whole finally becomes aware of the ‘invisible ideology,’ neoliberalism, and its political consequence, the ‘Uniparty,’ we have almost completed a transitioning to the next phase. Neoliberalism is widely understood to be a spent force now, and many are starting to wonder — What’s next?
‘Neoliberalism is dying – Now we must replace it’
‘The Rise and Fall of Neoliberalism’
The Uniparty, as a consequence, isn't nearly so unified as it was in the heyday of this ideology (when neoliberalism officially became the economic ‘orthodoxy’ of our day). As explained earlier, this happened when President Bill Clinton and Prime Minister Tony Blair came to power, and then continued to support the same economic ideas that had been introduced under the Conservative governments before them.
Neoliberal ideas dominated from the early eighties, right up until the time Blair stepped down in the UK (2007), which was the year of the Great Financial Crisis (GFC) of course. This is the year the monetary system underpinning neoliberal economics — the 0% reserve, ‘capital adequacy’ system — finally stalled. I shouldn’t attempt to explain the monetary details here, other than to say this was implement between 1991-1994 as a consequence the Basel Accords. I elaborate further in a Tish Talk last month, should you want to hear a little more on this. The economic situation since the GFC has been aptly described as a ‘zombie economy’ (dependent on continual infusions of Central Bank money).
It was at this point (2008), that the political divergence (and confusion) began, which spelled the beginning of the end for the Uniparty. Corporate interests still control both sides of the political spectrum, but the underlying economics (as you will have noticed) has now split. The left (as I've said before) — those technocratic liberals — seems to have embraced communism, with central planning and coupons for corporations that conform sufficiently to ESG requirements (as I explain in the video above). Canada's deputy Prime Minister even goes so far as to suggested that peoples’ homes should no longer be regarded as assets, whatever is meant by this (“You will own nothing and be happy,” springs to mind). The right, however, has stayed the neoliberal course, more or less; though around the world, a somewhat more Libertarian expression of this ideology is taking hold, in different forms.
In wrapping up this series (but not this story of course), I hope to suggest some tangible ways to break free of the postmodern economics that have brought us to this point. Ultimately, the answers are to be found in our culture — the overarching ‘invisible environment’ from which all other things ‘trickle down’ (if I can use that old catchphrase). Most folk, I suspect, would attribute the problems we confront now to money or economics, and politicians make light of this, promising to solve the ‘inflation’ problem (that ‘invisible tax’ that is stealing the value of our hard-earned dollars).
Just last month, coincidentally, my local monetary reform group referred to the work of economist Henry Simons (who you will recall from early posts); to my recollection, the group has not discussed the Chicago School before, other than to disagree with Friedman's famous statement:
“Inflation is always and everywhere a monetary phenomenon.”
I too disagree with this statement. There are two sides to every story, and this over simplification entirely ignores the other side of the equation: supply (or lack thereof). Monetary reformers cannot avoid discussing Friedman because ‘Monetarism’ (the system under which we lived from 1974 until 1994) was Milton Friedman's baby.
At the risk of getting lost in the weeds of monetary history here, I should quickly share one short video to illustrate the point above, in which Milton Friedman, asserts that ‘Only Government Creates Inflation.’
You will notice that Friedman does not mention commercial banks (as a cause of inflation), though it was known (even then) that well over 90% of the money in circulation is created in the form of loans by commercial banks. So logically, if commercial banks are responsible for most of the money created, then most of the inflation we have experienced can be attributed to the banks as well; and not, just, the government. I am not defending the government here (I hasten to add), nor am I letting central banks off the hook; all I hope to do is show that the problem is rather more complex. If we do not address the issue of private (for-profit) money creation (as we expose government and central bank corruption / incompetence), we will never fix the monetary mess we're in. Below is a 2018 excerpt from the Bank of Canada, which skims over the core problem, in my opinion, though it does explain how the system really works.
Statements to this effect exist in other central bank publications, but I would suggest watching the short Positive Money below (one in a series of six), for an overview. The Bank of England and the Bank of Canada, incidentally, function in a similar way, compared to the Fed and ECB. We will have to return to ‘the fix’ later of course, but to continue unraveling this web of intriguing (that is the story of neoliberalism) let me share my reply to the group (in response to the above mentioned reference to Henry Simons):
‘. . . Simons was a brilliant guy.
I think they killed him; 'conspiracy theorist' that I am.
You have to read the strange story of his demise of course.
He was the only one in the Chicago School who didn't (wouldn't) flip-flop on the idea of Monopoly Power. He would not give up on the Ordoliberal ideas (ideals) out of which neoliberalism emerged . . . before it was corrupted. Simons was also a monetary reformer (as you know) and his work should be more widely known.
The corrupting influence of Harold Luhnow and Leonard Read is well known (or should be well known). All of the Chicago School economists were threatened with the loss of their positions and income if they didn't go along (directly or indirectly); they were all funded by Harold Luhnow.
Mises caved, Hayek caved, Friedman cave. . . they all caved; and then they said what they were told to say (and this is what the world knows today). Leonard Read started FEE (the Foundation for Economic Education) and this was the birth of Libertarianism, as you may know . . .’
You'll see a number of explanations and quotations supporting all of this in my earlier posts (Neoliberalism I, II, III). Let's continue here though, with the ‘corrupting influence’ of Harold Luhnow. I think I was fairly clear on this point before (though perhaps I wasn't quite so blunt) and we should also look a little more closely at the Founding of FEE, and the birth of Libertarianism.
As mentioned earlier, I have long “danced on the edge of Libertarianism,” but I have too many questions (still) about the commodity-based money system Libertarians tend to endorse; gold, in this case. Gold is money, and a store of value (no question), but it cannot function effectively as a ‘currency’ for the society as a whole. Gold-backed money systems have been tried, and they have created a whole other set of problems which resulted in their dissolution. What hasn’t been explored though, is a fully public Sovereign (retail) currency for domestic use and a gold-backed (wholesale) money for international trade; although the BRICs nations are attempting to implement one part of this, with a gold-backed unit of exchange for international trade settlements.
Consequently, until these monetary details become part of the discussion, I can't (yet) call myself a Libertarian. I even have a few small reservations with the 100% reserve banking system, as advocated by Henry Simons, though I would accept this without hesitation over a private fractional-reserve system (for no other reason than this would force a serious discussion about public banking). As it happens, the discussion above took place recently in Switzerland; though most people were unaware of the 2018 Swiss national referendum on a return to 100% reserve banking.
The media here, needless to say, never mentioned any of this, and even Sir Mervyn King, former Governor of the Bank of England, did not touch on this subject when he spoke about The End of Alchemy at Rotman School of Management in 2016. When I spoke with him afterwards, and asked about this omission, his reply was: “Oh, those people just want to get rid of the fractional-reserve system.” Well, yeah, I wanted to say, but then I realized, we don't actually have a fractional-reserve system anymore. That was the old system, before 0% reserve, capital adequacy, was phased in. The following short video from Positive Money will explain this in ‘illuminating’ detail:
‘How is money really made by banks? Banking 101 (Part 3 of 6)’ (2:30mins)
As discussed above, by 2016 the world had already moved into a whole new monetary reality (since 1994 in fact). The world has seen a series of these monetary resets (and subsequent crises). In 2007/2008, the 0% reserve system hit the wall, hence the ‘end of the alchemy’ (or the near end of the latest monetary Ponzi Scheme that is). In 2020 I wrote a piece for my regular mailing list called: ‘Upside-down alchemy: turning gold into debased money.’ I should probably continue this series on neoliberalism as an exploration of monetary issues, and start by revisiting some of these older commentaries.
Despite the fact that Sir Mervyn King and I had a mutual connection (or two) in the offshore world, and our conversation could have been longer, we were cut short by Tiff Macklem (a Dean at the Rotman School at this point) who was literally tugging on King's sleeve, as if to say, these are the crazies I warned you about, we have to go now; and so that was the end of that (for the time being).
The continuing history:
The main point on which largely well-meaning (I have to believe) neoliberals, and the earlier ordoliberals, diverge, is monopoly capitalism. The nature of money itself, however, is seldom broached (except by brave souls such as Henry Simons), and to this day economists steer clear of the subject. Most don't understand, or pretend not to understand, the nature of money. They dismiss money as a ‘neutral agent’ (with no attributes of its own), treating money (as accountants must) as a ‘unit of account’ only. Economists do this, I imagine, so as to avoid tangling with the banks; thereby jeopardizing future employment opportunities.
Returning to the issue of monopolies (such as the commercial banking cabal for instance), Henry Simons states, in his 1934 A Positive Program For Laissez Faire - Some Proposals For A Liberal Economic Policy (pg 4):
‘. . .political liberty can survive only within an effectively competitive economic system. Thus, the great enemy of democracy is monopoly, in all its forms: gigantic corporations, trade associations and other agencies for price control, trade unions—or, in general, organizations and concentrations of power within functional classes. Effectively organized functional groups possess tremendous power for exploiting the community at large, and even for sabotaging the system.’
We can clearly see money interests behind ‘the second’ Chicago School economists, and CIA interests behind subsequent generations; those ‘Chicago Boys’ who acted as advisors to CIA installed military governments in South America. This too is well documented and widely understood (again, please refer back to the earlier posts). Even Wikipedia recounts this generally overlooked history. With respect to the United Fruit Company, founded in 1899:
‘By 1930, it had absorbed more than 20 rival firms, acquiring a capital of $215 million and becoming the largest employer in Central America... the company owned 3.5 million acres (14,000 km2) of land in Central America and the Caribbean and was the single largest land owner in Guatemala. Such holdings gave it great power over the governments of small countries. That was one of the factors that led to the coining of the phrase "banana republic".’
‘In 1952, the government of Guatemala began expropriating unused United Fruit Company land to landless peasants.[14] The company responded by intensively lobbying the U.S. government to intervene and mounting a misinformation campaign to portray the Guatemalan government as communist.[16] In 1954, the U.S. Central Intelligence Agency deposed the democratically elected government of Guatemala, and installed a pro-business military dictatorship.’
This history, of course (the Cold War as a plausible rationale) explains why the Chicago School economists (the second Chicago School — Friedman et al) flip-flopped (or were ‘persuaded’ to flip-flop) on this key economic principle, brushing aside their earlier concerns.
We tend to forget the angst of those Cold War years; but think back to the 1980s, or look up films like The Hunt for Red October and Red Dawn. The support for American business monopolies, in this climate, was almost understandable; and South America was the testing grounds. The Robber Barron capitalists already had a foothold here, and this ‘beachhead’ in the Globalist's campaign, had to be secured. The American Fruit company, and other such ‘capitalist’ ventures, had to be justified and encouraged. Business practices such as this, however, have created the most important division of our times.
Although the details of this history are not generally known, over the past couple of decades a whole generation has been ‘re-educated’ to reject capitalism. As a result, a new orthodoxy is being established (to replace that of neoliberalism) which paints ‘capitalism’ as an absolute evil; and thus, a great many people now subscribe to either Communism or Anarchism. I must touch on the Anarcho-capitalist version of Libertarianism later, suffice it to say though, capitalism too (like neoliberalism) was hijacked.
Those who would reject capitalism, I would suggest, are fighting an irrelevant, 100+ year-old, battle; and in the process, they pave the way for a new system (that won't be communism or anarchism either). As Silas Walter Adams points out in his book, The Legalized Crime of Banking, the system we live in today would be more accurately described as ‘creditalism’ (as opposed to capitalism); a system built on bank credit, that is. This term never caught on, of course, because almost no one has heard of Adam's book, and even if they had, ‘creditalism’ doesn't roll off the tongue quite so easily as ‘capitalism.’ And of course, capitalism is singled out specifically in one of the most influential works of the past two centuries: Das Kapital.
Unfortunately, over the past decade or two, schools have become like those ‘state indoctrination centres’ that Huxley described in his Brave New World; as government (and corporate) funded mainstream media have become a de facto Ministry of Truth. We are intentionally not provided the kind of information (and history) that will allow us to make effective decisions.
The Rebellion of 1837, for instance, was taken out of the general curriculum here. Perhaps the oligarchs who still run Ontario, felt is wasn't prudent to remind people how easily oligarchic moneyed interests can monopolize all aspects of the economy when they control the money supply — through the Bank of Upper Canada at that time. It also wouldn’t serve these interests to show people that they can actually change things, and even provide public alternatives, such as the Farmer's Bank and Bank of the People.
Such an outcome was unthinkable in the minds of the oligarchs of the day, the Family Compact and the Château Cliche. It didn't take long for them to undo whatever progress was made, when people awakened and rose up. Now, of course, the oligarchs’ world view has been codified in neoliberal ideology and economics.
The prevailing mindset (widely held) maintains that all services should be private, and for profit; especially public utilities and recession proof, ‘necessity-based’ retail. The Mantra of neoliberalism is free-markets and competition, but this is never the case for long. Where out right monopolies are not possible, cabals eliminate competition and fix prices (as in banking, the grocery store business, and elsewhere). Since neoliberalism has been modified, conveniently forgetting Henry Simons’ warning (that monopolies are ‘the great enemy of democracy’), Small and Medium-Sized Enterprises (SMEs) everywhere must compete with giants on a decidedly uneven playing field. If they succeed, and survive, their ultimate fate is to be gobbled up by one of these giants, and assimilated into the neoliberal Borg.
Let me return here to the birth of Libertarianism, as mentioned in the email above, to my Canadian monetary reformer friends. Behind the Foundation for Economic Education (FEE), was the money of Harold Luhnow. The brains behind this program however, were figures like Leonard Read (founder) and Henry Hazlitt (the first vise president). Both of whom were specifically invited by Harold Luhnow to participate in the very first Mont Pelerin Society meeting in 1947 (the year following the deaths of both Henry Simons and John Maynard Keynes).
I spoke earlier (in Part III) of possible CIA connections, with Sydney Hook, and the ‘American Committee for Cultural Freedom’ in particular, but we see these connections everywhere. The CIA’s involvement, in order to further the goals of wealthy American business interests and subtly influence the public, is not a secret, and particularly since the Smith-Mundt Modernization Act of 2012, which made it legal to directly propagandize the domestic population (a whole other story of course).
The Shadow Cliche
None of this should be surprising, because these folk recognized the value of information; ‘intelligence’ gathering has always been a private club, of sorts, for the power elite, and when the Office of Strategic Services (OSS) transformed into the Central Intelligence Agency (CIA), these interests migrated over. As Outlined in Frances Stonor Sauders’ 1999 book (mentioned previously), Who Paid the Piper:
'[R]unning a country is precisely what most OSS-ers were brought up to do. Recruited from the heart of America's corporate, political, academic and cultural establishment, Donovan [then head of America's war time intelligence service] had assembled an elite corps which hailed from America's most powerful institutions and families. Members of the Mellon family held espionage posts in Madrid, London, Geneva, Paris. Paul Mellon worked for the Special Operations Directive in London. His Sister, Ailsa (once known as the world's richest woman) was married to his commanding officer, chief of OSS London, David Bruce, son of a US senator and millionaire in his own right, J.P. Morgan's sons were both in the OSS. The families Vanderbilt, DuPont, Archbold (Standard Oil), Ryan (Equitable Life Insurance), Weil (Macy's Department Store), Whitney, were all represented in the ranks of Donovan's secret army.' pg 34-35
'Internationalist, abrasive, competitive, these men had an unshakable belief in their value system, and in their duty to offer it to others. They were the patricians of the modern age, the paladins of democracy, and saw no contradiction in that. This was the elite which ran American foreign policy and shaped legislation at home. Through think-tanks to foundations, directorships to membership in gentlemen's clubs. . .' pg 37
For further reading on this subject, I should also refer you to David Rockefeller's own Memoirs, chapter 27, ‘Proud Internationalist’ (page 405) in which he explained that wealthy Internationalist bankers represent ‘a secret cabal working against the best interests of the United States.’ The most clever accomplishment of this group however (beside convincing a lot of people that anyone pointing to comments like this must be a ‘conspiracist’) has been to disseminate an ideology which appears to support the interests of the people while, in reality, doing precisely the opposite. Through a subtle program of ‘re-education’ everyday people have been harness to directly support the interest of an super wealthy, power elite. Think-tanks like the Mont Pelerin Society and the Foundation of Economic Education (FEE), have had a far reaching influence.
Friedrich Hayek's idea, that efficient markets self-regulated through an automatic price discovery mechanism; and that any regulation, therefore, gets in the way. No one likes regulations, but this is what prevents ‘gigantic corporations’ from walking all over, or gobble up, any potential competition. This, of course, is not only a threat to democracy, as Simons maintained, but also to the ‘effectively competitive economic system’ these economists once sought.
It appears, however, that there is a form of Libertarianism that understands the inherent contradiction; though I’m not sure how many Libertarians (or economists in general for that matter) know the dubious history of FEE. In the wake of the Covid economic fiasco, everyone has seen that the world's billionaires profited handsomely from their monopoly control of various market sectors, while ma and pa shops (and a wide swath of Small and Medium-sized Enterprises) all suffered, and many failed.
The shift away from Anarcho-Capitalism (absolutely against any kind of regulation) to ‘Minarchism’ (a moderate version of Libertarianism which recognizes a need for some regulation, and understands the dangers of monopoly power) is a positive development; which could, conceivably, take neoliberalism back to its ordoliberal roots, and provide a workable alternative for the future.
Should the Libertarian movement free itself from whatever ‘shadow cliche’ influences might still be exerting influence, and stand resolutely against the monopolies and gigantic corporations ‘exploiting the community at large’ and ‘sabotaging the system’ (as Simons put it), then this organization's day may have arrived.
It is important to remember that ordoliberals and early neoliberals once held this ideal as a core principal – until Harold Luhnow, et al, co-opted the economics profession. These ‘monopolies and gigantic corporations’ of course, also include those ‘too big to fail’ banking corporations that now run the world — having turned Central Banks into ‘pliant servants of private bankers’ (to quote Yanis Varoufakis from his 2023 work Technofeudalism, pg 203, ‘Democratized Money’).
This issue of privatized money vs. public money, is the main point of contention here. Atlas Shrugged is still one of my favourite books, and as I think about it (having just finished reading Technofeudalism in the Vancouver Airport, flying back home from Haida Gwaii) I feel the banker in Ayn Rand's most famous epic novel, Michael ‘Midas’ Mulligan, might even have got along with Yanis Varoufakis.
Coincidentally, in the 1990s, one of my brothers-in-law, and a long-standing family friend, both worked at Chase Manhattan Bank, New York (on the very top floors of the World Trade Center's Tower 1). The new computer system they were implementing — no surprise here — ‘Midas.’ You may recall my comments about New York Banker Benjamin Anderson and Ayn Rand in Neoliberalism Part III.
The image here, at the foot of the Rockefeller Center, takes on a whole new meaning in light of all we've discussed. A ‘Banana Republic’ is precisely what the Internationalist banking cabal has been slowly reducing to United States to (as suggested in the above mentioned Memoirs excerpt). What’s ‘good’ for America, is what’s good for the private club that still shapes its foreign policy and legislation, at least, that’s how the patricians of the modern age see it.
Left and Right can find common ground on this essential monetary issue. The 100% reserves system Yanis describes above is very close to that described by ‘Midas’ Mulligan (and to which most Chicago School, ‘sound money’ people might aspire), because a 100% reserve system would be very similar to a gold-backed system. Unless Mulligan was issuing gold receipts (as money) for gold he didn't actually have (and it doesn't seem this way, given Rand's description of her character). No ‘fractional reserve’ shenanigans at Midas Bank, unlike the commercial banks today. There are variations of this theme too, that I must leave for my next piece — on monetary theory (and practice).
Charles I, you may recall, was beheaded for appropriating private gold from the Tower of London, the story goes (please refer back to my Substack: Subterfuge) and if The Sovereign (no less) could lose his head for a 'Capital Crime' of this nature (fiddling with the nation’s money) then lowly private bankers (and central bank governors) might well have cause for concern — as people become more informed. ‘Merv the Swerve,’ Sir Mervyn King, came through his term as Governor relatively untarnished, despite everything (as you can read) — You must decide whether his UK nickname is deserving. His book is revealing nonetheless, and I do believe he is trying to tell us what is really going on; he does, whether he intended to or not, on page 237.
What central bankers do, of course, is generally a mystery; but they will always be criticized when the economy flounders (and virtually implodes). There is more I'd like to comment on here (and I will in my next piece on all things monetary), I also wish I'd had longer to chat with the former governor of the BoE. Mr. Macklem, is in the thick of things at the moment (and wouldn’t be disposed to chat in any case), but it will be interesting to hear his recollections and musings after the fact, in light of King’s 2020 follow up: Radical Uncertainty: Decision-making for an unknowable future.
On the cusp of a technological coup by the ‘cloud capitalists,’ the most pressing economic challenge of our times (as Yanis Varoufakis sees it), it is critical that people understand the monetary system within which they live. The mainstream media, ABC, BBC, CBC, is never going to provided this kind of information. As Ed Dowd suggests, ‘what they are not talking about’ is what we should be paying attention to.
Atlas Shrugged is as voluminous as all of the above mentioned books combined, but in the 1990s, a survey by the Library of Congress found Rand’s novel to be ‘the most influential book in the US, after the Bible.’ So it’s worth adding this 1200 page tome to your reading list as well (keeping in mind the FEE backstory). The works of Yanis Varoufakis, however, are ‘easy reading’ by comparison and, I would suggest, more insightful; in that these ideas came from someone deep inside that world (the real world) and someone, importantly, who took a stand.
Ayn Rand is gone, sadly (as are the people around her), but we have here a socialist Minister of Finance and a conservative Central Bank Governor — someone from the left, and someone from the right — and what an interesting conversation this would be. I am certain that somewhere in between can be found a practical way forward, a solution to the economic woes of our day. The left and right divide exists, I have always maintained, because the population as a whole does not understand the nature of money.
We trusting souls contract with one another in good faith, and assume our medium of exchange is sound; but Mammon preys on our ignorance. This is a new age though, quite literally, and at long last the world is waking up to the great Tricker's most devious scheme.
As mentioned above, I must close this introduction to neoliberalism here, returning to Part I, and ‘the greatest show on earth’ — but the story is far from over.
Again, I thank you for your on going interest and support,
David