In 2002/3 John Jopling and I wrote
Redefining Globalisation and People-Power
This site introduces its key ideas and some associated topics
MAIN COMPONENTS OF THE GLOBAL MONETOCRACY
Leading the Gaian Revolution: Commonsense for Desperate Times
Gaian Democracies: Redefining Globalisation & People-Power by Roy Madron & John Jopling
From Chapter 4 of" Gaian democracies: Re-Gefining globalisation and People-Power"
THE GLOBAL MONETOCRACY
Main components of the Global Monetocracy
Component 1: The purpose of the Global Monetocracy
The common purpose of money growth: in order to maintain the debt-money system.
The defining component of any purposeful human system is its purpose. The purpose of the economic system promoted by all Western governments is never debated. It is nowhere even acknowledged. You will not find it written over the door of any presidential office, state legislature or party political headquarters. Nevertheless, in our judgement, the true purpose of the Global Monetocracy, is that of money growth in order to maintain the current debt-based money system.
What is our evidence for this assertion? The debt-money system itself has been described in earlier Schumacher Briefings by James Robertson and Richard Douthwaite. They show that almost all the money we use (i.e. all except the notes and coins, which today are about 3% of the total) came into existence as a result of a bank agreeing to make a loan to a customer, at interest. iThis is why it is called ‘debt-money'.
This system has several extremely important consequences. First, it gives the banks a free lunch. They are, in effect, able to print money and lend it out at interest. Bank profits from this source alone in the USA, UK, Eurozone and Japanii are about $140 billion per year. It is quite outrageous that the banks should have this power. Counted among public figures that have been bold enough to object are three US presidents: Thomas Jefferson, Abraham Lincoln and Franklin Roosevelt. Its many critics amongst economists have even included Milton Friedman, a favourite of Margaret Thatcher and the American Right.iii That the governments of Western ‘democracies' permit the banks to continue to enjoy this massive subsidy, and for this extraordinary privilege to be off the agenda of public debate, is a tribute to the power of the ‘elite consensus' discussed later in this chapter.
Secondly, the effect of this method of creating money is that the economy has to grow in order to avoid collapsing. In industrial countries, between 18% (Sweden) and 26% (Japan) of each year's total output is ploughed back into investment projects. If in any year this figure falters, the economy risks entering a downward spiral. The fact that the necessary growth can be achieved only by increasing the total level of debt makes the economy heavily dependent on confidence. People borrow when they are optimistic about being able to repay with interest. Businesses borrow when they want to expand. Confidence in the future is self-fulfilling. So is the lack of it. The economy therefore constantly moves between boom and bust; it is systemically unstable.
Consider what happens if growth slows or stops. First of all unemployment appears. Firms that invested in the past in the expectation of increasing sales find themselves with surplus capacity, and consequently cancel further investment projects. This puts the people who would have designed, constructed and equipped them out of work. So for the government, no growth or slow growth means rising unemployment and, as a result, higher social welfare bills. Also, because wages, turnover and business profits fall away, it means lower tax receipts. The public finances go into the red, and the government has to choose between increasing tax rates or borrowing, thus increasing the National Debt. The policies of the party in office lose all credibility, making it unlikely to be returned at the next election.
The consequences for the business sector are even more serious. Since interest has to be paid on most of the money invested in the failed expansion projects, corporate profits tumble. This cuts share prices, and although the personal wealth of all shareholders is reduced, the fall is particularly painful for company directors with share options or large holdings. Worse, the developing recession cuts the value of their other investments too. All the assets in which they hold their wealth - investment properties, land, antiques, fine art - fall in price. Even the housing market collapses because of the rising unemployment, leaving millions with negative equity.
The worst danger of all is that the economy falls to the sort of level it reached in the 1930s and that high levels of unemployment persist for several years. This would throw the viability of the entire capitalist system into question - a frightening thought for those who owe their power to it. Not surprisingly, the possibility of a downward spiral is a prospect that terrifies governments. That is why - whatever their political colour - governments try to work closely with the business sector. In this way they can ensure that, regardless of any social or environmental damage, the economy continues to grow. The debt-money system thus forces governments to put the imperative for short-term growth above long-term considerations, such as the widening inequalities gap or humanity's relationship with Gaia.
Governments are quite open about the need for economic growth. But what they hardly ever admit is that this need is imposed by the debt-money system, let alone that this method of creating money is quite unnecessary and certainly contrary to the interests of the taxpayer and the public generally.iv And they will of course always contend that growth will benefit people directly, even though the opposite has been shown to be the case in many countries over the last few decades.v
Nor is it true, as our current leaders invariably assert, that economic growth is necessary for human development in poorer countries. In Complex Systems Theory and Development Practice, Samir Rihani has provided compelling evidence that, for nations where the need for human development is most desperate, economic growth is largely irrelevant and possibly wasteful.vi
Furthermore, it is the banks, rather than governments, who shape the way the economy develops, because a high volume of bank lending - which the banks control - is essential if the present money system is to function. They determine who can borrow and for what purpose, according to criteria which favour those with a strong cash flow or substantial collateral. Justice and sustainability are irrelevant. The system thus favours rich people and multinational companies against smaller firms and poorer individuals. It gives an automatic advantage to the wealthy and thus tends towards ever-greater inequality. It also totally ignores Gaia.
In systems-thinking terms, the growth imperative imposed by the debt-money system is a positive feedback mechanism - a vicious spiral. It is also a classic case of leverage: the leverage that the debt-money system exerts on national economies and on the global economy as a whole leads directly to the effects we outlined in Chapter 2.
Debt-money is also the ideal instrument for imposing a stranglehold of debt on the world's poorest countries.vii It forces them to increase their exports, thus drawing down commodity prices for the benefit of wealthier countries. It is the basis of the global financial system in which, year after year, money flows not from rich countries to poor countries but in the opposite direction.viii It is the source of the system's instability, the main impact of which always falls on the poorer countries and on the poor in those countries.
Linked to the debt-money system is the use of the currencies of some of the wealthiest countries (US dollars, UK sterling, Euros, Japanese yen and Swiss francs) as ‘reserve currencies', so-called because they are held by central banks as reserves. These are national currencies being used as though they were global currencies. Around 70% of all foreign currency reserves held by central banks are US dollars. In effect, the system enables a wealthy country to import goods from, or acquire assets in, a poorer country, without ‘paying' for them. For example, Japan can import goods from an African country and pay for the goods in yen. These cost Japan nothing to print, or more probably, to create with an electronic entry. If those yen remain in the central bank of the exporting country, or if they are kept in a bank in Japan in an account controlled by the African country or a member of its ruling elite, or if they are used to buy investments in Japan, it follows that Japan never has to export anything in return. The effective cost to the Japanese economy is nil.
Between 1992 and 2000, the number of US dollars held as reserves by central banks around the world grew by $800 billion, an average of $100 billion a year. This constituted an $800 billion interest free loan by the rest of the world to the USA. In other words the USA has been able to buy $800 billion worth of goods and foreign assets in effect without paying for them. It has been described as a tribute, a crippling tax that the rest of the world pays to the USA. For the USA, it is another case of a free lunch.ix
Even that isn't all, because almost all those dollars were created by US banks as debt. Richard Douthwaite has calculated that the total return to the USA from creating the money is of the order of $425 billion per annum. This has enabled the USA to run a trade deficit in the order of $1.2 billion per day. Compare that with the figure of $343 billion for the US military budget for 2002.x It is a country that has been able to build its military strength at the expense of the rest of the world - not so much a free lunch as a free army, navy and airforce.
The figure of $425 billion per annum can also be compared with the estimate by the United Nations Development Programme that $40 billion per annum over ten years would solve most of the world's problems of extreme poverty, unsafe drinking water, malnutrition, sanitation and pre- and post-natal care. Yet, while the world was paying the USA a $425 billion per annum tribute, US aid to ‘developing' countries was running at around $10 billion per annum. The USA, by far the wealthiest country in the world, is the donor country that gives away by far the lowest proportion of its national productxi - over the last half century the proportion has declined from 0.3% to 0.1%.xii "What a peculiar world," comments Joseph Stiglitz, former Chief Economist of the World Bank and Chair of President Clinton's Advisory Committee on the Economy, "in which the poor countries are in effect subsidising the richest country, which happens at the same time to be amongst the stingiest in giving assistance in the world."xiii
The purpose of the Global Monetocracy explains why, for example:
Note that what we have been looking at here is the purpose of the Global Monetocracy as a system. What we have named as the Global Monetocracy is the aggregate of the components shown in the diagram. The purpose of that aggregate system is not the same thing as the conscious purpose of any player in the system. This is not a conspiracy theory: it is a statement about a system.
The purpose of a system does however have a controlling influence on the way the whole system works, and hence on the behaviour of all players in it. That of course is why we have called the system a ‘Global Monetocracy'.
Shared operational theories of the global regime
Component 2: Shared operational theories
Shared operational theories
Underlying the purpose of the Global Monetocracy, and providing the basis for its claim to intellectual respectability, legitimacy and competence, are a number of key operational theories.
It is a striking fact that all of these theories are currently in crisis. Neo-liberal economics is fatally flawed both by its own standards and by the yardsticks of justice and sustainability; nation-states are dominated by multinational corporations and cannot grapple with the regional and global issues confronting the human family; voters are disenchanted with the kind of politics produced by representative democracy; command-and-control leadership methods are increasingly less effective in complex modern societies; and the manufacture of consent no longer provides a reliable basis for social control. The inadequacies of each of these theories will now be spelt out in a little more detail.
The success of what John Maynard Keynes called "this misleading and disastrous" economic ideology is not an accident.i It is the result of a concerted, well financed, utterly determined and increasingly globalised campaign led originally by the Austrian economist Frederick von Hayek, his colleague, Milton Friedman, and other members of the so-called ‘Chicago School'. It is a theory of economics deliberately developed to serve the interests of the owners of capital. It serves as a rationale to justify the money growth economy.
As early as 1947, Hayek founded The Mount Pelerin Society, which brought American and European conservatives together in a village near Lausanne, Switzerland. As Susan George has revealed, Americans who attended that first Mount Pelerin Society meeting had their travel and accommodation expenses paid for by the William Volker Fund.ii Volker money also bailed-out shaky free-market academic magazines, financed the books published by the Chicago School, paid the bills for the influential Foundation for Economic Education and funded meetings of free-market thinkers at US universities.
The Mount Pelerin Society inspired friendships, networks and joint projects, and has remained an international club for free-market thinkers ever since. Membership of the society is by invitation and - significantly - the members' names are not disclosed, though it is known that members have included the Thatcherite Czech ex-Prime Minister, Vaclav Klaus, the former French finance minister, Alain Madelin, Boris Yeltsin's chief advisers and, of course, Margaret Thatcher.
The opinion-moulding strategy that was launched in the late 1940s is being pursued with undiminished vigour to this day. Hundreds of millions of dollars are spent every year to enable The Mount Pelerin Society and scores of other free-market institutions to maintain their dominance of the field.iii
By the mid-1980s, adherence to free-market neo-liberal economic ideology had become the benchmark for the credibility of finance ministers, treasury mandarins, professional economists and ‘expert' economic advisers throughout the industrialised world. This was despite the fact that since the middle of the 19th century the deficiencies of neo-classical economics have been extensively documented. As many eminent economists have shown, the proposition that a market economy necessarily maximises commercial efficiency and social welfare is not true, even in theory.iv Even international financier George Soros agrees that fundamentalist market ideology - blind faith in free, unfettered markets - is supported by neither modern theory nor historical experience.
Neo-liberalism is a theory of economics that is totally divorced from living systems. Professor John McMurtry has described it as "an economic paradigm that has no life co-ordinates." For McMurtry, ‘life values' include ecology and ‘non-profit' work, things that are not monetized and hence not valued by markets.v Neo-liberal economics is thus blind to Gaia and to the damage its application does to the moral, social and ecological dimensions of our human and natural worlds. The evidence of the destruction inevitably caused by the application of neo-liberal economic theory, and of the repeated failure to achieve even declared objectives, is overwhelming, yet this paradigm nevertheless sets the parameters of acceptable political and democratic thought. It resembles a religious theology that provides its priesthood with an unchallengeable but entirely metaphysical authority; neo-liberal economists are the priests promoting that religion and not, as they claim, scientists seeking to understand the nature of the world they purport to explain and predict.
Representative democracies are, however, perfectly suited to the Global Monetocracy, because they are designed to minimise public involvement in government, and to enable the dominant elite to remain continuously in control. The system provides the constitutional framework that has enabled the elite to force neo-liberal economics on a world that naturally resists it. As John Gray, Professor of European Thought at the London School of Economics, has pointed out: "Free markets are creatures of state power, and persist only so long as the state is able to prevent human needs for security and the control of economic risk from finding political expression. Encumbered markets are the norm in every society, whereas free markets are the product of artifice, design and political coercion. Laissez-faire must be centrally planned; regulated markets just happen. The free market is not, as Right-thinkers have claimed, a gift of social evolution. It is an end product of social engineering and unyielding political will. It was feasible in 19th century England only so long as functioning democratic institutions were lacking."vi
The key role of the ordinary citizen in representative democracies is to vote at elections. But while the choice at elections is increasingly meaningless, citizens are still regarded as having had their say as voters. The vast majority of ordinary citizens are still excluded from active participation in governmental decision-making at all levels. Contact with ordinary people is limited to focus groups, opinion polls and consultation. There is no room for citizen initiative. The result, inevitably, is a largely passive and disillusioned citizenry. This has led to mass abstention from the system, with over 50% of voters in the USA staying away from the polls. Membership of political parties in Europe has plummeted. The picture is similar throughout Latin America and Eastern Europe.vii
Amongst politicians, those with the most money and the best connections are especially favoured. Moreover the system provides easy access for big business to government through electoral funding, lobbying and policy-making processes that are specially designed to be business friendly.
Representative democracy thrives on carefully choreographed displays of adversarialism and inter-party competition. It legitimises secrecy and censorship. It facilitates the manipulation of public opinion. Public debate is effectively infantilised.
The critical link between politicians and the people is now the focus group, originally devised for companies to discover how to package products so that they overcome potential customers' resistance to them. Several decades ago political consultants spotted that elections are won and lost by the largely self-interested preferences of the small minority of so-called ‘swing voters'. Swing-voters have no party loyalties and it is their votes that ‘swing' elections by a few percentage points one way or the other. As Robin Cook, Leader of the House of Commons and a member of the New Labour elite, has said: "The reason why, at election time, we chase those 0.25% of the electors who are the crucial swing voters in the crucial target seats, is that ultimately they are the only ones whose votes matter."viii From their studies of voting patterns, electoral strategists have persuaded political leaders that they have to listen to, and rapidly satisfy, the desires and prejudices of swing voters. The consequence is that policy is made on the basis of last month's focus group results, and all parties strive to get closest to the swing voters at whatever cost to their principles, the loyalty of their ‘traditional' supporters or the interests of the community as a whole.
Once the focus group strategists have identified the messages that are most likely to appeal to swing voters, huge sums are spent on advertising targeted at them. Candidates in the 2002 congressional and gubernatorial races in the USA spent close to $1 billion for television commercials alone. In the UK, having won power by using these methods, New Labour leader, Tony Blair, was able to say: "I have taken from my party everything they thought they believed in. What keeps it together is success and power." ix
Representative democracy has many other flaws. Elections, which allegedly protect the people from abuse of power, are frequently manipulated by those in high office in order to prolong their power. And, as we saw in the UK following the Falklands War, and in the 2002 mid-term elections in the USA, wars and threats of war favour the party in office. It pays today's political leaders to pretend there is a crisis, or a threat the nation's prosperity or pride. Presidents Bush and Mugabe have proved that it pays to manufacture such a crisis. The link here with the ‘manufacture of consent' (see below) is obvious.
Regular elections also invariably ensure that elected politicians concentrate on producing a stream of uncoordinated policy initiatives to placate the swing voters, ignore the long-term consequences of their policies and generate ever-greater complexity and confusion.
As we shall see in Chapter 5, the proposition that representative democracy is the only practicable form of democracy in today's world is nonsense. It is one of the many myths promoted by the Global Monetocracy for its own protection.
The principle of national sovereignty is inherently conflictual and competitive. It cuts across natural diversities of culture and geography. It fosters nationalism, illusions of moral superiority and dreams of empire. At the same time, under the cloak of national sovereignty, the nation-state provides the executive and legislative support required for the monetisation and corporate ownership of the entire human and natural worlds.xi
As with all the components of the Global Monetocracy, it is the way in which they operate together that matters. As John Gray has pointed out, the global free market works to set sovereign states against one another in a struggle for dwindling natural resources.xii The effect is to impel states to become rivals for the control of resources that no democratic institution has the responsibility for conserving. In this struggle the already wealthier states inevitably win. It is a recipe for ever-greater economic and political instability. Rich countries can afford to mitigate, at least temporarily, the penalties that global free markets impose on their citizens. In poorer countries the global free market produces fundamentalist plutocracies and works as a catalyst for the disintegration of traditional societies.
From a systems perspective, one of the most serious defects of the principle of national sovereignty and the nation-state system is that it has blocked the development of democracy for the human family as a whole. Once the elites had chosen to conceive of the human family as a collection of states, responsibility for organising the interaction between human societies became the preserve of state governments. According Philip Allott, Professor of International Public Law at Cambridge University: "The result was that we came to have an international system which was, and is, post-feudal society set in amber - undemocratised, unsocialised - capable only of generating so-called international relations, in which so-called states act in the name of so-called national interests, through the exercise of so-called power, carrying out so-called foreign policy conducted by means of so-called diplomacy, punctuated by medieval entertainments called wars or, in the miserable modern euphemism, armed conflict. This is the essence of the social process of the international non-society."xiii
In other words, on the global stage there is no democracy at all. Nothing could be better suited to the advancement of the purpose of the Global Monetocracy, led by largely uncontrolled trans-national corporations operating in a largely unregulated global marketplace. The 1992 Earth Summit in Rio de Janeiro highlighted the weakness of state governments faced with strong lobbying by trans-national corporations. Corporations and their lobby groups easily ensured that any consideration of binding regulation of trans-national companies was excluded from the programme endorsed by the so-called, but misnamed, ‘world leaders'.xiv
In the decade since Rio the absence of any global democracy has allowed corporations the political space to manoeuvre themselves into decision-making positions on vital global issues. The outcome is the current programme for the further commodification and privatisation of nature launched at the 2002 World Summit on Sustainable Development at Johannesburg.xv
Britain's aim was to control the thought of the more intelligent members of the community in the US. If they could be persuaded to disseminate British propaganda, they might succeed in converting the pacifist USA to wartime hysteria. The USA entered the war against Germany in 1917. The strategy had worked brilliantly. And it taught every other nation a lesson. The lesson was that when state propaganda is supported by the educated classes, and when no deviation is permitted, it can have a big effect on public opinion.
The success of Britain's propaganda campaign in WW1 has inspired all the state propagandists down to the present day: from Hitler's Goebels to Tony Blair's Alistair Campbell, although, of course, with the spread of radio, TV and the cinema, the techniques have been constantly refined.
By the early 1920s, propaganda had been re-branded as ‘public relations' and the lessons learnt from Britain's success in dragging the USA into the first World War gave rise to something much more powerful than mere imitation: it spawned a theory. In 1922, the young Walter Lippman, later to be the most revered of American political journalists, saw himself as a theorist of modern democracy. In his immensely influential book, Public Opinion, he argued that public relations amounted to a "revolution in the art of democracy", and could be used to "manufacture consent".xvii In other words, the new techniques of public relations could be used to persuade the voters to agree to policies that they didn't want. The theory of manufacturing consent rested on Lippman's proposition that "in a properly-functioning democracy" there are three distinct classes of citizens.
First of all, there is the specialised class: the citizens who take some active role in running general affairs - what today we would call the ruling elites, or perhaps ‘the Establishment'. The second class are the decision-makers: the people who analyse, execute, make decisions and run things in the political, economic, and ideological systems; in other words, the public officials, bureaucrats and apparatchiks. Then there is what Lippman called "the bewildered herd", the vast majority of citizens who have been excluded from playing any meaningful role in the government of their society. By ‘manufacturing consent' through public relations (i.e. propaganda) techniques, the specialists and decision-makers could tame the bewildered herd into acquiescence. Today, state and corporate public relations is a huge industry. Billions of dollars a year are spent in trying to control the public mind. And, as Noam Chomsky says, "Propaganda is to democracy what the bludgeon is to a totalitarian state." xviii
Fortunately, however, we - the bewildered herd - are never properly tamed. When large numbers of us can get together - in political campaigns, trade unions, colleges or churches - we sometimes refuse to allow our consent to be manufactured; and then our leaders tell us that we are creating ‘a crisis of democracy'.xix In fact, by forcefully - but non-violently - expressing our collective views we are doing what citizens in democracies are supposed to do. But, in the emasculated version of democracy that has co-evolved with the Global Monetocracy over the past four hundred years, by expressing our fundamental disagreement with the actions of the Government, we are being ‘anti-democratic'. The sooner we are driven or bamboozled back to the apathy, obedience and passivity of the bewildered herd, the better.
Here is a recent example of how manufacturing consent works. On 6 October 2002, the Washington Post's Ombudsman agreed with readers who had complained that the paper had totally failed to cover the huge anti-war rallies in London and Rome, and the doubts expressed by four-star Army and Marine generals as to the wisdom of attacking Iraq. The Post's failure to report opposition to the drive to war justified readers' complaints because: "Whatever one thinks about the wisdom of a new war, once it starts it is too late to air arguments that should have been aired before."xx
Identical methods of manufacturing consent are now used by political parties, government bodies and private corporations.xxi In the case of business, the purpose is to create the consumer demand that the growth economy craves. In the case of the political parties and public bodies, it is to secure the public's acceptance of their own exclusion. The US media analyst, Ben Bagdikian, sums it all up by saying that the institutional bias of the mass media "does not merely protect the corporate system. It robs the public of a chance to understand the real world".xxii
The manufacture of consent is in fundamental opposition to the concept of a learning society. Increasingly though, the crisis in the theory of manufacturing consent is deepening. The old maxim that "you can't fool all of the people all of the time" is coming home to roost. The consequence is that the drive to "get across the government's message" and keep the bewildered herd under control, has become increasingly desperate, obvious and counter-productive.xxiii
Command-and-control leadership is based on the assumption that people are basically lazy, unmotivated and in need of constant supervision. They have to be told what to do and how to do it, either by specialists or by people who are smarter and/or more experienced: i.e. the people who have all the answers. Over time, the assumptions of command-and-control leadership become self-fulfilling prophecies. People become what command-and-control leaders expect them to be. The huge reservoir of intelligence, creativity, good will and energy that other kinds of leaders can liberate from people is unrecognised and wasted.
For a very limited period, in some very unambiguous situations, command-and-control leadership is permissible and can work well. But when it is applied in complex, long-term, open-ended situations, the results can be disastrous. In a fascinating study of its application to environmental and socio-economic problems, C. S. Holling and Gary K. Meffe of the Department of Zoology, University of Florida, tell us that: "attempts to control ecosystems and in socio-economic institutions... with more control... usually result in unforeseen consequences for both natural ecosystems and human welfare, in the form of collapsing resources, social and economic strife, and losses of biological diversity... If natural levels of variation in system behaviour are reduced through command-and-control, the system becomes less resilient to external perturbations, resulting in crises and surprises." xxv
And in System Failure, Jake Chapman reports the consequences of command-and-control leaders applying hard-systems thinking to the complex situations involved in the delivery of the UK's health services:
In spite of being inappropriate for the resolution of the hugely complex and unprecedented problems now facing local communities, nations, regions and the whole human family, with very few exceptions command-and-control leadership is still the basic leadership style of all Western ‘democracies' and of much of the corporate world.
Command-and-control leadership ensures that the Global Monetocracy continues to respond to the challenges of the 21st century with the same ‘tame' solutions - more trade, more deregulation, wars to control essential supplies, competition between states to attract inward investment etc. - that were responsible for creating the situation we are in. It is also fundamentally at odds with the concept of self-organising systems. One of the key innovations in Gaian democracies will be the replacement of command-and-control leaders with liberating leaders, as described in Chapter 5.
Component 3: The ‘elite consensus'
The elite consensus
upholding the values and assumptions of the Monetocracy
It is probably no exaggeration to say that the ‘elite consensus' determines how the Monetocracy works. Its influence seems to be even more fundamental than that of the operational theories, because while these have largely been created to justify and legitimate its purpose, the elite consensus is actually the source of that purpose.
The elite consensus sets limits on the behaviour of everyone in the system. These limits cannot be questioned: they define the paradigm. Anyone who seeks to question any of these propositions will be told that they are not living in the real world.
It is the elite consensus that explains why political, media and business leaders fail to respond to the major issues facing Gaia and the human family, why they are deaf to warning signs and suggestions for remedial action. Those things are outside their paradigm, their worldview.
There have been many studies of the components of the worldview that underpins the elite consensus.xxvii Some of the key points are shown in the box.
The elite consensus
Science and technology
The market economy
Once these presuppositions and principles have been internalised, they become an integral part of the worldview of politicians, bankers, corporate executives, academics, editors and journalists. Spirited debate, criticism and learning are allowed only within the boundaries set by the consensus.
Component 4: The global leadership cadre
The global leadership cadre
covering politics, finance, business, academia and the media.
The expenditure of billions of dollars on developing and promoting the theory of neo-liberal economics has been matched by an equally well-funded programme of education and brainwashing to create the elite cadre of Western political leaders. Over the past fifty years, a lavish assortment of study trips, scholarships and ‘fellowships', paid for by the U.S. Government and free-market foundations, has been used to mould the worldview of thousands of politically ambitious young Europeans, Asians, Africans and Latin Americans.
To get a glimpse of how the global leadership cadre is recruited, log-on to www.cylc.org/alumni/spotlight.html. There you will find the fond reminiscences of a young Englishman who attended a National Young Leaders Conference while still in school. He recalls "the inspiration that NYLC provided", his "privileged access to Congress and the Supreme Court, as well as many of the people who work inside government", which had enabled him to "understand and appreciate the value of genuine representative democracy - something we seem to lack in the UK". He hopes to represent people in his future career.
This ambitious young man is following in some very big footsteps. Bright and politically ambitious young Britons who have benefited from similarly privileged experiences are now leading members of New Labour in the UK, including the Prime Minister, the Chancellor of the Exchequer and their chief advisers. All, together with Tony Blair's Chief of Staff, Jonathan Powell, are supporters of the British-American Project for the Successor Generation (BAP). The BAP is a little-known but highly influential transatlantic network of ‘chosen' politicians, journalists and academics. Regular attendees at BAP meetings are defence and security specialists, NATO advisers, Defence Ministry think-tank people and counter-insurgency experts.
The BAP is funded by the Pew Charitable Trusts of Philadelphia (established in 1985 by the billionaire J. Howard Pew, a devoted supporter of the Republican Party), the far-right Heritage Foundation and the Manhattan Institute for Policy Research (founded by former CIA head William Casey). It organises regular meetings of "24 Americans and 24 Britons aged between 28 and 40 who... would be leaders in their country and perhaps internationally". As Nick Cohen noted in the Observer of 31 October 1999: "The Brits are encouraged to help their careers by following the American way." In its 1997 newsletter, following New Labour's election victory, BAP warmly welcomed the elevation of its members to the Blair Cabinet: "Congratulations from all of us!"
Apart from politicians and trade unionists, the ranks of the Atlanticist elite include Charles Moore, the editor of the Daily Telegraph, James Naughtie, formerly of the Guardian and now presenting Radio 4's Today programme, and Trevor Phillips, a former-TV reporter who is now Chair of the Commission for Racial Equality.
The readiness with which ambitious British politicians and journalists embrace the values and policies of their American friends is the fruit of years of relentless conditioning by the combined forces of the US State Department, the Central Intelligence Agency, right-wing think-tanks, the British Foreign Office and the British intelligence services. After World War II hundreds of millions of dollars were lavished on travel, scholarships, hospitality and propaganda to counter the ideological influence of communism. This strategy, combined with revulsion at the appalling excesses of Soviet and Chinese communism, resulted in generations of Europe's nominally left-wing politicians, trade unionists, journalists, artists and academics becoming fervently anti-communist in public, and, more importantly, enthusiastic devotees of free-market capitalism in private.
The New Labour project is evidence of the triumph of this policy. The slavish adherence to neo-liberal economic theory and the elite consensus on globalisation are only the most visible signs of this triumph. Much less obvious is the way in which every aspect of UK government is now dominated by the interests of big business. For nearly 60 years, US free-market ideologues have financed, educated, employed and smoothed the career-paths of an increasing number of the members of the front bench of the British Labour Party (and Social Democrats from every other major nation), whether in government or in opposition. The consequence is that, in 2003, when Washington says jump, the response from their chosen placemen in our nominally British government is to ask "How high?"
Component 5: The working partnership
The big business-government partnership
(with big business as the lead partner)
A close working partnership between the governments of the Western ‘democracies' and big business is both a natural consequence of the Global Monetocracy's purpose and the obvious strategy for implementing it.
As evidence of the nature of the partnership, the membership of President George W. Bush's cabinet is perhaps the most blatant example.xxviii Tony Blair has followed the US model, by including several millionaire businessmen in his New Labour government. He appointed as head of his government's energy tax review team the former chairman of British Airways, Lord Marshall, who had lobbied against proposals to tax aviation fuel. He persuaded the G8 summit to elect as head of its global task force on renewable energy the Chairman of Shell, a company doing its utmost to increase sales of fossil fuels.xxix He appointed the chairman of Northern Foods, Lord Haskins, as ‘rural recovery coordinator'.xxx And he took with him to the World Summit in Johannesburg the chief executives of three multinationals that had been involved in rows over important wildlife habitats and ignoring human rights.xxxi
Less obviously, in the wake of the BSE and foot and mouth crises, the UK Government set up the Curry Commission to advise on the future of farming and food, but the terms of reference, insisting that the Commission's advice must be "consistent with the Government's aims... for increased trade liberalisation", could not be questioned. Even less obvious from the outside is the degree to which big business takes a central role in detailed policy-making and implementation alongside the civil service. The British Government has 320 Task Forces with over 2500 members. Big business takes about 900 of those seats, compared with a mere 70 Trade Union representatives. To see the detailed picture of how the Task Forces work log-on to www.red-star-research.org.uk.
In Captive State, George Monbiot has described the government-backed corporate take-over of public services in the UK. In a Guardian article he wrote: "State and corporate power are fusing almost everywhere on earth, but in Italy they have condensed into the stocky figure of a single man. Silvio Berlusconi, the prime minister, is worth around $10 Billion... His control of most of the private media (through his businesses) and most of the public media (through the government) means that he can exercise a dominion unprecedented in a democratic nation over the thoughts and feelings of his people." After their recent meeting, Berlusconi was reported as telling the press that he and Blair saw eye-to-eye "on all the matters that were raised".xxxii Elsewhere in the world we can see that in the newly ‘democratised' republics of the former USSR the line between Government, big business and organised crime is so blurred as to be indistinguishable.
The effect on democratic politics of such cosy unanimity between government and big business is disastrous. As subscriptions from members and trade unions decline, politicians and parties become ever more reliant on donations from wealthy businessmen and large corporations to pay for the elaborate machinery of electoral success - pollsters, focus groups, advertising and so on. The pay-off for the corporate funders is that, in return, taxpayers contribute massively to the little discussed ‘corporate welfare system'.
‘Corporate welfare' takes many forms: from tax-breaks, legislation and the provision of infrastructure (roads, schools, local government services etc.) to the pernicious practice of handing over licences for patents arising from Government-financed research. Then there are the straightforward subsidies paid out by governments to businesses, totalling $1,900 billion per year worldwide, of which $1,450 billion are reckoned to be perverse subsidies - those that severely distort the global economy and inflict massive injuries on the environment.xxxiii The lobbying power of the organisations representing subsidised industries can be gauged from the fact that, while only $50 billion per annum is spent on aid globally, $350 billion per annum is spent on agricultural subsidies alone.
The armed forces and other arms of the state are frequently used by governments to serve the interests of big business abroad. There are clear links, for example, between the dependence of big business on fossil fuels and government action abroad, most notably that of the United States. The US produces less than half the petroleum it uses and thus a prime aim of its foreign policy is to secure outside sources. The drive for US military and economic domination, the war on Afghanistan and its aim of controlling Iraq are closely linked to its wish to secure sources of oil in the Middle East and Central Asia.xxxiv
Another pay-off for political donations is the huge effort governments make to ensure that the regulation of state and international economic activity and laws relating, for example, to patents, are ‘business-friendly'. This factor generally trumps environmental or safety considerations. According to Mae-Wan Ho, many of the dangers of genetic engineering have not been taken on board by the regulatory bodies. "On the contrary, safety regulations have been notably relaxed. The public is being used, against their will, as guinea pigs for genetically engineered products."xxxv
Governments serve big business in more subtle ways, by standing up for the Global Monetocracy's purpose and not allowing the democratic process to be used to question the elite consensus. Politicians consistently use the authority vested in them as elected representatives, plus all their political skills and the state's communication systems, to assert and confirm the elite's values as being - beyond question - in the public interest, whatever the indications to the contrary. In a recent interview, Kevin Phillips, formerly chief political strategist for President Richard Nixon stated that money has "taken control of both parties [i.e. Republicans and Democrats], pretty much taken control of the culture and controls the whole dynamic of politics". Their own dependence on corporate donations explained why the Democrats had held back from commenting on connections between Enron and the Bush family "partly because they're so interested in raising money that they can't see their soul in the mirror".
i John Maynard Keynes, The General Theory of Employment, Interest and Money, 1936, p.1.
ii Susan George, ‘Winning the War of Ideas', Dissent, Summer 1997.
iv For example, Guy Routh in The Origins of Economic Ideas, Macmillan Press, London, 1975; the Australian economist Steve Keen in Debunking Economics: The Naked Emperor of Social Sciences, Pluto Press, Sydney, 2001; and The Richard T. Ely Lectures by Professor Kenneth J. Boulding 1965, Prof Joan Robinson 1971, J.K. Galbraith 1972.
v John McMurtry, ‘What economics hides: the paradigm revolution' article posted 16 Jun 2001 on the MAI-NOT network. See http://mai.flora.org/forum/27059.
vi John Gray, False Dawn: The Delusions of Global Capitalism, Granta, London, 1998. p.17.
vii See Richard Swift, The No-Nonsense Guide to Democracy, Verso, London, 2002.
viii In the course of his 'keynote' speech at a recent Charter 88 conference on 'The Future of Democracy'. See www.privy-council.org.uk/output/page291.asp
ix Attributed to Tony Blair by Andrew Rawnsley in Servants of the People, Penguin, London, 2001, p 195; quoted by Robin Ramsay in The Rise of New Labour, Pocket Essentials, Harpenden, 2002. The statement is true whether or not Blair actually said this. For our purposes, it confirms the inability of ordinary people to influence policy through political parties.
x See David Held, Democracy and the Global Order, Polity Press, Cambridge, 1995; and David Held, Anthony McGrew, David Goldblatt & Jonathon Perraton, Global Transformations: Politics, Economics and Culture, Polity Press, Cambridge, 1999.
xi See George Monbiot, Captive State, Macmillan, London, 2000; John R. Macarthur, Selling Free Trade: NAFTA, Washington and the Subversion of American Democracy, Hill & Wang, NY, 2000; Vandana Shiva, Biopiracy: The Plunder of Nature and Knowledge, South End Press, Cambridge MA, 1997; and Vandana Shiva, Protect or Plunder, Zed Books, London, 2001.
xii See John Gray, op cit.
xiii Philip Allott, The Health of Nations: Society and Law Beyond the State, C.U.P., Cambridge, 2002, p.409.
xiv Especially the World Business Council for Sustainable Development.
xv See www.corporateeurope.org or contact email@example.com
xvi Noam Chomsky, ‘Media Control', Alternative Press Review, Fall 1993 (reprinted from Open Magazine).
xvii Walter Lippman, Public Opinion, 1922.
xviii Noam Chomsky, Media Control: The Spectacular Achievements of Propaganda (The Open Media Pamphlet Series, No. 1), Seven Stories Press, NY, 1997.
xix As with the protests against the Poll Tax in the UK, the Reclaim the Streets and Anti-WTO Campaigns.
xx See Fairness and Accuracy in Reporting at http://www.fair.org/activism/iraq-responses.html
xxi As demonstrated in Adam Curtis's TV series, The Century of the Self, shown on BBC 2 in the Spring of 2002.
xxii Edward Herman & Noam Chomsky, Manufacturing Consent: the Political Economy of the Mass Media, Pantheon Books, NY, 1988, p.303.
xxiii Numerous independent agencies monitor government, corporate and corporate media attempts to manufacture consent for actions and policies that are scandalous or illegal. In particular, see www.prwatch.org/ and www.medialens.org/
xxiv Dean Anderson & Linda Ackerman, ‘How Command-and-control as a Change Leadership Style Causes Transformational Change Efforts to Fail', Results From Change, Issue 7, 1 Jun 2002. See www.beingfirst.com/resultsfromchange/200206.html
xxv CS Holling* & Gary Meffe, Command-and-control and the Pathology of Natural Resource Management, *Department of Zoology, University of Florida & University of Georgia's Savannah River Ecology Laboratory, SREL reprint 2078.
xxvi See Jake Chapman, op cit.
xxvii See Helmut Bossel, op cit.; John Gray, op cit.; Christopher Lasch, The Revolt of the Elites, Norton & Co, NY, 1995; John McMurtry, Unequal Freedoms, op cit.; Robert H. Nelson, Economics as Religion: From Samuelson to Chicago and Beyond, Penn State UP, PA, 2001; and John Ralston-Saul, Voltaire's Bastards: The Dictatorship of Reason in the West, Penguin, Toronto, 1992.
xxviii See www.opensecrets.org/bush/cabinet.asp
xxix George Monbiot, ‘As we know from bombing Serbia: refineries are the key', The Guardian, 14 Sep 2000.
xxx George Monbiot, ‘Rout of the small farm', The Guardian, 7 Aug 2001.
xxxi Mark Townsend, ‘Top bosses ‘hijacking' eco-summit', The Observer, 21 Mar 2002.
xxxii Bruce Johnston, ‘Berlusconi, Blair and the Italian connection', The Daily Telegraph, 16 Feb 2002.
xxxiii See Norman Myers & Jennifer Kent, Perverse Subsidies: How Misused Tax Dollars Harm the Environment and the Economy, Island Press, Washington DC, 2001.
xxxiv George Monbiot, ‘Why Blair is an appeaser', The Guardian, 5 Nov 2002.
xxxv Mae Wan Ho, op cit., p 10.
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