This post is a response to a recent posting on Zero Hedge entitled, “Hoover Warned New Deal May Lead to Fascism“.
The roots of the current crisis are in Keynesianism (and they extend into neoclassicism/conventional modern economics), yet the solutions are not in Austrianism.
FDR wanted to put an end to British colonialism and financial empire following WWII. In 1945, He requested Bretton Woods provisions as agreed at the conference. These would have transformed the US wartime economy into a productive engine for the advancement of human society both in the United States and abroad – helping other nations recover from the war and grow as sovereign powers.
Fixed exchange rates and a strong dollar as reserve were supposed to create post-war institutions for international trade between sovereign nations – to raise the value of each society based on resource development in and for that society. The spread of this type of centralized banking, outlined in Henry C. Carey’s “The Harmony of Interests”, represents a middle ground between the interests of business and workers that raises the standard of living for each republic.
There was a lot of posturing in this direction by Keynesians, particularly at the time, because of their agreement with the central banking principle. They wanted to create consensus in favor of their sponsors’ (continued) control. But the goal of the Keynesian central bankers was very different to that of FDR, Morganthau and the – for lack of a better label – Whigs (followers of Hamilton, List, and Carey). All one has to do is look at the role of – and fight over – the BIS following WWII to know the true goals of the Keynesians were suspect.
Their goal was continuation of oligarchy – supremacy of the rich, who loot from resource-rich nations for their own gain, and who do not wish to see the standard of living raised for average people. After all, with the right kind of education, some among the masses might prove themselves more creative, innovative, and technologically powerful than their self-declared rulers. For the benefit of the ruling class, nations must either remain undeveloped, or the development of the nation must be predominantly controlled by the already wealthy and powerful. Either scheme will do.
FDR would have directed the power of central credit to the growth of infrastructure and raw technology that would have led to both the creation of businesses in the United States, and the ability of those businesses to sell technology to say, the Africans, so that they could establish – for example – their own diamond mines, and raise the standard of living for their populations by following the United States’ political and economic models. It is easy to see how this type of policy was a real threat to the policies of “sacred” old-European imperialism. It could have actually created a world where old powers would have to negotiate with new powers – where the lives of all people and peoples were considered to have a right upon the earth. If these policies spread around the world, imperialism would be finished – forever.
The policy is dirigist, because it is not “free tradism”, where economies end up being looted from the side in. All things being equal, Austrianism might work. But we live in a world of unequal development and wealth, and the path of development and equalization via the “open” market is a process nobody wants their children to be forced to live through. It is a path that is disrecommended by its immorality, just as the gulag/world-control model is disrecommended by the same.
The Keynesians would loot from the top down by setting up a central bank, operated by and for the oligarchy (whether obviously or secretly) and controlling both the resources and the population (and its government) that way. On the other hand, the Austrians would establish “free markets” (meaning no tariffs, no protectionism, no central bank, no works projects) – leaving the door wide open for international corporatists to undercut prices for labor and goods in any and every nation with a population not willing to live in huts and work for pennies an hour. This policy results in a population forced to return to “localism” (euphemism) because of a lack of access to education and technological jobs, whose government (if it even has one) can never defend against a world power (read: empire) because it is a) disorganized and b) bankrupt (from looting money formerly set aside for the maintenance of its infrastructure simply to feed the hungry).
Once the infrastructure has been so looted that roads are crumbling, bridges are falling down, railroads have rusted through, etc – industry within a nation has been rendered impossible. There’s simply not enough power, and there are not the correct pre-existing institutions (such as transportation and human-development infrastructure).
People who think FDR only got the country out of the depression through establishment of the military industrial complex, and not via his implementation and expansion of the New Deal, need to stop and reflect – how could the factories necessary for the creation of the war machine have been adapted so quickly, if the New Deal had not launched hundreds of power and works projects prior to the need arising? If FDR had followed “free tradism” (a British-originated policy, helpful to empire) the US would not have been industrialized enough to be able to mobilize quickly enough to save the British’s asses after their man, Hitler, got away from them. Ironic, to say the least.
Anyway, lucky for the City of London, FDR died before he had the opportunity to expose the BIS or get the real Bretton Woods provisions implemented. Wilson sided with British imperialists, closed the book on the BIS, and agreed to the proliferation of Keynesian monetarism and international centralization. The rest, as they say, is history.
If people think “free tradism” will save the United States as a humanist philosophical entity, they are sadly mistaken. It will continue to return us to a state of deindustrialization and localization, rather – with the consequences I outlined.
It has, in point of fact, already almost completely undermined the Constitution – turning what remains of the organized nation into the police arm of the empire. We cannot convince any branch of government to preserve the stated rights of man, but we’re welcome to profit from participation in the international war machine! Confused and hopeless, we’ve allowed ourselves to become a nation of fearful hypocrites, and we’ve allowed our children to become cannon fodder for the empire’s international wars for resource supremacy.
We are held hostage by the banksters – partly because of centralized control (read: The Federal Reserve), but also because of a lack of it. Truly sovereign financial policies – policies in favor of the productive growth of the nation – would certainly include more spending on things with ROI for the American people, like infrastructure and energy. Instead, our “leaders” bankrupt the country with handouts, bailouts, and wars.
To make matters worse, the Obama administration postures at works projects, and speaks of FDR. This fuels confusion, because the pennies they’ve spent on these projects amount to nothing – giving the policies themselves a bad name among the confused, angry, uneducated population. Our government could serve us, instead it pretends to do so – betting against us, in favor of the oligarchy. As for the controllers, they hope we remain ignorant (or at least, fearful) enough never to understand or demand a return to truly patriotic economic policies. So far they’ve succeeded admirably in herding us from one acceptable-to-them policy to another, and back again – ad nauseaum.
This reality actually explains a lot, once you get over the shock of it (and verify what I’ve said with a little historical research). It explains why Ron Paul is allowed to exist, but Kennedy was shot after attempting to curtail the actions of the Federal Reserve. Kennedy, who wished to return to FDR’s policies under Eleanor’s tutelage, was a tremendous threat. Paul, on the other hand, would lead us strongly on towards more “free tradism” – a policy which suits the empire fine. The oligarchs probably laugh their heads off when they hear people talk of a return to Constitution and the “free market” in one breath – the escalation of looting under total free-marketism increases chaos and disorganization to the point where no “rights” can be defended for long. Obviously, the founders came to the very same conclusion, or they wouldn’t have created a central government in the first place.
C. K. Dexter Haven
Tracy Lord
Politics Unbound 