Guest Post: The Dark Age Of Money

Tyler Durden's picture

Authored by James C. Kennedy, originally posted at CounterPunch,

[It's Thursday; The World Series is on - so is Football; Grab a drink, we know it's long - and read this - at least skim the bolded segments and the last section - will open your mind a little]

If you often wonder why ‘free market capitalism’ feels like it is failing despite universal assurances from economists and political pundits that it is working as intended, your intuition is correct.  Free market capitalism has become a thing of the past.  In truth free market capitalism has been replaced by something that is truly anti-free market and anti-capitalistic.  The diversion operates in plain sight.

Beginning sometime around 1970 the U.S. and most of the ‘free world’ have diverged from traditional “free market capitalism” to something different.  Today the U.S. and much of the world’s economies are operating under what I call Monetary Fascism: a system where financial interests control the State for the advancement of the financial class.  This is markedly different from traditional Fascism: a system where State and industry work together for the advancement of the State.

Monetary Fascism was created and propagated through the Chicago School of Economics.  Milton Friedman’s collective works constitute the foundation of Monetary Fascism.  Knowing that the term ’Fascism’ was universally unpopular; Friedman and the Chicago School of Economics masquerade these works as ‘Capitalism’ and ’Free Market’ economics.

The foundation of Friedman’s corrupting principle is that the investor (money to be more precise) has no duty, obligation or covenant to anyone or anything.  Friedman’s ‘Market’ is not subject to ‘any’ human standard of morality, political limitations or national interests.  Money is free to act without bounds or conventions.  Nothing is prohibited as long as the market can provide a “clearing price”.

The fundamental difference between Adam Smith’s free market capitalism and Friedman’s ‘free market capitalism’ is that Friedman’s is a hyper extractive model, the kind that creates and maintains Third-World-Countries and Banana-Republics, without geo-political borders.

If you say that this is nothing new, you miss the point.  Friedman does not differentiate between some third world country and his own.  The ultimate difference is that Friedman has created a model that sanctions and promotes the exploitation of his own country, in fact every country, for the benefit of the investor, money the uber-wealthy.  He dressed up this noxious ideology as ‘free market capitalism’ and then convinced most of the world to embrace it as their economic salvation.

As improbable as it sounds, this ideology has the near-universal support of most economists, the media, universities, the Federal Reserve, the U.S. Treasury, nearly every member of The U.S. Congress and most everyone you know.  Today Friedman’s ideology is accepted, to some degree, by nearly every country in the world.  But ultimately this exploitive model is not sustainable at any level, or for anyone or any nation.

The ultimate difference between Friedman’s ideology and Smith is simply this: Smith was in fact a Mercantilist.  True, he opposed the custom of hording gold and other Mercantilist practices, but ultimately he was a Mercantilist. Smith promoted “free trade” with the goal of improving the English merchant’s advantage, and thus the State’s.  Nothing expresses this more clearly that the title of his book An Inquiry into the Nature and Causes of the Wealth of Nations.  Mercantilism is based on the relative wealth of one Nation State over the other, not the plunder of the State and it’s peoples for the benefit of the individual.

Smith believed in the power of the State and recognized that it was only by the power of the State that free enterprise could succeed and thrive. In a world without the State, he sided with Lock, “life was brutish and short”.  Consequently one had obligations to the State and the people who make up the state: the working man.

According to Smith every butcher, baker, craftsman and merchant would seek out his own self-interest and that economic advantage would ultimately benefit his fellow Englishman and the Crown.  Smith’s arguments against some precepts of Mercantilism were intended to give the English tradesman a greater advantage, nothing more.  The intended effect was to enrich one’s State above all others as an alternative to the primitive act of war, the traditional means to National enrichment.  Smith viewed things as a zero sum game.  And as England was the undisputed master of global exploitation at this time, exploitation of other Nations was fair game.

However, according to Economist David Ricardo trade between nations of relative economic parity result in what he termed “Comparative Advantage”.  Comparative Advantage is based on specialization: Germany builds machine equipment, Italy does leather goods, France produces cheese, wine and literature.  When these nations trade with each other all parties enjoyed a net gain as a result of specialization and non-duplication of resources.

Of course this does not work when first world nations off-shore factories and jobs into subsistence-based economies (the term “comparative” is no longer germane).  Off-shoring into non-comparative economies is purely extractive because all of the gains are ‘privatized and are no longer correlated to national interests.  Non-Comparative off-shoring undermines both the host and source/flagship nation.

The financial entity is able to extract environmental, capital, tax and infrastructure concessions from the host nation.  If the host nation ever seeks to renegotiate its position with the financial entity the entity can enlist the powers of its flagship nation (i.e. State Department).  This type of intervention can be very costly to the flagship nation and end very tragically for the host nation.  Under Monetary Fascism the financial entity maintains out-sized rents from the host nation by utilizing the state as its enforcement agent, while maximizing tax avoidance via off-shore corporations (and other gimmicks).

Free market capitalism, as conceived by Smith, was Nationalistic in nature and as the Nation State became wealthier, so did its people and industry.  This relationship required shared obligations and shared rewards between the State and its people.

Traditional Fascism, as conceived by Mussolini or Hitler, had an aggressive Nationalistic disposition where the State promoted Industry above all others in order to strengthen the State relative to its perceived rivals.  Hitler and Mussolini believed that as the State lifted industry, industry lifted the people – dignity and pride in one’s nation were foundational principles.

Monetary Fascism, as conceived by Friedman, uses the powers of the state to put the interest of money and the financial class above and beyond all other forms of industry (and other stake holders) and the state itself.

In democracies and first world nations this is achieved through lobbying, campaign donations, financial incentives, revolving door regulators and through other means.  As such, the state is coopted into altering regulations / legislation, diverting investigations / prosecutions or creating tax loopholes for the benefit of the financial class/ industry.  Ultimately these actions undermine states sovereignty.

For the rest of the world state interests and sovereignty are undermined through the IMF, The World Bank and other global monetary agencies.

Monetary Fascism has a strong preference for political rather than capital investments.  These  investments are designed to sustain and support the preferences and activities of the financial class as it manipulates and create ever larger out-sized rent opportunities or constructs risk-diverting transactions that aggregate a ‘risk-arbitrage premium’ to one side of a transaction and transfers all future losses to the other.

On a global basis Friedman’s ideas heavily influence international treaties on taxation and capital flows with the single minded goal of freeing capital from any obligation to the host or origin country.  These agreements have essentially created a virtual nation, or non-nation, of money that is ultimately beyond the reach of the conventional Nation State.  Friedman’s ‘invisible hand’ is free to extract the wealth of any corporation or Nation without any reciprocal obligations.

The Serene Insurrection of Money

All economic theories are devised to fill a need; to justify public and / or private actions. With the rapidly growing profits to the financial class during the divestment era, beginning in the early 1970s and continuing today, they needed some ideological justification for what they were doing (selling out America’s future and destroying corporations and jobs for quick profits) so they found and embraced Monetary Fascism. In fact, they found each other: Friedman was just ‘fulfilling a need in the market place’. Friedman simply created a new ideology that justified what the financial class was doing.

Rationalizing the divestment of an entire economy is morally deplorable, but it also offered “out-sized” profit opportunities on a massive scale.  Seeking relevance in this sweeping tide of economic-cannibalism other academics rushed into the water.  None bothered to consider the long term consequences that would result from the wholesale dismemberment of our industrial economy.  Instead academics suddenly ‘discovered’ an implausible utopian future that would be sustained by the creative powers of finance and trading our industrial heritage for a service economy.

Shocking? – no, the academic promotion of concepts, theories, historical narratives and the state of ‘fact’ and ‘science’ are increasingly available to the highest bidder.  Custom realities are also made-to-order ad nausea from within our Nation’s many tax exempt ‘think tanks’ that attempt to define public debate and guide public policy for the benefit of their patrons.

Milton Friedman and the Chicago School of economics claimed to have refined and developed modern,  scientific tools of ‘free market capitalism’, capable of unlocking ever greater rewards from Adam Smith’s simple, primitive concept of free markets.  Monetary Fascism was rapidly adopted because western culture recognizes the tremendous historical contributions of traditional free market capitalism and wanted to participate in the promise of these enhanced rewards.

In truth, it was nothing more than a cloak of deception – providing cover for the unscrupulous behavior of investment bankers, corporate raiders, speculators, off-shore corporation, debt mongers and bubble pushers (typically one and the same).  The enhanced rewards came from the pilfering of capital investments and technology from generations past, the liquidation of employees and off-shoring of production, the pilfering of pension accounts and the termination or spin-out of R&D departments and option packages to executives and directors that focused on short term stock price targets.

Bell Labs, once part of AT&T, laid the foundation for all modern telecommunication and electronics technology today was morphed into Lucent Technology.  Lucent quickly looted the legacy portfolio of Bell Laboratories to enrich themselves and shareholders, leaving a worthless shell that was eventually merged with Alcatel.

Wall Street Investment Bankers, leveraged buyout firms and hedge funds became the Paladin Knights of the ’free market’ whose allegiance was to the ‘noble shareholder’, markets and liquidity.  In truth the shareholder was/is nothing more than a nameless, faceless transient in an endless pursuit of ever larger ‘outsized returns’.  Traditional capital formation was replaced with financial schemes designed to acquire existing asset for liquidation, management and directors traded long term management discipline for short term performance and accounting gimmicks tied to stock and option pricing.  With most of the IPO capital used to pay for the exit of early investors, the stock market has become nothing more than a series of game theory type exit strategies.   The equity markets are a failed forum for the creation of productive or capital intensive projects.

However, the larger system failure at the nation and global level stems from the perversion of the public and private debt market.  This was made possible through massive decade’s long deregulation and the post 2008 financial crisis.

The entire 2008 financial crisis lies at the feet of The U.S. Congress.  When The U.S. Congress repealed the Glass Steagall Act, passed in response to the Great Depression, they eliminated any meaningful financial oversight within the Banking and Investment Banking industry.

Why did the U.S. Congress change the law that protects our economy from a second 1930s type depression?  Simple, it was campaign contributions (shit-loads of cash, considered bribes or worse in the private sector), filling the top post in the Fed, Treasury and the Administration with top level executives from Goldman and the like and the prospects of private sector jobs in the financial industry for pliable regulators, retired Members of The U.S. Congress and former Presidents.

It was from the decades-long cash infused orgy of conflicted interest that Congress finally entrusted the financial industry with “self-regulation.” If you believe the rhetorical record, deregulation was intended to unleash the ‘wealth creating powers’ of these new financial instruments created through the pure genius of the investment bankers.

Alan Greenspan and others saw no limits to the potential economic contributions of the financial markets – if they could only be freed of unnecessary and burdensome regulations.

This wanton deregulation allowed the financial industry to create trillions of dollars in unregulated CMOs and CDSs (CMO: Collateralized Mortgage Obligations – packages of high risk mortgages that were rated AAA & CDS: Credit Default Swaps – bogus insurance on junk paper like CMOs) and other complex derivatives, hypothecated derivatives, synthetic derivatives, even hypothecated synthetic derivatives and the ‘black pools’ of unregulated capital that created and priced these complex financial instruments.

This resulted in the unprecedented and unsustainable accumulation of debt and related derivative instruments, literally in the hundreds of trillions of dollars, dwarfing global GDP by a number of factors, controlled by unregulated and uninhibited bankers.  Ultimately it has cost most nations their sovereignty.

Monetary Sovereignty and the Death of Nations

Friedman’s model of wealth extraction has been in conflict with the traditional Nation State and the concept of State sovereignty from inception.

Great, you say!  The state is evil and must be replaced with something new.  Beware of this thinking.  The evils of the state are nothing when compared to the money-counter.  The State must answer to the public, or at least the mob.  The money-counter only answers to his insatiable desire for more and more money.

Friedman’s ideology undermines State sovereignty by initially delinking the aggregation of wealth from the interest of the state.  As wealth accumulates it is then used to alter political outcomes, tax avoidance and financial regulations for the benefit of the wealthy.  Throughout history the State has always jealously protected its sovereignty.  So how did this ideology survive and eventually overtake the State.

Easy, they co-opt everyone.  First the academics and think tanks then one political party after the other.  The media was consumed and consolidated by large corporate conglomerates who quickly enforced their own interest’s at the editor and programmer’s desk. Then they locked in the entire public through 401(k)s and savings plans.  Even the unemployed and the unemployable qualified for credit cards, new cars and even homes. At the national and global level they expanded public and private debt everywhere.  They made everyone feel richer for a short time.  At the same time the financial industry off-shored, liquidated, crowded out and displaced the traditional industry of our economy.

With the introduction of Monetary Fascism financial activities as a percentage of GDP grew from less than 5% in 1969 to more than 22% of GDP by 2008.  Over the same period U.S. manufacturing as a percentage of GDP declined from more than  26% to just 12%. Using historical measures 2008 GDP for the manufacturing sector would be considerably less than 10%. Only the federal government was consuming a larger portion of GDP at 35%.

Taking the number one spot in the U.S. economy, the finance industry has become the most influential player in government.  But the real power behind the finance industry is much deeper than just the political access that campaign donations buy, the financial industry has wide and deep influence throughout government policy via the Federal Reserve, Treasury, Fannie May, Freddie Mac, the FDIC, key advisory rolls in the Administration, Members of Congress, political appointments within the SEC, CFTC, and membership on The Council on Foreign Relations and participation in global organizations like the G8, G20, Basil Accords, IMF and World Bank.

Through their unparalleled influence over the Administration, Congressional Finance Committees and the Federal Reserve they gained full control over the regulators.  In fact, it was the Allen Greenspan, Tim Geithner (Federal Reserve) Robert Rubin, and Larry Summers (the Administration) and others who silence ‘Rouge Regulators’ who attempted to alert The U.S. Congress to the potential risks of deregulation, dark pools and derivatives.  Greenspan, Summers, Rubin and others essentially staged a soviet era show trial against Brooksley Born and others, designed to send the message to any would-be-regulators that the rules no longer apply to the financial class.   It worked.

Once they controlled the regulators and the key members of the Congressional Finance Committee they were free to alter accounting standards, create complex financial vehicles, and leverage risk in derivatives while real losses accumulated to staggering and globally disruptive levels. They hypothecated CMOs and even synthetic CMOs to unsupportable levels, papering over any potentially observable warning signs with zero-collateral CDSs.

The real risks to global finance were hidden in the derivative instruments related to the massive debt portfolios controlled by the “Too Big To Fail” banks with unprecedented political power.  These banks were not subject to any measurable regulatory restriction.  Point of fact, Goldman Sachs and others were able to morph into traditional Prime-Banks overnight, with the blessing of their regulators, instantaneously gaining unlimited access to the Discount Window.  The act is so egregious that the public is incapable of cognition, while the media, academics and think tanks collectively remain silent.

Unlimited access to the Discount Window was not enough.  Investment Banks and the overall financial industry enjoy unlimited government largess in the form of Quantitative Easing, immunity from prosecution, as it relates to fraudulent financial instruments such as CMOs, CDSs & assorted derivatives, front running client accounts, pilfering of client accounts, wholesale asset sweeps from failed banks to failing banks and even the wholesale world-wide manipulation of LIBOR.

The final act of treachery was delivered by the U.S. Supreme Court who imbued ‘money’ with a voice and electoral powers.  This decision treated each and every single dollar in circulation as a prospective voter.  In the hands of an ordinary citizen the dollar’s ultimate voice is limited to $2,500 per person per candidate.  But in the hands of a corporate controlled Super-PAC the dollar’s voice is virtually unlimited.

The Financial Sector invested more than $5 billion in campaign contributions and lobbyists from 1998 to 2008.  As if $5 billion was not sufficient, the new Supreme Court Ruling and the creation of Super PACs will create a financial Tsunami Effect on politics.

Super PACs may raise and spend unlimited sums of money from individuals, corporations, associations, and other interest groups to “overtly” advocate for political candidates.  A recent example of how disruptive this is demonstrated by Sheldon Adelson and his wife’s $10 million contribution to Newt Gingrich.  The Aelson’s ‘legal’ Super PAC contributions were able to keep ‘their candidate’ in the Republican Primary single handedly.  Gingrich had no meaningful support beyond this single patron.  Democracy?  Representative government?

This decision effectively abolished our representative form of government.  Again, this act of treachery did not spark any meaningful discussions from academics, constitutional scholars, think tanks, civil rights groups or the media. Why?  They have all been co-opted.

Today the power of the State blindly serves the interest of these banks at the expense of all others.  I am not claiming that this needs to be a preconceived conspiracy. To the contrary, the outcome was inevitable.  Without any restraints most growth oriented systems, such as a virus, tend towards uninhibited growth.  With no means of restraint, equilibrium becomes impossible.  The single-minded focus on the growth of money compromises all other systems in the economy.

Any U.S. political leader who puts forward a Nationalist agenda is pillared as an opponent of ‘free trade’ and a danger to ‘free markets’.  A perfect example is the U.S. Congressional and Administrative reaction to traditional Industrial Policy initiatives.  The universal reaction is to characterize any U.S. Industrial Policy initiatives as “anti-free trade” and un-American.  This is wrong on both counts: Adam Smith’s entire argument about free trade was intended to enhance England’s Industrial Policy.  It is also a fact that the U.S.’s industrial greatness was rooted in 200 years of government directed, supported or sponsored Industrial Policy.

The press and pundits also contribute to this reversal of reality when they recently questioned Obama’s commitment to capitalism and free trade because he criticized Mitt Romney’s “Off-Shoring” of U.S. jobs as the head of Bain Capital.  According to the press and pundits off-shoring is a foundational principle of ‘free markets’, but off-shoring has no basis whatsoever in Smith’s free markets.  Off-shoring as we now employ it technically does not fit with Riccardo either, as Riccardo’s arguments of Comparative Advantage pre-suppose reciprocation of trade between relatively equal partners.

Historically governments would use tariffs or other measures to balance out large deviations between un-equal or undesirable trading partners.  Today corporations and the financial industry pocket these out-sized ‘comparative disparities’.  Eventually this results in wide spread unemployment and dislocation inside the flagship/host-country and all of these accumulated costs simply become a burden of the state.

This is nothing more than arbitraging disparity and transferring the resulting collateral costs to the state.  As the unemployment and dislocation costs to the state threaten the asymmetric relationship between the state and the financial class, the financial class promotes austerity through its various think tanks, financially sponsored academics and loyalist inside Congress and the Administration.

Outside the U.S. it is the IMF, the World Bank and various international trade and financial trade and monetary agencies including the EU that promote austerity.

Today the financial and banking class enforces this ideology through the media and government with the same ruthlessness of the Church during the Dark Ages: to question is to be a heretic.  It is a much more sinister form of excommunication for any public figure who does not accept or property articulate his allegiance to Friedman’s poisoned ideology.

Consequently, it is a sad fact that both Democrats and Republican Members of Congress wear Monetary Fascism on their sleeves – out of conviction or fear.   Both parties have become slaves to this deadly ideology.

Global Contagion

Challenging Monetary Fascism is much more dangerous for political leaders representing countries outside the G-20.  Populist leaders who put forward Nationalist policies are automatically in violation of one or more international ‘free trade’ agreements.  Non-conformity with these agreements ultimately results in trade sanctions, IMF or World Bank imposed austerity, or worse…

Friedman’s ideology is global and his rules of ‘free trade’ are deeply integrated into the laws of international trade.  All of our Nation’s international treaties on trade and banking are a series of interlocking agreements that force all nations to subvert their sovereignty and conform to Monetary Fascism.  It is a global pandemic built on a world-wide transmission system with universal powers of enforcement.  Sovereign Nations comply or they lose their credit rating.  Considering the world wide mass escalation of debt to GDP for most western nations, a small increase in the cost of borrowing would easily result in default and bankruptcy.

Today, Nation States face nothing less than financial Armageddon – the Sampson Option, if they do not comply with the demands of the global banking industry.  And it is with this weapon that the Financial Class has come to dominate the State.

Forget Al Qaeda, the only legitimate threat to U.S. and international security is the financial class.  They have created Weapons of Mass Financial Destruction (Financial WMDs) and they stand ready to take down the world economy.  They are more dangerous than any ‘terrorist group’, or even all of the ‘terrorist groups combined.

Exaggeration – consider what Friedman’s ‘free market’ banking system has done to Iceland, Ireland, Spain, Greece, Estonia, etc.  How many western nations has Islam overthrown?  Not one, and by comparison that should scare you.

Money has become the state and the traditional state is forced to serve money’s interests.  Everywhere the Financial Class is openly lording over sovereign nations.  Ireland, Greece and Spain are subject to ultimatums and remember Hank Paulson’s $700 billion extortion from the U.S. Congress.  The $700 billion was just the wedge.  Thanks to unlimited access to the Discount Window, Quantitative Easing and other taxpayer funded debt-swap bailouts the total transfers to the financial industry exceeded $16 trillion as of July 2010 according to a Federal Reserve Audit.  All of this was dumped on the taxpayer and it is still growing.

Why must the people of Ireland or Iceland accept the losses of the private banking sector as a public obligation?  Why must Greece accept austerity because its politician’s entered into a series of deals structured by Goldman Sachs specifically designed to deceive its EU partners?  If Goldman Sachs authored documents with the intent of fraud then Goldman Sachs is required to bear the losses and prosecution.  The taxpayer had no hand in this.

It is breathtaking.  Within the last 40 years ‘money’ has gained total control of each and every one of us.  Generations to come will enter this world burdened with the debts of their fathers.  It is inescapable and ubiquitous.  More than just a spider’s web, or a money-sucking vampire squid, it is a global pandemic that infects our very DNA.  It is the Original Sin of money – subject to compound interest, converted into a derivative, hypothecated and rolled into a CMO and then leveraged through CDSs.

The uber-wealthy will continue to aggregate wealth.  The banking system will continue to make ‘risk free bets,’ booking gains and shifting the losses to the public.  As these losses accumulate on the public balance sheet the state will be forced to seek austerity measures from the public. As austerity and debt levels increase the global economy will continue ‘circling of the bowl’ with increasing speed until we suddenly plunge into the vortex.

All Bow to the Welfare Queen

Total governmental transfers and assumed liabilities related to U.S. financial institutions since 2008 exceed the entire history of all social welfare programs for all free world economies collectively since Bismarck (do the numbers, its true).

So, how is it that history’s biggest welfare queen can demand that the rest of human society be forced to take responsibility for its prolific reproduction of trillions of dollars in derivatives and other financial abominations in the name of ‘free markets’?  Easy, your government has surrendered its National Sovereignty.  Representative government has ended. The public’s misconception and blind acceptance of Friedman’s ideology as a legitimate form of capitalism is precisely what makes Monetary Fascism immune from any true political recourse.

It is the classic case of failing to properly identify the true nature and source of a contagious epidemic.  This is the hidden strength of Monetary Fascism.  Failure to identify the source of the disease or its mode of transmission assures continued contagion, misdiagnosis and mistreatment.

The public’s support for Friedman’s poisoned system is based on the past success of true capitalism and free markets as surmised by Smith.  Most U.S. Citizens desperately want to regain our Nation’s former prestige.  Because they cannot differentiate Smith’s system from Friedman’s they see government restrictions on business, taxes and capital flows as the obstacle to achieving our previous economic greatness.  The public can be counted on to demand even greater deregulation, undermining their relevance in the system and our Nation’s economy and sovereignty.

Whole industries have long ago disappeared.  Friedman’s Monetary Fascism has burnt through most of what remains of the middle class.  Seeking fuel, the fire has spread to the upper middle class and the lower middle class. Small businesses and Unions are consumed in the flame.  Even the ranks of the finance industry were offered up to the god of money.  Tens of thousands of recently dispossessed upper middle class and the lower ranks of the wealthy find themselves without meaningful work and dark prospects.   All of these people have passed through the bowels of Monetary Fascism, yet they stand up and defend ‘free markets’ so that they can be consumed once again as this raging fire seeks new fuel.

The only rational defense is for people everywhere to denounce Friedman’s ideology in all public policy debates and academia, and to articulate the true principles of Adam Smith.

Ending the tyranny of Monetary Fascism begins with the wide spread recognition that it is the anti-theses of capitalism, free markets, individual self-determination and national sovereignty.  However, it is truly unstoppable as long as the world continues to view it as the embodiment of Adam Smith’s “free market capitalism”.

Until then, the plunder will continue, lives will be discarded the angry mob will continues to grow.  As we approach critical mass the fear is setting in.  The remaining upper middle class and middle class fear losing what they have, while the recently disenfranchised desperately cling to their faith in Friedman’s ‘free markets’ in the hopes of redemption.  The faithful double down on their own demise, while the ranks of the dispossessed swell.  Every one of us has become a bit player in our own tragedy.

We are at the end of human evolution, we have become chattel.  We are conditioned to the service of those with money, who only seek to enlarge their store of money, to beget money, for money’s sake and nothing more.  The future is grim.

The predictable long term outcome is a steep decline into a very dark Monetary Feudalism.

When asked in an interview what humanities’ future looked like, Eric Blair, better known as George Orwell, said “Imagine a boot smashing a human face forever.”

Welcome to the Dark Age of Money.

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tocointhephrase's picture

Free market Capitalism.

lol good one!

anonnn's picture

University of Chicago founded/funded by John D. Rockefeller of Standard Oil fame.

Surely a meaningless detail of no consequence to U of Ch spawn Leo Strauss, Milton Friedman, etc.

Refer to Naomi Klein's Shock Doctrine for details of U of Ch's global effects., [the book oddly does not mention Rockefeller's original influence. or I missed it].

t0mmyBerg's picture

OK, it was Thomas Hobbes that made the observation about the life of man, nasty, brutish and short, not John Locke (with an e at the end you should note if you invoke his philosophy in one of your future rambling rants).  Errors of fact aside, I think you have an unhealthy fixation on Milton Friedman, who, while not perfect, I am pretty sure was not an advocate of monetary fascism.  But whatever.  What do I know.

Orly's picture

The author seems to confuse human nature with someone being in the right place at the right time.  His idea of "monetary fascism" is what I would call "collective greed;" nothing more, nothing less.

new game's picture

as the pedulum swings history repeats. while the monetary power concetrates the majority boils.

what i watch is gun control, because history says the story times millions dead that the jackboot of power can not

have this. how about a mortar for lack of loyality-no trace of freedom left...

u.n./above mentioned oligarchs know  that that is the last resistence to overcome.

while the  last nation to allow guns in ordinary citizens hands appears to be near the end it remains to be

seen if the collective rage will act accordingly.

toomanyfakeconservatives's picture

There is no such thing as "human nature". Nuture matters FAR MORE than nature. The human nature myth is right up there with the "DNA determines everything" myth.

Orly's picture

You cannot be serious! <Invoking my best McEnroe>

You don't have kids, do you?  If you do have them, then you must know that they are as different as night and day and there is not a thing you can do about it.  If you don't have them but will have them, then at that time you will understand that you have absolutely no clue as to what you're talking about.  If you don't have them and don't plan on having them...well, that's probably okay, too.

Kiwi Pete's picture

So true Orly. Reminds me of a family we knew when I was a kid. Two totally normal kids and one a total mongrel who ended up in jail. 

putaipan's picture

financial fascism, inverted totalitarianism.... whetever. collective geed indeed. hey! let's wish this guy alittle luck-

putaipan's picture

you gonna click it? i ain't gonna click it.     3 days now and ZH hasn't picked up on this.

putaipan's picture

4 days. dead journalist/editors kids dead.....stilll nothin'


Everyman's picture

Today the U.S. and much of the world’s economies are operating under what I call Monetary Fascism: a system where financial interests control the State for the advancement of the financial class.

Sounds like it is time to have "open season" on the financial class.  Kill 'em all, and let the politicians sort out the peices.



Bindar Dundat's picture

Let's make sure we differentiate between those who started and grew their companies and the banksters.  Just sayin' I hate the bankers too but I made some good coin as a business man.  Guess there are not to many like me on this site.  Marxists and entrepreneurs need not apply?

Orly's picture

I, for one, appreciate all perspectives, as long as they are cogent and kind.


hapless's picture

"Let's make sure we differentiate between those who started and grew their companies and the banksters."

Good luck with that.  For many, the recognition of starters/growers leave too many loose ends that need to be explained.

Radical Marijuana's picture

Have you noticed, Everyman, that the banksters can easily pay for private military contractors, as well as that the banksters control the professional killers that work for the government, and, indeed, the banksters, by controlling the government, were able to thereby massively subsidize the privatized professional killers?  In general, these sorts of suggestions about killing those in the financial classes ignore that those classes can pay for the best mercenaries. ... Such a suggestion is a childish daydream, and moreover, it is NOT based on paradigm shifts in our militarism, that does better death controls, through a better murder system, which is the only theoretical solution that might work.

Tango in the Blight's picture

I wonder how many bodyguards follow Lloyd Blankfein wherever he goes.

David449420's picture

Perhaps the most profound explanation of what is happening to our world  that I have read in the last four years. Doesn't present any solutions  but I hope that this essay (and others like it) will be the catalyst that will start to move us towards actually developing some solutions.

Bob's picture

Here's some historical context that helps fill out the picture:

Michael Hudson: The Road to Debt Deflation, Debt Peonage, and Neofeudalism

Beware the false differentiation the Austrians (the sons of Mises, Hayak, Rothbard, etc.) are promoting between themselves and the Friedmanites.  The Austrians are simply a more virulent strain . . . who wrap themselves around "Liberty" as the theme of a war they claim to be waging against a socialist straw man. 

Here we have Rothbard condemning Friedman for retaining objections to private monopolies:

Here's a paper from the mises institute proclaiming that eliminating Glass-Steagall would usher in a new age of freedom:

The version of "Liberty" these sick fuckers are pushing is Friedman on steroids and meth.  These are the guys putting the final touches on that jack boot that would crush the face of humanity forever.

As our present author notes, if you think government is bad, domination by extra-govermental entities that literally control the world's economy is gonna be far worse.  That is a genuine NWO . . . one accountable to no one.

traderjoe's picture

Point of Order: One must go back to 1913 to see the true source of corruption and monetary facism. A guy like Friedman? Either a shill, insider, or useful idiot. 

The Federal Reserve Note, the abdication of monetary sovereignty, the borrowing of the people's money at interest from banks that can factionally reserve it for free, and the debt-money system are simply the scam of the century. 

All else, is just a part of the theater. 

new game's picture

yes, keeping it simple and understandable to anyone with a little brain power; i ask why cant i create money so i can control your fucking life?

and until people connect their shity situation and this monetary regime and actually overcome the fucks(not by voting) we continue down the road of a mortar for disobedience...

toomanyfakeconservatives's picture

American civilian patriots, backed by American patriots in the military will step in soon and end the monetary treason...

northerngirl's picture

This could be true, but there is one problem...Most Americans do not want to take the time to learn how our economic system for the past 100 plus years has been nothing more than smoke and mirrors.  If that were not true we would not be in this mess today.  There really is a sense that no matter what happens there will always be someone out there to take care of us.  Guns and gold are good, but those will not fix our problems either.  The mindset of the mass has to change from being a looter to a producer.  When we have more producers than looters the United States will grow strong again.  Are there enough American Civilian Patriots and the American Patriots in the Military that understand what needs to be done to bring this country back to an economic sanity?  Put 3 Americans in a room with a problem and you will get 4 different answers on how to solve the problem.  Sadly, the problem will never to solved, but the 3 Americans will fight each other to the death defending their answer.  Hence, where we are today...

anonnn's picture

Regarding a solution, this may help :

George Seldes* view was: While all societies have leaders, in a failed society the
wrong persons are chosen and/or accepted to be the leaders; those wrong
leaders are more precisely the mis-leaders, as the prefix "mis-" aptly
denotes. This view of a basic problem, from which so many other problems
grow, got Seldes' attention and he postulated the brilliant handling of it.

How Do You Tell The Leaders From The Mis-leaders? Seldes found just one
answer to that question. He said so in a speech and I have a copy to hand;
it is from his 1953 book "Tell The Truth And Run" p.118-119, extracted below.

[BEGIN EXTRACT] "...Is there a simple way by which an intelligent but
confused people can test men and parties, a sure way? I do not know if I
have the right answer, but about Christmas time,1944, when Clifton Fadiman
for the Writers War Board asked me [among scores of others] to write a radio
address to the Germans [which our Army later broadcast to the civilian
population from transmitters along the front], I sent the following:

People of Germany:
I hear you say the same words today I heard on December 13, 1918,when I
marched into Coblenz with the First Division of the American Army.

You shouted then and you shout today: "Wir waren belogen und betrogen." You
cry out that you were "lied to" and "betrayed" by your leaders. In 1918 it
was the Kaiser and the Junkers who had fooled you into a commercial war;
today it is the Nazi crowd of politicians, cartel businessmen,
landowner-Junkers---practically the same outfit.

You had your eyes opened suddenly in November, 1918, when the men of the
fleet and a few labor leaders with their armbands reading "Arbeiter and
Soldaten Rat" [Workers and Soldiers Committees] came to the cities and
overthrew the monarchy, and you had your eyes opened the other day when from
the underground the real leaders of the people of Germany suddenly appeared
and overthrew Fascism.

I saw you in 1918 raise your fists to the sky and shout "Nie Wieder
Krieg"---"No more war". I hear you shout "no more war" today.

But I also hear someone who is not being carried away by the great elation
and the great emotion of this great day. I hear a man call out: "But we will
be betrayed again--and again-- unless we , the common people, find a way to
tell our friends from our enemies. How can we tell who are the real leaders,
who are the misleaders? Hitler promised us everything good. How can we tell
when false leaders arise and make promises?"

I think I can answer that. Let me ask you, first, what did Hitler do about
labor--about the labor unions? Remember, he never had the backing of labor.
He fought labor. He was anti-union.He had been a scab and a labor spy. And
the first thing he did when he seized power was to smash the unions by
confiscating union treasuries.

And Mussolini? He gave the people what he called a "Labor Charter". But it
was a slave charter.. He organized labor-management committees, but the
employers named the labor men on them as well as their own.

It is so in all Fascist countries. Labor is the bulwark of democracy. Labor
is the people. So this is your answer for the future: Judge and test every
man, every leader, by his words and actions regarding labor. If the Italian
people, who knew Mussolini was a labor-faker, and the German people, who
knew in 1922 that Hitler was a tramp who had never done honest work and
always hated the unions, had fought these two men on their labor records; if
they had gotten the middle class and the intellectuals and the liberals and
all anti-Fascists to work together, they would never have been betrayed.

There was a way of telling. The test was labor. And in the future, you
people of all nations, you can tell your true leaders fom the Fascists, or
the misleaders, by their record on labor. It is the only real test I know
of. And if you use it rightly you will have a democracy instead of
Fascism--and war--and death. [END EXTACT]



George Seldes was an American journalist of highest integrity and
credibility, as he wrote mostly from his own, actual observations an
experiences. He died 1995 at age 104, in Vermont. For example,
he uniquely interviewed Gen.[later President] Paul von Hindenburg just after the WWl
Armistice [and was nearly shot for breaking US Army rules to do it]; he
learned firsthand and tried to break the story in the 1920' s of Benito
Mussolini's direct involvement in the murder of his popular rival Matteoti;
he broke virtually the whole, basic story just after WWll of the tobacco
industry's addiction, cancer and health debacle. And of course Seldes' works were
actively suppressed.

falak pema's picture

+ 100 loved it. Thanks.

Never betray the people. Never stigmatise its representatives as EVIL, even if they be dumb, and not attuned to reality.

Talk and reason them. Make them part of the solution. Thats why those who rule are truly "the best and brightest"; if they know how to share...the ciment of civilization.

Cypher_73's picture

By that measure, Mitt Romney is an utter failure. Yeah, that seems about right.

jez's picture

When asked in an interview what humanities’ future looked like, Eric Blair, better known as George Orwell, said “Imagine a boot smashing a human face forever.”


No he didn't. This is a mangled extract from "1984" in which someone -- I think it's O'Brien but I don't propose to go through the book to confirm it -- says to Winston Smith: "If you want a picture of the future, imagine a boot stamping on a human face — forever."


Poor old Orwell. Still being misrepresented after all these years. May I recommend that you read his essay "Politics and the English Language" (1946) for priceless advice on clarity and precision in writing and reporting.


And you mean "humanity's future", by the way.

Orly's picture

You are exactly correct, jez.  O'Brien says to Winston in the book 1984, "If you want a vision of the future, Winston, imagine a boot stamping on a human face forever."

He also said, "If you're a man, Winston, you're the last man. Your kind is extinct. We are the inheritors. Do you realize that you are alone? You are outside history. You unexist."


stormsailor's picture

this one is a keeper,  excellent article,  outstanding.

uncle reggie's picture

We are entering the final stage before total control is established. When drones fill the airspace over every city in a few years, the final piece will be in place. The boot is polished and poised to crush humanity.

toomanyfakeconservatives's picture

Governor Tarkin: Princess Leia, before your execution, I'd like you to join me for a ceremony that will make this battle station operational. No star system will dare oppose the Emperor now. 

Princess Leia: The more you tighten your grip, Tarkin, the more star systems will slip through your fingers. 

adr's picture

I got a D in my college economics class based on Friedman. I ended up dropping the course. It wasn't that I didn't read the book or do the work. I was just told all my answers that went against the insanity of Friedman's philosophy were deemed wrong by my professor.

That six hours per wee for three months was the iggest waste of time in my life. But it did prove that the quickest path to wealth is fraud.

That professor drove an Audi S5 and lived in a $500k home.

slightlyskeptical's picture

Thats a good story. In college I was taking Econ 2 or whatever they called it back then and on day one knew I couldn't sit there listening to the crap. Fortunately Prof tells us that any grades/test we miss will be made up on the final. So I did nothing all year, never went to class, etc. and final counted 100%. Turns out just about everyone failed every assignment and test (I wonder why?) so the Final was 20 multiple choice questions. I attended the study session (My second class) and ended up with an easy A.


new game's picture

my ray of hope always comes from a natural understanding; the strong will survive as a whole and the rest will perish.

good night...

falak pema's picture

r u leaving us already? Or are we all leaving u?

Quinvarius's picture

 Every time you buy an ounce of real money, you are walking away from this slavery.

toomanyfakeconservatives's picture

Nothing dollar-denominated in my basement bank... coffee, canned food, ammunition, gold, silver, and so on.


On the global stage, the 100+ nation BRICs alliance is getting ready to end the slavery and ditch the Federal Reserve Note forever.

Kreditanstalt's picture

"The foundation of Friedman’s corrupting principle is that the investor (money to be more precise) has no duty, obligation or covenant to anyone or anything. Friedman’s ‘Market’ is not subject to ‘any’ human standard of morality, political limitations or national interests. Money is free to act without bounds or conventions."

And what is the responsibility of GOVERNMENT in all this?  

Isn't government - not "corporations" - supposed to be in charge?

Why blame investors and speculators?  Why doesn't GOVERNMENT enforce the rules???


Government has the authority....government is the problem, not a corrupted bystander...   

Orly's picture

Walmart does have guns...

But you are exactly correct in that it is the role of government to oversee that the rules get laid down fairly for all.  I suppose the author's point is that the financial arm of society and the political arm of society are one and the same, i.e., monetary fascists.

It follows that in any mature society, the ones who have the guns protect the ones who have the money, so they can make more money and they can buy more guns.  Invented by Milton Friedman.

Smart guy.  Cleopatra should have thought of that.


falak pema's picture

the lady in the carpet who had two roman lovers who held their gladius swords like their  victorious "guns"; she chose well her lovers but they both died on her. The guy who won had no time for her. Augustus only liked Egyptian grain and he wouldn't touch any woman who had slept with Mark Anthony. Strange how men don't appreciate women for their carpet bagging tricks. 

Awesome post by the author and wonderful summary of the financial demise of US exceptionalism in this PAx Americana morph. 

One rule of history this author does not refer two is the basic principle of all nation state constructs : the golden rule of balance of power to which FDR adhered; never to demonise the vanquished enemy. What Richelieu and Metternich taught the nation states of Europe in previous centuries. His immediate successors stretched out their hands to the losers of WW2 and rebuilt the world.

Reagan and Thatcher as the intransigent Catholic kings of this new, revitalised, Unilateral, Anglocentric construct, and their Bush family and NWO cabal successors, demonised the enemy within; the welfare state and unions; as the recalcitrant nations of the vital Oil patch, veritable life line to fuel the post industrial global age.

And it led to hubris, even after the collapse of the old enemy of USSR. When you feel you tower like a colossus over the world and none can challenge your pre-eminence either from within or from without, you are on the road to deperdition.  The mind set of Augustus and consorts...lost to Cleopatra's charms, to the existence of all the others. The ciment of nation state becomes brittle like that of imperial construct without.

Sad, painful lesson of unknown dimension for us, as the first world loses it collective superior culture to an Oligarchy that knows no values other than material, ephermeral gain for the "happy few"; now a corrupted and dangerous legacy to future generations. 

PS : Here is an interesting graphic presented in Jesse's café that allows you to understand "monetary/financial fascism" in the overall political spectrum. 

Jesse's Café Amé the extremes, the Left and Right become almost indistinguishable in their disregard for the individual. 

Orly's picture

Headed right for my old haunt in New Jersey.  I'd kind of like to experience a hurricane in New Jersey.  I've been through them in Texas, Louisiana and Mississippi but never up north.

falak pema's picture

don't ride your broomstick like Mary Poppins, you might find that ole Sandy has a wicked tail,  like wily croissants and strong cawfee is nice to wake upto with orange juice. Smell the heather and gather the mushrooms. 

Radical Marijuana's picture

... the ones who have the guns protect the ones who have the money, so they can make more money and they can buy more guns ...

THAT is the essence of the real problem.

It is a combined money/murder system.

Those who were the best at backing up their lies with violence controlled governments. Indeed, governments were always systems of organized lies, operating organized robbery. Our current system has only astronomically amplified the size of that, and so, its own madness is its only significant threat.

Nobody outside of that system of debt controls, backed by death controls, could do anything significant to change it. The politicians are already puppets, or else they have no careers. (The politicians that could not be bribed or intimidated were assassinated, or destroyed in some other way.) Therefore, the government is organized crime, effectively controlled covertly by even better organized criminals. The dilemma is that there are NO practical ways to change that.

Peterus's picture

Constitutional Republic is better than nothing and what is up now in the West. With popular revolt, overturning of current govt before a lot of corruption sets in, shredding current Constitution and writing it down again every few decades it could probably work pretty good. USA got somewhat corrupted almost instantly but until WWI it was still tolerable amount.

Though Ankap is the real way to go. Take the basic rule - I own myself, I own stuff I've made, found, traded for and were given. All violations to it, all aggression is always wrong. Is it violence or war, is it theft or taxes, is it coercion or (some) police action, is it fraud or politicians misrepresenting reality. No exceptions to any "special" group of people.

Nimby's picture

And what of land?  What right do you have to land?  Does not the entity that protects your interest in the land from which you harvest the food you eat, or make the things you sell, or rest your body not have an interest in that land as well?
What of pollution?  Part of the bundle of rights that comes with an interest in property (be it allodial or fee simple) is the right to enjoyment.  If a neighbor is, through pollution of one form or another, supressing that enjoyment, what mechanism would you employ to restore your rights?  BTW, I'm not trying to come across as some wacko-environut, it's just that the statists have embraced this cause as a means to an end (that end NOT being private property rights!), so please don't confuse me as such and take this in an unneccessary direction.  It seems to me that Ankap is an impossible dream.

Vooter's picture

"Why blame investors and speculators? Why doesn't GOVERNMENT enforce the rules???"


Why blame rapists and murderers? Why doesn't GOVERNMENT enforce the rules???

Vooter's picture

"Government has the authority....government is the problem, not a corrupted bystander..."

Oh, I if someone robs a bank, we should let the robber go and arrest the police for not preventing the robbery?

Vooter's picture

"Isn't government - not "corporations" - supposed to be in charge?"

YOU'RE NOT SUPPOSED TO COMMIT CRIMES, regardless of who's in charge. Get it?

Kreditanstalt's picture

Following your logic, we'd have to say that governments, and police are totally useless.  I think they are getting off easy in this mad public race to find villains ("evil corporations") and victims (themselves)...what about government??  Is it USELESS??

Government: "a body having a monopoly on violence in a given territory."

They have the guns.  Without government inaction, "evil" corporations would be nothing.

toomanyfakeconservatives's picture

Great article... it's a sworn affidavit for the coming MASS ARRESTS...