Nick Giambruno: The decline of Western Civilization is on a lot of people’s minds.
Let’s talk about this trend.
Doug Casey: Western Civilization has its origins in ancient Greece. It’s unique among the world’s civilizations in putting the individual—as opposed to the collective—in a central position. It enshrined logic and rational thought—as opposed to mysticism and superstition—as the way to deal with the world. It’s because of this that we have science, technology, great literature and art, capitalism, personal freedom, the concept of progress, and much, much more. In fact, almost everything worth having in the material world is due to Western Civilization.
Ayn Rand once said “East minus West equals zero.” I think she went a bit too far, as a rhetorical device, but she was essentially right. When you look at what the world’s other civilizations have brought to the party, at least over the last 2,500 years, it’s trivial.
I lived in the Orient for years. There are many things I love about it—martial arts, yoga, and the cuisine among them. But all the progress they’ve made is due to adopting the fruits of the West.
Nick Giambruno: There are so many things degrading Western Civilization. Where do we begin?
Doug Casey: It’s been said, correctly, that a civilization always collapses from within. World War 1, in 1914, signaled the start of the long collapse of Western Civilization. Of course, termites were already eating away at the foundations, with the writings of people like Jean-Jacques Rousseau and Karl Marx. It’s been on an accelerating downward path ever since, even though technology and science have been improving at a quantum pace. They are, however, like delayed action flywheels, operating on stored energy and accumulated capital. Without capital, intellectual freedom, and entrepreneurialism, science and technology will slow down. I’m optimistic we’ll make it to Kurzweil’s Singularity, but there are no guarantees.
Things also changed with the creation of the Federal Reserve in 1913. Before that, the US used gold coinage for money. “The dollar” was just a name for 1/20th of an ounce of gold. That is what the dollar was. Paper dollars were just receipts for gold on deposit in the Treasury. The income tax, enacted the same year, threw more sand in the gears of civilization. The world was much freer before the events of 1913 and 1914, which acted to put the State at the center of everything.
The Fed and the income tax are both disastrous and unnecessary things, enemies of the common man in every way. Unfortunately, people have come to believe they’re fixtures in the cosmic firmament. They’re the main reasons—there are many other reasons, though, unfortunately—why the average American’s standard of living has been dropping since the early 1970s. In fact, were it not for these things, and the immense amount of capital destroyed during the numerous wars of the last 100 years, I expect we’d have already colonized the moon and Mars. Among many other things…
But I want to re-emphasize that the science, the technology, and all the wonderful toys we have are not the essence of Western Civilization. They’re consequences of individualism, capitalism, rational thought, and personal freedom. It’s critical not to confuse cause and effect.
Nick Giambruno: You mentioned that the average American’s standard of living has dropped since the early 1970s. This is directly related to the US government abandoning the dollar’s last link to gold in 1971. Since then, the Federal Reserve has been able to debase the US dollar without limit.
I think the dollar’s transformation into a purely fiat currency has eroded the rule of law and morality in the US. It’s similar to what happened in the Roman Empire after it started debasing its currency.
What do you think, Doug?
Doug Casey: All the world’s governments and central banks share a common philosophy, which drives these policies. They believe that you create economic activity by stimulating demand, and you stimulate demand by printing money. And, of course, it’s true, in a way. Roughly the same way a counterfeiter can stimulate a local economy.
Unfortunately, they ignore that, and completely ignore that the way a person or a society becomes wealthy is by producing more than they consume and saving the difference. That difference, savings, is how you create capital. Without capital you’re reduced to subsistence, scratching at the earth with a stick. These people think that by inflating—which is to say destroying—the currency, they can create prosperity. But what they’re really doing, is destroying capital: When you destroy the value of the currency, that discourages people from saving it. And when people don’t save, they can’t build capital, and the vicious cycle goes on.
This is destructive for civilization itself, in both the long term and the short term. The more paper money, the more credit, they create, the more society focuses on finance, as opposed to production. It’s why there are many times more people studying finance than science. The focus is increasingly on speculation, not production. Financial engineering, not mechanical, electrical, or chemical engineering. And lots of laws and regulations to keep the unstable structure from collapsing.
What keeps a truly civil society together isn’t laws, regulations, and police. It's peer pressure, social opprobrium, moral approbation, and your reputation. These are the four elements that keep things together. Western Civilization is built on voluntarism. But, as the State grows, that’s being replaced by coercion in every aspect of society. There are regulations on the most obscure areas of life. As Harvey Silverglate pointed out in his book, the average American commits three felonies a day. Whether he’s caught and prosecuted is a subject of luck and the arbitrary will of some functionary. That’s antithetical to the core values of Western Civilization.
Nick Giambruno: Speaking of ancient civilizations like Rome, interest rates are about the lowest they’ve been in 5,000 years of recorded history. Trillions of dollars’ worth of government bonds trade at negative yields.
Of course, this couldn’t happen in a free market. It’s only possible because of central bank manipulation.
How will artificially low interest rates affect the collapse of Western Civilization?
Doug Casey: It’s really, really serious. I previously thought it was metaphysically impossible to have negative interest rates but, in the Bizarro World central banks have created, it’s happened.
Negative interest rates discourage saving. Once again, saving is what builds capital. Without capital you wind up as an empty shell—Rome in 450 A.D., or Detroit today—lots of wonderful but empty buildings and no economic activity. Worse, it forces people to desperately put their money in all manner of idiotic speculations in an effort to stay ahead of inflation. They wind up chasing the bubbles the funny money creates.
Let me re-emphasize something: in order for science and technology to advance you need capital. Where does capital come from? It comes from people producing more than they consume and saving the difference. Debt, on the other hand, means you’re living above your means. You’re either consuming the capital others have saved, or you’re mortgaging your future.
Zero and negative interest rate policies, and the creation of money out of nowhere, are actually destructive of civilization itself. It makes the average guy feel that he’s not in control of his own destiny. He starts believing that the State, or luck, or Allah will provide for him. That attitude is typical of people from backward parts of the world—not Western Civilization.
Nick Giambruno: What does it say about the economy and society that people work so hard to interpret what officials from the Federal Reserve and other central banks say?
Doug Casey: It’s a shameful waste of time. They remind me of primitives seeking the counsel of witch doctors. One hundred years ago, the richest people in the country—the Rockefellers, the Carnegies, and such—made their money creating industries that actually made stuff. Now, the richest people in the country just shuffle money around. They get rich because they’re close to the government and the hydrant of currency materialized by the Federal Reserve. I’d say it’s a sign that society in the US has become quite degraded.
The world revolves much less around actual production, but around guessing the direction of financial markets. Negative interest rates are creating bubbles, and will eventually result in an economic collapse.
Nick Giambruno: Negative interest rates are essentially a tax on savings. A lot of people would rather pull their money out of the bank and stuff it under a mattress than suffer that sting.
The economic central planners know this. It’s why they’re using negative interest rates to ramp up the War on Cash—the push to eliminate paper currency and create a cashless society.
The banking system is very fragile. Banks don’t hold much paper cash. It’s mostly digital bytes on a computer. If people start withdrawing paper money en masse, it won’t take much to bring the whole system down.
Their solution is to make accessing cash harder, and in some cases, illegal. That’s why the economic witch doctors at Harvard are pounding the table to get rid of the $100 bill.
Take France, for example. It’s now illegal to make cash transactions over €1,000 without documenting them properly.
Negative interest rates have turbocharged the War on Cash. If the central planners win this war, it would be the final deathblow to financial privacy.
How does this all relate to the collapse of Western Civilization?
Doug Casey: I believe the next step in their idiotic plan is to abolish cash. Decades ago they got rid of gold coinage, which used to circulate day to day in people’s pockets. Then they got rid of silver coinage. Now, they’re planning to get rid of cash altogether. So you won’t even have euros or dollars or pounds in your wallet anymore, or if you do, it will only be very small denominations. Everything else is going to have to be done through electronic payment processing.
This is a huge disaster for the average person: absolutely everything that you buy or sell, other than perhaps a candy bar or a hamburger, is going to have to go through the banking system. Thus, the government will be able to monitor every transaction and payment. Financial privacy, even what’s left of it today, will literally cease to exist.
Privacy is one of the big differences between a civilized society and a primitive society. In a primitive society, in your little dirt hut village, anybody can look through your window or pull back the flap on your tent. You have no privacy. Everybody can hear everything; see anything. This was one of the marvelous things about Western Civilization—privacy was valued, and respected. But that concept, like so many others, is on its way out…
Nick Giambruno: You’ve mentioned before that language and words provide important clues to the collapse of Western Civilization. How so?
Doug Casey: Many of the words you hear, especially on television and other media, are confused, conflated, or completely misused. Many recent changes in the way words are used are corrupting the language. As George Orwell liked to point out, to control language is to control thought. The corruption of language is adding to the corruption of civilization itself. This is not a trivial factor in the degradation of Western Civilization.
Words—their exact meanings, and how they’re used—are critically important. If you don’t mean what you say and say what you mean, then it’s impossible to communicate accurately. Forget about transmitting philosophical concepts.
Take for example shareholders and stakeholders. We all know that a shareholder actually owns a share in a company, but have you noticed that over the last generation shareholders have become less important than stakeholders? Even though stakeholders are just hangers-on, employees, or people who are looking to get in on a shakedown. But everybody slavishly acknowledges, “Yes, we’ve got to look out for the stakeholders.”
Where did that concept come from? It’s a recent creation, but Boobus americanus seems to think it was carved in stone at the country’s founding.
We’re told to protect them, as if they were a valuable and endangered species. I say, “A pox upon stakeholders.” If they want a vote in what a company does, then they ought to become shareholders. Stakeholders are a class of being created out of nothing by Cultural Marxists for the purpose of shaking down shareholders.
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