It is intellectual nonsense to attempt to blend a nationalist politics with an internationalist economics – a fudge which fake Brexiteers in England are trying to achieve. I suspect the same contradiction is present among America’s “Right.” A nationalist economics is set inevitably on a collision course with Finance. The genuine “Right” must understand this.
It is received wisdom, in light of Brexit and Trump, that the world is on the verge of a paradigm shift and that it will require perhaps one further upset – a Marine le Pen presidency in France, for example – for the move to become irreversible. A new, “alternative” Right is poised to capture a narrative which for decades has been the monopoly of the Left with its supposedly progressive agenda. With that agenda’s failure, a space has opened up for this new force to re-establish the role of the state and thereby honour the bargain at the heart of the Social Contract. For what is the purpose of government if not to protect the citizenry in the deepest sense? – to secure the borders that encircle it, the culture which defines it, its welfare, its safety and so on. The nation, submerged by globalising institutions which in fact do the bidding of the Banks and Transnational Corporations, is rising. Meanwhile the old liberal order issues its warning; beneath the clamour we should discern the menace: the Valkyrie ride once more.
But it is now that the disparate elements which comprise this new force must define a coherent intellectual programme which unites them and can serve as a guide to future generations when no such programme currently exists. This will be no easy task. First, because the Left, in unholy alliance with neo-liberal economists, dominate the universities and thereby control the forming of our most able, and malleable, young minds – in a manner not dissimilar to that by which Saudi-funded mosques have inculcated heresy throughout the Islamic world. Second, because the genuine Right must be disentangled from the deviancy of Thatcherism – or neoliberalism – with which it is mistakenly conflated. Authentic conservatism has nothing to do with that brand of extreme economic liberalism and it would be a capital error for the architects of the new paradigm to confuse the two.
For the time being, the elements which comprise this new force, acting on brilliant instinct, see only the Hydra’s heads: uncontrolled immigration, homogenisation, increasingly vast discrepancies in wealth, spiraling indebtedness, social breakdown, cultural decadence, the erosion of tradition, the corrosion of our very characters, the disappearance of the nation, environmental degradation, over-population, to name a few. But how to pierce the heart and slay the serpent once and for all?
Limitations of space make it impossible to outline a comprehensive manifesto but here are some ideas.
Before anything the new force will need to make out the real enemy, and there should be no doubt about its identity: international finance. Every one of the hydra’s heads sprouts from this evil and it works by means of a process that is very simple but to which our “elite” seems oblivious.
It begins with the creation of money – which is to say debt – out of nothing. It took the Bank of England 320 years to admit the reality in its first quarterly Bulletin of 2014. Some 97% of the world’s money is not physical cash, or tangible, at all, but “fiat”- manufactured by banks when they conjure up loans to their customers many times the value of their deposits by means of fractional reserve banking; conceptually very similar to counterfeiting, with the important distinction that the instruments created by such means attract interest while counterfeit notes do not. Bearing in mind the development afoot to phase out the remaining 3% cash, the day will soon arrive when every last financial transaction will be channeled through these banks. Being the creators of the world’s money these institutions become in turn the arbiters of who that money is distributed to, and for what purpose – a unique privilege for which no politician or economist has provided the slightest justification; Liberal Democracy’s ultimate weapon, directed against the people it claims to liberate.
But the creation of loans that attract interest out of nothing has a consequence: the need for growth. Expansion – relentless and extractive – becomes not our friend as the politicians would have it, but our worst enemy. We borrow 100 pounds at ten per cent. We now need to grow to 110 pounds by the end of the year, just to stand still. Granted, a part of the excess will be mitigated by inflation but for our creditors to feed at least a portion of this excess will need to be “real.” When we can no longer grow in these real terms – now in fact – then we will have to pay back our loans out of existing capital; exactly what has been happening over recent decades. Our capital – resources and state assets – have been cannibalised (often under the fig leaf of privatisation), and the revenues generated thereby mis-described as ‘profits’ instead of capital depletion; simple false accounting designed to create the impression of growth and exactly the path down which the IMF insists countries such as Greece and the rest of the world must travel.
To put some figures to my argument: the environmentalist Margrit Kennedy demonstrated how a single penny invested at the time of Christ at 4% would have bought 8,190 balls of gold the weight of the earth by 1990. Increase the rate of interest to only 5% – the approximate amount assumed by pension funds to meet their future obligations -and it could have bought 2,200 billion of them. Such is the power of compound interest. Begin not with a penny but with the trillions upon trillions of debt currently outstanding and the reader will quickly grasp what has eluded our politicians: that while it may be possible for numbers to be multiplied in this way on a computer, it is clearly impossible to do so on a planet of limited size and resources. In short, our liabilities can never be repaid. Notwithstanding this fact, our obsession is to swap that which perishes – the real – for that which does not: the virtual; that which is finite – the world – for that which is not: interest bearing debt. I can think of no greater example of collective madness in human history than this quest to build the ultimate perpetual motion machine and it stands a good chance of destroying us.
Understand this psychotic compulsion for growth and we recognise how so many of the hydra’s heads have come into being. Take the one most talked about: unbridled immigration. The logic of growth to fund escalating debt for the benefit of a tiny minority requires that people must flow as easily as money in a twisted two-way convulsion. The bottom line necessitates outsourcing our industry to places where human beings come cheaper, perhaps because the targeted country has laxer labour laws, or because its inhabitants are more desperate and have lower expectations than our own spoiled workers, or simply because capital there is allowed to decamp and suppress the local currency, thereby lowering costs for the investing corporation. Mexicans are happy when a new American factory opens and they are employed. Meanwhile their relatives will try their luck further afield, smuggling themselves across the border where their numbers will curb the wages of the host country’s population. But eventually the corporation which built the factory tires of Mexico. Its workers now demand more where in Vietnam they seek less. Ever-pressurised by the loans it needs to service and the exigencies of its owners whose shares have been valued on the assumption of future growth, in the tap of a keyboard it transfers its capital to Saigon and “adios amigos.” Back to your hovels you go. Money knows no loyalty and no flag. That is why finance must be cosmopolitan, why it must sap the nation and the communities within it, and why the internationalist discourse of the Left and of the mainstream, bogus Right, directed through globalising institutions such as the EU and WTO, is Goldman Sachs’s most perfect bride.
Mr Trump is correct. The process is bad for Americans. But here is the point: it is just as bad for Mexicans; and for the rest of us. The hunt for growth evolves and now Darwinian logic herds us to the next horrific phase: the outsourcing of work not to foreigners but to robots.
While the first step in the formulation of the new paradigm must be the identification of the enemy, the second step will require the subordination of that enemy, namely global finance – or the virtual – to the real, such as industry and agriculture; which is another way of saying the rejection of Thatcherism, or neo liberalism. Because the real recognises limits – anathema to a liberal mindset which does not – this in turn must lead to an economics that can accommodate contraction in an overpopulated and over-exploited world. But such contraction will inevitably occasion the wholescale repudiation of the debts which our politicians know perfectly well can never be repaid. Too frightened and self-interested to admit this fact because such repudiation would have redistributive consequences that cannot be contemplated by vested interests, their strategy has been simple and criminally irresponsible: to delay the day of reckoning for future generations. It was cheap money, loaned into existence, that got us into the mess in the first place and yet the cure administered by our experts has been to prescribe ever larger doses of the same medicine and to make the hole even bigger.
In fact there is only one solution: massive debt jubilees as proposed, among others, by the economist Steve Keen and, before him, Rome’s Emperors and the Book of Leviticus. Perhaps auspiciously, if there is one man whose business career will have taught him the ins and outs of debt write-offs, it is surely America’s new President. If such a mechanism is practised every minute at the level of the corporation, I see no reason why the same cannot pertain to private debt: a sort of global Chapter 11 if you like. The bankers will cry. We weep for them.
It worries me therefore when certain representatives of the new force speak wistfully about Thatcher and Reagan. Their thinking must be more rigorous. No one was a greater friend to finance and the virtual economy. It was they who allowed the processes I have described to run riot by giving free rein to international finance. And it is their heirs, all along the political spectrum, who deliberately stoke the insecurities of the Middle Classes in particular, arguing that they will have too much to lose if the financial status quo is altered. But this is wrong. In fact it is exactly the Middle Classes who have been most prejudiced. All the research shows how in the last few decades it is the top tiny percent – a rentier class living off interest – who have benefitted vastly to the detriment of all the strata below them, the greatest portion of which comprise the middle classes. Mistaking what was a global credit splurge for genuine enrichment, we have been suckered. Take housing, for example. On paper we may be ‘richer’ but who really owns our homes? Us, or the bank? The same with our cars and the shirts on our backs. A class of owners or of debt slaves? We all know that over the past few decades our quality of life has been in terminal decline. Where previously one breadwinner per household was sufficient, thereby freeing the non-breadwinner to perform that socially (and economically) vital task of bringing up healthy members of society, two breadwinners are needed to compete ever more ferociously just to keep their heads above water, abandoning their children into delinquency – not good for business, let alone society. Less leisure, less time for friendship, less social cohesion, more stress – no matter what some clown on CNN tells us about GDP having “grown.” Talk of rehabilitating the nation and protecting its culture and its people without confronting the financial system that suffocates them is intellectual incoherence.
Moreover, what evidence is there that to be a genuine conservative we need espouse neoliberal economics? Were the Tories not originally the protectionist party? And why should weak-to-the-wall contempt for the less privileged define conservative psychology? Now is the time for the “interdependence,”(code for dependency pure and simple), so lauded by our internationalist politicians, to yield to greater national self sufficiency, for there can be no such thing as sovereignty or freedom without a large measure of economic independence. And economic independence will require in turn for the creation of the nation’s money to revert from privately owned international banks to the state, where it belongs. Simply put, any politician posing as a “Brexiteer” who does not seek to rein in finance is a fake.
I refer the reader to one of Keynes’s lesser known works, a prophetic lecture entitled “National Self Sufficiency” delivered at University College Dublin, in a year the significance of which is evident – 1933 – for insight into the distinctions that must be drawn between the varieties o f internationalism and their radically different qualities. Had either the Left or the Right grasped these distinctions instead of confusing them, as they continue to do, then the world would be a happier place:
The divorce between ownership and the real responsibility of management is serious within a country, when, as a result of joint stock enterprise, ownership is broken up between innumerable individuals who buy their interest today and sell it tomorrow and lack altogether both knowledge and responsibility towards what they momentarily own. But when the same principle is applied internationally, it is, in times of stress, intolerable…Experience is accumulating that remoteness between ownership and operation – what is historically symbolised for you in Ireland by absentee landlordism – is an evil in the relations between men, likely in the long run to set up strains and enmities which bring to nought the financial calculation…I sympathise therefore with those who would minimise, rather than maximise, economic entanglement between nations. Ideas, knowledge, science, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.
Finally, to suggest a third plank in the new order’s programme; all the disastrous consequences that I have referred to, stemming from the imperative to grow in order to pay down exponentially increasing debt, have at their centre a view of man: as a commodity; not something unique and precious, or sacred, but something to be exploited and sucked dry. The neoliberal and the Marxist are psychological twins: materialists who dismiss man’s transcendental nature. And so we will need a change – in mood. The very spirit of the age must alter. What form that spirit will take is a matter of conjecture. Suffice to say that it tends to have the same home: the nation. It will undo the fixation set by Marx and nearly every economist who followed him. “Economics” must be whipped back into its proper place within the genuine hierarchy – not as the locomotive of history, at the pinnacle of our priorities, but as a subset of the environment and of human societies. For without a healthy ecosystem and healthy societies there can be no such thing as a healthy economy. And when this new spirit is ushered in at last we shall possess the antidote to the current paradigm’s signature tune: ugliness.
In the words of F.D Roosevelt given at his inaugural speech as President.
Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men … Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
In sum, Mr Trump, and any leader who considers themselves the representative of a new, genuine Right, will be judged not so much by how they deal with Mexicans and Muslims, but by how they deal with Wall Street.